This paper is part of the International Journal of Applied Research in Business and Management (ISSN: 2700-8983), Volume 6, Issue 1, published in 2025.
Authors
Ayanthi Pathirathne, Augustus Osseo-Asare
Abstract
In the past two decades, multinational corporations (MNCs) have come under enormous pressure to address issues relating to multiculturalism, as part of their international business (IB) strategies. Addressing multiculturalism issues has become urgent for MNCs seeking to sustain competitive advantage and achieve UN’s Sustainable development goals (SDGs). Our objective is to test the hypothesis that multiculturalism does not positively and significantly impact firms’ business strategy. We adopt quantitative methodology, comprising a Questionnaire Survey via Qualtrics of 318 MNC employees selected from 10 UK-based MNCs between April and June 2020. SPSS multiple regression analysis of the data, reveal three key findings: a/three measures of multiculturalism, namely, ‘liberalism’, ‘heterogeneity’, and ‘retention’ have positive but statistically insignificant effects on business strategy; b/‘heterogeneity’ has the greatest effect, followed by ‘liberalism’, and ‘retention’ has the least effect; c/in a declining order, salad bowl multiculturalism positively impacts ‘product differentiation’, ‘focus strategy’, and ‘low-cost leadership’. These findings contribute to IB research and practice given the increasing relevance of issues of sustainability, social responsibility, governance, and the urgency to achieve UN’s SDG goals in every country. Future research would adopt mixed research methodology to provide a holistic understanding of the association between multiculturalism and business strategy.
Suggested Citation (APA 7th)
Pathirathne, A., Osseo-Asare, A. (2025). How Does Multiculturalism Impact Firms’ Business Strategy and Competitive Advantage?. International Journal of Applied Research in Business and Management, 6(1). https://doi.org/10.51137/wrp.ijarbm.2024.aphi.45641
