Seminar paper from the year 2007 in the subject Psychology - Work, Business, Organisational and Economic Psychology, grade: 1,3, Friedrich-Alexander University Erlangen-Nuremberg, language: English, abstract: As a result of the advanced globalization, organizations increasingly operate in international and global markets. They cooperate with companies from all over the world and em-ployees of different nationality are engaged. More and more people live and work in foreign countries. Between organizations, multinational corporations are becoming commonplace (Bhadury et al., 2001, cited by Seymen, 2006). Consequently, they have to deal with a wide range of diversity: different values, cultures, customs, lifestyle and manners encounter. Also the growing level of domestic diversity is a reason for increasing cultural diversity (Stone, Stone-Romero, Lukaszewski, 2007). Essentially the United States are concerned, but also European countries. In the U.S. there are over 84 million members of the four primary minority groups like African-, Hispanic-, Asian- and Native-Americans. Another factor of increasing diversity is the rising immigration rate and the higher birth rates among ethnic minority groups (Stone et al., 2007). Definitely, lots of advantages result of the above mentioned developments. Globalization has enabled transnational business and the communication all over the world has been extremely simplified. Markets for services and products have grown the lack of boarders offers a lot of opportunities and flexibility. A high number of researchers argue that multiculturalism offers also benefits inside organizations. It is empirically proven that employees in multicultural organizations are more creative and have improved decision-making results (Adler, 1983, cited by Stone et al., 2007). Anyway, with those developments occur some conditions, which cannot be ignored. The organizations have to challenge the improvement and the management of people on a global scale. This implicates some difficulties like matters of motivation, leadership, productivity and authority (Higgs, 1996, cited by Seymen, 2006). Researchers state, that while focussing on the positive effects of multiculturalism, its critical role in a high number of organizational processes has not been considered enough (Erez, 1994, cited by Stone et al., 2007). But there is no doubt that culture has impacts on diverse organizational processes.[...]