Cultural Diversity Management, Inclusion and its Relationship to Innovation Performance in the German Automotive Industry: A Comparative Case Study.

Abstract: The aim of this thesis is to investigate the influence of inclusion on the relationship between cultural diversity and innovation performance in the context of unit orientation in the German automotive industry. A distinction is made between operational and innovative units. For this purpose, semi-structured interviews with ten employees from six German automotive companies were conducted in the context of a comparative case study. This form of qualitative research is particularly suitable for identifying subjective perceptions in terms of sensitive subjects. The current uncertainty and digital disruption in the automotive industry adds to the highly dynamic and competitive environment of MNCs. With increasing crosscultural interactions, a culturally heterogeneous workforce represents a resource that enhances creativity and adaptability in the context of dynamic capabilities. This paper shows that innovative units are more culturally heterogeneous than operational units and consequently confirms the assumption that cultural diversity acts as an important driver for innovation. Furthermore, it is found that the development of cultural competences accelerates adaptation processes in heterogeneous environments and that some companies possess a higher cultural absorptive capacity due to global innovation activities, market-specific product requirements and a diversified product portfolio. Finally, it is found that inclusion positively influences peak innovation performance and that inclusion provides a greater impact for innovative and culturally heterogeneous units. Furthermore, this paper develops a conceptual model that complements current research regarding diversity and innovation management and is therefore equally relevant for international business research and sociopsychological research.