Conflict Costs in National and International Business: A Comparative Analysis

Abstract

Studies presented the importance of conflict costs. Cultural diversity adds more complexity to working groups, fostering conflict. The aim of this research is to investigate how cultural diversity affects conflict costs, measured in terms of lost time & cost amplifiers. Data was collected through an online survey with 490 respondents for national conflicts and 185 respondents for culturally diverse conflict situations. The differences between the two groups are explored by examining their impact on conflict cost amplifiers and the costs themselves. We found that intercultural diversity increases the number of conflicts per year. However, cultural heterogeneity did not affect conflict intensity, duration or the time spent on cost variables. This research is the first one to investigate the effects of cultural diversity on different facets of conflict costs. The results demonstrate the potential, as well as the need for further research.