Ethnic diversity in the workforce is a subject of growing interest for western organizations. In EU countries, continuous immigration flows of post-war guest workers and their family members, ex-colonial immigrants, political refugees, and highly educated workers have led to an increase of people with a foreign nationality (Organisation for Economic Co-operation and Development [OECD], 2003). However, foreign population percentages vary significantly between EU countries. For instance, Luxemburg (39.9%), Austria (10.3%), Germany (9.5%), and Belgium (9.1%) have relatively high rates, whereas the lowest rates, of about 2%, are found in Greece, Finland, Portugal, Spain, and Italy. Other EU countries fall somewhere in between these two extremes, such as the Netherlands, Denmark, Sweden, the UK, and France, with percentages ranging from 4.3 to 6% (OECD, 2003). In the future, ethnic diversity in many EU countries is likely to increase even further as demographic figures indicate that net-migration flows (immigration minus emigration) are larger than the natural growth of national populations (Ekamper and Wetters, 2005; OECD, 2003).

The increase in ethnic diversity, along with accompanying demographic developments, have had a significant impact on the composition of the workforce. About fifty years ago, the demographic features of most work organizations were fairly homogeneous (Williams and O'Reilly, 1998). Many employees shared a similar ethnic background, were male, and worked for the same employer throughout their working lives. Nowadays, managers are confronted with teams and departments that are more diverse in terms of gender, age, ethnicity, organizational tenure, functional background, educational background, and so on.