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Abstract
<p>The author examines how cultural diversity influences innovation capacity in German small and medium-sized enterprises (SMEs) and which diversity management strategies can foster innovative processes. Drawing on a literature review and qualitative expert interviews, she shows that cultural diversity offers opportunities such as shifts in perspective, cognitive diversity and improved market understanding, but at the same time can lead to communication problems, differing understandings of hierarchy and autonomy, and increased coordination effort. The findings make clear that diversity does not automatically foster innovation, but must be actively shaped through leadership, shared values, psychological safety and operational measures.</p>