Topic 6 The Nature of Diversity

 

THE NATURE OF DIVERSITY

“The Person who figures out how to harness the collective genius of the people in his or her organization is going to blow the competition away."

Walter Wilson (Former CEO – Citibank) 

Challenges in Organizations

·         Growing multicultural societies

·         People with different cultures and experiences

·         People with different needs and desire

·         Employees of different cultural background

Example:

Papua New Guinea has over 1000 different cultural groups and over 800 different languages. Organizations and firms doing business in PNG has to understand its employees and their different cultural traits if it has to operate effectively and efficiently.

Australia before 1788 there were more then 200 Aboriginal language groups inhabiting the Australian continent. The ‘first fleet’ added a mix of people from 26 nations. The gold rush era in the mid 1800s continued the multicultural advance, as did the post-World War II immigration period. Today, new social policies and management practices have emerged to foster more cohesive links between all Australians, although the difficulties and challenges remain essentially the same. 

What is Diversity?

Diversity is not an absolute phenomenon – that is, a group or an organization cannot be said categorically to be, or not to be, diverse.

• Rather, diversity is best conceptualized as a continuum. Example: If everyone in a group or organization were exactly like everyone else, there would be no diversity whatsoever. That group would be homogeneous in nature.
• Most group or organizational settings are characterized by a level of diversity that sit somewhere between.

Narrow definition of diversity emphasize differences in race, ethnicity and gender,  while broader definitions imply that the term refers to all individual differences among people.

Broadly defined, diversity exists in a group or organization when its members differ from one another in respect of one or more important dimensions such as age, race, sex or ethnicity.

Diversity is not characterized against a predetermined standard. It does not refer merely to people who are different from the dominant majority group, but includes the difference and similarities of the majority.

• Example: A board of directors made up of eight males of European origin and two female and two men of Asian origin does not have only two diverse groups. The majority eight males represents another group.  

 
Work Force Dimension

There are two levels of diversity. One known as First Level Dimension also called Primary or Core dimensions. This level include characteristics that have an important influence on our lives.

Characteristic are often visible to others and are either impossible or difficult for individuals to change. They are age, ethnicity, sex, mental and physical abilities and characteristics, race and sexual orientation.

First Level Dimension also called Primary or Core dimensions

Differences that are visible to others and either impossible or difficult for individuals to change (e.g. Age).

Secondary dimensions - The other level consist of characteristics that in general are less visible to others and more variable in terms of the influences they may have on our lives.

We have more control over these characteristics because we can make choices regarding their acquisition, modification or dismissal. They are Secondary dimensions. These are communication style, education, family status, religion, first language, geographic location, income, work experience, work style, organization role and level.

Secondary dimensions. Characteristics over which individuals have a degree of control through choices about their acquisition, modification or dismissal. Under these two levels of diversity, we have more control over those characteristics classified as secondary dimension than we do over those classified under first level or primary dimension. 

Primary Dimension - (Mental and Physical Abilities and Characteristics)

•         Age

•         Ethnicity

•         Gender

•         Race

•         Sexual Orientation

Secondary Dimension

•         Military Experiences

•         Religion

•         Income

•         Work Experience, Work Style

•         Geographic Location

•         Organizational role and level

•         Communication Style, First Language

•         Family Status

•         Education 

The dimensions of diversity have very significant implications for diversity management. Manager need to ensure that basic primary differences do not bias decision making.

Example: Refusing to interview a female or Asian for a position is a biased decision, based on primary differences that the individual is unable to influence.  

Diversity Management

Setting up a corporate or organizational culture that values primary differences is of paramount importance in diversity management. Valuing primary differences will ensure that the organization avoids recreating patterns of discrimination in which status, access, benefits and burdens are based on primary differences rather than on ability.

The increasing diversity among employees in organizations is a reflection of social changes. Increased access to education, rising levels of education, and individual demands for meaningful work and career opportunities have meant changes to lifestyle and subsequent changes in business and commerce.

• Diversity is increasing in most organizations today for four basic reasons:
1. Changing demographics in the labour market
2. Changes in the legislative framework
3. Globalization of markets
4. The recognition of value in a diverse work force

• The effect of increasing diversity in organizations has been to bring about change at an individual, organizational and social level. This impact, in turn acts as a force for further change.

 

• The increasing importance of recognizing diversity at all levels has affected the development of organizational strategies and structures for marketing, competition in national and international markets, and dealing with numerous stakeholders (including employees and customers) as well as addressing the conflict inherent in managing differences 

CHANGING DEMOGRAPHICS IN THE LABOUR MARKET

• Changing Gender Role
• Strengthening Profile of Indigenous people
• Ethnicity

o   Growing Participation of People with disability

A range of factors are changing the demographics of the contemporary labour market in Australia and else where. These include changing gender roles, the strengthening profile of indigenous people, ethnicity issues, the growing participation of people with disabilities, and aging population.

Changing Gender Roles:
 

In most culture, women’s role  have been to raise children. This has had a marked impact on the women’s ability to participate in the formalized labour market both historically and now.

However, due to improved access to a wider range of education, the increased availability of suitable jobs and improved access to training and retraining, more women have entered the labour force over the past 30 years.

Social changes including birth control, role changes (such as man and women sharing domestic tasks, including child rearing) and increasing number of child-care facilities have also meant that women have more freedom to move into the workforce.

• This increase has placed a demand on organizations to provide career opportunities, equal pay, promotion prospects and family responsive policies and practices without discrimination.

• Research also indicate that organizations still have structures and processes that still systematically discriminate against women.

• Australia has been described as having the most segregated and segmented work force in the world, with gender governing the type of work people do and how it is organized. Only 3.4% of directorships on board in publicly listed companies are held by women.

• One of the reasons cited for women’s low representation in management is the glass ceiling which keeps their numbers concentrated in the lower levels of organizations. The term glass ceiling was coined in the 1980s to describe a barrier so subtle that it is transparent, yet strong enough to prevent women from moving into top management positions.

• As a result of these barriers, many women are opting to set up their own small businesses in order to build a lifestyle that encourages work and family harmony.  

 Strengthening profile of Indigenous People:

In some countries around the world indigenous people are encouraged into the formal workforce  with the radical shift in government policy towards integration.

Reasons include lack of access to education, and bureaucratic management styles that not only inhibit the process of cross-cultural learning but also are unable to cope with different socialization mechanism.

Ethnicity:

Some countries around the world have a multicultural society given the movement of people across national boundaries through immigration and labour mobility. Australia and the USA have a rich cultural diversity given the mentioned factors. The surge in immigration to Australia were the result of international events  (war, border changes, poverty, destruction) as well as the consequence of Australia’s immigration policy, its industrial demand for labour and its small population. 

Skills of Migrants Workers

Skills of migrant workers have often been undervalued with their overseas qualification not recognized. Most have ended up working in assembly lines while others have been forced to go into small business in their own communities.

Growing Participation of People with Disabilities:

In the past people with disabilities worked under the charity model of employment, which encouraged a sheltered workshop approach. Such work and situation faced by the disable person were often undervalued. 

Disable people also had little or no control over their own work situations, including pay and working conditions. In PNG and else where legislations have or  are been enacted to encourage non-discrimination of people with disabilities which has enable them to integrate into normal workforce.

Only 20.4 per cent of people with disabilities are currently actively participating in the Australia labour force. It is believed this figure is an indication of lack of educational and training opportunities for people with disabilities as well as their guarded acceptance or non-acceptance in the workplace.

Aging Population:

The average age of the Australian workforce is gradually increasing. Several factors have contributed to this trend.

The baby-boom generation (people born in the 20 year period after World War 2) continues to age.

·         Decline in birth rate for the following generation

·         Improvements in health and medical care enabling people to remain productive and active longer

·         Legislations in most Australian states and New Zealand prohibits age discrimination in employment with compulsory retirement being unlawful, and being phased out in most jurisdictions.

 

There are negative stereotypes typically held of older people including alleged  increase absence from work, loss of memory or diminishing intelligence. This cannot be substantiated.

Organizations cannot afford to have productive people forced to leave the work force on the basis of such ill founded assumptions.
 

Legislative Changes

The legal obligations of Australia and New Zealand with respect to diversity arise from ratified treaties made with the United Nations and its special agency, the International Labour Organization. These have been designed to protect human rights and ensure non-discriminatory treatment. Some of these legislation have been in place for 20 years.

Australia legislation places the responsibility for discriminatory behavior on the organization as well as on the individual. The only defence for an organization is to prove that reasonable steps were taken to avoid discriminatory behavior. Steps that can be taken:

·         Top management support

·         Policy development

·         Education and Training

·         Changes to processes and practices

·         Monitoring problematic situation. 

 

Globalization

Globalization was initially conceptualized as the worldwide process of economic and industrial restructuring. Industrial countries invested in factories in developing nations with lower wage structures and reduced their costs at home through restructuring and technology changes.

Today globalization is also seen to include the process of continual change to gain competitive advantages. This change profoundly affects the organization, industry and workforce on an international scale.

International and multinational organizations must buy, staff, sell and invest in different markets, often at the same time.

Managers have to deal with diversity not only within their own organization, but also on a global scale as  they interact with people from a variety of cultures, with different social norms and mores. 

Opportunities and Challenges of a Diverse Workforce

Diversity as a force for Social Change

• Organizations are becoming increasingly diverse which provides both opportunities and challenges for organizations.
• Diversity within organizations can also be a force for social change. Example a manager who learns to interact effectively with a diverse set of people at work is also going to be better equipped to deal with a diverse set of people in other social settings.
• Conversely, an individual who is comfortable interacting within diverse settings outside of the workplace should have few problems when he or she encounters diversity in the workplace.
• Thus diversity in organizations both facilitates and is facilitated by social change in the environment.
• Organizations also affect social change through the images they use to promote themselves and their products.
• E.g. An organization that runs advertisements showing only European-Australian male executives in its workplace conveys a certain image of itself.

Diversity as a Source of Competitive Advantages

• Many organizations have found that diversity in the work force results in increased productivity and competitive advantages in the marketplace.
• Six Arguments have been formulated to demonstrate how diversity contributes to competitiveness. 

Six Arguments

Six arguments have been formulated to demonstrate how diversity contributes to competitiveness. 

1.      Resources acquisition argument – Proposes that organizations which manage diversity effectively become known among women and minority group member as a good place to work. These organizations are able to attract qualified employees from among these groups as well as from other segments of society.

 

2.      Creativity argument – Proposes that organizations with diverse workforce  are generally more creative and innovative than the less diverse organizations.

 

3.      Systems flexibility argument – Proposes that organizations have to become more flexible if they are to manage a diverse workforce effectively. With flexibility, organizations are able to respond better to changes in its environment.
 

4.      Cost argument – proposes that organizations that learn to cope with diversity generally have higher levels of productivity and lower level of turnover and absenteeism. Those organizations that do a poor job of managing diversity, on the other hand suffer from low productivity and higher levels of turnover and absenteeism.

 

5.      Marketing argument – proposes that organization with diverse workforces are better able to understand different market segments than are less diverse organizations.

 

6.      Problem-solving argument – Diversity carries with it an increased pool of information, large common pool of information and less common pool of information. With a diverse organization there is a probability that problems can be identified quickly.

 

Diversity as a force for Organization Changes

From the discussion, we  note that organizations do not operate in a cultural or social vacuum. Research in areas such as sociology, organizational behaviour, organizational theory and management theory continues to show that value systems underpin organizational culture, which in turn, influences decision-making systems.

• Increasing diversity has encouraged organizations to introduce flexible decision-making systems, with movement towards group and team structures – thus opening the way for better management of diversity.

• Diversity has also had an impact on management processes and leadership styles. In the past different leadership styles were not considered appropriate in organizations.

Diversity as a Source of Conflict

Diversity can also be a source of non-productive conflict in organizations. Conflict can arise for a variety of reasons. One cause can be individual perceptions and expectations of what is equitable treatment within the organization. 

Conflict may arise;

·         Example, when an individual think that someone has been recruited, promoted or dismissed because of his or her diversity status such as sex or ethnicity.

·         Indigenous woman is promoted in an organization with an affirmative action program, some man may feel that she has been given preferential treatment.

·         Misunderstanding due to cultural or individual communication differences.

·         Inappropriate sexual and religious jokes, personal biases and prejudice.

·         Unwillingness to accept people who are different can all be potential causes of conflict

·         Improper use of e-mail can potentially have a very negative effect on organization operations

• Managing diversity to encourage the benefits of diversity and reduce the negative effects of excessive conflict requires cultural awareness, increased time for decision-making and communication training.

Students are encouraged to read more into the topics discussed in class. 

SOURCE:


Crane, Matten, (2007) Business Ethics; Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford.

Nickel, McHugh, McHugh, (2005) Understanding Business 7^th Edition, McGraw-Hill

Johnson, Abramov, Business Ethics 2004, “A Publication of the Good Governance Program” International Trade Administration Washington D.C. 2004