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The "business case for diversity" stem from the progression of the models of diversity within the workplace since the 1960s. The original model for diversity was situated around affirmative action drawing strength from the law and a need to comply with equal opportunity employment objectives. This compliance-based model gave rise to the idea that tokenism was the reason an individual was hired into a company when they differed from the dominant group. This primarily included race, ethnicity, and gender. Although affirmative action is the law, in most cases, U.S. employers are prohibited by federal and state laws from giving race or ethnicity any consideration in hiring or assigning employees, including hiring to fill diversity quotas. However, the U.S. Supreme Court has upheld the use of limited preferences based on race, ethnicity, and sex, when there is a “manifest imbalance” in a “traditionally segregated job category”.
The social justice model evolved next and extended the idea that individuals outside of the dominant group should be given opportunities within the workplace, not only because it was the law, but because it was the right thing to do. This model still revolved around the idea of tokenism, but it also brought in the notion of hiring based on a "good fit". From social justice developed the model of representation and diversity acceptance where the scope of diversity expanded beyond gender, race and ethnicity to include age, sexual orientation, and physical ability. Today, the diversity model is one of inclusion which reflects a globalized economy and multicultural work force where value is placed on diversity of thought, and the perspectives shared from individual standpoints are seen to benefit organizations that are savvy enough to capitalize on them. The business case for diversity theorizes that, in a global marketplace, a company that employs a diverse workforce, is better able to understand the demographics of the marketplace it serves and is thus better equipped to thrive in that marketplace than a company that has a more limited range of employee demographics.
Beyond having a workforce that mirrors the changing demographics of the global consumer market and the ability to better understand their desires and preferences, productivity, and costs can be analyzed to assist in building the business case for diversity. In the deficit model, organizations that do not have a strong diversity inclusion culture will invite lower productivity, higher absenteeism, and higher turnover which will result in higher costs to the company. On the other hand, a company choosing to foster an inclusive environment for increased productivity, better problem-solving capabilities, and increased market share is applying the investment model, or value-added model to diversity inclusion strategies. Either model, however, requires an intentional implementation from top leadership for the culture to truly be one of inclusion and acceptance.
In a journal article entitled "The multicultural organization" by Taylor Cox, Jr., Cox talks about three organization types that focus on the development of cultural diversity. The three types are: the monolithic organization, the plural organization, and the multicultural organization. In the monolithic organization, the amount of structural integration (the presence of persons from different cultural groups in a single organization) is minimal and white male privilege is very tangible. This type of organization may have women and marginalized members within the workforce, but not in positions of leadership and power.
The plural organization has a more heterogeneous membership than the monolithic organization and takes steps to be more inclusive of persons from cultural backgrounds that differ from the dominant group. This type of organization seeks to empower those from a marginalized standpoint to encourage opportunities for promotion and positions of leadership.
The multicultural organization not only contains many different cultural groups, but it values this diversity. It encourages healthy conflict as a source of avoiding groupthink.
The culture of an organization is reflective of the leadership. Exploring organizations that have experienced dramatic culture shifts, such as NASA from the height and success of the Apollo era to the demise of the Challenger and Columbia days, it is evident that the culture was in large part affected by the top leaders. A study of successful multicultural organizations as opposed to monolithic and plural organizations can be understood by applying theories of leadership which have evolved over time. Trait leadership theory suggests that leadership is dependent on physical and social attributes of the individual and greatly based on European cultures. Theories that deal with power and authority will include the autocratic, democratic and laissez-faire leadership styles which reference the management and subordinate relationship to distributing and sharing power. These can overlap and lend themselves to situational leadership which Paul Hersey and Kenneth Blanchard suggested depends the combination of the relationship behavior and the tasks at hand. The last types of leadership which underscore those of the multicultural organizations are transformational and discursive leadership. Transformational leadership focuses on change agents and those with a competency to see the vision for the future and communicate it to others. Discursive leadership takes a closer examination of a leaders ability to shape the organizational talk, meaning and resulting interpretations from all discursive acts, symbols and vocabulary. The combination of these last two leadership styles creates a culture that allows and encourages mid-level managers to use diversity as an influential resource in order to enhance organizational effectiveness. In the Journal of Applied Behavioral Science, C.L. Walck defines managing diversity in the workplace as "Negotiating interaction across culturally diverse groups, and contriving to get along in an environment characterized by cultural diversity".
Diversity is beneficial to both the organization and the members as noted above. Diversity brings substantial potential benefits such as better decision making and improved problem solving, greater creativity and innovation, which leads to enhanced product development, and more successful marketing to different types of customers. Diversity provides organizations with the ability to compete in global markets. Simply recognizing diversity in a corporation helps link the variety of talents within the organization. The act of recognizing diversity also allows for those employees with these talents to feel needed and have a sense of belonging, which in turn increases their commitment to the company and allows each of them to contribute in a unique way. Standpoint theory suggests that marginalized groups bring a different perspective to an organization that challenges the status quo since their socially constructed world view will differ from that of the dominant group. Although the standpoint of the dominant group will often carry more weight, a transformational leader will encourage conflicting standpoints to coexist within an organization which will create a forum for sanctioned conflict to ensue. Conflict stems from challenging the way things have always been done, and/or ideas and problems that have not been explored from multiple perspectives. Standpoint theory gives a voice to those in a position to see patterns of behavior that those immersed in the culture have difficulty acknowledging. These unique and varying standpoints help to eradicate groupthink which can develop within a homogenous group. Scott Page’s (2007) mathematical modeling research of team work reflects this view. His models demonstrated that heterogeneous teams consistently out-performed homogeneous teams on a variety of tasks. Page points out, however, that diversity in teamwork is not always simple and that there are many challenges to fostering an inclusive environment in the workplace for diversity of thought and ideas.
One of the greatest challenges an organization has when trying to adopt a more inclusive environment is assimilation for any member outside of the dominant group. A number of scholars have studied the interplay between power, ideology, and discursive acts which serve to reinforce the hegemonic structure of organizations. Everything from organizational symbols, rituals, and stories serve to maintain the position of power held by the dominant group. Extending this concept to diversity inclusion where organizations seek to hire or promote individuals that are not part of this dominant group into management positions, a difficult tension develops between the socially constructed organizational norm and acceptance of cultural diversity. Often these individuals are mentored and coached to adopt the necessary traits for inclusion into the privileged group as opposed to being embraced for their differences. According to the journal article "Cultural Diversity in the Workplace: The State of the Field", Marlene G. Fine explains that "those who assimilate are denied the ability to express their genuine selves in the workplace; they are forced to repress significant parts of their lives within a social context that frames a large part of their daily encounters with other people". Fine goes on to mention that "People who spend significant amounts of energy coping with an alien environment have less energy left to do their jobs. Assimilation does not just create a situation in which people who are different are likely to fail, it also decreases the productivity of organizations".
Another challenge faced by organizations striving to foster a more diverse workforce is the management of a diverse population. Managing diversity is more than simply acknowledging differences in people. A number of organizational theorists have suggested that work-teams which are highly diverse can be difficult to motivate and manage for a variety of reasons. A major challenge is miscommunication within an organization. There are competencies, however, which help to develop effective communication in diverse organizational environments. These skills include self-monitoring, empathy, and strategic decision-making. Self-monitoring refers to a communicator's awareness of how his/her behavior affects another person along with his/her willingness to modify this behavior based on knowledge of its impact. Empathy enables the receiver to go beyond the literal meaning of a message and consider the communicator's feelings, values, assumptions, and needs. Strategic decision-making implies that the communication sources and channels used to reach organization members, as well as the substance of the messages conveyed, are mindfully selected.In her article entitled "Developing Receiver-Centered Communication in Diverse Organizations", Judi Brownell explains that a message meaning can never be completely shared because no two individuals experience events in exactly the same way. Even when native and non-native speakers are exposed to the same messages, they may interpret the information differently. Each interprets messages and discerns meanings based on their unique standpoint, and without a willingness to accept differing standpoints, an environment is created where the marginalized groups have no voice.
This is an additional challenge that diverse organizations face, maintaining a culture which supports the idea of employee voice especially for marginalized group members. When the organizational environment is not supportive of dissenting viewpoints, employees may choose to remain silent for fear of repercussions, or they may seek alternative safe avenues to express their concerns and frustrations such as on-line forums and affinity group meetings. By finding opportunities such as these to express dissent, individuals can begin to gather collective support and generate collective sense-making which creates a voice for the marginalized members so they can have a collective voice to trigger change.
Managing diversity goes far beyond the limits of equal employment opportunity and affirmative action. Chief Diversity Officers (CDO) recognize that strategic planning is necessary for creating a productive, diverse workforce. They seek out continuous learning opportunities and ongoing diversity sensitivity training for organizational managers and staff. Managers must be willing to work towards changing the organization in order to create a culture of diversity and inclusion that follows the mission, vision, and values set forth by the leadership. Three approaches towards corporate diversity management can be distinguished: Liberal Change, Radical Change, and Transformational Change.
The liberal concept recognizes equality of opportunity in practice when all individuals are enabled freely and equally to compete for social rewards. The aim of the liberal change model is to have a fair labor market from which the best person is chosen for a job based solely on performance. To support this concept, a framework of formal rules has been created and policymakers are responsible for ensuring that these rules are enforced on all so none shall be discriminated against.
One weakness of the liberal view is that the formal rules cannot cover every aspect of work life, as there is almost always an informal aspect to work such as affinity groups, hidden transcripts, and alternative informal communication channels. The liberal-change approach centers on law, compliance, and legal penalties for non-compliance. Title VII of the Civil Rights Act of 1964 protects employees and job applicants in the United States from discrimination by employers. In Europe, the 1957 Treaties of Rome establish the right to equal pay for women and men. In 2000 the European Parliament and the Council passed EU directives concerning equal opportunities at work. Directive 2000/78/EC establishes a framework for equal treatment in employment and occupation. Directive 2006/54/EC deals with the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. These anti-discrimination laws uphold affirmative action and ensures equal treatment for job applicants and employers regardless of their gender, race, ethnicity, age, sexual orientation, physical ability, or belief structure.
In contrast to the liberal approach, radical change seeks to intervene directly in the workplace practices in order to achieve balanced workforces (in regard to all diversity dimensions), as well as a fair distribution of rewards among employees. The radical approach is thus more outcome focused than focused on the forming the rules to ensure equal treatment. One major tool of radical change is quotas which are set by companies or national institutions with the aim to regulate diversity of the workforce and equal opportunities. Quota systems are critically discussed concerning their effectiveness. Arguments for and against quota systems in companies or public institutions include contrasting ideas such as: quotas compensate for actual barriers that prevent marginalized members from attaining their fair share of managerial positions to quotas are against equal opportunity for all and imply that a marginalized member only got the position to fill the quota. Sweden’s quota system for parliamentary positions is a positive case for radical change through quota setting. A quota system was introduced at the Swedish parliament with the aim of ensuring that women constitute at least a ‘critical minority’ of 30 or 40 percent of all parliament seats. Since the introduction of the system, women representation in parliament has risen dramatically even above the defined quota. Today, 47.3 percent of parliamentary representatives are women, a number which stands out compared to the global average of 19%.
Transformational change covers an equal opportunity agenda for both the immediate need as well as long-term solutions. For the short term it implements new measures to minimize bias in procedures such as recruitment or promotion. The long term, however, is seen as a project of transformation for organizations. This approach acknowledges the existence of power systems and seeks to challenge the existing hegemony through implementation of equality values.
One illustrative case for transformational change is ageing management; Younger employees are seen as more innovative and flexible, while older employees are associated with higher costs of salary, benefits, and healthcare needs. Therefore companies may prefer young workers to older staff. Through application of the transformational concept an immediate intervention provides needed relief while a longer-term culture shift occurs.
For the short-term, an organization can set up legislation preventing discrimination based on age (e.g., Age Discrimination in Employment Act). However, for the long-term solution, negative stereotypes of older employees needs to be replaced with the positive realization that older employees can add value to the workplace through their experience and knowledge base. To balance this idea with the benefit of innovation and flexibility that comes with youth, a mixture of ages in the workforce is ideal. Through transformational change, the short-term solution affords the organization the time necessary to enact deep rooted culture changes leading to a more inclusive environment.
Diversity issues change over time, depending on local historical and dynamic conditions. Intentional "diversity programs" can assist schools, government agencies, and businesses facing rapid demographic changes in their local consumer market and labor pool by helping people work and understand one other better. Resources exist through best practice cases of organizations that have successfully created inclusive environments supporting and championing diversity.
An example of a company involved with creating diversity in the workplace is MentorNet, a nonprofit online mentoring organization that focuses on women and underrepresented minorities in the STEM (Science, Technology, Engineering and Mathematics) fields. MentorNet has used an algorithm to match over 30,000 mentor relationships since 1997. The organization gives students, especially women and underrepresented minorities, the chance to seek mentors to discuss how to overcome diversity obstacles in their fields and eventually their workplace.
Implementing diversity inclusion initiatives must start with the commitment from the top. Hegemony refers to the dominant structure where one group is benefitting over others; however, the dominant group is not "doing" this to the other marginalized groups, Mumby claims all members are a part of actively participating and maintaining the dominant structure. Max Weber used a web metaphor to explain that we live in a socially constructed web of meaning which we ourselves create and which we cannot live outside of. Individuals therefore have agency to create the structure and influence it through communication discourse practices, yet they are simultaneously constrained by what they create. When practical consciousness, which Gidden's refers to as taken for granted knowledge and behavior as a naturalized "way it is", is interrupted, then intentional change to the hegemonic system can occur. For this reason, with a commitment from top leaders in an organization to change the existing culture to one of diversity inclusion, the diversity change management process can succeed. This process includes analyzing where the organization is currently at through a diversity audit, creating a strategic action plan, gaining support by seeking stakeholder input, and holding individuals accountable through measurable results.