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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.
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".
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.
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. This type of organization may have minority 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.
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. Situational leadership, where the balance of managing relationship behavior and the tasks at hand, underscore multicultural organizations.
The combination of "transformational leadership" and "discursive leadership" 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".
On one hand, there is a lack of documented evidence for the claimed benefits to the organisation and the individual.
On the other hand, diversity is claimed to bring 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, encouraging conflicting standpoints to coexist within an organization which will create a forum for sanctioned conflict to ensue. Standpoint theory gives a voice to those in a position to see patterns of behavior that those immersed in the culture have difficulty acknowledging. From this perspective, 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. The interplay between power, ideology, and discursive acts which reinforce the hegemonic structure of organizations is the subject of much study. Everything from organizational symbols, rituals, and stories serve to maintain the position of power held by the dominant group.
When organizations hire or promote individuals that are not part of this dominant group into management positions, a 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". That is, with a diverse workforce, management may have to work harder to reach the same level of productivity as with a less diverse workforce.
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. Fine reported a study of "work groups that were culturally diverse and found that cross-cultural differences led to miscommunication." That is, a diverse workforce led to challenges for management. The meaning of a message 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. There are competencies, however, which help to develop effective communication in diverse organizational environments. These skills include self-monitoring, empathy, and strategic decision-making.
Maintaining a culture which supports the idea of employee voice (especially for marginalized group members) is another challenge for diverse organisation. 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.
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. The liberal-change approach centers on law, compliance, and legal penalties for non-compliance.
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.
In contrast to the liberal approach, radical change seeks to intervene directly in the workplace practices in order to achieve balanced workforces, 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.
Arguments for and against quota systems in companies or public institutions include contrasting ideas such as quotas
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% 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.
Intentional "diversity programs" can assist organisations 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 such resources is MentorNet, a nonprofit online mentoring organization that focuses on women and under-represented minorities in the science, technology, engineering and mathematics fields.
Implementing diversity inclusion initiatives must start with the commitment from the top. 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.