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diversity in organizations

Paper Type: Free Essay Subject: Business
Wordcount: 4544 words Published: 1st Jan 2015

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This paper aims to show a deep examination of how diversity is interpreted and wrongfully applied in many organizations today. In this essay, I would explore and discuss the term “Diversity”, its definitions, merits, demerits, its varied applications and if there is a cause and effect relationship between diversity workforce and organizational effectiveness. This essay would also show why the term diversity is remotely satisfying and elaborate on the need for a new paradigm for understanding Diversity. My study supports the principles of the Diversity theory but not its varied applications which inhibit organizational effectiveness.

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The term “diversity” has found its place in almost all HRM literature; the front page. Jackson et al (1993), states that “the term diversity has little history within the behavioural sciences and is not (yet) a scientific construct. Instead, it is an everyday term that sprang to life rather recently, nourished by widespread media coverage of the “managing diversity” activities that organizations are adopting in response to changing work-force demographics. Nevertheless, the body of social science research relevant to understanding the dynamics of diversity in organizations is not large, although it is widely dispersed across sub disciplines that cross reference each other nor have a common terminology” (See Friedman, 1996:67). Another interesting definition is found in Ashkanasy et al (2002) which defines diversity as a concept that “encompasses acceptance and respect. It means the understanding that each individual is unique and recognizing our individual differences. They can be along the dimensions of race, ethnicity, gender, sexual orientation, socio economic status, age, physical abilities, religious beliefs, political beliefs and other ideologies and the exploration of these differences in a safe, positive and nurturing environment. Diversity is about understanding each other and moving beyond simple tolerance to embracing and celebrating the rich dimensions of diversity contained within each individual”

Allen et al (2008) asserts that diversity is a challenge and that “organizations have struggled to embrace and manage it successfully. Researchers have struggled to conceptualize and study the term effectively. Theorists predict differing effects of Diversity: that they will spark integrative insights, creativity and innovation (e.g. Finkelstein and Hambrick, 1996; Hoffman and Maier, 1961) or that they will provoke conflict, division and dissolution (e.g. Chatman, 1991; Tajfel and Turner, 1979)”.

Workforce Diversity (A Critical Analysis)

Structural Diversity Vs Demographic Diversity

“The demographics of the workforce are changing and will continue to change rapidly. Almost every organization looks different – both in terms of who’s employed and they positions they hold, than it did ten years ago” (Sonnenschien, 1999:2). Jackson et al (1995) also asserts that the “changing work-force demographics and new organizational forms are increasing the diversity of work teams in general and decision making teams in particular. Given these environmental changes, work teams that are diverse in terms of sex, race, and ethnicity, national origin, area of expertise, organizational affiliation and many other personal characteristics are increasingly common. The changing demographics of today’s labour force, account for the increasing gender diversity, cultural diversity (including cultural differences due to race and ethnicity) and age diversity (See Kling, Hyde, Showers and Buswell, 1999; Konrad, Ritchie, Lieb and Corrigall, 2000; Roberson and Block, 2001)”.

According to Ongari and Argolla (2007) “Workforce diversity is a complex phenomenon to manage in an organization. The management of workforce diversity as a tool to increase organizational effectiveness cannot be underscored, especially with current changes sweeping across the globe. It is argued that organizations that value diversity will definitely cultivate success and have a future in this dynamic global labour market (Jain and Verma, 1996). Workforce diversity management has become an important issue for both governments and private organizations. Its importance has mainly been brought about by the free movement of labour due to globalization and the fight for human rights by certain minority groups who feel excluded from the employment sector. The workforce diversity emerged mainly to further the availability of equal opportunities in the work place. This equal opportunity philosophy is aimed at ensuring that organizational make the most out of the difference from a diverse workforce rather than losing talent which might assist the organization to be more efficient and effective. The increased mobility and interaction of people from diverse backgrounds as a result of improved economic and political systems and the recognition of human rights by all nations has put most organizations under pressure to embrace diversity at the work place. Diversity brings with it the heterogeneity that needs to be nurtured, cultivated and appreciated as means of increasing organizational effectiveness”.

A more diverse workforce according to Thomas and Ely (1996) will increase organizational effectiveness. “It would lift morale, bring greater access to new segments of the market place and enhance productivity. Yet if this is true, what then are the positive impacts of diversity? Numerous and varied initiatives to increase diversity in corporate organizations have been under way for over a decade” (Sonnenschein, 1992:49). “Rarely, however, have those efforts spurred organizational effectiveness, Instead, many attempts to increase diversity in the workplace have backfired, sometimes even heightening and hindering a company’s performance” (Tsui and Gutek, 1999).

As is commonly ascribed, Riodan (2000) asserts most people assume that workforce “diversity is about increasing racial, national, gender or class representation – in other words, recruiting and retaining most people from traditionally underrepresented identity groups”. Taking this commonly held supposition as a starting point, Thomas and Ely (1996) set out to investigate the link between diversity and organizational effectiveness and they found that “thinking of diversity simply in terms of identifying group representations inhibited effectiveness”. They also found that organizations usually follow “two paths in managing diversity, In the name of empathy and fairness, the organizations encourage women and people of colour to blend in or they set them apart in jobs that relate specifically to their backgrounds, assigning them, for example to areas that require them to interface with clients and customers of the same identity group”. In this kind of case, companies are operating on the assumption that the main virtue identity groups have to offer is knowledge of their own people. “This assumption is limited and detrimental to diversity efforts” “(See Elsass & Graves, 1997; Finkelstein & Hambrick, 1996; Jackson, May and Whitney, 1995; Milliken &Martins, 1996; Reskin, McBrier & Kmec, 1999; Shaw & Barrett Power, 1998)”

A recent meta-analysis of the effects of task related (e.g. tenure) and non task related (e.g. ethnic and gender) diversity, by Weber & Donahue (2001) “revealed no dependable effects on organizational effectiveness, performance or cohesiveness”. Williams and O’Reilly (1998) assert that “diversity goes beyond increasing the number of different identity groups’ affiliations” in a company but that diversity should be seen and “understood as the varied perspectives and approaches to work that members of different identity groups bring”.

Another argument is by Cummings (2004) which says that “effective work groups engage in external knowledge sharing- the exchange of information, know-how and feedback with customers, organizational experts and others outside the group. This paper argues that the value of external knowledge sharing increases when work groups are structurally diverse”. “A structurally diverse work group is one in which the members, by virtue of their different organizational affiliations, roles or positions, can expose the group to unique sources of knowledge. It is hypothesized that if members of structurally diverse work groups engage in external knowledge sharing, their performance will improve because of this active exchange of knowledge through unique external sources”.

Cummings (2004) also assert that “scholars examining diversity in work groups have primarily focused on the consequences of demographic diversity (e.g. member differences in sex, age, or tenure) for processes such as communication, conflict, or social integration” ( See also Jehn et al, 1999, Pelled et al, 1999 and O’Reilly et al, 1989). “The consistently negative effects of demographic diversity on group processes are likely the result of heightened member emphasis on social categories rather than project relevant information. Demographic diversity should not increase the value of intra-group knowledge sharing or external knowledge sharing unless it exposes members to unique sources of knowledge related to the work” (for a review see Williams and O’Reilly. 1998).

Relatively, “little attention has been given to member differences in organizational affiliations, roles or positions. With the rise in labour costs, global expansion and corporate mergers, workgroups are often used as a means for connecting members who are dispersed across different geographic locations, who represent different functions and report to different managers or who work in different business units “ (DeSanctis and Monge, 1999; Jarvenpaa and Leidner, 1999; Maznevski and Chudoba, 2000). This variation in features of the group structure is introduced here as “structural diversity because of its potential to expose members to different sources of task information, know-how and feedback. Four types of structural diversity in work groups” are mentioned below as:

“Geographic locations” (See Van den Bulte & Moenaert, 1998), “Functional assignments” (See Bunderson & Sutcliffe, 2002), “Reporting managers” (e.g. Burns, 1989) and in “Business units” (See Hansen, 2002)

Another research done by Siciliano (1996) on 240 YMCA organizations, found no significant relationship between diversity and organizational effectiveness. Middleton (1987) also asserted that “diversity in any form has no impact on the operating efficiencies of an organization and diversity does not appear to influence one way or another, an organization’s tendency to perform its control function.

Merits of Managing Workforce Diversity

“Managing diversity can create a competitive advantage. Potential benefits of diversity include better decision making, higher creativity and innovation, greater success in marketing to foreign and domestic ethnic minority communities and a better distribution of economic opportunity” (Cox, 1991; Cox & Blake, 1991). According to one study (Watson et al, 1993) “culturally diverse groups relative to homogenous groups are more effective both in the interaction process and job performance; these benefits occur after a diverse group has been put together for a period of time”. Mueller (1998) states that “as all the segments of society have a stake in the development and prosperity of society as a whole, creating and managing a diverse workforce should be seen as a social and moral imperative”. “As globalisation is increasing, diversity will help organizations to enter the international arena” (Cascio, 1998). “Diversity enhances creativity and innovation (Adler, 1997; Jackson et al, 1992) and produces competitive advantages (Coleman, 2002; Jackson et al, 1992)”. “Diversity teams make it possible to enhance flexibility (Fleury, 1999) and rapid response and adaptation to change (Adler, 1997’ Jackson et al, 1992)”.

Organizational Challenges

“Companies can succeed at diversity if the initiative to create, manage and value the diverse workforce has the full support of the top management” (Hayes, 1999; Jackson et al, 1992). Fiske, 1993 states that “for increased effectiveness and adaptation of the diversity discourse, companies have to start thinking about diversity more holistically- “as providing fresh and meaningful approaches to work and stop assuming that diversity relates simply to how a person looks or where” they are from, only then would companies reap diversity’s full rewards” and “Organizations with a diverse workforce can provide superior services because they can better understand customers’ needs (Weitling & Palma-Rivas, 2000). Hiring women, minorities, disabled, etc will help organizations to tap into these niche markets (Mueller, 1998) and diversified market segments” (Fleury, 1999).

Jackson et al (1995) state that “the business economy has received much recent attention, with trade barriers are removed and competition intensifies, many companies are beginning to expand their operations in order to take advantage of foreign labour and consumer markets. For smaller companies, foreign activities may be limited to a single joint venture or to offshore production or distribution systems that involve one or two other countries. For larger corporations, foreign offices may be in over one hundred different countries (See Fulkerson &Schuler, 1992). The presence of international affiliations, although not inevitable, is likely to lead eventually to the formation of teams of people with diverse cultural backgrounds, including management teams, design teams, operation teams and marketing teams (Adler & Ghadar, 1991; Kanter, 1991; Von Glinow & Mohrman, 1990) of which engage in decision making activities”

“Theories and techniques of diversity management have been developed and enthusiastically supported by a growing number of chief executives, training specialists, diversity consultants and academics” (Saji, 2004)). Diversity can improve organizational effectiveness. “Organizations that develop experience in and reputations for managing diversity will likely attract the best personnel (Carrel et al, 2000). “Diversity requires a type of organizational culture in which each employee can pursue his or her career aspirations without being intimidated by gender, race, nationality, religion or other factors that are irrelevant to performance” (Bryan. 1999). Managing diversity means “enabling the diverse workforce to perform its full potential in an equitable work environment, where no one group has an advantage or disadvantage” (Torres & Bruxelles, 1992).

“Diversity in the workplace can be a competitive advantage because differing viewpoints can facilitate unique and creative approaches to problem-solving, thereby increasing creativity and innovation, which in turn leads to better organizational performance” (Allen et al, 2004). “For example, in Botswana, the society is becoming multicultural due to the increasing migrant population and their descendants. For organizations, this means that their market share, efficiency. “Human capital, international competitiveness and level of innovation will depend on their ability to effectively manage a diverse workforce both within and across organizational boundaries” (Barker & Hartel, 2004; Dass & Parker, 1996; Kandola et al, 1995; Strauss & Mang, 1999)”


Jackson (2003) “In today’s business environment, work teams are becoming more common and more diverse, intensifying the importance of understanding the dynamics of work- team diversity. Of particular importance, is diversity within decision making teams. Organizations are rapidly restructuring to take advantage of the potential benefits of diverse decision making teams are worth the risk (or can be successfully avoided). Many of the specific assets and liabilities of work teams arise directly out of diversity”.

Despite various intensive efforts to measure diversity and predict its outcomes, Jackson (2003) asserts “many literature offer few conclusive findings about the effects of diversity in the workplace. Lack of a common paradigm will make it difficult to accumulate comparable findings over time, while agreement around some issues could accelerate our ability to learn from previous accumulated evidence. One useful element that could be suggested could be a common paradigm; it would be for researchers to agree to a common theme or definition of diversity which would in turn lead to less confusion about this concept” (See also Carroll & Harrison, 1998; Bedeian & Mossholder, 2000).

Jackson (2003) affirms that “Pettigrew (1998) used a very different approach to developing a blueprint for enabling organizational effectiveness. Based on a comprehensive review of a large body of research conducted in a variety of settings, Pettigrew identified the conditions needed to reduce intergroup bias and its negative consequence and described several processes that could be engaged to create these conditions. To the extent an origination’s diversity initiatives support these processes, they would encourage the development of positive intergroup relations, employee commitment, improved productivity and increased organizational effectiveness (See also Gaertner et al, 2000) and they are:

Learning about the other group(s) was one key process identified by Pettigrew, Inaccurate stereotypes resist change for a variety of reasons but inaccurate stereotypes can be modified if people receive sufficient disconfirming evidence. Such learning is often the objective of diversity awareness training.

Behavioural Change is the second key process that is needed to promote positive intergroup relations. Engaging repeatedly in positive behaviour with members of a work team can lead to long term attitudinal change towards members. Providing training in the behavioural competencies needed to work effectively in organizations characterized by diversity is one way to encourage people to engage in positive behaviour towards work group members

Creating positive emotions associated with the work group is the third key process. For example, mentoring programs may encourage the development of intergroup friendships. The value of personal friendships may help explain the apparent success of informal mentoring programs”.

In conclusion, it seems likely that active diversity management will be required in order for organizations to comprehend the potential benefits locked up within their diverse work forces and as such organizations must put in place strategies to enhance workforce diversity. “Research based principles for achieving these benefits and minimising potential losses have been offered. Some organizations are undoubtedly experimenting with practises that are consistent with these principles” Jackson et al (1995). By the end of this decade, perhaps another review of diversity will yield useable suggestions for how to create a sustainable and effective organizational condition called for by Pettigrew’s analysis.


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