According to Triandis et al. (1994), "[m]anaging diversity means changing the culture--that is, the standard operating procedures. It requires, data, experimentation, and the discovery of the procedures that work best for each group. It is more complex than conventional management but can result in more effective organizations" (p. 773). Thomas (1992) explains that managing diversity is to empower or enable employees. Managing diversity prescribes approaches that are philosophically broad enough to encompass all dimensions of diversity (p. 315). Henderson (1994a) relates managing diversity to the accomplishment of the organization's goals. For him, managing diversity also emphasizes the managerial skills and policies needed to optimize and emphasize every employee's contribution to the organizational goals.
Leach, George, Jackson, and LaBella (1995) used the term working with diversity in place of managing diversity. They implied that working with diversity "calls forth the challenge to be curious, inquire, interact, reflect, and experiment. It requires individuals to be respectful, curious, patient, and willing to learn" (p. 3). These authors used the term working with diversity rather than managing diversity because they believed that the word managing may be perceived as having a negative connotation such as controlling. However, managing diversity does not mean controlling or containing diversity, it means enabling every member of the workforce to perform to his or her full potential (Cox, 1993). For the purpose of this report, the term managing diversity will be used and will encompass the meaning for both working with and managing diversity.
Carnevale and Stone (1994) define valuing diversity as being responsive to a wide range of people unlike oneself, according to any number of distinctions: race, gender, class, native language, national origin, physical ability, age, sexual orientation, religion, professional experience, personal preferences, and work style. Carnevale and Stone (1994) also noted that valuing diversity involves going beyond the Golden Rule of treating others as you wish to be treated yourself, but instead involves treating others as they wish to be treated. Hayles (1992) further noted that "valuing diversity is wise for personal, social/demographic, legal and productivity/profitability reasons" (p. 186).
There are important fields that have shaped and continue shaping diversity (Simons, 1992). They have been pioneering organizations in valuing diversity. International business has been one of the pioneer fields in valuing diversity. Diversity, in this case, has emerged as a need for survival and success. Multinational corporations are forced to develop and implement strategies that could lead them to capture and retain diverse customer bases not only nationally but also throughout the world (Fernandez, 1993). They are also required to recruit and retain a diverse workforce that mirrors its market.
Diplomacy has been another area that requires valuing of diversity. Diplomatic-post employees need not only be aware of diversity issues, but need to develop skills to face the challenge of dealing with other cultures. Religious organizations have also seen how important it is to value and manage diversity to adapt their messages to other cultural identities. They are probably the ones that "have been in the forefront of documenting, studying and learning to manage cultural differences" (p. 83).
Voluntary associations of individuals who serve overseas are also examples and pioneers in valuing diversity. Private groups concerned with health, peace, ecology, and other humanitarian objectives have also developed sophisticated training and resources to meet their needs of surviving and understanding other cultures. Similarly, disciplines such as anthropology, sociology, history, and linguistics have dealt with diversity. Diversity issues have also been the concern of those who teach philosophy and ethics. Individuals in social work and psychology have striven to understand differences between people. Educators and human resource development professionals have had to deal with different learning styles of immigrants and expatriates. Lately, Affirmative Action and Equal Opportunity and Employment Equity (AA/EEO) are the regulations that encourage diversity in organizations (Simons, 1992).
Sports/athletic organizations is another group that has had the need to effectively manage diversity. Sports/athletic organizations include group dynamics, behavioral processes, social interaction, socialization, and subcultures. Sports have become more institutionalized, especially at the highest levels of amateur and professional athletic events, and have come to reflect the corporate/commodity model, which makes sports more like work than play (Frey & Eitzen, 1991). An athletic team's win-loss record many times is used to measure its effectiveness. Similarly, a business organization's profit-loss record is used to measure its efficiency. Comparable to organizations, an athletic team designs policies and procedures to recruit, socialize, train, and promote its team members. These policies and procedures are strategically used to make the team more effective, so they can compete and win (Guttmann, 1988).
In many professional athletic teams, players come from all parts of the world, different cultures, speak different languages, eat different foods, have different levels of education, and hold different values. To win and be competitive, the team members need to understand and appreciate each other's differences and work toward an overall team goal. Murrell and Gaertner (1992) conducted a study that examined team interaction and performance outcomes in football teams. They found that there was a significant difference between members of winning versus losing teams involving issues of team unity and cooperation, and interpersonal conflict. Players who were members of winning teams rated team unity and cooperation as more important, and interpersonal conflict as less favorable than players on teams with losing records.
Rossett and Bickham (1994) identified five reasons for organizations getting involved in diversity programs: (1) compliance (want to do what is expected of them by taxpayers, shareholder, society), (2) harmony (want all employees to understand and appreciate each other), (3) inclusion (want underrepresented employees to succeed), (4) justice (want to correct past wrongs), and (5) transformation (want to change the way the organization does business in order to take into account diverse employees, customers, and markets).
Many companies trace their diversity initiatives to the Workforce 2000 report (Johnston & Packer, 1987), which greatly intensified concern for the effective utilization of an increasingly diverse workforce. However, many believe that the concern for managing diversity started with AA/EEO. Traditionally, AA/EEO requirements have been based upon social, moral, and legal obligations. While many companies are still obligated to comply with AA/EEO policies today, they are convinced that programs and processes for managing diversity go beyond compliance with AA/EEO policies because they are directly connected to bottom-line business issues (Cox, 1991; Cox & Blake, 1991; Elshult & Little, 1990; Fernandez, 1993; Morrison, 1992; Sabur, 1991; Thomas, 1991). As Gottfredson (1992) points out, "Our nation must work harder to help all workers develop themselves to their fullest and . . . such efforts are required not only in the interest of social justice, but also to maintain competitiveness in the global marketplace" (p. 279).
To understand diversity and its importance to the competitive process of
companies, it is necessary to understand the difference between managing
diversity and AA/EEO initiatives. Fernandez (1993) summarized the
differences in the following table:
| Managing Diversity | AA/EEO | |||
|---|---|---|---|---|
| Reason: Proactive and based on business reality and needs. | Reason: Reactive and based on governmental law and moral imperatives. | |||
| 1. | Top management plays crucial leading roles | 1. | Top management delegates the leading roles to AA/EEO administrators | |
| 2. | AA/EEO is a crucial part of the diversity strategy | 2. | AA/EEO is a separate strategy | |
| 3. | Strategic part of the business plan | 3. | Nonstrategic, not tied into the business plan (except in progressive companies) | |
| 4. | A strong linkage to managerial performance evaluations and rewards | 4. | No real linkage to managerial performance evaluations and rewards | |
| 5. | A crucial strategy linked to team-building and quality efforts | 5. | A corporate strategy not linked to team-building and quality efforts | |
| 6. | A wide variety of programs that affect the organization's cultural values and norms | 6. | Targeted special programs with little strategic focus that have no significant impact on the organization's cultural values | |
| 7. | Long-term linked commitments that use ongoing acquired knowledge as building blocks for future strategies, plans, and goals | 7. | Short-term, unlinked commitments with very little building on acquired knowledge for the next steps | |
| 8. | Emphasizes strategies to more effectively manage a diverse customer base, a more diverse stakeholder base, and a more diverse influencer base | 8. | Emphasize strategies to deal primarily with employees, not customers, influencers, and stakeholders | |
| 9. | Inclusive (focuses on all employees regardless of race, ethnicity, gender, age, religion, language, personality, sexual orientation, physical/mental limitations, and so on) | 9. | Exclusive (primarily focuses on women and people of color) | |
| 10. | Respects, values, understands, and appreciates differences | 10. | Attempts to make individuals conform to organizational norms | |
| 11. | Produces significant change in reward, recognition, and benefit programs | 11. | Reward, recognition, and benefit programs not changed | |
| 12. | Both an internal strategy (i.e., a crucial aspect is to be actively involved in community and social issues around diversity) | 12. | Primarily an internal strategy (i.e., only a limited involvement in community and societal issues to meet governmental requirements) | |
| Source:Fernandez (1993), pp. 294-295. | ||||
Many other individuals have also differentiated managing diversity from AA/EEO (Bolick & Nestleroth, 1988; Carnevale & Stone, 1994; Gottfredson, 1992; Griggs, 1991; Henderson, 1994a; Jackson & Alvarez, 1992; Loden & Rosener, 1991; Thomas, 1992). AA/EEO policies are important steps in opening the workplace to diversity. However, alone, they are limited and do not create conditions that capitalize on the full potential of diversity. While AA/EEO policies have greatly increased the recruitment and hiring of women and minorities, they have done little to ensure their promotion or retention. Managing diversity differs from AA/EEO programs in that diversity programs tend to have broader goals and means for improving organizational climate. Managing diversity initiatives are "efforts to create an environment that works naturally for the `total' diversity mixture" (Thomas, 1992, p. 308), not just women and minorities (Gottfredson, 1992). Griggs (1991) noted that companies which have been successful as AA/EEO employers are now realizing that the diverse workforce they created needs to be better managed in order for them to fully maximize their human resource potential and increase their competitive edge.
Finney (1989) examined the reasons four companies implemented diversity programs. She found that these companies did not implement their diversity programs because it was the social, legal, or "in" thing to do. They did it because it was the right thing to do for their company's needs, circumstances, and philosophy. These companies developed diversity programs to address the needs of their workers, satisfy the demands of their competitiveness, or fulfill the requirements of their role in the community. It is important to note that these companies were extremely visionary and were some of the first companies to start implementing diversity programs. Similarly, Work (1993) believed that while the needs for managing diversity may appear to grow mainly out of notions of social and economic "fairness" and "morality," the clear and central need for effectively managing diversity is maintaining and improving corporate productivity and profitability in national and global competition.
Organizational participants are willing to accept change related to diversity only if the potential benefits are clear and worthwhile (Thomas, 1992). Thomas further noted that seeing diversity as a business issue does not mean that it no longer has legal, moral, or social responsibility implications, but, rather, that awareness of the business implications is necessary for sufficient motivation to implement strategies for managing diversity. Similarly, Griggs (1995) believed that most people do not value diversity until they perceive it to be in their self-interest to do so. In fact, it is informed self-interest that constitutes the only sound reason for valuing diversity, whether at the personal, interpersonal, or organizational level (p. 7).
Triandis and Bhawuk (1994) conclude that the following are some of the common reasons companies involve themselves in diversity management:
Surveys of business leaders indicate that interest in managing diversity is widespread (Jackson & Associates, 1992). For example, in one study of 645 firms, 74% of the respondents were concerned about increased diversity, and of these about one-third felt that diversity affected their corporate strategy. When the company executives were asked why they were so concerned about managing diversity, they mentioned two primary reasons: (1) perception that supervisors did not know how to motivate their diverse work groups, and (2) uncertainty about how to handle the challenge of communicating with employees whose cultural backgrounds result in differing assumptions, values, and sometimes language skills (Towers Perrin & Hudson Institute, 1990). Some companies have connected higher turnover rates for women and minorities to a work environment that does not support diversity (Cox & Blake, 1991; Kilborn, 1990). Consequently, the lack of support for diversity has incurred excessive recruiting and training costs (Caudron, 1990; Schmidt, 1988).
Jackson and Alvarez (1992) concluded that the two economic forces that are especially relevant to workforce diversity are the shift from a manufacturing based economy to a service economy, and the globalization of the marketplace. Jackson and Alvarez believed that with 78% of American jobs in the service area, diversity issues will gain in importance because in a service economy effective interactions and communications between people are essential to business success. Triandis et al. (1994) concur that "Delivering service products requires employees with well-developed interpersonal skills; [and that] cultural similarity between the service provider and the customer may improve the effectiveness of service delivery and the perceived quality of service" (p. 770). Several studies have found that race and gender affect interaction between employees and customers in service businesses (Juni, Brannon, & Roth, 1988; McCormick & Kinloch, 1986; Stead & Zinkhan, 1986). Some organizations believe that with a diverse employee population, they can better understand customers' needs in ethnic and international markets (Adler, 1983; Griggs, 1991).
Increased competition and the changing marketplace are convincing many business leaders that diversity should be an essential part of their business strategy. Corporate leaders have decided to incorporate diversity for four business reasons: (1) to keep and gain market share, (2) to reduce costs, (3) to increase productivity, and (4) to improve the quality of management in their organizations (Morrison, 1992). Others have cited similar findings. For example, Cox and Blake (1991) noted that companies that learn how to manage diversity acquire a competitive advantage over companies that do not know how to deal with diversity. They found that sound management of diversity positively affects cost savings, employee selection, creativity, problem solving, flexibility, marketing, and resource acquisition. Triandis et al. (1994) reported that those companies that "manage diversity well are more likely to gain competitive advantages, attain increased productivity from available human resources, and reduce the intergroup conflict cost" (p. 775).
Copeland (1988) interviewed 100 line managers, EEO professionals and personnel administrators, and 25 crosscultural educators and trainers. The purpose of her study was to identify why employers need to value diversity. She found out that there are ten reasons to value diversity. She identified demographic changes, competition, high levels of productivity, expanding markets, and new sources for talent as some of the important values that can be derived from diversity in the workplace.
Some managers believe that a diverse workforce can outperform a homogeneous one of comparable talent. Although, managing heterogeneity may be more difficult in the beginning than managing homogeneity, most organizations, communities, and countries do not have the option of working in a homogeneous environment (Thomas, 1992). Therefore, it is becoming necessary that individuals and organizations become aware of the many advantages associated with having a heterogeneous work environment (Griggs, 1995).
Several studies have provided evidence that diverse groups produce higher-quality ideas and are more likely to reach high-quality decisions than groups that have similar members (McGrath, 1984; McLeod & Lobel, 1992; Milliken & Martins, 1996; Triandis, Hall, & Ewen, 1965; Watson, Kumar, & Michaelsen, 1993; Willems & Clark, 1977). Bantel and Jackson (1989) appraised the diversity of top management teams in 199 banks and found that the greater the diversity of the team, the greater the number of administrative innovations. These authors considered diverse teams related to tenure and age, as well as educational and functional backgrounds. They did not include gender and race as variables in their study. Therefore, the findings of this study may not be generalized to diverse teams in terms of gender, race, or any other variable not considered in the study. However, a recent study conducted by Bantel and Jackson (1996), in which management research on how different types of diversity affects group outcomes was reviewed, revealed that, regardless of their type of diversity, groups may be able to obtain benefits from a greater variety of perspectives inherent within a diverse group.
Hoffman and Maier (1961) investigated the effects of heterogeneity with respect to gender and personality in quality of problem solving. They formed homogeneous and heterogeneous groups of undergraduate students of psychology and human relations and conducted a laboratory study on them. From this experiment, Hoffman and Maier discovered that heterogeneous groups were relatively superior to homogeneous groups in problem-solving ability. They found out that mixing sexes in groups enhanced the quality of solutions to problems. Once again, it may not be proper to generalize their findings to heterogeneous groups related to race because race was not a variable considered in this study. The researchers operationalized heterogeneity in terms of gender and personality only. However, a more recent study conducted by Watson et al. (1993), in which race and gender were the variables being studied, showed that ethically diverse teams viewed situations in a broader range of perspectives and are able to "outperform homogeneous groups on complex problem solving tasks" (p. 598).
Another advantage is that even though diverse groups may encounter more difficulties than homogeneous groups at the forming stage (Watson et al., 1993) or may take more time to reach a decision (Hoffman, Harburg, & Maier, 1962), they are more likely to seek the full range of possible solutions to the problem than a homogeneous group (Ellis & Fisher, 1994). Altogether, people of different cultures bring a variety of perspectives and outlooks to a task; such diversity may add to the pool of resources available to a group (Adler, 1991; Nelton, 1988). Diversity can increase the potential group productivity (S. Jackson, 1991; McGrath, 1984) and the quality of ideas generated by the group (McLeod & Lobel, 1992; Watson et al., 1993). Hayles (1996) concludes that higher performance of homogeneous groups occurs both in quality and quantity.
For companies to have effective employee work groups/teams that support one another's efforts, they must get their employees to value, respect, and accommodate people who are different from themselves in terms of race, ethnicity, language, culture, religion, age, ability, status, sexual orientation, family structure, and so forth (Gardenswartz & Rowe, 1994). A survey by the American Productivity and Quality Center found that half of the 467 large firms in their study planned to rely significantly more on self-managing employee work groups/teams (Dumaine, 1990). In most companies, when employee work groups/teams are formed, diversity is certain because in today's complex and pluralistic world homogeneous groups are rarely found (Gardenswartz & Rowe, 1994).
For many organizations, managing diversity is a viability issue in at least six ways:
Loden and Rosener (1991) believe that embracing diversity will require organizations to invest time, effort, energy, and commitment, but it will result in significant long-term advantages. The most likely long-term advantages will include
In summary, valuing or managing diversity is a bottom line issue for organizations (Johnson, 1995). Possibly the simplest and the strongest rationale for managing diversity stems from the potential to increase productivity among all workers, especially among those groups of workers that have historically been underrepresented and underutilized. Examples of these groups include women, people of color, people with physical disabilities, older workers, and gay or lesbian employees (Ehrlich & Garland, 1988; Morrison & Von Glinow, 1990; Stewart, 1991). Although it is not legally required that organizations manage diversity; it is in the best interest of American corporations to develop and use the talents and energies of all their workforce. Managing diversity's goal is to develop an environment that takes into consideration all dimensions of diversity and works for all employees at all levels in the organization (Griggs, 1995; Loden & Rosener, 1991).