ABOUT THIS CONTENTClass notes from my core MBA Organizational Behavior (OB) course. These focus on managing cultural diversity.
The term diversity refers to a variety of management issues and activities related to hiring and effective utilization of personnel from different cultural backgrounds.
Diversity as a Competitive Advantage
Six areas where sound management can create a competitive advantage
Inevitability-of-diversity issues (the need to hire more women, minorities and foreign nationals because of national and cross-national workforce)
- Resource acquisition
Value-in-diversity hypothesis (diversity brings net-added value to organization processes)
- Organizational flexibility
- Data shows that turnover and absenteeism are higher among women and racioethnic minorities than for white males.
- Job satisfaction levels are often lower for minorities.
- Frustration over career growth and cultural conflict with the dominant, white-male culture may be the major factor behind the different satisfaction levels.
- Organizations that fail to use and retain employees from different backgrounds can expect to suffer significant competitive disadvantages compared to those firms that do.
- Attracting and retaining excellent employees from different demographic groups.
- As women and racioethnic minorities increase in the workforce, organization must compete to hire and retain these people
- Markets are becoming as diverse as the workforce.
- Selling goods and services is facilitated by a representational workforce in several ways
- Companies with good reputations have favorable public relations. People may prefer to buy from companies with good reputations.
- Culture has a significant effect on consumer behavior. In some cases, people from a minority culture are more likely to give patronage to a representative of their own group.
- Work team heterogeneity promotes creativity and innovation.
- Minority views can stimulate consideration of non-obvious alternatives in task groups.
- As long as team members have similar abilities, the heterogeneous teams were more creative than the homogenous teams.
- In order to reap these benefits, research shows that heterogeneous team members have to be aware of the attitudinal differences of other members. Therefore, cultural awareness training must occur in corporations.
- Diverse groups have a broader and richer base of experience form which to approach a problem. Thus, it can also improve problem solving and decision making.
- Decision quality if best when neither excessive diversity nor excessive homogeneity are present. “Variety is the spice of life.”
- A core of similarity among group members is desirable.
- Better decisions due to:
- A variety of perspectives brought to the issue.
- Higher levels of critical analysis of alternatives through minority-influence effects
- Lower probability of groupthink (the absence of critical thinking is caused by the preoccupation of maintaining cohesiveness).
- Managing diversity enhances organizational flexibility.
- Some evidence that women and racioethnic minorities tend to have especially flexible cognitive structures.
- As policies and procedures are broadened and operating methods become less standardized, the organization becomes more fluid and adaptable.
Suggestions for Organization Change
Specific features of multicultural organizations
- Pluralism: all groups respect, value and learn from one another.
- Cultural groups are well represented in all levels of the organization.
- Minority groups are members in the informal networks of the organization.
- Absence of prejudice and discrimination.
- Equal identification of minority members with the goals of the organization.
- Minimum inter-group conflict based on race, gender, nationality, etc.
Five key components needed to transform traditional orgs to multicultural ones
- Top management’s support and genuine commitment is crucial.
- Champions are needed at lower levels, especially in key line managers.
- Awareness training – creating an understanding of the importance
- Skill-building training – educate on specific cultural differences and how to respond to differences in the workplace.
- Treat training as an on-going education process rather than one-shot seminar.
- Helpful in identifying issues to be addressed in the education process.
- Identify areas where changes are needed and provides clues about how to make them.
- Necessary to evaluate the change effort.
- Uncover sources of potential bias unfavorable to members of certain cultural groups
- Identify ways that corporate culture may inadvertently put some members at a disadvantage.
- Monitoring change
- Evaluating results
- Institutionalizing the changes as part of the organization’s regular on-going processes
- Should include:
- Additional training
- Repetition of the systems audit
- Use focus groups for on-going discussions about diversity issues.