Diversity Management has been defined as accepting that the workforce consists of diverse individuals. Diversity could be on the basis of work-style, age, background, sex, race, disability, personality (Kandola & Fullerton, 1998). A productive environment could be created by embracing these differences where everyone is contributing at their highest potential and feel appreciated while they achieve company goals and objectives (Kandola & Fullerton, 1998).
The organisation for primary data collection is from the Pharmaceutical sector having 40% stake in the market and an annual turnover of £21 Million (Fig.1.1). With over 160 types of medicine production, this company is Britain’s 3rd largest Medicine Producer. 300 employees work between 3 sites of manufacturing, packaging and the corporate office. About 150 employees, most of whom are either African or White work at the main manufacturing site; at the second packaging site there are about 130 employees of mixed origins contribute while at the corporate office, out of 30 people, most are women, of Indian origin except one and also most employees are below the age of 40 (Fig.1.2). The company vision is to maximize inclusion to drive greater business results and sustainable competitive advantage (BL, 2004). This would be achieved by fostering a culture that embraces differences and drives innovation thereby, achieving a skilled, high-performance workforce that reflects the global market place.
Research Aims and Objectives:
- The main purpose of this dissertation is to research people’s perception of diversity and the effects it has on the workforce of a company. This will be investigated with the help of a questionnaire, interview and a tracking log conducted among the employees of the company from all designations.
- It would be imperative to research the positives of having a diverse workforce and how they contribute in achieving the company objectives, differently. The trials and tribulations faced by them owing to their diversity will be looked into and methods to tackle them will be discussed.
- Open questions in the survey would include: Share an experience where the organisation supported your religious needs?
- Through this research, old theories of diversity will be revised, extended and applied to creating new knowledge which would have theoretical and/or practical application. It will not only simplify and add meaning to existing definitions but also create new understandings of diversity.
- Considering the industry sector at the time of recession, many people have lost their jobs, mainly those who are not British nationals. Hence, the question is: how will an organization create profits if all the diverse individuals who contribute to the company objectives have been dismissed. Therefore, in this project, the question addressed is: What are people’s perspectives of Diversity and how does it affect an organisation.
Diversity – definitions:
This section covers some of the theory and research on Workplace Diversity which is of particular relevance to this research. It is important to define “diversity” for the purpose of this project. CEO of Proctor & Gamble, Alan Laffey said that ‘A diverse organisation will out-think, out-innovate and out-perform a homogenous organisation every single time’ (P&G, 2009; Skinner, 2001).
Diversity can be defined as a mixture of people with different group identities within the same social system (Fleury, 1999). There are many definitions to diversity, in essence it includes culture, race, geographic origin, ethnicity, gender, nationality, functional or educational background, physical and cognitive capability, language, lifestyles, values and beliefs, sexual orientation, physical abilities, social class, age, socio-economic status, and religion (Dessler, 1998; Ferdman, 1995). The National Council for Voluntary Organisations defines Diversity as the integration of age, gender, sexual orientation, religious preferences, disability and ethnicity without biases into society (NCVO, 2007). According to CIPD, diversity has multiple levels like that of Social Category Diversity that includes demographic variances like age, gender, ethics and race; Informational Diversity which embraces organisational variances like that of education, experience in the field and utility and lastly, Value Diversity encompasses psychological differences like that of attitudes, behaviour and personality (Worman – CIPD, 2005). According to Anderson and Metcalfe, completely diverse people working together may lead to conflicts owing to diversity in their ideologies, experience, personalities, culture and attitude among other variables. Organisations that promote creativity need to find a way to satisfy such differences and lay out ground rules to ensure successful team working. Thereby, it assures competitive edge owing to the creativity and innovation brought by diverse perspectives in products, service pattern and methods of working. The downside is that organisations need to ensure that this does not let employees lose their individuality in the race to fit in (Anderson & Metcalfe, 2003).
‘Diversity’ is often associated with ‘ethnicity’ as in case of American Indian/ Alaska Native MBA students showed 89% in a survey. Least association was seen in case of Asian-Indian MBA students which showed 67%. ‘Gender’ was seen to be the second most common associate among all survey groups. It showed strongest association of 78% among American Indian/ Alaska Native MBA students and least association of 43% by Asian-Indian undergraduates (Fig 2.1, 2.2). Among all survey groups, Latino/Hispanic undergraduates associated ‘diversity’ with ‘language skills’ while Asian-Indian undergraduates relate ‘diversity’ with ‘religion’ and American Indian/Alaska Native undergraduates connected ‘diversity’ with ‘age’ (Black Collegian, 2006).
History of Diversity and Legislation:
The concept of diversity came into power in 1990’s (Gatrell and Swan, 2008). In the 70’s, 80’s and early 90’s the need for diversity in the workplaces in UK grew because of the diminishing talent sources as well as to curb the discriminatory HR practices that were carried out against colour and gender. The first piece of legislation to be passed to support diversity was the Equal Pay Act 1970 legislates against discrimination between men and women in relation to their terms and conditions of employment followed by Sex Discrimination Act 1974 which made it unlawful to discriminate on the basis of gender. After these came the following pieces of legislation:
- Race Relations Act 1976 – protection against discrimination on the grounds of ‘race or ethnic or national origins.’
- Disability Discrimination Act 1995 – protection against discrimination for disabled people.
- Employment Equality (Religion and Belief) Regulations 2003 – made it unlawful to discriminate against workers on the grounds of religion or belief.
- Employment Equality (Sexual Orientation) Regulations 2003 – made it unlawful for employers to discriminate against or harass a person on the grounds of sexual orientation.
- Employment Equality (Age) Regulations 2006 – made it unlawful to discriminate against individuals on the grounds of age.
- Equality Act 2006
- Racial and Religious Hatred Act 2006.
(Daniels, 2008) Diversity training and interpersonal learning was introduced to help diverse workforces bridge the gaps between their education and cultures.
The fundamental essence of diversity is based on its policies. To understand this, it is essential to know what a policy is. Organizational policies are a bunch of fundamental codes and relevant directives, devised and imposed by the presiding body of an organization, to express and limit its conduct while aiming for long-term objectives (Business Dictionary, 2009). An organisations goals, strategies and practices can be affected by a recognized set of broad, open directives, devised after an investigation of all internal and external aspects. Corporate policy is devised by the organisation’s executive board to lay down the organisation’s objectives to known and predictable state of affairs and circumstances. It also determines the creation and execution of strategy, and directs and limits the strategy, verdict, and deeds of the organisation’s employees in accomplishment of its aims (Business Dictionary, 2009).
A policy is meant to balance individual and personal rights while safe-guarding the nation. Due to the ethnic and diverse mix in USA and Europe, the new diverse workforce required equal opportunities and diversity issues to be sorted out at the fore front ((Kandola and Fullerton, 1994; Cox, 1992). Hence, these countries have created policies and laws that protect diversity and promote equality (Dass and Parker, 1999; Kirton and Greene, 2000; Lawrence, 2000; Woodhams and Danieli, 2000). It was created to eliminate discrimination faced by black and ethnic minorities (Healy & Oikelome, 2007). In the 1990s, the NI office initiated the Policy Appraisal and Fair Treatment guidelines (PAFT) which span across areas of religion and political beliefs, ethnicity, sex and race, disability, sexual orientation, age, marital status and those amid dependants. After its establishment, all new policies needed to satisfy the above mentioned nine equality sets (Bagilhole, 2007).
Diversity Policies in SMEs v/s Large Corporations:
According to Carrell, a policy that focuses on eradicating discrimination and bringing about fairness would help focus on overlooking differences and integration. However, he observed through a study that 70% of his respondents were from small companies while 30% were from companies employing 500 or more employees (Fig 3.1). 46% of this total had policies professing employee diversity in place of which 42% said that their policies were executed only in the last 5 years. 53% of the respondents in all said they do not have a written policy in place to enforce diversity and among them, only 7% opined of having discussed such an issue in their company (Fig 3.2, 3.21) (Carrell, 2006).
Some SME’s opine that they are simply too small to employ a diverse range of individuals while others find it convenient to hire within the family. In such enterprises, diversity management can create a platform for new products and diverse clientele and networks which is overlooked in their short-sighted vision (European Community Programme, 2007). While SME’s harangue the increase in competition, they fail to see how innovation with the help of diversity can provide them with sustained competitive advantage. Other identifies benefits are reduced absenteeism, turnover, time wasted or lost, higher client loyalty and brand value and also, access to wider markets. Some SMEs that implement diversity policies feel that it not only increases an employee’s sense of belonging to the company but also their commitment and dedication to the job. The informal learning obtained from knowledge and skills gathered by working with diverse teams can also be of great competitive advantage (European Community Programme, 2007).
Determining whether an organisation is diversity friendly is simple. Typically, large organisations have an entire page devoted to diversity and workforce friendly policies which are also available in print on request. A study revealed that 76% of senior global executives opine that their companies have 1 or no minorities (Fig 4). In some cases, in an effort to increase diversity levels, minorities are placed in positions that would add no value to their career graph. Hence, they choose to not be part of the organisation (Diversity Jobs, 2009). Looking at any large company like Coca Cola, General Motors and Nike among others, their common factor is their recognition of diversity being their key to direct and spanning sales. In order to have a diverse external environment, it would help to have a diverse internal environment as well in terms of contacts, approaches and skills (Eaddy, 2003). Contrary to the notion of diversity practices in Multinationals, the challenges faced by them were discussed among 50 academics, senior executives and HR professionals from multinational corporations at the Global Workforce Roundtable Summit at London in 2006. Some of the challenges faced are the dismissal of diversity policies as an “American notion”, the extent to which these practices need to be developed in order to be trickled down the ladder and implemented, getting people down the ladder to embrace the concept of diversity policies and take initiatives in its implementation (Global Workforce Roundtable Summit, 2006).
Perspectives on Diversity:
The Jewson and Mason Model (1986) is states that there are two perspectives on equality and diversity:
I. The equality of opportunity or liberal approach introduces fair procedures to offer access to institutions, services, social positions and resources.
II. The equality of outcome or radical approach refers to affirmative action for historically discriminated and disadvantaged groups (Gatrell & Swan, 2008).
The liberal approach to equal opportunities is described by a belief of an individual or their imagined capabilities and merits rather than structural sources of inequality. This approach believes that these barriers can be removed such that individuals find a way ‘to make the best of themselves’ (Jewson & Mason 1986: 314; Gatrell & Swan, 2008). The main objective of this approach is to make sure people are treated equally at the work place (Jewson & Mason 1986: 315). Emphasis is on an individualistic view of fairness and equality rather than a group based approach that encompasses equal and free competition among people (Kirton & Greene, 2004). In the radical view, ‘ability’, ‘skills’, ‘talent’ and merit are socially constructed norms by powerful dominant groups and that inequality is produced as a result of these social practices (Jewson & Mason 1986: 315). Hence, individual merit is not a neutral term but a criterion to filter out diverse candidates from jobs and opportunities based on a socially valued judgment (Gatrell & Swan, 2008). Thus the radical approach looks at equality as a form of social justice centring on checking the outcome of procedures and its effects of different groups and equalising the outcome rather than the opportunity (Richards 2001: 16; Gatrell & Swan, 2008).
The Business Case is another model for managing diversity and is related to bettering “economic productivity and service delivery and depoliticising models of social relations (Blackmore, 2006; Gatrell & Swan, 2008).” It harnesses differences so that a productive environment may be created that not only benefits the individual but also the organisation (Kandola & Fullerton 1994:8). A diverse workforce brings material benefits to an organisation such as increased profit, creativity and representative customer care (Gatrell & Swan, 2008). It is seen as an investment rather than a cost and rejects ‘the notion of justice for an instrumental, utilitarian model (Kirton & Greene, 2004).
The Social Justice Model favours a structural explanation of inequalities based upon the concept of social justice (Kirton & Greene, 2000:5). This mode of diversity management can give rise to increased quality of outcomes for individuals as well as groups as it highlights heterogeneity of difference within social groups while taking into account that difference is not a individual possession but socially constructed within social relations (Kirton & Greene, 2000; Ferreday, 2003). This model acknowledges that some differences matter more than others as shown in the research conducted by Ahmed et al. (2006), Hunter & Swan (2007) among others demonstrates that race & gender have a significant consequence on the admission to paid work, working conditions and experiences and possibility of discrimination (Gatrell & Swan, 2008).
Cultural Diversity Model addresses how diversity can be used as a tool to achieve competitive advantage in an organisation. This model was viewed from the social responsibility goals of an organisation which is a fraction of the constitution of diversity management. According to Cox & Blake (1991), focussing on seven areas of effective diversity management can lead to a company’s sustained competitive advantage like education programs, cultural variances, prejudice free human resource management schemes, diversity mindset, heterogeneity in race/ religion/ ethnicity, organisational culture and higher vocation resource acquirement for women i.e. extinction of glass ceiling (Parhizgar, 2002). Glass ceiling is an organisational prejudice or a bias in attitude that prevents women and minority groups from progressing to higher leadership designations in an organisation (Princeton, 2009). Researchers contradict this theory as they don’t find the connection between diversity and organisational competitive advantage. In Cox’s view, in the 1970s monumental organisations were leading USA that did not give importance to diversity or the essential HR function. Instead of being given a fair chance, minority groups were expected to acculturate themselves to the norms set by majority groups i.e. in this case, white men. Pluralistic organisations that came into power in the 1960s, implement diversity management in ways of recruiting minorities, monitoring for fairness and providing diversity training and programs. A key difference between a pluralistic organisation and a multicultural organisation is minorities group are not only employed and value but also identified as key contributors and formally as well as informally completely integrated into the organisation. Cox and Blake also created a model in 2001 that claimed 5 cyclical steps to a successful multicultural organisation. The five steps are leadership, research and dimension, academic backing, coalition of management systems and follow up action steps (Stahl & Björkman, 2006).
The effect of diversity on performance in an organisation is still unclear. Its effect maybe positive or negative in some situations and also sometimes there may be no effect at all (Barrett-Power & Shaw, 1998). Research based on race has shown that diversity in teams can yield benefits as well as costs (Campion, Medsker and Higgs, 1993; Guzzo & Dickson, 1996; Jackson, 1991; Magjuka & Baldwin, 1991). A team can be defined as “a distinguishable set of two or more individuals who interact independently and adaptively to achieve specified, shared and valued objectives” (Salas, 1986). Organisations depend upon teamwork to improve quality, experience of work, product and customer service for their members (Guzzo, 1995). Teams are believed to be vital tools for solving problems and making decisions in a highly complex, international environment (Tjosvold, 1995). Magjuka & Baldwin (1991) found that within a group, diversity showed positive effect on job performance in a sample of 72 manufacturing teams. Some studies have shown that diverse groups (based on race) are more creative and make better decisions than homogenous groups (McGrath, 1984; McLeod and Lobel, 1992) but they can also be less cohesive, less satisfied, have less conformity and more prone to turnover (Jackson, Brett, Sessa, Copper, Julin and Peyronnin, 1991).
3 Level Impact of Diversity:
Diversity creates an impact on three levels: individual, group and organisation (Nkomo, 1998). “At an individual level, key variable in understanding diversity are culture distance, perceived similarity, a sense of control as well as culture shock (Triandis, 1997). According to previous research by Berry (1984), an individual goes through an “acculturation process” which is; assimilation, separation, deculturation and integration. With assimilation, the culture that is dominant in the group becomes the standard and individuals try to live up to the standard. With separation, majority cultures and minority cultures do not merge as individuals from the minority cultures distance themselves from majority cultures. In deculturation, the individuals of minority cultures lack strong ties with the group as they neither have ties with their own minority culture nor with the standard majority culture. Integration refers to the state where individuals change to a certain extent to accommodate the common norms and standards (Berry, 1984). If an individual from a minority culture is unable to adapt, the group is considered to be at fault instead of the majority culture (Nkomo, 1991). The Alteration Model suggests that minority individuals need not be forced to practice a particular, standard culture or adapt to their own minority culture. They can become competent in multiple cultures and use what is required of it in a context. This may also be known as “code-switching” where an individual uses a language that best suits a context (LaFromboise, Coleman and Gerton, 1993).
Group Level Diversity:
At a group level, diversity can give rise to emotional conflict or task related conflict within a group. Task related conflict will increase group performance while emotional conflict will hinder performance (Kottke & Agars, 2004). In a group research on diversity, it was found that readily observable factors (surface level) are important for group development but deeply held values and beliefs (deep level) are decisive in group processes that yield group outcomes (Stockdale & Crosby, 2004). Group composition has been investigated as surface and deep-level diversity (Harrison, Price and Bell; 1998). Surface-level diversity maybe defined as differences in age, sex, race, ethnicity and other biological characteristics while deep-level diversity maybe defined as differences in behaviour, attitudes, morals, values and beliefs that require interaction to be understood.
Organisational Level Diversity:
Many consultants and academics argue that organisational level diversity is essential to serve the 21st century consumer (Gardenschwartz and Rowe, 1993; Morrison, 1992; Thomas, 1990; Wilson, 1997). Diversity makes an organisation more effective by bringing a lot of creative perspectives to the table. This has served as a base for many claims that suggest that diversity is a resource and strength for an organisation (Adler, 2003; Dobbs, 1998; Thomas, 1990). O’Reilley et al. (1997) conducted a research in an organisation that gave primary importance to employee diversity. They found that within the organisation’s groups, diversity created positive performance-related results. Studies show a negative as well as positive effect in organisations as ethnic groups or minorities perceive themselves less likely to advance in an organisation than majorities. Ethnic groups when exposed to majority groups are more susceptive to emotional conflict (Kizilos et al.; 1996). This creates a branching in the hypotheses as the attraction and social categorization theories suggest that diversity will cause a negative effect on organisation performance while only information and decision making theory suggests that diversity promotes organisational performance (Jarry & Pitts, 2005). Information and decision making theory is based on educational and functional diversity and not ethnic diversity. Hence, it forms a weak basis against two prominent theories (Jarry & Pitts, 2005).
According to CIPD, managing diversity stands for valuing people for who they are; whether they are customers, clients, or even employees, they are all fundamentally diverse. Diversity management is not about identifying a single constant individual difference but about recognizing different individual changes and their ability to create a large scale impact and create dynamic changes (Mullholland, Ozbilgin and Worman; 2006). Managing diversity is meant to bring people from different areas and thought processes together to ensure self development as well as production of superior quality results. It is meant to nurture creativity and innovation by caressing diversity while creating an atmosphere of creative genius and healthy competition (Leader; 2009). The University of Vienna describes diversity management as a strategy or a business plan to perceive, promote, acknowledge implement and preserve essential competencies within an organisation (University of Vienna, 2007). Diversity management stresses the necessity of indentifying cultural variances Between sets of employees, and making rational grants for such differences in policies within the organisation (Thomas, 1990).
There can be a few negative consequences of diversity management like that of the trainer’s values expressed in a training program. The trainer’s values are just one’s point of view and not the universal truth and yet it is forced upon unsuspecting trainees during a program. Some trainers may have ulterior motives or discreet agendas and usually training occurs too late. Diversity training is often looked upon as a band aid, a quick fix if you will a shortcut to a difficult situation. However, quick fixes are prone to disintegrating fast. A psychological disadvantage is the creation of an image that the trainees have some issues in dealing with diversity. Also, the definitions of diversity are often too narrow and under-expressed with the focus on diplomacy rather than honest opinions. Trainers chosen are also often based on which minority group they represent rather than how well they train (Public Personnel Management, 2002).
A study among companies that provide diversity training revealed 33% who said that their efforts were quite or extremely successful. 30% said their efforts were quite successful while 3% opined extreme success. 50% of the firms opined neutral or varied results while 13% said their results were quite unsuccessful and 5% opined extreme failure (Fig 5) (Public Personnel Management, 2002).
On understanding the effects of diversity, it is useful to know how diversity can be managed. Every individual is different from another in matters of age, education, gender, values, physical ability, mental capacity, personality, experiences, culture and the way each approaches work (Jamieson and O’Mara 1991: 3-4). Diversity advantage can be obtained by realizing, acknowledging and valuing these differences and creating an environment that appreciates these attributes – by being flexible enough to meet needs and preferences – to create a motivating and rewarding environment (Jamieson and O’Mara 1991: 3-4). Managing diversity is not only about handling issues on discrimination but also making sure that everyone is contributing to their maximum potential to achieve the organisation objectives (Argott, 2008). Diversity management does not mean only increasing opportunities for women and minorities. It means increasing competitive advantage by taking those diverse variances and creating a comprehensive atmosphere where each can contribute and make a difference (Larson, 2004). This concept covers everyone including the white and middle class males while focussing on movement and culture within the organisation and meeting business objectives (Argott, 2008). Diversity Management differs from Equal Opportunities in its lack of reliance upon positive action or affirmative action (Kaler, 2001). Diversity training is training to increase the contributor’s knowledge, skills and awareness of different cultures. This would prevent civil rights violations, promote team work and also provide opportunities to different minority groups (Kalev, Dobbin and Kelley, 2006). It is an effective way to broaden diversity in an organisation and also, increase an individual’s ability to cope with it (Vaughn, 2007).
Present Day Diversity Management
Hudson carried out a national survey as a result of witnessing a friend who was denied a job, promotion or increased salary as a result of their ethnicity. The survey conducted in USA in 2005 throws light on startling figures of 31% among African-American employees and drops to 18% among white workers (Fig 6.1)(Hudson, 2005). One out four (23%) employees opined that they know someone who has been treated differently on the basis of their gender. African-American women are more likely to make this claim than others. 23% of workers polled that they do not work for employers who actively promote diversity and 13% are unsure whether their companies have a formal diversity program. 64% of them work for diversity promoting firms (Fig 6.2), 20% of employees know someone who has been treated differently based on their gender and 18% know someone whose been discriminated against based on their ethnic or racial variances (Fig 6.3). These statistics increase to 32 and 29% respectively with workers in non-diversity promoting companies. Employees working for large or multinational corporations are said to report a statistic of 76% for supporting diversity and its programs (Hudson, 2005).
Since this report, two approaches to managing diversity have been founded. One is that which defines diversity in relation to equal opportunities and affirmative action only (Carrell, Mann & Sigler, 2006). Affirmative Action can be explained as taking measures towards the depiction of women and minority groups in terms of employment, edification and commerce in which they have been ostracized throughout history. This method includes preferential assortment i.e. selection on the basis of race, colour, ethnicity among other. Hence, it is a subject of great controversy (Stanford Encyclopaedia of Philosophy, 2009). The other point of view argues the broader concept is inclusive of differences of the people i.e. considering that team members consist of different ages, genders, races, ethnicities and demographic categories to the likes of sexual orientation, religion among others (Carrell, Mann & Sigler, 2006). Hudson’s survey called for the implementation of the narrow point of view. However, more recent studies have shown that affirmative action does little to sort out the causative agents of inequality, bias and injustice and does not contribute to the enhancement of opportunities open to men and women in the workplace (Thomas, 1990).
Xerox is among the top employers who enforce diversity. They are ranked among the “Top 50 Corporations for Supplier Diversity,” “Top 50 Companies for Diversity” and “Corporate 100.” They focus on four key areas to enhance diversity management like that of communiqué, CEO dedication, staff demographics and purveyor diversity. Xerox has been found to give more opportunities to Hispanics in the USA and also been named the national #1 in women’s employment opportunities. At Xerox, a Supplier Diversity Program is mandatory for all employees especially those of middle management. The power of this program lies in the recognition of the strength in adversity right from the entry level to the top management (Poder 360, 2009). Xerox employees being diverse; act as campaigners in recommending and negotiating with diverse clientele. Xerox partnerships with diverse suppliers to finance and contribute to their business while profiting from it (Xerox, 2009). They call this their pioneering practice that brings them results (CSR, 2005).
AstraZeneca (AZ) is one of the leading pharmaceutical companies who employ over 65000 people worldwide. Formed by the merger of Astra AB of Sweden and Zeneca Group PLC of UK, AZ brought together the merger of likeminded vision and diversity in race, religion, age, gender, ethnicity and skills (AstraZeneca, 2009). Here, diversity is looked upon in the broader sense and utilized to create high performance teams with the help of sharing ideas and discussing strategies across the board. At the heart of their vision, is the creation of true cultural diversity. Hence, they create small programs and global initiatives to embed diversity (AstraZeneca, 2009). Here, diversity is focussed on three a