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Workforce demographics have changed drastically over the last 50 years, and continued changes are expected. Economies are now globally determined and multinational organizations are becoming the norm rather than the exception. Today, most organizations have been or soon will be impacted by these changes. As a result, diversity and diversity management within the organizational sciences is one of the most dynamic areas for theory building and research. Defining diversity requires a consideration of its historical antecedents, which includes the civil rights movement and affirmative action. Managing the changes in the workforces of organizations is the notion of diversity management. During the early era of diversity management, very little theory existed to guide the practitioner’s actions to creating programs to manage people. Despite the lack of theory, considerable research regarding the effects of diversity within groups exists, and a myriad of diversity initiatives have been implemented. Organization wide implementations have relied on the case study to investigate the outcomes, which have yielded mixed bottom line results. The true impact of diversity and of diversity initiatives is complex, and requires a comprehensive and multidisciplinary approach. The future changes forecast for globalization demand that the effects of diversity and their resulting applications be studied.
Defining Diversity Management
Defining diversity management from an organizational perspective requires first a definition of workplace diversity itself. These definitions of diversity have evolved significantly over time. Early efforts defined diversity almost exclusively in terms of race and gender differences in the workforce. In some sense, the terms diversity and race and gender were treated synonymously during the 1990s. Since then, however, the meaning of these terms has expanded. In addition to race and gender, individuals with disabilities, older workers, and foreign-born workers (to name only a few examples) became recognized for their contributions to workforce diversity. Beyond the incorporation of additional demographic differences, as efforts to address organizational diversity increased, researchers began to look at a variety of individual differences as well. Differences in experiences, expertise, and knowledge among members of a team might be considered to represent important elements of diversity. A further conceptualization of diversity has recently been presented which characterizes individual differences as either “surface-level,” which refers to characteristics that are easily observed or identified such as race, gender, or age, or “deep-level,” which refers to differences that may not be directly observable, but are important characteristics of the individual, such as personality and value system. With this distinction of surface- versus deep-level forms of diversity comes the recognition that each form may raise different challenges for the management of diversity in organizations. Although this latter distinction represents a more comprehensive approach to thinking about diversity, some diversity researchers have expressed concerns that emphasizing deep-level factors may incorrectly suggest that surface-level factors, such as race and gender, are less important for organizations to consider. (Reasons why attention to both levels of diversity is important will be discussed in more detail later.) Despite these concerns, there is no question that a richer understanding of the different forms of diversity in an organization should be incorporated in efforts to develop theories of diversity management and in the practice of diversity management.
Early Efforts to Address Diversity in Organizations
Much like the history of defining diversity, modern forms of diversity management are the result of an evolutionary process that began with rudimentary ways of thinking about demographic differences in the workplace. In response to two key governmental actions, the Civil Rights Act of 1964 and Executive Order 11246 signed by President Johnson in 1965, as well as to growing societal pressures from the civil rights and women’s movements, the first programs to deal with diversity began to emerge. These initiatives were not the comprehensive approaches organizations strive for today. Initial programs came in the form of Affirmative Action (AA), and Equal Employment Opportunity (EEO). These programs were primarily aimed at increasing the numbers of underrepresented individuals in the workforce with little consideration of the impact such changes might have on the organization as a whole or on its individual members. Although the intention of such programs was to provide fair opportunities for qualified members of previously underrepresented groups, their implementation often included quota systems or some form of preferential treatment, which, in turn, led to negative reactions and, in some cases, to litigation for reverse discrimination (i.e., discrimination against qualified White males). As a result, attitudes towards AA programs became polarized, and though many people remained strong proponents, many others in organizations and in society saw these policies as unfair. In some cases (e.g., California Proposition 209) legal actions resulted in court decisions that deemed any consideration of race and gender in selection or promotion as unconstitutional. Not only did such programs lead to divided attitudes among the citizens, they created great skepticism among individuals in the workplace. Because little attention was paid to how such efforts would be perceived, the unfortunate consequence of many AA/EEO efforts was to create a culture of resentment and cynicism towards any diversity effort. To change perceptions, and to improve the quality of diversity efforts, researchers and practitioners began to rethink how to address diversity.
The Emergence of “Diversity Management”
In the early 1990s, theorists and researchers alike changed their thinking about organizational diversity in a fundamental way. Past efforts, both in research and in practice, had conceptualized diversity almost exclusively in terms of the numbers of women and ethnic minorities in the workplace. The focus, therefore, was on developing and implementing AA or EEO programs to increase the number of women and ethnic minorities in organizations. This focus, however, did not adequately consider the impact on the organization and its members. Although AA and EEO practices resulted in increased diversity as expressed in numbers, these early efforts also led to lawsuits alleging unfair hiring and promotion practices, had a negative impact on worker attitudes and perceptions of fairness, and had the ultimate effect of polarizing attitudes toward the process. It was clear that addressing diversity in organizations required a more sophisticated approach, and theorists took note of the need in the last decade of the 20th century.
As researchers continued to advance thought about diversity management, and as practitioners became increasingly involved with diversity initiatives, some began to recognize that diversity is about more than just numbers. Led by individuals such as Taylor Cox (2001), Gary Powell (1993), and Roosevelt Thomas (1990), theory and practice in diversity management began to incorporate the idea that diversity was not a number to be counted, but a resource to be managed. For there to be advancements in the development and implementation of more effective initiatives in organizations, theorists and researchers needed to learn more about the psychological and organizational processes associated with a diverse workforce.
Early Models of Diversity Management
These pioneers of diversity management began with the development of what are now considered the early models of diversity management. These early models were ostensibly categorization schemes for identifying and describing organizations in terms of how they dealt with diversity. Cox (2001) described organizations, based on their level of diversity and approach, as monolithic (meaning comprised of only one culture),pluralistic (including members of multiple cultures but with limited interaction or consideration of the other), and multicultural (an organization that was actively developing a diverse workforce and building from strengths). Powell’s (1993) categories were in large part descriptors of organizational strategy toward and philosophy about diversity; these categories were benign neglect (ignoring, without malice, issues of diversity), reactive (addressing diversity when problems or issues arose, such as a discrimination lawsuit), and proactive (identifying issues of diversity and proactively developing policies and practices to address the needs and strengths of a diverse workforce). Roosevelt Thomas’s (1991) categories were reflective of similar distinctions in organizational approaches to the changing face of the workforce. His categorization scheme included affirmative action, valuing diversity, and managing diversity.
Although each of these early models is unique in its description of organizations and organizational diversity efforts, they are united on two important points. Together, these points changed the way researchers and organizations thought about diversity. First, each of these models identify that it is possible to address diversity on different levels, and that organizations range in their efforts to manage diversity. Though each model defines slightly different categories, they all share the common thread of ranging from simplistic to sophisticated in approaching diversity. Second, and most critically, each model identifies that at the most sophisticated level, organizations must see diversity as a resource that must be managed if organizations are to compete in a global economy.
It is clear that these models of diversity management provided an important change for the advancement of diversity management. This new conceptualization represented a fundamental change in the ideas and efforts of both scientists and practitioners in the field. These advances were not, however, without their limitations. Although they provided a goal for organizations to strive for in the form of active management of diversity, they offered little in the way of the psychological or organizational processes that were representative of an organization that had successfully achieved the “top” category. Furthermore, the process for achieving the top level was unknown.
In subsequent years, additional insights into the diversity management process began to emerge. Theorists began to identify the psychological and organizational processes that may affect efforts to address diversity. One of these insights was the recognition that existing organizational climate would impact the reception of and reaction to initiatives. Consequently, the assessment of organizational culture and climate was identified as a critical component to the development and implementation of diversity initiatives. Similarly, others have argued for the consideration of a “personalization” approach to diversity management. Drawing on fundamental principles of social psychology, the “personalization” approach proposed by Nurcan Ensari and Norman Miller (2006) suggests that personalized contact with out-group members (individuals who are different from the majority within the group) facilitates self-other comparisons and self-disclosure which, in turn, leads to positive social and cognitive outcomes such as the development of trust and familiarity, the breaking down of stereotypes, and ultimately, the development of empathy and the reduction of bias. For the organization, the personalization model as a form of diversity management may result in reduced conflict, litigation, and discrimination while improving productivity and the overall climate.
Integration of Organizational Development Insights
Drawing from research in organizational development, diversity researchers also began to consider the importance of top management support, recognizing that the lack of formal or informal support from top management would undermine diversity initiatives. Other organizational level ideas emerged as well, such as the importance of integrating diversity efforts into the mission, values, and strategy of an organization. Still others recommended conceptualizing diversity management as characteristic of a “learning organization.” Learning organizations are adapting, supportive of change, and focused on the development of the workforce, each of which are characteristics that are said to be important to advancing diversity efforts. These advances were critical yet limited in that they largely occurred independently of each other and provided little guidance as to how to achieve the desired changes within the context of diversity. A number of researchers recognized that more comprehensive models were needed.
More Comprehensive Models of Diversity Management
The recognition that diversity was something to be managed was a critical stage in the history of diversity study. But despite the categorized descriptions provided by Cox (2001), Powell (1993), R. Thomas (1991), and others, very little was known about how to transition an organization from a less to more sophisticated stage, or about the individual, organizational, and/or societal obstacles that may emerge when trying to make such a transition. Although these early models described the goal of a more sophisticated organizational approach to diversity, there was minimal guidance on how to achieve a given level of sophistication. Toward the end of the 1990s, advanced models began to emerge that more accurately reflected the complexity of diversity management. Furthermore, in different ways, they began to reflect both the practical complexity of diversity management as well as the multitude of individual and organizational processes that are related.
In building on his earlier ideas, Taylor Cox (2001) introduced the Model for Work On Diversity, which identified five key areas of organizational development, each of which was critical for—and a critical indicator of—an organization’s diversity management efforts. The areas he identified were (a) leadership, which emphasized the importance of top management vision, strategy, and involvement in the diversity process; (b) research and measurement, which underscored the importance of diagnosing organizational characteristics and culture, as well as identifying and targeting benchmarks along the way; (c) education, which meant training management and employees on key issues, diversity expertise, and newly implemented policy and procedures; (d) alignment of management systems, which represents the reality that diversity management efforts must be incorporated across all systems within an organization, such as recruitment and selection, socialization processes, performance appraisal, and training; and (e) follow-up, which stresses the importance of accountability, reporting results, and continued growth.
Cox’s (2001) model is based primarily on his applied work with multinational organizations headquartered in the United States with offices throughout the World. Although limited in its theoretical foundation, the Model for Work on Diversity provided a comprehensive description of the organizational processes that are involved in effective diversity management. At the same time, a simpler model based on a classic theory of organizational change was introduced by Richard Allen and Kendyl Montgomery (2001); their model was the Model for Creating Diversity. Their contribution was not in taking a comprehensive approach as Taylor Cox had in describing the organizational areas of importance to diversity management, but instead, in the recognition of a key underlying process: organizational change. Their application of social psychologist Kurt Lewin’s (1951) model of organizational change introduced a dynamic way of thinking about diversity management. Diversity management was not just an organizational process, but was, fundamentally, a change process. Lewin’s model posits that organizations going through change navigate through three phases of (a) unfreezing, (b) moving, and (c) refreezing. Unfreezing requires the organization to recognize and be prepared to eliminate “old” ways of doing things and thus pave the way for change. Changing within the Lewinian framework consists of revising the fundamental structures, such as management hierarchies, and processes, such as how promotions are done, within an organization. At the final stage in Lewin’s model, new structures and processes are “refrozen” into place. With their own model, Allen and Montgomery argued that the unfreezing, changing, and refreezing for diversity ultimately ends in a competitive advantage for the diverse organization. From a diversity perspective, thinking in terms of a change model means recognizing that efforts to manage diversity must first consider the current state and culture of the organization. Further, clear objectives and end goals must be identified to facilitate the development of the organization and its individual members. Finally, supports must be in place to ensure that the new state is accepted by employees. Attending to these aspects of change when considering diversity, Allen and Montgomery argued, would maximize the likelihood that the process would be successful and that diversity would become a competitive advantage for the organization.
Diversity Management: Cross-Disciplinary Approaches
In addition to the contributions of the more sophisticated models such as these, diversity management as a field has been advanced by important ideas from fields other than psychology. Some theorists, such as Ann Jordan (1995) or Rajvinder Kandola (1995), have argued that a cross-discipline approach is necessary to understand and further the field of diversity management. One example of such an advance is the contribution of experts from the field of social work who cogently argue that an important aspect of diversity management in organizations is the incorporation of community responsibility, which means being aware of the impact that an organization has on the community in which it is located, taking into account the community’s unique needs and accepting the responsibility to serve those needs in return for the opportunity provided to the organization to grow and to thrive. Anthropologists also offer unique contributions to the field of diversity management by acknowledging the uniqueness of individual organizations within the context of a complex and comprehensive system or network of organizations. Cross-discipline efforts do not require leaving the field of psychology. In fact, many diversity ideas come from within the discipline of psychology, but represent different areas of expertise. For example, social psychological phenomena related to cultural differences, such as the acculturation of individuals into unfamiliar environments, are pertinent to managing diversity—adapting to a more diverse organization might be seen, for example, as comparable to an immigrant’s acculturation to a new culture. Similarly, contributions from cognitive psychology include an understanding of the role that cognitive schema (how people categorize information), scripts (how people behave based on expectations), and heuristics (“rules of thumb”) play in decision making, including the reduction of bias in important personnel decisions of selection or promotion.
The most recent approach to advancing models of diversity management attempts to incorporate advances from multiple disciplines as well as from the ideas presented by the Model for Creating Diversity and the Model for Work on Diversity. In 2004, Mark Agars and Janet Kottke introduced the Full Integration Theory, which is an attempt to integrate previous theoretical approaches and to identify more completely the underlying processes that facilitate or hinder organizational efforts to manage diversity effectively. In it, they identify diversity management as a change process that includes three stages: (a) issue identification, in which an organization’s top management team recognizes that efforts or initiatives related to diversity are needed and changes to organizational mission and strategy are initiated; (b) implementation, in which formal structure, practice, and policy changes are implemented, and behavioral changes are supported; and (c) maintenance, in which structural and cultural goals have been met, efforts to measure and monitor critical diversity variables are introduced, and sociocultural forces work to strengthen a diversity-supportive context.
In addition to the stages themselves, Full Integration Theory identifies four underlying psychological mechanisms that are critical to the transition through each stage and from each stage to the next. Critical to this theoretical development is the suggestion that at each stage, some underlying processes may be more critical than others, and diversity management efforts should consider the potential impact of these underlying process in setting up programs. The underlying processes include perceptions of fairness, perceptions of threat, perceptions of utility, and social cognitions. Perceptions of fairness refer to the extent to which employees perceive personnel decisions and practices to be fair for all employees. These perceptions are critical during the implementation phase, when an organization is introducing new policy and practices. Perceived fairness will facilitate acceptance of these new polices. Similarly, diversity initiatives, because they will forecast change to the status quo, often lead to perceptions of threat. Threat, in turn, leads to increased rigidity, less risk taking and innovation, and greater likelihood of exclusive behaviors (e.g., male managers conducting business while playing golf). Utility refers to the extent to which arguments for diversity can be made in terms of financial matters—the bottom line. Given that skepticism often exists around diversity initiatives, evidence of utility is argued to be a critical component of the successful identification of diversity management as a valued organizational goal, and in its maintenance once policies are introduced. Finally, social cognitions (e.g., stereotypes; in-group biases; beliefs about men, women, and minorities) shape our decision making and our relationships with others in the organization. Management of these cognitions (e.g., limiting the opportunity for stereotypes to impact hiring decisions) is a critical component of effective diversity management as well. Although these four underlying processes may be relevant to many forms of change, the authors include them for the specific implications for change related to diversity.
Although initial efforts to test the model have provided some supportive evidence, much more testing is needed. The value brought by this theory, however, includes the integration of the comprehensive practical nature of Cox’s (2001) model with the recognition that diversity management is fundamentally a change process, as identified by Allen and Montgomery (2001). In addition, the identification of underlying processes that serve as explanatory mechanisms for the success or failure of diversity efforts—and the incorporation of these factors at various levels of analyses, including individual, group, organizational, and environmental—pro-vides a significant contribution to practice. Furthermore, Full Integration Theory takes a multidisciplinary approach to diversity management by incorporating ideas from psychology, sociology, organizational studies, economics, and social work. Continued advancement in our understanding of the complex diversity issues presented to organizations will necessarily require a comprehensive approach.
How Does Diversity And Diversity Management Affect Individuals, Groups, And Organizations?
Researchers from the social and management sciences have extensively studied diversity and diversity management. Their primary objective has been to determine how diversity and diversity management affects individuals’ attitudes, group productivity, and organizational profitability. Achieving this objective has met with mixed success. In general, a great deal is known about the effects of diversity on people’s attitudes, somewhat less is known about the effects of diversity on group processes and outcomes, and still less is known about the effects of diversity management on organizational outcomes such as profitability.
First, a Word About the Difficulties in Conducting Diversity Research
Because the topic of interest requires the study of employees and intact groups within the organization, it is often not possible to create the kind of experimental control groups that would permit conclusive comparisons. (This problem, of course, is not specific to diversity management, but is true for most applied sciences, such as management.) Therefore, the bulk of the research conducted in this area can be classified as using the case study method, which is the careful examination of an individual case—person, group, or organization—but does not permit definitive conclusions such as those found in experimental research. Despite the difficulties in conducting experimental research, a number of conclusions can be drawn about how diversity and diversity management affect individual attitudes, group processes, and organizational functioning.
As noted earlier, there are a number of ways in which diversity might be defined. Because most researchers have examined race and gender in their studies, most of the research to be described will reflect what is known when those demographic characteristics are studied. Other types of diversity, such as thinking styles and personality differences, have also been studied.
To provide structure for this review of what is known about the outcomes of diversity and diversity management on people and organizations, research-based knowledge of these effects will be categorized into the levels of data examined: individual, group, and organization wide.
Individual-Level Interventions And Outcomes
The most common type of diversity management is diversity training, which consists of programs directed toward individuals with the purpose of creating an awareness of diversity, modifying individuals’ attitudes toward others different from them, and ultimately, changing individuals’ behavior. Diversity training itself can take a myriad of forms
for individual employees, with the most common including sensitivity workshops, cultural immersion exercises, and skill development. In sensitivity training, employees become more aware of their own biases regarding others. Cultural immersion exercises provide an opportunity for employees to become more knowledgeable about other people’s cultures. When employees undergo skill development, they learn and rehearse interpersonal skills. Typically, in all of these kinds of training sessions, employees learn about the changing demographics of the labor force, how diversity differs from AA, the nature of stereotyping and discrimination, and the value of diversity to business success. In follow-up surveys to these kinds of training, women and ethnic minorities report more favorable attitudes toward their employers. A key limitation of these types of interventions is that they are often limited to a focus on changing attitudes, which may not translate into desired behavioral changes. Therefore, the full impact of diversity training on behavioral outcomes is largely unknown.
An Illustration of Individual Diversity Training and Outcome
In one study, Jeanne Hanover and Douglas Cellar (1998) assessed middle managers at a Fortune 500 company. The middle managers had been assigned to either a diversity-training workshop or a control group. In the diversity-training workshop, the managers were exposed to presenters, videotapes, case studies, simulations, role plays, and group discussion. The control group consisted of managers who had not taken the diversity training at the time of the study, but were expected to receive the training at a later date. Four months before the training and two months after the training, the researchers asked the managers about their attitudes toward the value of diversity and their own behavior toward their employees. Managers who had received the diversity training had more positive attitudes about diversity after the training than those who had not had the training. The managers who had had the training were also more likely to discourage stereotypic comments or jokes at work and were more likely to encourage discussion about how diversity might affect work productivity or group cohesion.
Networking and Mentoring Programs
Another commonly used corporate diversity management initiative directed at individuals is support groups, which are composed of employees with similar backgrounds such as race, gender, nationality, and sexual orientation. In these support groups, peers share their experiences and network. These support groups often provide individuals with the opportunities to interact with more experienced employees (mentors), who can provide guidance in navigating the formal processes and structure of the organization. Many organizations have also set up formal mentoring programs designed for minorities and women. In these programs, protégés are matched with a senior manager or executive who meets regularly with the protégé, explains the functioning of the organization, and helps the protégé develop the necessary managerial skills to advance in the organization. Research into mentoring programs indicates that protégés benefit both emotionally and professionally from their experiences. There is, however, contradictory evidence regarding how effective these programs are in advancing minorities and women into the executive ranks. Participants in these programs report satisfaction with the programs, but hard data regarding the movement of minorities and women into executive positions indicates only some success.
Attitudes of the Individuals in the Majority Toward Diversity Training
One issue that has been of special interest is how those who have longest been in the majority within organizations—White men—will view diversity programming. White men tend to have less favorable attitudes toward the concept of diversity and diversity management than women and ethnic minorities do. Despite the differences in attitudes, the results of several research studies have indicated that White men are not less satisfied with their jobs, less committed to their organizations, or more likely to leave an organization that initiates diversity management or programs than are minorities and women.
Summary of Empirical Evidence for Individual Interventions and Outcomes
Overall, the empirical evidence supports the claim that diversity training can lead to more positive attitudes about people of different backgrounds. Nevertheless, many questions remain about the factors that influence the development and malleability of these attitudes. Different demographic groups have different attitudes toward organizations that institute diversity programs; however, these differences are not always expressed in behavior. White men are not more likely to leave organizations that institute diversity programs, although they indicate that they are less attached to those organizations than are women and ethnic minorities. Even though attitudes are only the first step in managing diversity, they are important for managers to understand.
Effects of Diversity on Group and Organization Outcomes
Diversity initiatives generally target individuals or whole organizations. Within organizations, of course, are groups or teams of employees who must work together to accomplish the objectives of the organization. Though few diversity initiatives are directed only at groups, there are good reasons to examine the nature of diverse groups. With the continuing globalization and demographic shifts in the workplace, many employees are now working in teams, and those teams are often composed of people with different backgrounds, including different nationalities.
How do groups function when there is considerable diversity in their midst? Although not all research comes to the same conclusions, the research on demographically diverse work groups tends to find the following: diverse groups are less cohesive and have more conflict, and the people within are more likely to withdraw or quit than people in homogeneous groups. On the positive side, heterogeneous groups are more likely to generate novel or creative solutions to problems. These general findings have led to considerable research to explicate the reasons for less group cohesion, more conflict, and higher withdrawal rates.
A Search for Moderator Variables
To better understand the nature of findings about group functioning and outcomes, many researchers have looked for moderator variables; a moderator is a third variable that affects the relationship of two other variables. The goal is to identify other factors that might explain why heterogeneous groups tend to be less productive on most tasks than homogeneous groups. One promising moderator that has been well studied is the nature of conflict within the heterogeneous group. Considerable work has been done on understanding work conflict; this work has classified group conflict into two primary categories: task conflict and emotional (or affective) conflict. Task conflict refers to conflict among the individuals about the group’s objectives or about how to perform the work. This type of conflict can be useful because it requires group members to discuss the work to be done and can lead to better group outcomes. Emotional or affective conflict refers to conflicts in personality or personal misunderstandings. Emotional conflict almost always reduces the group’s performance because the conflict distracts the group from the work to be done. In heterogeneous groups, the differences in backgrounds and experiences that people bring to the group are likely to create both task and affective conflict.
Why Different Types of Diversity Matter
One of the benefits of identifying moderator variables in studying diversity within groups is that it permits an examination of how different types of diversity may differentially impact a group’s functioning and outcomes. As noted earlier, several theorists have suggested there are two basic types of diversity: one based on demographic differences (“surface-level”) and another rooted in more deeply embedded and not overtly visible differences (“deep-level”). These deep-seated, or deep-level, differences include different cognitive styles, values, personalities, and beliefs, and they may correspond, to a degree, with the surface-level factors, but are just as likely to be substantially independent of them. Because research has found that deep-level diversity usually affects the outcomes of groups more than surface-level diversity, some researchers have argued that much less attention should be given to the surface-level variables.
The reader should be aware that there might be a disadvantage to abandoning the study of surface-level differences. Diversity researcher Alison Konrad (2003), for example, has argued that focusing on the unobservable differences among individuals to the exclusion of the surface differences would negate the critical work that initiated the diversity movement, work that was born of the very real consequences for people who were and are visibly different from the majority. And in fact, readily observable demo-graphic differences are likely important factors in the formation of groups, even though deep-level differences may be more critical factors in group process. Recent research by Katherine Phillips, Gregory Northcraft, and Margaret Neale (2006) emphasizes the importance of simultaneously examining both surface-level and deep-level diversity. Within a group, observable differences among the individuals serve as a trigger for individuals to consider differences that they might not otherwise notice in a group of people similar to them. The effect of priming thoughts about individual differences subsequently helps group members recognize unique contributions that may result from individual differences within the group. Although the contributions that are most valuable to group outcomes are likely to be a function of deep-level differences, these contributions would probably not be sought in a group without observable differences. Interestingly, this interaction of surface- and deep-level differences provides a paradox for diversity management. A frequent strategy employed in diversity training is to focus on the deeper similarities—values, personality characteristics, cognitive processes—among people with the goal of making people feel comfortable with each other, despite any overt differences such as race or gender. This strategy may be counterproductive to the potential benefits of diversity, which are more creative group solutions. Interestingly, one of the contributions of the personalization model of diversity management noted earlier is that it attempts to address the uniqueness of differences by emphasizing self-disclosure and self-other comparisons with the goal of raising awareness of similarities and differences.
The research to disentangle the effects of these surface and deeper levels of diversity is still in its infancy. One of the difficulties with group research is that few groups are experimentally studied over a lengthy period of time. It is regrettable that there is a trade-off in the study of groups: in general, groups that can be studied for any length of time are already existing work groups for which there will be few comparison groups. The largest number of studies about group diversity has examined artificially constructed groups in classroom settings, which permits experimental control, but also limits generalizability. To date, researchers conducting the latter type of studies have provided the best attempts to understand the underlying processes that affect the outcomes of diverse groups and, ultimately, diversity programs in organizations. Ideally, more field studies will be done in the future to confirm the applicability of results gleaned from controlled experiments to ongoing organizations.
Illustration of an Organization wide Diversity Initiative
System wide changes are the most powerful and affect all individuals within the organization. A case study of Sandia National Labs demonstrates how a system wide diversity effort works. The workforce of Sandia National Labs historically has consisted of highly educated, mostly White men. In the early 1990s, a job satisfaction survey uncovered a hostile work environment at one of Sandia’s main labs. In response to this finding, top leadership determined to change the culture of the organization, yet also to pay close attention to business performance and create more diversity among its workforce. Sandia’s first step was to create a diversity planning department that was responsible for developing and implementing plans at all levels of the organization. Fifty employees were trained to serve as internal consultants (called “diversity champions”) on issues of diversity; 15 employees underwent additional diversity training and developed a conference on diversity to be presented to the 200 top Sandia leaders, and a group of employees in each division of the company formed diversity councils, which met to identify barriers to high work performance and inclusion. Diversity champions, vice presidents, diversity councils, and the human resource (HR) division worked together to develop family-friendly practices and networking groups, and they included diversity management objectives into managers’ performance appraisals. Sandia continues to work toward an inclusive workplace and has been recognized repeatedly for its success. In 2006, for Sandia’s attention to diversity, the magazine Diversity Inc named Sandia in its “Top 50” places to work in the United States.
Diversity Management’s Impact on Organizations’ Profitability
Although there is considerable interest in how diversity and diversity management lend themselves to the bottom line or success of an organization, very few research studies at this level of analysis are available. Most of what is known about the success or failure of diversity initiatives within organizations comes from case analyses of individual organizations such as the Sandia case described briefly in the previous paragraph. Most case studies report success, possibly because few organizations would want to have their failures chronicled in public. With that caveat in mind, there are several researchers who have examined the generally held concept that diversity is good for the bottom line and have analyzed multiple organizations in one study. The results have been equivocal. One strategy has been to compare stock prices for firms that achieved awards for their diversity practices (in the form of AA) to stock prices of firms who had been in litigation for racial and gender discrimination (Wright, Ferris, Hiller, & Kroll, 1995). Under one statistical strategy, the organizations that had won awards had better returns than those who were in litigation, but when the award-winning firms’ stocks were scrutinized with a different method, their stock returns were no better than the firms in litigation (Bierman, 2001).
Other researchers have examined the relationship of the composition of the boards of directors with returns on investment. Companies with the most women and minority directors had investor returns that were appreciably higher than those companies with no women or minority directors (Richard, 2000). Several explanations are possible for these results. The firms with diverse boards may have better access to or understanding of the consumer and employee needs that drive success. Alternately, a firm that chooses to name minorities and women to boards of directors may be able to attract more and larger investors. Finally, it is possible that already financially successful firms are more forward looking when it comes to consumer trends; these firms more quickly recognize that the workforce and the consumer mix are changing, and they want to remain leaders by appointing representatives from the evolving consumer base.
Organization wide Intervention Effects on Advancement of Women and Ethnic Minorities Into Management
One of the most recent and thorough examinations of the effects of diversity on the number of women and minority men within organizations comes from the work done by sociologists Alexandra Kalev, Frank Dobbin, and Erin Kelly (2006). Kalev and her colleagues collected the information reported on EEO-1 forms for all private U.S. organizations with more than 50 employees or a contract with the federal government of $50,000 or more. (U.S. firms must file an EEO-1 report annually with the Department of Labor and the Equal Employment Opportunity Commission.) These researchers then selected a sample of more than 800 firms from the EEO-1 reports and contacted the human resource (HR) directors of those companies. The HR directors were asked to describe their companies’ diversity interventions, which were categorized into (a) assigning responsibility for AA plans or diversity goals by appointing a specific executive or group to address and monitor diversity goals, (b) reducing biases through diversity training, and (c) providing mentoring and formal networking programs for women and ethnic minorities. These intervention categories were compared with the number of women and ethnic minorities who had achieved management positions in those companies. In line with theoretical expectations that changing organizational structure introduces the most profound changes for an organization’s employees, Kalev et al.’s key finding was that requiring responsibility for advancing diversity goals yielded the best results in helping women and ethnic minorities move into management positions. A key method for assigning responsibility was the use of diversity task forces, comparable to the diversity councils created at Sandia Labs. An interesting result was that diversity training and networking and mentoring programs were not effective in their own right, but were made effective by being conducted in organizations that had developed responsibility assignments.
Criticisms Of Diversity Management
Among the U.S. public, there has been a mixed reception to diversity management initiatives. This varied reception is most likely a function of the history of diversity management, which shares overlap with the history of AA and civil rights movements. Some, therefore, have argued that diversity management is merely a new, politically correct label for of times-despised AA policies that were perceived to have led to reverse discrimination. Still others have argued that the United States has become a color-blind society and that diversity management (or antidiscrimination laws or AA) is no longer needed. Generally speaking, there is ample evidence that discrimination on the basis of gender or race continues in the workplace. However, even in the face of evidence, not all people agree on the existence of discrimination or its meaning within society, so it is not surprising that there will be disagreements about the proper role of corporations in managing the diversity within their workforces.
Not all negative reactions to diversity programs come from those who believe that discrimination no longer exists. Trade unions, especially those in the European community, have resisted diversity initiatives because they are suspicious that diversity management represents a retreat from a commitment of redressing inequalities in the workplace. More specifically, trade unionists and others are concerned that organizations will focus on “soft” interventions such as training and eliminate the recruitment and selection programs that have benefited women and ethnic minorities. Another criticism of diversity management has been that broadening the rubric of diversity beyond race and gender may dilute the impact of traditional AA programs for the groups who have historically suffered the most discrimination. Interestingly, it is also possible that many Europeans will not want to be categorized in the way that ethnicity is so readily used in the United States. One of the most damning criticisms has been that using the bottom line as an argument for diversity management eliminates the moral responsibility for removing inequalities in society. Diversity management, therefore, may permit governments and individuals to ignore the underlying causes for social inequality and its subsequent consequences (cf. Wrench, 2005). These debates and reservations about diversity management are expected to continue.
Diversity In The Context Of Globalization
A final issue that has risen to prominence in the diversity management literature is the understanding of diversity in a global context. Although most of the research reviewed here represents a Western approach to diversity management (reflecting the English language body of literature) there is no question that the globalization of societies in general, and the workforce in particular, implies that diversity management is a global issue. Diversity management on a global scale, however, is not a simple matter.
Approaches to and concerns about diversity vary considerably within the industrialized countries of East Asia and Australia. Diversity programming in Japan, for example, reflects somewhat different concerns than programs in the United States and the European community. The Japanese workforce is relatively ethnically homogenous, but there are more women, more older workers, and more workers who do not expect lifetime employment than there have been in years past. With these demographic shifts, accommodation in the Japanese workplace has begun, but it has progressed slowly. To gain a better understanding of its vast talent pool, researchers in India have begun to explore the large variations within the country’s regions and how those differences affect people’s attitudes toward work. Diversity programming in Australia and New Zealand shares strong similarities with the diversity initiatives of the United States and Europe, centering on race and gender while also focusing on the special circumstances of indigenous peoples.
Increased globalization creates interesting challenges for the future of diversity management. Cross-cultural differences in values, as well cultural dimensions such as masculinity-femininity (the existence of gender roles in a society), or individualism-collectivism (the emphasis placed on individual achievement versus overall concern for the larger community) represent clear obstacles to the development of “one-size-fits-all” practices of diversity management. As diversity management practices have emerged over the last few decades, key points of emphasis (e.g., goals based on fairness vs. social responsibility vs. performance outcomes) have emerged in different countries, each with a different priority. Although each strategy may, in turn, lead to effective diversity management, the processes that support such efforts may be different, as may the associated outcomes.
Diversity management is likely to become more important in the foreseeable future because of a number of global trends that have emerged during the past decade. The demographics of most industrialized countries are shifting, reflecting internal changes such as aging workforces and more working women, but also reflecting continued immigration patterns of people from poorer countries seeking better work opportunities. Multinational companies are expanding into uncharted territories in search of new customers and labor. These changes will demand an understanding of the challenges and opportunities posed by diverse individuals working together. These challenges will also require that theories to guide research—and ultimately, practice—become sufficiently comprehensive to accommodate the complexities of the emerging workplaces and labor forces. Studying the individual differences at both surface and deep levels will be critical to understanding the new diversity. So, too, there will be the need to seek and gather insights from multiple disciplines to fully appreciate the complex new work world.
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