Diversity as a Business Strategy - Assignment Example

Student’s Name] [Instructor’s Name] [Class] Diversity as a Business Strategy Critics argue that diversity management has moved equal opportunities away from a moral and ethical issue and turned it into a business strategy ( Wrench, 2005 : 77) Should we be concerned? Justify your answer. From the various possible viewpoints that can be taken on the topic, i.e. ethical, moral as well as business, it does not seem that there is any cause for concern if diversity is seen as a business strategy. In fact, it might be a cause for celebration since those things which are good for business might be more readily accepted than things which become a part of government regulation or legal requirements. It seems that businesses are more ready to follow ethical egoism which means that they will do what is best for them rather than any other ethical code which asks them to do what is best for others. In that regard, viewing diversity as a business need helps the cause of both diversity supporters and business professionals. Diversity has been important for business as a legal requirement in the past. However, the recent trend as reported by Lockwood (2005) as well as Kirton & Greene (2005) has been to see diversity as a tool for gaining competitive advantages. The prime example of this kind of use of diversity comes from organizations like DuPont and GE have gained many benefits from having a diverse workforce and their examples show that diversity can be very useful if correctly utilized. On the other hand, while the legal requirements for diversity may be easily fulfilled, it is not an easy objective to make a competitive advantage out of it and a lot has to be done by many companies before it can claim to have diversity as a competitive advantage. In business terms, diversity can no longer be considered only a part of the legal requirements for operating a company of a certain size (Daniels & Macdonald, 2005). Anti-discrimination laws might have been necessary at a time when civil rights and racial equality were being contested across the world but today diversity is an established business practice which has a direct effect on the performance of a company. From the evidence presented in this paper it seems clear that while diversity is a desired and beneficial characteristic for a company, there are still a lot of problems that remain with us and they need to be managed before a company can gain the benefits from having a diverse workforce. The cause of concern is not if companies are getting to an acceptable level of diversity but in how they can use it to their advantage. The importance of the need for diversity can be judged from the fact that some forward looking organisations are considering diversity levels to be a part of their company’s strategic objectives and have made their policy creators to be responsible for ensuring a diverse set of employees. DuPont is one such company which has successfully used diversity to its own advantage while fulfilling all legal requirements but there are other companies across the world that still have diversity related issues despite all the efforts being made by them. The management body of any company plays a very important role in establishing the business strategies of diversity by trying to create an organisational system that nurtures a respectful and inclusive environment. This environment is such that each member of the company has the opportunity to contribute to the success of the company in equal terms (Folkes & Patrick, 2003). Therefore the HR manager of the company is the person who should be most aware of diversity issues including the understanding of diversity as a business concern rather than a legal concern. Managers in power should function as the champions of diversity if any lack of diversity is felt in the company. For the clients as well as other stakeholders of the company, diversity displays an attitude that the company not only values the individuality of the employees but also understands and knows how to get the potentially significant business contributions from having a diverse workforce. Lockwood (2005) bemoans the fact that while the importance of diversity may be understood by businesses, many managers are not fully aware of diversity issues and the problem is even more severe with general managers. He is in agreement with Daniels & Macdonald (2005) who suggest that all management professionals need to improve their understanding of diversity and help others within their company realize the business benefits of diversity. This would in turn improve their business results as well as give them strategic plans with which they can help their own organisation become more diverse. In fact, the main concern for these analysts is the process of managing diversity in a company since it includes both the ability to create diversity in an organisation as well as having the ability to manage diversity to improve the business results of the company. The particular reason why diversity is created or needed based on legal or ethical requirements seems to be ignored as unimportant. The major driver behind the business case for diversity is the demographic change which is currently affecting the European labour market. These changes are significant on their own but in the context of diversity; an organization can use its human capital and positive workforce interactions to be the basis of its international as well as local success. The sharing of information between colleagues, project teams, buyers and dealers, for example, all depends on the quality of connections and talents in the company (Brown, 2005). When the market is diverse and the company is not, it can lead to difficulties in communications and even establishing business contacts. Resultantly, workplace diversity is to be viewed as a requirement to be competitive in the business world which is changing rapidly. Perhaps the most convincing arguments towards the monetary reasons for creating diversity in a company are offered by Brown (2005). His focus is on the nature of changes which bring a company closer to the ground realties of the world around them which depend on diversity and cultural understanding. He writes about the Mortgage Bankers Association (MBA) which decided to increase the diversity levels of the company clients with various marketing strategies. Since this American company caters to new home buyers who are investing in a house through the process of getting a mortgage, they discovered that attracting a diverse clientele requires a diverse leadership and a diverse workforce as well. Simply targeting minorities in their advertisements and billboards was no longer a guarantee for a diverse clientele. The president of MBA is reported to have said that diversity is not merely about connecting with new markets, in fact, it is a requirement for very survival of a company in the upcoming markets. Brown (2005) also suggests that diversity programs and initiatives often fail because if used incorrectly, they can potentially waste time, money and other resources for the company. In such cases, a company is falling back on meeting legal conditions and not business requirements for the company. In fact, Shuller (2005) suggest that to gauge the benefits of diversity as well as the actual level of diversity in a company is not an easy task. Using quantifiable SMART objectives, diversity management and enhancement teams can be given specific targets to achieve and their target based business performance can be measured alongside the diversity levels of the company. Such targets and evaluations can be made both internally with regard to the people working for the company and externally when it comes to the customers and stakeholders in the business. DuPont is seen as a good model of a company which has managed to enlarge its customer base considerably by embracing diversity as a business tool rather than an ethical dictate for their company. The company takes diversity as a business essential which is vital for repeat business with their customers and strategic competitiveness against the competition (Lockwood, 2005). This philosophy was established and shown to be true when the company discovered how one small change in their production process could present them with quantifiable profits. At the pharmaceutical branch of the company, the sales of an anticoagulant medication in the large Hispanic (non-English speaking) markets were quite low. When a Hispanic manager saw that the medicine was only marketed in English, he asked for the relevant information and instructions to be translated into Spanish while they were being packaged with the product. In a short time, the sales of the drug improved significantly. In fact, the rise in sales figures was so dramatic that educational materials for the same and other drugs in DuPont’s portfolio were quickly translated into more than a dozen different languages and they now bring in millions as additional revenue for their company (Lockwood, 2005). Perhaps the only area where this business based approach could be a cause for concern would be a position where a diverse workforce may be seen as a negative sign by a consumer. For certain positions, the public may be biased to suggest that one gender, race or ethnicity is better at performing a task than the other (Crawford et. al. 2002). However, this situation may also be exploited as a reason for success for the company since the person whose gender fits the mental job description as upheld in stereotypes may be able to win and convince more clients than others (Eagly and Karau, 2002). These stereotypes and their effect on counter-stereotypical professionals also suggest that as society becomes more accepting towards a more diverse workforce; such biases will disappear over time (Sherman, 1996). While the financial and legal requirements establish the case for diversity as a given, there are reports which suggest that many companies do not have the diversity ratios which are recommended by business experts. Clarke (2005) suggests that even countries like America that have boasted about being open and accepting to all, the workplaces still contain biases. He says: “The days of politically correct multiculturalism have not contributed to the end of bias. Workplace discrimination is alive and kicking, and statistics of job-related bias against African Americans and women remain eye-opening. One in five professionals knows someone who has suffered inequity on the job. Despite that nearly half of African Americans surveyed said their employers actively promote diversity, more than 31% can name someone who has been on the receiving end of racial discrimination. (Clarke, 2005, Pg. 38)”. While the American situation is negative when it comes to diversity issues, the conditions in Europe and the UK are not much better either. It has been many years since diversity was seen first as a legal requirement (DTI, 2006) and many more than when it was seen as a tool for boosting the business outlook for a company, yet there are still those firms who struggle with diversity initiatives and are puzzled when they are faced with discrimination and racism lawsuits. What is most troublesome is that some of these firms are the most respected and admired companies in the world. General Electric is often noted as a company which has been promoting diversity causes for a long time. Yet, even in GE, there are situations where discrimination is alleged. Marcel Thomas was working for GE as the Chief Executive of their Aviation Materials business and now Marcel Thomas is taking GE to court. As reported by Alleyne (2005), the case is based on the following claims: 1. GE practices biased relations with the African American workers of the firm. 2. At the managerial level, GE pays African Americans a lesser amount of money than their Caucasian counterparts and denies them promotions to higher levels. 3. GE tried to strike back against those employees who protested about the discriminatory practices and gave them their notices. Several other companies who have had outstanding diversity records for many years have been taken to court by their employees challenged by other oraganisations over discrimination issues. Interestingly, more than fifty percent of the companies of the thirty top enterprises on the good diversity list published by Black Enterprise have been sued by their employees in the past. Court cases, frustrated employees/managers, astonished directors and misunderstandings on both sides of the line have led many experts to believe that diversity issues will take many more years to be fully resolved between employers and employees (Alleyne, 2005). In such an environment, the more companies that see diversity as a business advantage, the better the situation will be for those who seek diversity as a legal and ethical requirement. However, this advantage can only be attained if diversity is properly managed and given the due attention which prevents it from becoming a source of conflict between employees or between the workers and the company itself. In conclusion, I would have to say that even though the corporations of the world have come a long way in creating and getting benefits out of having a diverse workforce, there is still a lot to be done to make everyone happy and that can only be handled by managers of the future who are prepared for seeing diversity as both a business need and an ethical concern. Word Count: 2,507 Works Cited Alleyne, S. (2005). But Can You Walk the Walk. Journal of Black Enterprise, 36(2) Pg. 100-105. Brown, R. V. (2005). The ROI of Diversity. Mortgage Banking. 65(12) Pg. 111-113 Clarke, R. D. (2005). Workplace Bias Abounds. Journal of Black Enterprise, 36(2) Pg. 38-39. Crawford, M., Sherman S. J., and Hamilton D. L. (2002). Perceived Entitativity, Stereotype Formation, and the Interchangeability of Group Members. Journal of Personality and Social Psychology, 83 (5), Pg. 1076-94. Daniels, K. and Macdonald, L. (2005). Promoting Equality: challenging discrimination and oppression in human services, London McMillan DTI (2006). ‘Discrimination in Employment’ DTI.gov.uk, [Online] Available at: http://www.dti.gov.uk/employment/discrimination/europe/page24085.html Eagly, A. and Karau, S. (2002). Role Congruity Theory of Prejudice toward Female Leaders. Psychological Review, 109 (3), Pg. 573-98. Folkes, V. and Patrick, V. M. (2003). The Positivity Effect in Services: Seen One, Seen Them All? Journal of Consumer Research, 30 (1), Pg. 125-37. Kirton, G and Greene, A. (2005). The Dynamics of Managing Diversity – A Critical Approach, Butterworth Heinemann. Lockwood, N. R. (2005). Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage. HR Magazine, 50(6) Pg. 1-14. Sherman, J. W. (1996), Development and Mental Representations of Stereotypes. Journal of Personality and Social Psychology, 70 (6), Pg. 1126-41. Read More