management

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Diversity in Work and Organizations

Our promise to treat employees with respect is reflected in our approach to diversity, which is led by a Diversity Council comprising business function directors and chaired by a Board Director. Everyone is Welcome at Tesco programme is the name we give to our diversity and inclusion work.

We want everyone at Tesco to meet their full potential regardless of age, gender, disability, ethnicity or sexual orientation. Our diversity strategy aims for a workforce at all levels that mirrors the communities we serve.

Our priorities reflect those of the countries in which we operate. We focus on employing local people and developing local people and developing local leaders wherever we operate. Of the 180,000 people employed in our international business, fewer than 200 are from our UK business.

Diversity in action

We introduced a policy on working beyond retirement and have almost 2,500 staff over the traditional retirement age. It is attitude and ability - not age - that makes for great service for our customers.

Our Diversity Advisory Group meets every six weeks to monitor that our workforce mirrors the composition of the population as a whole.

Four out of five applicants for jobs are our customers, which helps us in our aim for our staff to be representative of the local communities we serve.

This year we were one of 19 companies to be included in a European Commission compendium of good workplace diversity practice.

We provide all our managers with a religious toolkit, which enables them to understand and support people from all backgrounds and faiths through information on diet, prayer and dress, and suggestions on how to support their staff during festivals.

We were the first UK employer to set targets for the recruitment of disabled people and have been given the two-tick symbol by Remploy.

In short, we're as diverse as you make us.

Ethnic and cultural diversity:

We do not discriminate on the basis of ethnic origin and promote understanding of different cultures to help staff work effectively together. In the UK, stores celebrate cultural festivals such as Eid and Diwali alongside traditional British festivals. Our managers have a religions toolkit providing information on festivals, diet, fasting and prayer to help them understand and support people from different faiths. In 2007, this toolkit was updated to cover the growing range of cultures and countries our employees and customers come from, including Bangladesh, the Caribbean, China, Ghana, India, Pakistan, Poland and Somalia.

Gender and sexual orientation:

In 2007, we launched the Tesco Women's Network which aims to help female managers and directors progress. Around 150 women from across the Group attended the launch event. We are in the process of forming a similar network for sexual orientation.

Age:

We have no retirement age in any of the country we operate and employ people in their 70s and 80s.

What are the challenges that need to be considered when addressing diversity and fairness in international organizations?

Over the past few decades, academicians, practitioners and researchers have taken (greater) cognizance of the fact that diversity is a phenomenon that has a wide range of implications within the workplace and society. According to Cox, O’Neill and Quin (2001) diversity is the variation of social and cultural identities among people existing together in defined employment or marketing system (cited by Price, 2004). It is acknowledged that diversity management encompass a wide range of factors (which some refer to as distinguishing characteristics) such as ethnicity, gender, age, disability and sexual orientation and that these factors cannot be treated in isolation (Lauring and Ross 2004, p.90). Several diversity programs have been initiated and implemented in organisations throughout the world aimed to improve working relationship between the individuals carrying different demographic attributes or for that matter any other distinguishing characteristic.

The main challenge for present organizations, therefore is not how to recruit diverse employees in order to meet quotas (or under affirmative action) but how to manage diversity that these employees bring to an organization. Several researchers (Cox, 1991) have argued that if diversity is managed effectively it can offer creativity, innovation and improved decision making. However, if the organization fails to mange diversity it will have to bear extra costs, bad communication, interpersonal conflicts and higher employee turnover.

Diversity management has become very important in most OECD countries over the last 20 years. The main trigger behind this increased significance towards the subject is the changing cultural and ethnic-based demographics of workplaces as labour markets become more diverse. It has been pointed out by some researchers (Sippola 2007, p.253) that even traditionally homogeneous countries such as Finland are experiencing a transition towards diversification. According to Lauring and Ross (2004, p.89) this change has been driven by a range of factors such as internalization of business, legislative reform and demographic changes (including higher growth rates of minority groups and changing immigration patterns). Almost all of these factors are comparable and valid for countries in European Union (EU). Thus managing diversity is sometimes seen as a strategic response to these changes and focuses on the utilization of the entire workforce.

In light of the foregoing it is becomes imperative for the multi-national corporations to remain abreast on the diversity front and keep account of several factors while formulating their diversity policy. Research conducted by Egan and Bendick (2003) revealed that a number of firms agreed about the inappropriateness of US domestic diversity program if implemented to their non-US operations unless appropriate resources were made available to develop a new program for the non-US operations. In spite of the need to implement a diversity initiative program ‘tailor-made’ to suit the needs of the host country most of the MNC’s opt for ‘multi domestic approaches’ outside US. Just a very few MNC’s (for example Shell Group) have however opted ‘global scale approach’; other international firms may be inspired to follow this approach in the future.

Ferner et al. (2005) examines the processes whereby diversity policy is ‘internationalised’ by US multinational companies and argues that the process of policy transfer to UK subsidiaries is complicated by incomplete and contested by differing conceptions of diversity between the US and the UK. The authors contend that the ability of actors within the UK subsidiaries to mobilise and deploy specific power resources allows them to resist the full implementation of corporate diversity policy, leading to a range of compromise accommodations. The evidence on the management of diversity in US MNCs is limited, and studies have been small scale (Egan and Bendick, 2003). However, it suggests that, in the latter part of the 1990s, companies began to transfer diversity programmes to their overseas operations. However Wentling and Palma-Rivas (2000) argue that initiatives abroad were generally fewer and less aggressive cited by Ferner et al. (2005, p.310). Ferner et al. contend that the basic framework of diversity of US MNCs tended to be the same as at home. Egan and Bendick (2003) argue that this ‘parallelism’ was reflected in a common global mission and corporate values, the use of global diversity teams, common administrative structures, common training programmes, and affinity groups, particularly for women. However, foreign subsidiaries were generally given autonomy to adapt policy to local concerns.

Moreover the research by Ferner et al. reveals that the nature of international diversity policy reflects a combination of product-and labour-market pressures for diversity in the home and host business systems. They found that companies that were globally more integrated in their operations appeared more likely to have strong global diversity policies; while companies’ whose markets – both domestically and internationally – were more diverse, especially in terms of gender and ethnicity had greater objective motivation for introducing diversity policies. It is however pertinent to mention here that the primary concern of the international firms is not social responsibility, legal compliance, and better community relations but given the nature of today’s competitive challenges, only business reasons supply the necessary long-term motivation for diversity (Ross 2004, p.91). Thus one witnesses a shift from concern with compliance to consideration of the ‘business case’ aimed at attaining competitive advantage to be derived from three broad elements: attracting and retaining skilled workers; servicing increasingly diverse markets; and improving organisational creativity and learning. Provided lack of conclusive evidence of link between diversity and business performance, the commitment to diversity may seem wavering (as noted in their less aggressive approach towards diversity principles) in international organizations.

Another factor which posits a challenge and needs to be taken into account by international organizations is the ‘attitude’ of the trade unions towards the diversity program. Kamp and Hagedorn-Rasmussen (2004) carried out research work in Denmark which highlights the role of unions to manage the problems related with diverse workforce in an organisation. The author points out those unions play a pivotal role in constructing that language of sameness and solidarity. Whereas, trade unions are not considered to play a vital role in diversity management developed in US. Furthermore another problem identified with the participation of the unions is their egalitarian approach with reference to feel comfortable recognising the diverse work force. Author cites interviews conducted by Greene and Kirton (2004) which revealed trade union members’ attitudes as “dominant attitudes ranging from scepticism to outright hostility, with diversity management being described as ‘a cover up’, or ‘window dressing’. From the perspective of MNCs understanding the trade union regulation becomes even significant if the diversity policies are to be implemented properly. Ferner et al. (2005, p.309) points out that in European countries, unions and collective bargaining are important elements of social regulation underpinning legal frameworks of equality, helping to build and enforce legal rights but such social supports are far weaker in the US business system. This makes it paramount for the multi-national firm not only to understand union regulations but to establish liaison with the union members.

Open communication is sometimes referred to as one of the approaches towards managing diversity. Sadri and Tran (2002) argue that managers may react more negatively towards workers who are perceived as dissimilar to them, than towards workers perceived as similar. Such reactions and attitudes in general have a potential to adversely affect the individual’s performance. They recommend the usage of open communication as a tool to facilitate diversity and to create a perception of fairness and equity among employees in the work place. In addition to that they proposed that most of the work place diversity initiatives fail because of the fear of the adverse consequences of such programs. Therefore, in order to successfully conduct these activities managers and supervisors must show their commitment and should communicate the employees about the benefits and importance of such programs.

International organizations working in other countries need to build their understanding of communication styles and patterns of other cultures. Cultures can be divided into “low-context system” and “high-context system”, which describe the cultural rules around information exchange and, in particular, the degree to which information in a culture is explicit, vested in words or precise and unambiguous meaning (low-context) and the degree to which it is implicit, vested in shared experience and assumptions and conveyed through verbal and non-verbal codes (high-context). Thus the high-context communication relies on shared experience and assumptions and high-context people will expect others to pick up what is bothering them and do not feel the need to be specific; they will talk around the point. Some authors (for instance see Korac-Kakabadse et al. (2001) have taken a deep plunge to expose the intricacies of the art of communication to reveal that Placing, Tone and Gestures also signify another important aspect of high-context communication.

The comparison of the Western versus Asiatic communication styles reveals that the Western mode of communication is direct and explicit whereas the Asiatic mode of communication is indirect and implicit (Osland, 1990). The Western country manager of multi-national firm operating in an Asian country needs to be cognizant of the peoples’ mode and style of communication which values the emotional exchange and the pleasure of the interaction; and is more indirect and implicit and requires shared meanings. These managers (more acquainted with high-contextual and straightforward mode of communication) will have to pay more attention to comprehend the intricacies of communication styles required in the host country’s environment. Training programs help managers to better understand and communicate with people from diverse backgrounds.

Extensive review of literature by researchers (Lauring and Ross 2004, p. 92) shows that organizational diversity will produce both benefits and difficulties; with some researchers findings showed a positive effect on organizational efficiency from group diversity in well-integrated groups, while others found that heterogeneous groups can be damaging to organizations due to the social conflicts (interpersonal and intergroup conflicts) that occur within them (Stephenson and Lewin, 1996 cited by Lauring and Ross 2004).

In spite of the fact that till date researchers are struggling to find enough evidence to support positive relation between organizational diversity and improved efficiency, Lauring and Ross (2004, p.93) argue that only positive correlation found between the two variables was in working environments where cross-cultural learning and knowledge sharing were actively promoted. In fact, the achievement of knowledge synergies has been one of the most discussed arguments supporting the business case for diversity management which promotes development and improvement of creativity, innovation, learning and problem solving through the cross fertilization of knowledge resources. Moreover authors (Adler 1997) found that cultural diversity can facilitate a more differentiated perspective when working with creative assignments (cited by Lauring and Ross, 2004). The authors cite research by Kochan et al. (2003) which revealed that although sometimes racial diversity can have a negative impact on organizational efficiency, but this can be mitigated by training and development focused initiatives.

The importance of managing diversity at all levels of the organisations has been pointed out by some researchers (for instance see Maxwell et al. (2001) with an observation that non-management employees are considered to be ‘inherently’ difficult to manage. The role of line managers has been given a pivotal position in managing diversity. This provides another challenge to the organizations, provided that the line managers are mostly working under stressful office environment.

A research by Friday and Friday (2003) provided a framework constituting three tools to manage diversity i.e. acknowledging, valuing and managing diversity. This three step model presents a planned change approach to change the corporate diversity strategy of the organisation. From the utilization of cultural reengineering to providing training to the employees, this framework helps an organization to achieve its goal of sustainable competitive advantage.

It therefore becomes imperative for an international firm to keep the afore-mentioned components of ‘managing diversity’ and equality under consideration, both at the time of formulation and implementation of policy. It is essential for the firm to understand the diversity laws and issues of the host country with which it is doing business with and it is advisable to ‘tailor’ its own diversity policy in line with the host country’s culture and requirements. The management of employees from diverse cultures, ethnicities and backgrounds it becomes necessary for the firm to focus on their differing needs and attitudes. Provided that the trade unions enjoy varying influence in different countries, the attention given by the firms to them in the backdrop of diversity, should vary accordingly.


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