Can and should diversity management be a strategic part of an organisation?

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Introduction

Stockdale and Crosby (2002), state that diversity management can be defined as "...systematic or planned programs or procedures are designed (a) to improve interaction among diverse people... and (b) to make this diversity a source of creativity, complementarily and greater effectiveness." (Stockdale and Crosby, 2004 as cited in Stahl and Björkman, 2006:223). Initiatives typically cover areas such as ethnicity, race, gender, age, sexuality, disability. However, they are recently being increased to consist of issues such as personality, family history and class. From the quotation, Diversity management can be seen as a practice that could benefit the employee, business and other stakeholder customer groups. The question is, Can and should diversity management be a strategic part of an organisation? This would mean the organisation absorbing DM principles into its culture, looking at short and long term plans that could aid management and employees and reflect contemporary demands (Amason, 2011). Diversity management is discussed further on theoretical and practical evidence as the role can provide within a business.

Main body

With the growth of globalisation, the changing demographic profile, an increase in women, ethnic minorities at work, organisations and the wider society began to pay more attention to the issues of diversity. As a result of these developments, equal opportunities policy came into creation. However, this attracted criticism to ignore individual differences and was limited recently because it lacked of discussion on the business case for tackling diversity issues. Moreover, theorists have stressed the importance for developing strategies directly to attract and retain the elements of people across a diverse in workforce. Hudson Institute's publication of 'Workforce 2000' stated that, the US would see an increasingly diverse workforce in their labour market in the year 2000 and this would have considerable implications in terms of effective human resource strategy (Johnston and Packer, 1987 as cited in Bilimoria and Piderit, 2007:254). Authors built upon the work and the platform of equal opportunities policies to present the business case for diversity initiatives.

According to Robinson (2007), benefit of DM is the potential to increase creativity and innovation amongst the workforce. Hence, being a group in different approaches, skills, opinions and insights could identify new systems and avenues to increase effectiveness and profitability. An environment where diversity is valued and respected individual that seem to be the creativity is encouraged (Nieuwenhuizen and Rossouw, 2008). Innovation is a key component in sustaining competitive advantage in a company's markets. Furthermore, diversity could prove a significant long term resource as well as improve employee relationship. As well as this, diversity has the potential to provide organisations, enhanced information and methods for reaching many diverse customers' base. For example, an organisation is male dominated, may subconsciously detract women from its products and services. Many females are employed; this could highlight issues to help and resolve the problem and generate greater business. Therefore, as Bressler and Yasgoor (2008) state "When companies increase the diversity within their business at the same time, the ability to attract new customers have been increased" (Bressler and Yasgoor, 2008:26). Additionally, it has been argued that a good diversity model can attract and retain high-quality employees (Anon, 2006). This is important for many organisations while recruitment is valuable employees exercise on ability, knowledge and repeats the recruitment process. It can also damage the firm's reputation if an employee's speech inadequately of the company's approach to diversity issues (Carr-Ruffino, 1999). The advertising to promote business which embraces diversity, the company may be able to engage high level of employees away from its competitors, whereas employees are a vital part of ensuring competitive advantage.

Consequently, the current trend in HR literature is strategic management. This involves analysing the business environment and creating and implementing strategies that the best engagement in organisations environment efficiency (Henry, 2008). From the above discussion of DM, it can be easily seen that how DM program could be designed in such a manner which it performs a strategic role. As Peters, (2008) defile that organisations fight to remain competitive and enhance productivity and effectiveness and diversity may be valid an option. However, there is a strategic case for DM and warrants consideration in a firm's strategic decision making and planning activities, with the potentials of increase efficiency and creativity, a wider customer base, greater attraction and retention of key employees and further profit creation.

Nevertheless, there are limitations within the literature and research currently available. Firstly, there are differences in the opinion to what approach diversity in organisations should take. In 1996 Kossek and Lobel identified 3 main HR approaches to diversity: Diversity Enlargement, Diversity Sensitivity and Cultural Audit, each with their own take on diversity (Kossek and Lobel, 1996 as cited in Barak, 2011). There is a whole host of other theorists whose models all take a slightly different approach to DM; for example, Cox's (2001) change model for work on diversity, Allen and Montgomery's Model for Creating Diversity (2001). According to Cox's (2001), model is a practical and involves the five components of leadership, research and measurement, education, alignment of management systems and follow-up. Diversity management is assessed by examining the organisation's success in each category. The most successful of the company is to across all five divisions and DM system (Crosby and Stockdale, 2004). In addition, Allen and Montgomery's model is common for a theoretical model which reviews diversity as a change model where organisations progress through the stages of unfreezing, moving, refreezing and competitive advantage (Crosby and Stockdale, 2004). These are presently the two of many models for diversity.

In contrast, there is a problem in terms of definitive outline, which are linked between DM and increased financial performance, employee satisfaction and other benefits (Burke and Cooper, 2005). Additionally, there is a danger within research of simplistically categorise people such as a man or woman, heterosexual, homosexual and so forth, avoiding the multifaceted and complex nature of every single person, perhaps ignoring other important aspects of our individuality and misinterpret results (Finch-Lees and Mabey, 2008). For example, an African-American woman may face discrimination at work on the basis of their gender and ethnicity; nevertheless, this may not be represented in research data. This needs to be addressed greater in the literature. Hence, there is a need for the further research in DM to demonstrate proven links between the use of diversity models and the benefits it promises. Research needs to be more sophisticated exploratory the broad and complex issues of diversity. The models for DM need to be further discussed in terms of practicality. All this will enable firms to see the issues of diversity more clearly and help them identify a means to initiate DM into their own organisations.

The review of the literature revealed a number of strengths that, DM can bring to an organisation. Firstly, it was suggested that, DM can assist with attracting and retaining key employees. This is a key district of an organisation's activities. Some companies put the costs of replacing an employee at as much as 200 percent of the positions annual salary and benefits (Carsen, 2005). It is important to embraces diversity in an organisation and has a recruitment and selection process that mirrors. Such as, many organisations are realising the opportunities that older workers can bring their firms for having designs recruitment and retention procedures around this idea. From this point of view, Sainsbury's retail business is one of a good example. The firm used a recruitment campaign entitled 'We can teach you one or two things, removed age from its application forms, introduced flexible working and pension protection plans (Ployhart, 2006 as cited in Wilton, 2011). It was also argued that a more diverse workforce can lead to further creativity and innovations. These are seen as key sources of competitive advantage. Schwartz (2006) states "Innovation creates advantages in the marketplace over competitors, leads to other competitive advantages such as cost savings and differentiates the organization in the marketplace through the eyes of its customers" (p: 92). We can see the essential enhance sources of innovation and creativity to the firm. Occasion, IBM is a company that recognises the potential innovations diversity can bring by taking advantage of the differences people bring to the workplace. As Love (2010) state that, the company founded the Women's Inventor's Community after noticing a lack of women inventors. This has been highly successful and led to over 300 granted patents. Without attracting more women to its firm, these patents might not have been achieved.

Finally, having more diverse workforce shows that the company supports diversity and this can be particularly important in attracting customers from diverse sectors of society (Ã-zbilgin and Syed, 2010). It was suggested that a moral diversity in the workforce could encourage a broader range of customers to use in organisation. Employees may be able to cooperate communicate and understand the needs of their customers, for example, by speaking their native language. This may be particularly important if a customer has had a negative experience of diversity issues with other firms in the past. As well as encouraging new customers, the organisation may find that it attracts international investment easily by showing its open attitude to diversity issues (Ã-zbilgin and Syed, 2010). Such as, Ford car manufacturer which is a good example of a company that has comprehended the potential power of DM and runs an Insight program designed to train its employees to greater understand of diversity issues and develop multicultural strategies. Customers are contacted through various methods of communication such as, Ford is in line with customer expectations. Furthermore, the company offers Spanish and Asian-American multi-language websites to achieve the customer target in difference cultures and easy to be viewed (Ford Motor Company, 2011). As well as this, Ford has a supplier diversity development office dedicated to utilising supplier companies owned by women and minority groups. Specially, Ford continues to expand its efforts in this area and remains committed to diversity (Ford Motor Company, 2011 (2)).

Given the benefits that diversity can bring and the success stories explored, the potential for DM is apparent. However, the literature review revealed a number of concerns. Firstly, there was a problem with empirical evidence to support the suggestion that, the benefits are given if DM is introduced to an organisation. Simply having a more diverse workforce does not automatically being benefits. If it has not been managed effectively over time that could become less productive for the organisation (Kraal et al, 2009). Critics have also called for the interactions between diverse groups in the workplace to be studied and understood how to link factors and outcomes more effectively (Wrench, 2007). However, studies that examine more than one source of diversity and observe effects over a greater period of time would also facilitate to give a clear picture of the effects of DM. Therefore, it does not mean ideas of diversity are wrong, but the greatest research would add more fuel for the argument.

From examination of organisations which have seen the benefits of DM, it should be noted that DM is often seen in large and multinational companies. DM of the extent is a present in these firms would not be suitable in a small organisation (Wrench, 2007). Although, in a small company, the customer and employee profile are unlikely to change rapidly and radically to compare with a large firm, meaning that a highly sophisticated form of DM is not required. This does not mean that DM is not important, but it doesn't need to be extent and formality as some of the examples explored in this essay. A written policy of DM and training for its staff may be substantial for a small company.

Another essential issue to note is that, the requirements of a DM model in Japan may be very different from the United States. These are two very difference societies with very diverse views, norms, values and expectations (Conte and Landy, 2010). What might be important to one group and may be insignificant to the other. Similarly, a CEO's views and expectations might vary greatly from a lower level employee. It is important that in creating a DM strategy, organisations consider context and perceptions. Therefore, these can be a large impact on its success in multinational organisations and complex including an important exercise.

Hence, these are accurately some of the criticisms of DM. and it is significant attentive that a company not to restrain from these criticisms; consistently, it rather takes these on board when introducing DM to their organisation. The DM model needs to be well suited to the organisation and people that it is designed for and constantly monitored to identify weak points and areas for improvement. Moreover, in a large organisation, there is scope to link this to the strategic operations of the organisation. Importantly, this is well planned and monitored to ensure that the program is generating the results expected. Organisations should concern with their employees, customers from the variety of social to be associated about DM and consider these achievements. The literature available is good for commence the point as long as the organisations don't simply 'copy and paste' models into their company without any practices as a result of communication and review will be key to a successful program.

Conclusion

From the discussion, we have revealed that there is a strong business case for integrating DM into the strategic operations of an organisation. We revealed that DM can stimulate innovation, creativity, bring closer ties with customers, aid the attraction and retention of key employees and stimulate organisational growth. Successful DM initiatives were seen at IBM, Sainsbury's and Ford. However, there were also problems identified in the argument for DM. Further research is needed to help produce more concrete evidence of the connection between DM programs and the benefits which suggested to be brought. Additionally, It was noted that, sophisticated models of DM are only relevant to larger organisations and in those companies which DM can be treated as a strategic issue. Furthermore, the individuality of people and organisations is vital in ensuring the success of DM. Ignoring the context and perceptions of the people in the organisation would prove costly. In conclusion, DM can play a strategic role in large organisations. The success of this will depend upon the way in which management approach the issues. DM will need to be integrated throughout the organisations activities and be a part of the organisations' culture, vision and mission. The company will need to get all of its employees and stakeholder work toward vision to ensure its continued success and reinforce with goals to review progress and offer recognition for achievements. If the company can do this later using DM as a strategic option could prove highly effective particularly as globalisation and diversity continues to increase. In summary: "Successful plans are guided by a clear vision for the future, involve all relevant stakeholders and include a clear and realistic timetable." (Erasmus et al, 2009:440).

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