Chapter 1 is providing an overview of the study context and explicating the research problem of the workforce diversity that will effect on the organization's performance. In this chapter, the research background, problem statement, research objectives, research questions, hypothesis of the study, significance of the study, and the chapter layout will be outlined.
1.1 Research Background
Nowadays, both government sector and non-government sector organizations are undergoing workforce diversity issue (Lawsson, 2009). Diversity defined as variety of different toleration and value by community or the society with the different background which in difference attributes such as the gender, religion, age and others (Mcshane, 2009).
Workforce diversity had become a major point of competitive requirement for an organization nowadays (Gandz, 2001). Every organization had recognized that by valuing and pursuing workplace diversity and managing it well could urge the contribution from worker to please customers, work effectively with partners and suppliers, and fulfill shareholders (Gandz, 2001).Workplace diversity is a strategic organizational response to globalization of business activities and the arising of diverse culture and the marketplaces (Gandz, 2001). Malaysia organizations understand that changing the business environment is important to increase the workforce diversity because it could help to improve the economies condition. The resident of Malaysia are fluent in Malay, Tamil and Mandarin by each three main races and it was take advantages for the local companies and also the multinational companies from global world ("Workforce Diversity In", 2009). Well manage in diverse worker can innovating the new ideas, perspectives and views to their works which will bring the success of the organization (Forbes, n.d.). Lauring (2011) noted that as a consequence of the rise of internationalized business environment and competitiveness, the managing of human diversity has become an ambitious task in business communities. The competitiveness among the industry will be decreased when the diversity is not supported during the changes of organization in external environment (Al Khattab, 2010).
1.2 Problem Definition
As we recognize that workforce diversity is a significant issue for all organization nowadays, many organizations are actively in applying diversity in their workplace. However, not all of them manage to execute it effectively. The root lies on the wrong way of operating from the top management teams, it requires management team to make adjustment internally based on the effect from the workforce diversity. The effect could be in either positive or negative, as some of the effects might influence management team to be confused and shift the awareness from the high visible to the less important effects (Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn, Leonard, Levine, and Thomas, 2002). It leads the management team to ignore, less concern or do not manage well on the important effects by the workforce diversity. Thus, the organization performance would be affected. Diversity is hard to study in organizational settings because it elicits sensitive issues that are difficult to discuss. Moreover, organizations are reluctant to contribution their experiences or data and the legal climate. Decades of research on the effects of diversity among teams and small groups indicate that diversity possess negative effects, as well as positive ones (Kochan et al., 2002). Organization's future directions and goals will be affected by these effects of workforce diversity; therefore, investigation of the effects of workforce diversity towards organization performance has to be carried out.
In fact, past research proposes that there may be no direct positive and negative relationship among diversity and performance, while in some groups, diversity might improve employees' performance, however in other groups, diversity might detrimental employees' performance (Jackson, 1992; Jehn, Neale, Northcraft, 1999; O'Reilly & Flatt, 1989; Richard, 2000; Steiner, 1972). Additionally, Richard, McMillan, Chadwick, & Dwyer (2003) mention that there might have both positive and negative effects to increase workforce heterogeneity within an organization. According to the Cox and Blake (1991), diverse workforce withstands potential competitive advantages for organization if they are well managed. This statement suggests that if the work teams can manage the diversity well, diversity is an asset for the work team to their performance. Moreover, Elsass and Graves (1997) also acknowledge that workforce diversity with a high quality social exchange may increase the organizational performance. However, diversity not only has positive but it also have negative impact on organizational performance (Kochan et al., 2003). Social identity theory proposes that diversity have negative impact on organizational behaviors and performance (Harrison, Price, and Bell, 1998; Pelled, Eisenhardt, Xin, 1999). According to Harrison et al. (1998) study corresponds that the heterogeneity possessing negative outcome (performance rating). Pelled et al. (1999) too state that race and tenure diversity may raise emotional conflict, but there is no prove shows that emotional conflict can enhance performance. Other than that, negative impact on workforce diversity can lead to increase in employee's turnover rate and lead to reduction in organizational performance (Pelled et al.,1999).
1.3 Research Objectives
1.3.1 General Objectives
The purpose of this research project is to investigate the relationship between the effects of workforce diversity towards organizational performance. By conducting this research project, researches will have a clearer understanding on the effects of workforce diversity will affect the organizational performance.
1.3.2 Specific Objectives
The workforce diversity is important as it affect the organizational performance. The researcher will develop why it is important to the organizational perfomance by investigating through the effects of workforce diversity as we know that good workforce diversity can lead to a better organizational performance and better environment for the employees. Hence, the research will be conducted to investigate on:
1. The relationship between discrimination and organizational performance.
2. The relationship between conflict and organizational performance.
3. To identify whether two independent variables have significant relationship with organizational performance.
1.4 Research Questions
To answer the following research questions to address the research problem had discussed above.
1. Does discrimination have any significant relationship with organizational performance?
2. Does conflict have any significant relationship with organizational performance?
3. Does the effect (discrimination, conflict,) have any significant relationship with organizational performance?
1.5 Hypotheses of the Study (for quantitative research)
H0: There is no significant relationship between discrimination and organizational performance.
H1: There is a significant relationship between discrimination and organizational performance.
H0: There is no significant relationship between conflict and organizational performance.
H1: There is a significant relationship between conflict and organizational performance.
H0: There are two independent variables (discrimination and conflict) are not significant affect the organizational performance.
H1: There is one or more independent variables are significant affect the organizational performance.
1.6 Significance of the study
This research project will provide significant value to top management particularly for the organization that has large workforce diversity because it evaluates the way of how the effects of the workforce diversity influence the organizational and employee performance. Difference organizations have different extent of diversity within the organization and the effects of workforce diversity could be positive or negative. Consequently, management team will be able to understand and manage the effects of the workforce diversity more effectively and the right way to enhance the competitive advantage of the organizational.
First and foremost, this research also enables the organization to know the reason of why the effects of workforce diversity are important, and how to manage it effectiveness. Owing to this reason, managing the effects of workforce diversity is very important which may affect the overall performance, and effective management of workforce diversity will makes a business organization successful. Without these, organization moves too slowly, stagnate, and lose their way.
Apart from these, this research project can help the organization to have a better way to manage the effects of the workforce diversity. This is because after this research, researcher is able to let the organization know what actually lead and affect the effects of the workforce diversity in the diverse workplace within organization.
At last, this study will identify and investigate factors influencing the effects of workforce diversity towards organizational performance. There are several effects of workplace diversity towards organizational performance. Besides that, researcher also try to discover which effects or variable that are mostly having position or negative relationship toward organizational performance. Eventually, this study will provide an idea to the organization on what is the main effect of workforce diversity towards organizational performance.
1.7 Scope and Limitation
Many researches and journals had published the issues of workforce diversity. However, many of the journals are outdated and do not correspond with the current trend. The evolution of social trend, technology and management style lead to confliction between those research journals and present situation. New research has to be carried out so that it could match with the current situation. Moreover, many findings from research shows that diversity in work teams can lead to negative consequences for example is disruptive conflict (Guzzo & Shea, 1992). However, if the organization can fully utilize and manage workforce diversity effectively, it will assist the organization to enhance the performance among teams and members.
1.8 Chapter Layout
This research can be categorized into five chapters which include the overview of our topic and literature review which are both located in chapter 1 and 2 respectively. Chapter 3 consists of data collection methods, sampling procedures and the data analysis techniques. Research results, discussions and conclusion are located in chapter 4 and 5 respectively.
As a conclusion, the effects of workforce diversity indeed are the important in the organization after go through a few cases. Without a proper management of the effects workforce diversity, it may be hardly to see good outcome from the company. So in order to have a better understanding about the effects of workforce diversity towards organizational performance, a review on relevant literature has to be done in order to seek supporting evidence to support the study. This however will be conducted in the next chapter.