The Strategic Management Of Diversity Leads Commerce Essay

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It is well know quotes said by Henry Ford founder of Ford Motor Company, father of the assembly line and mass production stating that business interest was to increase mass production and to cut the cost by using black paint that was quick drying and that allowed to accelerate the production. Nowadays if we would try to explain out customers shortage of choice in that way we would probably lost them all. XXI century puts a pressure on being unique, original and customised. In commercial and global world customer do not want to be another product of the production line. We as a customers want the world to adjust to our needs, abilities and we want to be the one that is choosing the colour.

Those needs are unchangeable whether we are customer or worker. More often conventional employment becomes limitation to our working career or working life balance. Employers also know that to be competitive, innovative and successful company achievement depends on workers as people are the most important assets of any company. In organisation especially trading in the international market more often working teams are diverse not only in traditional aspects like gender, age but also culture, origin, ethnic and religion. How to manage such diversity and take an advantage of it so it will lead company to big success? Answer is the strategic management of diversity.

Introduction to diversity

Constant changes on employment market such as global competition, drastic implementation on new technology and entering new products to the market demands from organisation abilities to attract talented and competent employees. However big competition on the market and also current recession forces companies to cost reduction strategies. More often we can observe changes in ways of working as companies are creating teams of people that are working on designated projects in predetermine time. This makes it difficult to plan long-term careers in one workplace. Some time ago people were binding career prospects with a business, now with their own development. In response to this changing market reality, and - at the same time - strong demand for attracting and retaining talented people, arose the idea of diversity management. Conducting a wise diversity policy give an opportunity to use often underestimated potential of minority groups of employees.

As a result, satisfied team gets great results in the market, which is also aim to employers. In addition, the management of diversity in the workplace enlightens organizations the diverse needs of its customers and as a result provides better service to them.

What is diversity? The first diversity definitions were related to such features which are primary identify such as race, ethnic origin and gender. Later it become apparent that this diversity is not fully recognised and is does not describe all issues which are associated with it. Jackson, May, and Whitney (1995) define diversity as ". . . the presence of differences among members of a social unit" (Jackson, May, Whitney 1995 p. 217). Another diversity definition is presented by Lau and Murnighan where they stating that "We limit our consideration of diversity to demographic differences, focusing particularly on age, sex, race and job tenure or status'' (Lau, Murningham 1998). However Sarah Moore in her journal work says that diversity is a selective concept. "Generally though, strong indicators of diversity tend to include such dimensions as gender, skin colour, age, cultural background, accent and levels of physical ability. Weaker dimensions include other physical characteristics such as height and eye colour" (Moore,

Thus, in a broader sense diversity contains all aspects of diversity in which people differ and are alike, both those visible, such as sex, age, race, ethnicity, disability, weight and invisible: sexual orientation, skills, education, experience, attitudes, life, lifestyles, learning styles, etc. Those differences can be found in every workplace despite the fact not all of them are recognised and thought about as important.

A review of the human resources, business, government and organisational literature formed three major components of diversity: a) primary personal characteristics-gender, age, sexual orientation, nationality, mental and physical abilities etc; b) Secondary personal characteristics- marital status, educational level, religion, language, cultural background, etc; c) Organisational related - position in hierarchy, full time or part time worker (or trainee), seniority, union membership, etc. Interactions of these elements determine the area of diversity in the workplace.

What are organisations already doing?

What strategic management diversity is?

As we know differences between people have impact on how people act, feel and behave and how one is perceive. All the above have influence on how people are working. Taking into account those differences will allow companies fully use proficiency and ability that are posses by workforce in order to obtain desired work load at high quality. This is the main goal of diversity management.

In other words, diversity management contains all activities of the organization

which seek to take into account and also optimal use of diversity in the workplace ensuring that all employees have the opportunity to make the most of their potential and enhance their self development and their contribution to the organisation.

It is also raising awareness of leaders, managers and employees, and on the other hand the implementation of procedures and initiatives in recruitment, changes in structures, the implementation of training and career development programs aimed at increasing diversity among employees.

Diversity Management is a comprehensive managerial process, which seeks to create a work environment in the benefit of all (Wozniakowski 2005).

Of course, this leads to changes in the culture of the organization, so the management of diversity should be properly prepare and treated as a process of change, in which all elements of the organisation must be involved.

Diversity Benefits

Diversity policies (Equality and Diversity Legislations- please refer to appendix 1) implemented in today's companies can make a significant improvement to the effectiveness of communication and a positive influence on building flexible, and more open attitude and in addition to encourage workers to knowledge sharing. Constant changes in the labour market made very important impact on building work friendly environment and a work climate in which not only management feels good but others workers as well.

Certainly diversity policies contributes to increased comfort of workers belonging to minority groups - such as women employed in occupations which have traditionally were dominated by men, ethnic minorities, disabled persons, persons with different sexual orientation.

The importance of the working atmosphere becomes greater when more complex is the area operations managers in the organizations network. In addition the possibility of direct contact with employees and the influence on the career development of the employees by its bosses creates different working environment.

Building good atmosphere in the team and good communication is one of the key roles of the managers. However, these tasks are difficult to fill, if there is no support from the appropriate personnel policy of the company and also towards creating appropriate culture of the organisation. So I would take a risk and say that the policy of diversity may be an important factor that affects the dynamic of companies' development operating under the global economy.

Since the early 90s there are more and more evidences of the wider range of ideas and employee's abilities when the implementation of the employers' policy programs for diversity started.

The literature of the recent years, distinguished flowing advantages of strategic management through diversity policies:

-improved productivity

-increased creativity / flexibility

-improved problem-solving attitudes

-improving understanding and acquiring of the new markets

-increase morale and job satisfaction

-better results in the retention of staff

-smaller number of lawsuits (

Figure 1: Perceived Benefits of diversity:

(Source: The Business Case for Diversity - Good Practices in the Workplace)

In the figure 1 "Perceived Benefits of diversity" prepared b European Commission we can observe that access to new labour pool was higher rated answer to question - which benefit can diverse workforce bring to business. On the second place we have benefit related to company's reputation.

There are many reasons why diversity management and creating a friendly working environment is essential for various businesses. Why?

Diversity: the rationale for business profitability.

Activities that are taking diversity into account are vary important for the business as they can improve the quality of human resources in organizations and also work as a filter for effective investment in human capital where that aspect is very important for the company as the best investment is in people. A diverse workforce can offer a wider range of resources, skills, ideas and energy to the business, providing a competitive edge. Organisations that embrace diversity will reap the benefit of recruit from wider pool of talent, broaden their markets, improve productivity and raise their community profile. Companies who are strong in managing diversity also increase creativity and flexibility.

BT (British Telecommunications plc) is an example of successful company in this mater (turnover: £18.6 billion turnover). A leader in communication industry, confident of its ability to communicate to diverse and multicultural Britain. There are a number of successful employee networks representing among others disabled, ethnic minority, gay, lesbian, bisexual and transsexual employees and those who follow a range of beliefs and religious traditions. "At BT we will only be able to deliver innovation, (…) and provide the range of products that will drive our business forward if we have a workforce that is every bit as diverse as the customers we serve''. Ben Verwaayen, Chief Executive Officer, BT Group

Another significant benefit is that company by diverse collection of skills and experiences for example languages and cultural understanding can obtain capital for new markets as customer base become more diverse. In result company is building broader service range that allows providing services to customers on global basis. Shell well known energy and petrochemical company with roots in Netherlands and now known globally has been committed to diversity since 1997. "Most importantly, diversity and inclusiveness build trust and strengthen relationships with all our stakeholders". Jeroen van der Veer, CEO,Royal Dutch Shell plc

Companies who are managing diversity will take advantage of the impulse to invent innovative ideas and excellence in its approach to work as workforce feels comfortable communicating variety points of views. Diversity and inclusion of various ideas and points of view leads to breakthroughs that enhance the ability to face the challenges of competitiveness in business.

If company wants to be one of the leaders in its market segment, it needs to be competitive and business to be competitive must take into account the diversity of its people, to motivate and strengthen those who work for them. Having a diverse workforce and a strong market position is the competitive advantage. This is needed to build customer loyalty. TNT (mail, express and logistics services) employs 161 000 people in 63 countries. Because TNT operates around the globe both its customers and its people represent the diversity of the world population. "Attracting, developing and retaining a diverse talent base make TNT an organization where everyone can make their unique contribution to the best of their abilities. And that makes us a better Company". Peter Bakker, Chief Executive Officer, TNT

A distinguishing feature of companies that have been effective in implementing diversity programs has enhanced the image and reputation. This is not just a matter of corporate social responsibility, but mainly the issue of internal and external PR. It is also an excellent opinion of their employer - the employer of choice. With such a brand on the market, company can expect to attract CV's of the brightest graduates and also new companies wanting to enter into business. BBC television states that diversity is a creative opportunity to engage the totality of the UK audience. BBC also aims to create service accessible to all - customers and to the people who work there.


Constantly increasing the number of employers interested in implementing diversity management in the working environment as a part of the company's growth strategy. The reason for it is no doubt in raising the economic benefits, not just the need to act in accordance with the letter of the law. Compliance with the law should be regarded as a first step towards tackling discrimination, because research shows that a diverse workforce is beneficial in terms of business. In particular, they show that the implementation of policies to promote diversity allows access to a larger group of talented people and attract and retain highly qualified personnel. Company that is has diversity policies becomes part of a broader strategy of companies in the field of building human capital and encourage creativity and innovation. Diversity can help companies work with customers, suppliers and shareholders because of the activities of the multicultural and globalized markets. Commitment to diversity can also enhance the corporate image. "Protection against discrimination" can help companies avoid court costs, high labour turnover and absenteeism. Benefits for companies employing, trainers and employees being promoted based on their competence and not taking into account factors such as gender, age, race, disability, sexual orientation or religion, are not paramount.