Multicultural and diversity management

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Diversity management is the “recognition and valorization of individual differences”. The concept of diversity encompasses acceptance and respect. It means understanding that each individual is unique, and recognizing our individual differences. These can be along the dimensions of race, ethnicity, gender, sexual orientation, socioeconomic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies. It is the exploration of these differences in a safe, positive, and nurturing environment. Moreover, it is about understanding each other and moving beyond simple tolerance to embracing and celebrating the rich dimensions of diversity in each individual, as opposed to a pure compliance to equality/affirmative action laws approach (Thomas, 1990). As seen from a US perspective, ‘Diversity management’ is supposed to represent a break from equality concepts such as equal opportunity and affirmative action (Thomas, 1990 ; Thomas and Ely, 1996). However, this distinction and implicit sequencing between diversity management and supposedly earlier equality and affirmative action laws may not hold in all countries around the globe. For instance, in the European Union, notions of diversity management and equality seem to be growing in parallel, and diversity management is sometimes seen as a vehicle towards the institutionalization of equality and/or positive action legislations (Klarsfeld, 2010). As an example, in France, debates about diversity management and discrimination grew simultaneously rather than in succession to one another (Klarsfeld, 2009).

History of diversity management[edit]

Diversity management should be understood as a historically situated concept. Diversity management as a concept appeared and gained momentum in the USA in the mid-1980s. At a time when President Ronald Reagan threatened to dismantle equality and affirmative action laws in the USA in the 1980s, equality and affirmative action professionals employed by US firms along with equality consultants, engaged in establishing the argument that a diverse workforce should be seen as a competitive advantage rather than just as a legal constraint. Basically, their message was : do not promote diversity because it is a legal mandate, but because it is good for business (Kelly and Dobbin, 1998). From then on, researchers started to test a number of hypotheses on the business benefits of diversity and of diversity management, known as the business case of diversity.

The Business Case for Diversity[edit]

There are many benefits to promoting diversity in the workplace. Higher innovation levels can be achieved with including workers from different backgrounds with different perspectives. Another key advantage is relationships with customers; customers are all diverse in their own way, more diversity creates a staff base that can relate with and serve all different types of customers. Appreciating diverse individuals will open up new avenues for talent to be unlocked and for the firm to really take advantage of all talent from different generations, ages, genders and backgrounds. Diversity management is becoming more common in the overall strategy of many successful companies today. If diversity is not managed the business may experience dysfunctional turnover; when a talented employee leaves because they feel as though they do not fit and are not being supported. Businesses can also experience many legal complaints if diversity is not managed properly, as well as a lack in innovation and creativity in their new products and ideas. Ethnocentrism is common among managers who generally hire those who are similar to them. Bias is also common among people who have a traditional outlook on society. These perceptions and bias can be overcome by teaching managers and employees about the benefits of diversity and learn about the myths, stereotypes and stigmas attached to different groups in society.


undertaken up to the present day provides only modest support to the proposal, that workforce diversity per se brings business benefits with it. Therefore, this idea remains open to debate and further research. In short, whether diversity pays off or not depends on environmental factors, internal or external to the firm. Dwyer, Richard & Chadwyck (2003) found that the effects of gender diversity at the management level are conditional on the firm's strategic orientation, the organizational culture and the multivariate interaction among these variables. Schäffner, Gebert, Schöler, & Kirch (2006) found that if the firm’s culture incorporates the normative assumption or belief that diversity is an opportunity, then age diversity becomes a predictor of team innovativeness, but not otherwise. Kearney & Gebert (2006) found that diversity in age, nationality, and functional background, have a positive effect on team innovativeness in a high transformational leadership context, but no effect in a low one. A curvilinear relationship between diversity and performance was identified by Richard, Barnett, Dwyer, & Chadwick (2004). Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn et al. (2003), found few positive or negative direct effects of diversity on performance. In the cases that came under their scrutiny, a number of different aspects of the organizational context or group processes moderated the diversity-performance relationship. Failing to manage diversity properly or developing diversity per se leads to only mixed results (Bell & Berry, 2007; Klein & Harrison, 2007). Overall research suggests that diversity needs to be properly managed if any business benefits are to be reaped. If properly managed, diversity likely will hold its business promises. This does not preclude that diversity at all levels of society should be a goal 'per se'. Beyond business benefits, research should pay more attention to societal benefits attached to the promotion of more inclusive and diverse workforces.

Implication for managers[edit]

If diversity is to be managed properly in order to foster better organizational performance, it is important for managers to understand and value cognitive diversity. One of the reasons is that the problems of today's business activities are complex to a higher extent than multiple years ago. Understanding the concept of cognitive diversity therefore is highly desirable for good management. Moreover, research projects are larger and more expensive, partly due to the economic hard times. Another result of the economic downfall is the greater need for innovation. Since competition increased significantly, companies have to diversify and innovate on fields other than their direct and indirect opponents. A last point of attention would include the essence of predicting the future becoming more important in the years that lay ahead of us.

Beyond cognitive diversity, group-based diversity (i.e., diversity along ethnic, religious, gender, age, socio-economic status lines) is also important to understand, value and manage.

Implications of managers on the work level are can be seen as more practical than the concepts described above. This can be said to be a hand-on approach. To realize the potential of employees in businesses, managers should be open for individual differences. In several cases managers would like to see employees to behave in a different way, while this is not method that employees are used to and in which they are most efficient. To realize the potential of the employees, it often is helpful to build teams capable of solving complex problems and making better predictions. Since people think and act differently and moreover have different backgrounds, a broad range of ideas will be gathered. In this way the best possible solution can be reached easily. One can say that in this way, you tap into a diversity of perspectives, heuristics, interpretations and predictive models to create innovating organizations capable of sustaining competitive advantage.

Some critical managing diversity issues are summarized below:

  • Creating an inclusive organization
  • Working to change the corporate culture towards valuing diversity
  • Demonstrating commitment through flexibility
  • Creating awareness and skills – learning and training
  • Measuring and creating incentives
  • Linking valuing diversity to strategic objectives
  • Assuring top management support
  • Clear and credible communication

Diverse and inclusive diverse organisations[edit]

Diverse organizations are characterized by a focus on employment profiles (i.e. workforce composition) and fair treatment. On the other hand, inclusive diverse organizations have policies and practices that facilitate the full utilization of human resources and enhance employees' abilities to contribute to their maximum potential. An organization however could go one step further, and become a truly inclusive organization. A truly inclusive organizations uses the diversity of knowledge and perspectives to shape their strategy, work, management and operating systems as well as its core values and norms of success.


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