Management Of Diversity In Organization

Management of Diversity in Organization

Abstract

Organizations have been becoming increasingly diverse in terms of gender, race, ethnicity, and nationality. This diversity brings substantial potential benefits such as better decision making, greater creativity and innovation, and more successful marketing to different types of customers. But, increasing cultural differences within a workforce also bring potential costs in higher turnovers, interpersonal conflicts, and communicational breakdowns. The utilities of diversity training and the essential managerial skills required for effectively managing diversity will also be discussed.

Diversity Management vs. Organizational Performance

Diversity of skills among individual members will increase the combined skills of the team. It is assumed that a team of people collectively having a diversity of skills will perform better than a team of people all having similar skills, Brakefield (1999).

In an empirical study of military tank crews, Tziner and Eden (1985) observed that crews consisting of all high-ability individuals performed more than additively better than expected, and that those consisting of all low-ability individuals performed even worse than expected.

The possible benefits which could be brought to organizational performance through diversity management can be related to six catalogues including cost, resource acquisition, marketing, creativity, problems solving and system flexibility. Here are some discussions for every catalogue.

1. Cost: As organizations become more diverse, the cost of a poor job in integrating workers will increase especially for those labor intensive jobs. Those who handle this well will thus create cost advantages over those who don't.

2. Resource Acquisition: Companies develop reputations on favorability as prospective employers for women and ethnic minorities. Those with the best reputations for managing diversity will win the competition for the best personnel. As the labor pool shrinks and changes composition, this will become increasingly important.

3. Marketing: For multi-national organizations, the insight and cultural sensitivity that members with roots in other countries bring to the marketing effort should improve these efforts in important ways. The same rationale applies to marketing to subpopulations within domestic operations.

4. Creativity: Diversity of perspectives and less emphasis on conformity to norms of the past should be able to improve the level of creativity.

5. Problem-Solving: Heterogeneity in decision and problem solving groups could potentially produce better decisions through a wider range of perspectives and more thorough critical analysis of issues.

6. System Flexibility: An implication of the multicultural model for managing diversity is that the system will become less determinant, less standardized, and therefore more fluid. The increased fluidity should create greater flexibility to react to environmental changes, for example, with greater speed and less cost.

But the impact of diversity management practices on company performance could go either ways. Because diversity does not come into organizations and businesses in a single dimension, employees bring several types of diversity with them into an organization simultaneously. It may not be only one or even two dimensions that make a difference; it may be the sum of the whole. One thing for certain is that diversity is not a substitute for ability. To get the highest possible performance from a team, all the best individuals should be gathered together.

Relationship between Diversity and Creativity

From Susan (1989), attitudes, cognitive functioning and beliefs are not randomly distributed in the population but tend to vary systematically with demographic variables such as age, race, and gender. When one manages a diverse combination of population in the organization will increase cultural diversity in organizations by the presence of different perspectives for problem solving, decision making and creative tasks.

Advocates of the value in diversity hypothesis suggest that work team heterogeneity promotes creativity and innovation. Research tends to support this relationship. Kanter's study of innovation in organizations revealed that the most innovative companies deliberately establish heterogeneous teams to "create a marketplace of ideas, recognizing that a multiplicity of points of view needs to be brought to bear on a problem". Kanter also specifically noted that companies high on innovation had done a better job than most on eradicating racism, sexism, and classism, in addition, tended to employ more women and racioethnic minorities than less innovative companies.

Research by Charlene J. Nemeth found that minority views can stimulate consideration of non-obvious alternatives in task groups. Nemeth found that the "minority" groups adopted multiple strategies and identified more solutions than the "majority" groups. She concluded that the groups exposed to minority views were more creative than the more homogeneous, majority groups. She further concluded that persistent exposure to minority viewpoints stimulates creative thought processes. Another experiment compared the creativity of teams that were homogeneous on a series of attitude measures against teams with heterogeneous attitudes. Problem solution creativity was judged on originality and practicality. Results indicated that as long as the team members had similar ability levels, the heterogeneous teams were more creative than the homogeneous ones. If people from different gender, nationality, and racioethnic groups hold different attitudes and perspectives on issues, then cultural diversity should increase team creativity and innovation.

Specific steps must be taken, however, to realize this benefit. The research shows that in order to obtain the performance benefits, it is necessary for heterogeneous team members to have awareness of the attitudinal differences of other members. Similarly, diversity needs to be managed in part, by informing work-group members of their cultural differences. In recognition of this, cultural awareness training has become a standard element of organization change projects focusing on managing diversity.

Demographic Diversity vs. Group Functioning Effectiveness

Although grouping people on the basis of ability can have synergistic effects on team performance, it is quite interesting that the overall effect could be unclear. Among a given group of individuals,