Diversity in Organizations

A Critical Examination

Cedric Herring, Loren Henderson

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317802211
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Diversity in Organizations argues that ensuring a diverse workforce composition has tangible benefits for organizations. Rather than relying on touchy-feely arguments, Herring and Henderson present compelling evidence that directly links diversity to the bottom line.

Readers will learn:

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• How and why diversity is related to business performance

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• The impact of diversity training programs on productivity, business performance and promotions

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• The biggest mistakes in diversity management, and how to avoid them

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• What can be done to make diversity initiatives more effective and politically palatable

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• How to measure success in diversity initiatives in rigorous, non-technical ways to achieve desired results

Presented accessibly, without shying away from the contentious aspects of diversity, the book also provides concrete advice and guidance to those who seek to implement diversity programs and initiatives in their organizations, and to make their companies more competitive. Students taking classes in diversity, human resource management, sociology of work, and organizational psychology will find this a comprehensive, helpful resource.

1
Introduction

For several years, we have “known” that diversity is intrinsically good. It has become common for proponents of the “business case for diversity” to claim that “diversity pays.”¹ For the most part, proponents of this view suggest that diversity in the corporate setting, for example, represents a compelling interest that will help meet customers’ needs, enrich understanding of the pulse of the marketplace, and improve the quality of products and services offered.² With respect to employees, diversity brings with it different perspectives. The greater the differences among employees are, the broader their perspectives, the stronger their teams, and the better their resources for problem resolution.³ Diversity also provides creative conflict that leads to closer examination of assumptions so that people from varied backgrounds can create complex learning environments that lead to better solutions to problems.⁴ Because of the putative competitive advantages of diversity, companies increasingly have relied upon a heterogeneous workforce to increase their profits. Because diversity provides fresh ideas, strong growth, positive company images, fewer discrimination lawsuits, and an enhanced ability to hire qualified workers, businesses should be aggressive about workforce diversity.⁵ In short, the rhetoric of diversity in industry suggests that a diverse workforce is good for business, and that diversity offers a direct return on investment that promises greater corporate profits and earnings.⁶

But evidence is a stubborn thing. Despite the fact that there are scores of books on the business case for diversity that have had very good sales, there are none that pass social science scrutiny in offering solid, systematic evidence to substantiate a link between the racial and ethnic composition of firms and business performance, per se. This lack of evidence has led to an upsurge of skeptical, anti-diversity works that suggest that the costs of diversity in the workplace outweigh its benefits.⁷ They say that proponents of the diversity model too often overlook the significant costs of diversity. For example, Peter Skerry points out that research on intergroup relations consistently finds that racial and ethnic diversity are linked with conflict, especially emotional conflict among co-workers.⁸ Ann Tsui, Terri Egan, and Charles O’Reilly found that diversity can reduce the cohesiveness of the group and result in increased employee absenteeism and turnover.⁹ Moreover, detractors of the diversity model suggest that the emphasis on diversity divides America into separate groups based on race, ethnicity, or gender and in so doing, suggests that some social categories are more deserving of privileges than are others.¹⁰ There is also the argument that greater diversity is associated with worse quality because it places lower performing people in positions for which they are not suited.¹¹ Finally, Katherine Williams (Phillips) and Charles O’Reilly suggest that most empirical evidence shows that diversity is most likely to hinder group functioning.¹² In short, critics of the diversity model posit that group differences result in conflict and its attendant costs. For these reasons, skeptics of the business case for diversity model have questioned the real impact of diversity programs upon the “bottom line” of business organizations.

For more than 20 years, scholars have been talking up the value of research-based management and lamenting the fact that academics are not providing the kind of information and evidence that diversity managers can use in their day-to-day activities and that diversity practitioners are not using the information and research evidence that scholars have produced.¹³ Unfortunately, the same thing is true in the field of human resources where there is the feeling that practitioners neither know nor follow research-based “best practices,” and practitioners feel that researchers do not really provide useful advice.¹⁴ The same is true within the growing field of diversity management.¹⁵

David Kravitz¹⁶ argues that:

academics and practitioners do not adequately grasp the other group’s domain. For example, academics are often unfamiliar with the reality of diversity work in business. They are unaware of, and thus do not study, novel approaches that practitioners have developed. They do not appreciate the challenges involved in applying their findings in the workplace and often do research with little practical value. Practitioners are not blameless. They are unaware of academic research about basic human nature and about what diversity management approaches are known to work—knowledge that could increase the impact of their programs and practices. In summary, academics and practitioners do not value, appreciate, or even understand one another.

Diversity in Organizations: A Critical Examination bridges the diversity research practice gap. It does so by bringing the best practices uncovered by academic research to bear on topics that matter to practitioners who are trying to determine what they need to know and do in order to manage diversity within their organizations more effectively and profitably. But Diversity in Organizations is not just another atheoretical howto book. Rather, it offers a hardheaded examination of the relationship between workforce composition and the business case for diversity. This book provides concrete evidence that diversity matters in business organizations. Rather than the kind of touchy-feely, we-wish-that-it-were-so arguments put forth by proponents of diversity in the past, it supplies data that directly links diversity to the bottom line. It provides the kind of theoretically informed, systematic analysis of data from actual business organizations that management scholars and social scientists are accustomed to seeing in their most rigorous professional journals. It puts forth a theoretical perspective—that of critical diversity—that is unapologetically pro-diversity for the right reasons. Yet, Diversity in Organizations presents these materials in a fashion that will make it accessible for the informed and educated person who cares about these pressing issues that confront our society and the business manager who wants to know what she needs to do in order for her company to become more competitive.

After demonstrating that diversity is beneficial, Diversity in Organizations shows why initiatives to promote greater diversity—like affirmative action— remain unpopular with Whites. But it does not stop there. It also offers real-life solutions to the political problems that arise from implementing diversity initiatives. It also looks at the various sources of support for, and opposition to, diversity and equal opportunity initiatives. In particular, it answers questions about why increasing proportions of the population say that they favor diversity but appear to oppose the means and goals to achieving it.

Diversity in Organizations: A Critical Examination is divided into 14 chapters. The next chapter provides explanations of some of the central concepts used by those interested in diversity issues, identifies the subject matter, and locates the work in the context of contemporary writings on diversity in employment and educational institutions. It introduces a theoretical perspective that we call “critical diversity.” The chapter provides a brief historical overview of changes in the discourse and rhetoric about inclusion as it has moved from debates about affirmative action to various notions of diversity. It calls for a move away from “colorblind diversity,” “segregated diversity,” and “snowflake diversity” toward a “critical diversity” that must go beyond celebrating group differences to examine all forms of social inequality, oppression, and stratification that revolve around issues of difference. It lays out some concrete strategies for doing so:

1. Target goods and resources to excluded people.
2. Advocate for an expansive notion of diversity, but seek out distributive justice that will serve to assist “disprivileged” groups.
3. Shift goods and resources away from privileged groups, especially when invoking the rhetoric of diversity.
4. Reconnect diversity to affirmative action and the need to offset historical and ongoing racial and gender discrimination, segregation, and bias.
5. Remind people that diversity is consistent with legal compliance.
6. Demonstrate to organizational members that diversity is institutionally beneficial.

In Chapter 2, we argue that without linking diversity to such concerns, the usage of the term diversity is hollow.

Chapter 3 provides a comprehensive overview of the business case for diversity thesis. In doing so, it explains why a business case for diversity is necessary. It then provides an examination and critique of this perspective that critics of diversity have put forth. It provides a clear, concise explanation of diversity as a concept. It also shows how diversity compares to related concepts such as affirmative action and quotas. Perhaps most importantly, it provides evidence from a nationally representative sample of real business organizations to examine the relationship between racial and gender workforce diversity and the business case for diversity. In doing so, it provides strong support for the business case for diversity perspective. It answers questions such as: How does diversity affect the business performance of organizations? Is there any tangible evidence that there is a relationship between the racial and gender composition of the firm and its sales revenue, its number of customers, its market share, or its profitability? The results are fully consistent with the argument that racial diversity in the workforce has a positive impact upon business performance. The relationships between racial diversity and various dimensions of business performance remain even after statistical controls for such factors as legal form of organization, gender composition of the firm, organization size, organization age, type of work conducted by the organization, and region. The chapter also provides insight into how diversity managers and others can use these results to their advantage in their quest for profit, productivity, and partnerships. Indeed, the chapter explicitly discusses the “diversity-profit equation” and how it can be leveraged for organizational gain.

Chapter 4 offers an examination of organizational characteristics, recruitment and retention factors, and employment practices and job benefits that are associated with the racial and ethnic composition of for-profit and nonprofit organizations in the United States. It demonstrates that there are tangible recruitment and retention strategies that companies can employ (or avoid) that make a difference. Organizations that foster climates that are inviting to racial and ethnic minorities and actively seek to promote them have more success in retaining them. Organizations can foster climates that are inviting to racial and ethnic minorities by offering job-training opportunities for employees of color and encouraging them to keep their skills current so that they can advance. Making the job search process transparent by posting information about job vacancies and utilizing internal hiring and promotion strategies are also associated with higher percentages of racial and ethnic minorities in the work-place. Many of the effective recruitment and retention efforts go hand-in-hand with signaling the importance of fairness in employment practices and the provision of job benefits that make it easier for organizations to be inclusive. The analysis also shows that racial and ethnic diversity increases marginally as establishment size increases, with the presence of unions, formal job training, internal hiring strategies, higher percentages of women in core positions, affirmative action and Equal Employment Opportunity (EEO) departments, formal job performance evaluations, and the provision of daycare facilities and subsidies. The availability of flexible work hours is associated with lower rates of racial and ethnic diversity. The chapter also explores the centrality of having a compelling recruitment brand when trying to win over talent, especially from diverse populations.

Chapter 5 examines the pessimism and skepticism surrounding the impact of diversity training programs. It focuses on the challenges of managing diversity by pointing to the dangers of racial and ethnic heterogeneity when appropriate diversity management tools are not in place. It provides an analysis of the conditions under which diversity leads to such workplace problems as increased absenteeism and worker turnover. Importantly, it also offers ways to resolve these issues by changing the culture of organizations so that employees understand the value and importance of diversity and of focusing on the goals of the organization rather than individual needs. In short, this chapter identifies conditions and practices that create and sustain environments that are supportive of diversity. The chapter also provides information about managing diversity in work organizations, corporate governance, and the biggest mistakes to avoid in diversity management.

Chapter 6 provides an analysis of gender diversity. It shows that in the last 50 years, women have come a long way in the U.S. workplace. Women’s participation in professional managerial roles has increased from 4 percent in the early 1970s to almost 50 percent today. Women have entered occupations that were previously closed to them. At the same time, women make 76 cents to the dollar of men. The number of women CEOs of Fortune 500 corporations can still be counted on one hand. Women account for only 12 percent of boardroom seats, and they make up only 16 percent of corporate officers. Despite women’s increasing participation in the labor force, they are still concentr...