Diversity within Diversity Management

Types of Diversity in Organizations

Andri Georgiadou, Maria Alejandra Gonzalez-Perez, Miguel R. Olivas-Luján, Andri Georgiadou, Maria Alejandra Gonzalez-Perez, Miguel R. Olivas-Luján, Andri Georgiadou, Maria Alejandra Gonzalez-Perez, Miguel R. Olivas-Lujan

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781789731729
• eBook ISBN: 9781789731736
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

Managing diversity plays a crucial part in enabling every member of the workforce to perform up to their full potential. Managers demand satisfactory performance from every member of their workforce and expect the best of their employees. But often, diversity and its management are not viewed as clear contributors to the organization's performance and bottom-line. Managing and leveraging diversity are set aside from the rest of the organization and hence, they are often undervalued amid all the other barriers that companies face. 

Whilst there is no single tried-and-tested "solution" to diversity and no easy way to manage implementation barriers, this edited collection of case studies from around the globe provides new insights for practitioners, managers, students and researchers. The book seeks to shed light on existing practices disseminating the value of diversity, whilst opening the road toward a wider perspective on its definitions. The contributors provide critical reflections of the current discourse on different types of diversity in heterogenous organizations around the world.

Pride and Prejudice: The Case of Barilla S.P.A.

Ronald Scott Wolf and Maria Alejandra Gonzalez-Perez

Abstract

Purpose — Reputational crisis negatively affects brands and companies. This chapter, based on a single case study, aims to explore how prejudicial corporate statements directed toward lesbian, gay, bisexual, and transgender (LGBT) individuals have affected the Italian multinational Barilla S.p.A., as well as how the company responded both internally and to the market in order to attempt to overcome the highly damaging consequences.

Design/Methodology — This chapter uses a single case-study methodology, which constitutes “a research strategy that focuses on understanding the dynamics present within single settings to create theoretical constructs, propositions and/or midrange theory from empirical evidence” (Eisenhardt, 1989, p. 534). The case-study design was chosen as it has been demonstrated to provide a methodological tool for both theory generation and theory testing (Gibbert et al., 2008).

Findings — Conclusions from the chapter indicate that negative, incendiary, and oftentimes comments citing either religious or stereotypical-based ideology negatively impact both the consumers and its associated publics in terms of product branding or reputation image.

Research Limitations — The study’s limitations, which rely primarily on a single case study and secondary research data, may motivate further investigative avenues, particularly as similarly referenced events continue to unfold almost daily, such as the study’s referenced incident with Philippine boxer Manny Pacquiao, as well as action taken by social media giants (Apple and Facebook) against the controversial media figure Alex Jones.

Practical and Social Implications — This chapter also looks at family succession roadblocks and navigating social media gaffes. These contemporary issues highlight challenges, strategies, sales and market share dynamics for the company, and suggestions for navigating the road ahead. The research concludes with possible linkages and insights for both ongoing management issues and potential areas for future research. Other findings indicate that rapid responses, particularly those citing concrete corporate policy changes or tangible actions, help to reverse and mitigate reputational damage, and contemporary approaches utilizing social media appear to buttress these efforts.

Originality/Value — This case study of Barilla as well as other firms mentioned, such as Chick-fil-A and Nike (which have experienced parallel situational crises), indicates that in only the last five years of contemporary international business practice, MNEs are continually and at times unexpectedly challenged by the lack of sensitivity demonstrated by their owners and spokespeople who utter comments which may be seen by the public as potentially harmful to the LGBT community. This study hopes to illuminate this challenge while offering tangible solutions to turning around future, similar situational crises.

Keywords: Reputation management; family business; gay and lesbian marketing; LGBT; diversity; social media; Barilla

Introduction

Increasingly, social networks have challenged and changed the traditional relationship between consumers and brands (Cova & Pace, 2006). There is an increase in the incidences in which the speed of communication to stakeholders via web-media and electronic word-of-mouth (WOM) has represented a real threat to corporate reputation. Recent examples, such as the Volkswagen scandal in September 2015 based on illegal software to manipulate CO₂ emissions, have caught the attention of both traditional media and social networks, causing negative effects in both the consumer and stock markets. Another example of reputational crisis unfolded as a consequence of anti-gay remarks in September 2013 made by the chairman of the pasta company Barilla. This chapter aims to provide both a conceptual and a theoretical understanding of the successes and the crisis management approach undertaken by this company.

Barilla G. e R. Fratelli S.p.A. (Barilla) is a successful family-owned¹ multinational foods manufacturing company with its headquarters in Parma, Italy. It began with humble beginnings in 1877 (Barilla, 2014a) as a small bread and pasta shop. Barilla is now a leading global sales player second only to private label brands, jumping from 9 to 12% of total market from the period 2009–2014, and is the dominant sales leader in both Italy and the United States, with sales of 900 and 800 US$ million respectively in 2014 (Euromonitor International, 2015). However, throughout its history, the pasta giant has faced many challenges, most recently, in 2013, a public relations disaster caused by its chairman’s comments aimed at gay and lesbian consumers.

In September 2013, Barilla Group’s chairman stated in an Italian radio station interview that the company “would never feature or market directly to gay couples. If they had a problem with that, said its chairman, they could eat another brand of pasta” (Heller, 2013). This event has raised not only ethical and political concerns but also marketing challenges; according to Forbes (Fuller, 2013), the LGBT community has roughly USD800 billion purchasing capacity, globally, per year, LGBT’s household average income is 23 percent higher than that of their heterosexuals’ counterparts, and it has been estimated that same-sex-partnered households make on average 16% more shopping trips than heterosexual households.

This chapter is structured with its first section offering an overview of how LGBT and other gender-related discriminatory practices have created a variety of public relations crises; it reviews reputational crisis management under different theoretical lenses. The subsequent section presents the methodological approach undertaken for conducting this single case study. This section is followed by the findings and discussions. Finally, conclusions and guidelines for future studies are offered.

Literature Review

Reputational capital (together with global leadership and stewardship development) has been considered as one of the strategic intangible assets that leverage sustainable competitive advantage in the twenty-first century (Petrick, Scherer, Brodzinski, Quinn, & Ainina, 1999). The democratization of Internet access combined with socially and environmentally concerned activists with access to social networks with (almost) universal coverage has brought massive advertisement opportunities for firms and their brands. At the same time, however, these opportunities have exponentially amplified the vulnerability for companies and have brought trials and tribulations for their managers. Responding to consumers’ demands for companies to act ethically, in a politically correct manner, and to assume societal concerns and social issues in terms of corporate social responsibility (CSR), communication strategy has taken unprecedented importance. These aspects must be taken into account as far as gaining (or losing) legitimacy in domestic and international markets (Taylor, 2014). In some cases, CSR communication has been associated with corporate reputation and also could create differentiation and competitive advantage (Fombrun & Shanley, 1990; Fombrun & Van Riel, 2004). There is consistency in the literature that crises can affect brand reputation and represent unexpected managerial challenges to communicate with stakeholders (Coombs, 2007). There is an increasing number of corporate reputational crises associated with social policies, and companies have experienced increasing public pressures to express their views on such policies (such as same-sex marriage, animal rights, etc.), even if they do not have an intrinsic connection to their core business (Hirsch, 2014). This represents a challenge for businesses operating both locally and internationally. Hirsch (2014) suggests four elements to be taken into account for tackling these public demands: (i) consumer dynamic sentiment mapping on certain issues; (ii) developing well-established points of view on issues for which they have been challenged in the past, or interest them the most; (iii) early engagement and continuous conversations with consumers; and (iv) decision clarity on what a focal firms’ policy is and when or how it might change.

The specific case of Barilla’s (2013) controversy and its effect on the LGBT community can also be examined from a different perspective. Pace, Balboni, and Gistri (2017) analyzed how social media multiplies negative reactions by stakeholders and exacerbates brand crises stakeholders via WOM. However, corporate reputational effects during a crisis can be mitigated if the company can anticipate the effects (Coombs, 2007). Coombs (2007) establishes factors that determine the reputational threat: (i) initial crisis responsibility (the attributed degree of firm’s responsibility by the stakeholders); (ii) crisis history (if the firm has a previous history of crisis); and (iii) prior relational reputation (the perceived consideration by the firm for its stakeholders across various domains in other different circumstances).

Situational crisis communication theory (SCCT) is an “evidence-based framework for understanding how to maximize the reputational protection afforded by post-crisis communication” (Coombs, 2007, p. 163). SCCT is informed by attribution theory (Bradford & Garrett, 1995); it states that when external actors accuse firms of unethical behavior, corporate executives communicate responses classified as no response, denial, excuse, justification, and concession.

Based on attribution of crisis responsibility (Bradford & Garrett, 1995), SCCT (Coombs, 2007; Coombs & Holladay, 2002) has identified three types of crisis clusters: (i) victim cluster (the firm is viewed as a victim of an unexpected event); (ii) accidental cluster (the event is considered uncontrollable or unintentional); and (iii) intentional cluster (the event is purposeful). Under this SCCT framework, reputational crises trigger affective reactions in stakeholders who will spread negative information about the firm when it is perceived as having high responsibility in the crisis (Coombs, 2007). Therefore, both the physical and psychological needs of the stakeholders need to be the main concern when a crisis arises, in order to move from crisis to opportunity (Liu & Fraustino, 2014; Ulmer, Sellnow, & Seeger, 2013).

Even though SCCT relies on experimental methods rather than case studies, it provides a useful theoretical lens for interpreting the role of postcrisis communication, while providing guidelines for addressing stakeholders during the postcrisis stage of Barilla’s chairman’s anti-gay pronouncement. In the next section, the methodological approach for this study will be described.

Methodology

This qualitative and exploratory study aims to answer the following research questions: (1) how do prejudicial corporate statements directed toward the LGBT people affect multinational companies; and (2) how does the company respond both internally and to the market in an attempt to overcome the highly damaging consequences. This study was designed to test the SCCT approach, as this framework has been found to provide conceptual and theoretical examples, providing tools to examine in detail the case of a company such as Barilla. Barilla S.p.A. has been chosen as an example of a company which has recently experienced a reputational crisis due to anti-gay statements by its chairman.

Case studies are methodological tools for both theory generation and theory testing (Gibbert, Ruigrok, & Wicki, 2008). This chapter uses a single case-study methodology, which constitutes “a research strategy that focuses on understanding the dynamics present within single settings to create theoretical constructs, propositions and/or midrange theory from empirical evidence” (Eisenhardt, 1989, p. 534).

There are several reasons why this chapter relies on secondary publicly available data. A most important justification is that public relations crises would not exist without manifestations such as articles in newspapers, blogs, tweets, and other media. In addition, particular attention has been given to the difficulty of gaining valid and reliable primary data, specifically on ethics-related studies (Cowton, 1998). Some of the reasons have been poorly designed questionnaire, low response rate, the use of poor scenarios, the use of convenience (instead of random) samples, and the sensitive nature of the questions.

Although there is abundant literature questioning issues such as rigor of internal validity, construct validity, external validity, and reliability in case studies (Gibbert et al., 2008; Yin, 1994), this particular method was chosen as it was deemed appropriate to generating relevant managerial knowledge (Leonard-Barton, 1990).

This study relies on publicly available sources (e.g., tweets, newspapers, and company reports). The data were collected, classified (based on its relevance and established credibility of the source), and organized in different theory-driven categories for their analysis.

The following section summarizes the main findings of this study.

Findings

The Studied Company: Barilla S.p.A.

The group operates principally in different countries in Western Europe and in the United States, yet has strong marketing and distribution presence in Latin America with expansion plans for the Asia/Pacific, Middle East, Africa, and Eastern European markets (Euromonitor International, 2017). While it is most known by consumers and the foodservice industry for its large variety of dried pastas, it pro...

Table of contents

• Cover
• Title Page
• Diversity within Diversity: Equality and Managing Diversity
• 1. Pride and Prejudice: The case of Barilla S.p.A.
• 2. Representation of Women on Corporate Boards of Directors and Firm Financial Performance
• 3. Demographics, Conflict, and Perceived Openness to Diversity
• 4. Influence of Immigrants’ Attributes on Unfair Discrimination in Organizations
• 5. Board Diversity in Audit and Finance Committees: A Case Study of Coca-Cola
• 6. Equality and Diversity of Students in Higher Education
• 7. Allyship as a Diversity and Inclusion Tool in the Workplace
• 8. Managing Diversity and Social Inclusion in a Telecom Project: Overcoming Cultural and Economic Barriers
• 9. Managing Workplace Inequality in Mexico: An Analysis of Gender, Age, and (Dis)Ability Status
• 10. Managing Gender Diversity in Companies Operating in Different National Contexts: The Case of Spanish MNCs in Latin American Countries
• 11. Inclusive Leadership: A Scientometric Assessment of an Emerging Field
• 12. Gender Bias in Academia: An Attempt to Render the Intangible Tangible
• 13. Diverse Human Families and Pet-friendly Work Environments: Pawternity of Dogs
• Index