Managing Diversity
Chapter 10
Learning Objectives
Define diversity
Understand how different cultures view
diversity
Explain Cox’s model of the multicultural
organization
Discuss various ways of managing
diversity in organizations
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Learning Objectives (cont.)
Describe unintended results of
managing diversity
Consider how managing diversity can
be a competitive advantage
Debate whether approaches to
managing diversity are converging or
diverging worldwide
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Diversity
A range of individual
differences, including those
that are visible and those
that are not, e.g.
Gender, age, ethnicity
National origin, religion,
disability
Education, profession, family
status, etc.
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How Different Cultures View
Diversity
Within and across
cultural factors
Difference in meeting
the challenge
Range of population
Laws
Social movements
Economic conditions
Globalization
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The United States
Canada
Japan
Germany
South Africa
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The United States
Fundamental tradition of valuing
equality and equal opportunity
Legal basis for managing diversity
Multiculturalism and valuing diversity
well established
Concern with the “business case”
Debate over affirmative action
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Unexpected Results: Americans’ circle of close
friends shrinking
25% said no close friends
50% had 2 friends, most likely family members
Compared to 4-5 friends twenty years ago
Could be due to
Americans working more
Marrying later
Having fewer children
Commuting longer distance
Non-white and less educated people tend to have
smaller networks than white and highly educated
Leading to lack of social support during disasters, e.g.,
Hurricane Katrina
(CNN report, 6/23/06, based on Duke University’s Research)
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Canada
Legislation applies only to regulated industries,
E.g., Broadcasting, telecommunications, banking,
railroads, airlines, shipping, government owned, etc.
Forbid direct and indirect discrimination
Pay equity law in Ontario and Quebec
Comparable value: Equal pay for work that is the
same or equally important and difficult
Some comprehensive organizational programs
Central funding for diversity programs
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Japan
Relatively homogenous population
Changing legislation and employment
practices that affect women workers
Impact of social demographic changes on
the labor market
Gender issues
Small firms and foreign firms in Japan
Diversity challenge to Japanese firms
Low birth rate
Aging population
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Population Estimates by Age and Sex
in Japan (2004 est.)
Population
(10,000)
Male
Female
600
500
400
300
200
100
0
Less
than 9
Male
15~19
25~29
35~39
45~49
55~59
65~69
75~79
Over
85
Age (5-year group)
Labor force is decreasing in Japan:
 Younger generation has the tendency of “not want to work”.
 An aging society, longest life length in the world
 These job spaces are substituted with 2.3 million immigrants & non-visa foreign labors
in Japan. Most of them are Brazilian.
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Current Population and Trends
Median
Age
65 or over
Life
Expectancy
Pop
Growth
U.S
36.0
12%
77.43
.92%
Canada
38.2
13%
79.96
.92%
Germany
41.7
18%
78.54
.02%
Japan
42.3
19%
81.04
.08%
S. Africa
24.7
5%
44.19
-.25%
China
31.8
7%
71.96
.57%
India
24.4
5%
63.99
1.44%
Countries
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Organizations’ View of Problems in
Hiring Foreign Workers (Japan)
Ability
11%
Rent
12%
Responsibility
13%
Wage
18%
Adaptability
21%
Training
21%
Communication
41%
Cultural Differences
42%
0%
10%
20%
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30%
40%
50%
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Germany
History of guest workers
Liberal law for asylum seekers
Evolving treatment of women
Recognizes EU’s six core dimensions of
diversity
Treaty of Amsterdam, 1997
Gender, age, race or ethnicity, sex orientation,
disability, religions
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Foreigners in Germany
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The foreign worker
population in Germany
increased tremendously
over a 40-year period, from
80,000 in the mid 1950s to
3 million in the late 1980s.
Now the immigrant
population in Germany has
reached approximately 8
million.
The more Germans built
their economy the more
they need foreign labor
help.
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
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1950s
1980s
2004
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South Africa as a Rainbow Nation
A mixture of African roots and deep
European impacts
The new democratic order created in
1994 is avowedly committed to
establishing a true rainbow nation
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Cultural Diversity
11 Official Languages
Ethnic divisions
black 75.2%,
white 13.6%,
Colored 8.6%,
Indian 2.6%
Religions
Christian: Most whites and
coloreds, and about 60% of
blacks
Hindu: 60% of Indians,
Muslim: 2%
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Afrikaans
English
Ndebele
Pedi
Sotho
Swazi
Tsonga
Tswana
Venda
Xhosa
Zulu
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The New Constitution
Prohibits discrimination based on race,
religion, gender, age, national origin, and
financial resource
Schools are required to use four instructional
languages so that no students would be
disadvantaged because of the language
barriers.
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Key Challenges to a Rainbow Nation
High unemployment rate
(Ginsberg, 1998; CIA 2002)
Population grows at 1% faster
than the GDP
Official unemployment rate at
30%, 2000
Estimated to rise to 55% by 2005
HIV/AIDS (CIA 1999 est.)
Population – 45 million
Adult prevalence rate –
19.94%
People living with HIV/AIDS
– 4.2 million
HIV/AIDS deaths – 250,000
Educational reform
Multi instructional languages
Outcome based education
Restructuring the systems
Shortage of financial resources
Shortage of quality teachers
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Six Dimensions to Analyze Organizational Capacity
for Effective Integration of Cultural Diversity
Dimensions
Definition
Acculturation
Cultural groups adapt to each other and resolve cultural
differences
Structural Integration
Cultural profiles of organizational members including
hiring, job-placement, and job status
Informational
Integration
Inclusion of minority-culture members in informal
networks and activities outside of normal working hours
Cultural Bias
Prejudice and discrimination
Organizational
Identification
Feelings of belongingness, loyalty, and commitment to
the organization
Inter-group Conflict
Friction, tension, and power struggles between cultural
groups
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Characteristics of Cox’s Three Organizational Types
Dimension of
Integration
Monolithic
Plural
Multicultural
Form of Acculturation
Assimilation
Assimilation
Pluralism
Degree of Structural
Integration
Minimal
Partial
Full
Virtually none
Limited
Full
Integration into Informal
Organization
Degree of Cultural Bias
Levels of Organizational
Identification
Degree of Intergroup
Conflict
Progress on both
Both prejudice
Both prejudice
prejudice and
and
and discrimination
discrimination, but
discrimination
against minorityculture groups are both continue to exist, are eliminated
especially institutional
prevalent
discrimination
No majorityLarge majorityMedium to large
minority gap
majority-minority gap minority gap
Low
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High
Low
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Creating an Organization That Can
Manage Diversity
Organizational vision
Top management Commitment
Auditing and assessment of needs
Clarity of objectives
Clear accountability
Effective communication
Coordination of activity
Evaluation
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Techniques for Managing Diversity
Managing Diversity Training Program
Core Groups
Multicultural Teams
Senior Managers of Diversity
Targeted recruitment and selection
programs
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Other Organizational Approaches
Compensation and reward programs tied to
achieving diversity goals
Language training
Mentoring programs
Cultural advisory groups
Corporate social activities that celebrate
diversity
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Unintended Results of Managing
Diversity
Programs that focus on encouraging certain
groups may create feelings of unfairness or
exclusion in others
Giving preferential treatment to certain
groups may stigmatize their members
Increasing diversity without recognition and
rewards for the new members can create
organizational tension
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How diversity may influence wages?
16 million foreign-born
workers in the U.S.
Impact by education
SF – 26% of the population
is foreign-born
Immigrants tend to earn less
Particularly those without a
high school education
Language affects income
Average earnings of
immigrant men (25-64)
speaking English: $37,694
Not at all: $11,316
Source: Harvard Research Cited by
SF Chronicle 5-4-04
-7.4% for low skill jobs not
requiring a high school
education
-3.6% with college degrees
Impact on wages by race
1980-2000
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All U.S. born -3.7%
Asian -3.1%
Black -3.5%
Hispanic -4.5%
White -5.0%
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Immigrant women entrepreneurs on
the rise in the U.S. (USBLS, Feb. 2005)
Rise by 190% since 1990
By 468% since 1980:
Mexico
Korea
Vietnam
Philippines
El Salvador
Germany
Canada
Top industries:
16.5%
6.1%
4.9%
4.0%
3.7%
3.6%
3.3%
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Private households: 13.7%
Child day care
9.2%
Restaurants/food
services
8.3%
Beauty salons
6.0%
Services to buildings
and dwellings
3.9%
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Reentering workforce poses problems
for professional women
50% were “frustrated”
18% described the job search as “depressing”
83% were over 35 years of age
81% had an MBA
Better opportunities with smaller firms
With more work-life balance
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Managing Diversity for Competitive
Advantage
Cost Saving
Resource Acquisition
Marketing
Creativity and Innovation
Problem Solving
Organizational Flexibility
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Managing Diversity for Competitive
Advantage
Not inevitably good or bad for an organization
HR managers generally see positive benefits
Positive or negative news on diversity issues
may affect the stock price
Looking beyond the “Business Case”
Labor market reality
American value
Social expectation
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Convergence or Divergence?
Increasing domestic
multiculturalism
Increasing globalization
of organizations
Antidiscrimination laws
Need for foreign labors
Social justice
Organizations of different
nationality may see
diversity from different
perspectives
Economic problems may
lead to resentment against
foreign workers or
immigrants
Financial resources may
be limited for managing
diversity and equity issues
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Implications for Managers
Managing a diverse workforce is an important
part of an international manager’s job.
Both international and domestic managers
must understand the impact of diversity and
know how to utilize the assets
Organizations should be aware that different
cultures view diversity differently, and should
consider diversity impacts both within and
across borders.
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