Managing Diversity

1. Managing Diversity Chapter 10

2. 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 IBUS 681 Dr. Yang

3. 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 IBUS 681 Dr. Yang

4. 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. IBUS 681 Dr. Yang

5. How Different Cultures View Diversity • Difference in meeting the challenge • The United States • Canada • Japan • Germany • South Africa • Within and across cultural factors • Range of population • Laws • Social movements • Economic conditions • Globalization IBUS 681 Dr. Yang

6. 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 IBUS 681 Dr. Yang

7. 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) IBUS 681 Dr. Yang

8. 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 IBUS 681 Dr. Yang

9. 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 IBUS 681 Dr. Yang

10. Population Estimates by Age and Sex in Japan (2004 est.) • 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. IBUS 681 Dr. Yang

11. Current Population and Trends IBUS 681 Dr. Yang

12. Ability 11% Rent 12% Responsibility 13% Wage 18% Adaptability 21% Training 21% Communication 41% Cultural Differences 42% 0% 10% 20% 30% 40% 50% Organizations’ View of Problems in Hiring Foreign Workers (Japan) IBUS 681 Dr. Yang

13. 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 IBUS 681 Dr. Yang

14. Foreigners in Germany IBUS 681 Dr. Yang

15. 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. IBUS 681 Dr. Yang

16. 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 IBUS 681 Dr. Yang

17. Cultural Diversity • 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% • 11 Official Languages • Afrikaans • English • Ndebele • Pedi • Sotho • Swazi • Tsonga • Tswana • Venda • Xhosa • Zulu IBUS 681 Dr. Yang

18. 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. IBUS 681 Dr. Yang

19. 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 Educational reform Multi instructional languages Outcome based education Restructuring the systems Shortage of financial resources Shortage of quality teachers 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 Key Challenges to a Rainbow Nation IBUS 681 Dr. Yang

20. Six Dimensions to Analyze Organizational Capacity for Effective Integration of Cultural Diversity IBUS 681 Dr. Yang

21. Characteristics of Cox’s Three Organizational Types Dimension of Integration Monolithic Plural Multicultural Form of Acculturation Degree of Structural Integration Integration into Informal Organization Degree of Cultural Bias Levels of Organizational Identification Degree of Intergroup Conflict Pluralism Full Full Both prejudice and discrimination are eliminated No majority- minority gap Low Assimilation Minimal Virtually none Both prejudice and discrimination against minority-culture groups are prevalent Large majority-minority gap Low Assimilation Partial Limited Progress on both prejudice and discrimination, but both continue to exist, especially institutional discrimination Medium to large majority-minority gap High IBUS 681 Dr. Yang

22. 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 IBUS 681 Dr. Yang

23. Techniques for Managing Diversity • Managing Diversity Training Program • Core Groups • Multicultural Teams • Senior Managers of Diversity • Targeted recruitment and selection programs IBUS 681 Dr. Yang

24. 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 IBUS 681 Dr. Yang

25. 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 IBUS 681 Dr. Yang

26. 16 million foreign-born workers in the U.S. 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 Impact by education -7.4% for low skill jobs not requiring a high school education -3.6% with college degrees Impact on wages by race 1980-2000 All U.S. born -3.7% Asian -3.1% Black -3.5% Hispanic -4.5% White -5.0% How diversity may influence wages? Source: Harvard Research Cited by SF Chronicle 5-4-04 IBUS 681 Dr. Yang

27. Rise by 190% since 1990 By 468% since 1980: Mexico 16.5% Korea 6.1% Vietnam 4.9% Philippines 4.0% El Salvador 3.7% Germany 3.6% Canada 3.3% Top industries: 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% Immigrant women entrepreneurs on the rise in the U.S. (USBLS,Feb. 2005) IBUS 681 Dr. Yang

28. 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 IBUS 681 Dr. Yang

29. Managing Diversity for Competitive Advantage • Cost Saving • Resource Acquisition • Marketing • Creativity and Innovation • Problem Solving • Organizational Flexibility IBUS 681 Dr. Yang

30. 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 IBUS 681 Dr. Yang

31. 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 Convergence or Divergence? IBUS 681 Dr. Yang

32. 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. IBUS 681 Dr. Yang