Organizational Processes for TPP: Session 7

1. Organizational Processes for TPP:Session 7 Managing Diversity in Organizations & Affirmative Action Planning

2. Introductions (5 min.) Key concepts and historical context (15 min.) Diversity research and organizational performance (30 min.) Case examples (45 min.) Break (10 min.) Preparing for the Affirmative Action Reactions (30 min.) Role Plays (45 min.) Session Design (3 hours)

3. Key Issues for Today • How do we gain competitive advantage from the diverse backgrounds, knowledge bases, and cultural experiences present in today’s workforce? • What is the relationship between diversity and organizational performance? Is there a “Business Case” for diversity? • How can we manage diverse teams to product positive organizational and personal results? • What are the elements of a systemic organizational approach to managing diversity? • How do we prepare for the coming debates/reactions to the affirmative action case?

4. Diversity – Some Visible Elements • Gender • Race • Ethnic • Age • Cross Cultural – look around!

5. Some Hidden Aspects of Diversity • Cognitive – how we approach problems • Discipline or Function – different knowledge; different solutions • Cultural – norms of interaction & communication • Multiple identities – woman, engineer, mother, project leader …..which one do others see? Which one comes out?

6. The Rhetoric Today “The Business Case” for Diversity • Talent Shortage • We need to reflect our customers • Diverse teams produce better results Lew Platt, former CEO, Hewlett Packard How did we get here?

7. 1960s–70s 1980s 1990s-present New Legal Requirements; Civil Rights Pressures; Affirmative Action “Valuing Diversity”: Training Focused on Attitudes and Sensitivities The Business Case: Expected to accelerate rate or progress A Brief Historical Tour

8. Prior Evidence • Legal/social pressures improved formal organizational HR practices but had little effects on attitudes, behaviors, or “subtle” discrimination • Few sustained effects of “valuing diversity” training • No consistent relationship between demographic diversity and team performance

9. Diversity Research Network Project • Industry-Academic Partnership • BOLD Initiative • Multi-university research Network • Field Studies in Companies • qualitative histories • quantitative analysis at team/group levels • Focus is on a “business case” analysis --diversity-group process-performance outcomes

10. Elements in a Systemic Model: Benchmarking • Commitment from the top • Commitment embedded in Org. Values & Strategies • Dedicated Resources--Accountable Prof. Staff • Management Accountability-Link to Perf. Reviews • Board communication-Info Exchange • Strong Fairness/Compliance System/Procedures • Diversity Training that Reaches All--Effectively • Mentoring & Career Development Supports • Diversity Committee/Identity Groups • Evaluation, Measurement of Effects/Progress

11. Beyond “Best Practices” Human Interactions • Perspectives: • Legal Requirement • Labor or Product Market Necessity • Opportunity for Learning • Skills & Capabilities for Leading & Working in Diverse Settings

12. The Research ModelThe Effects of Diversity on Group Processes and Outcomes Organizational Culture Business Strategy Human Resource Policies Diversity Group/Team Processes Outcomes Cultural Demographic Technical Cognitive Communications Conflict Cohesion Performance Satisfaction Turnover

13. Evidence--Building from the Studies • Historical Context: Diversity achieved through sustained effort, external pressure, mgmt. Commitment • External pressure necessary, but not sufficient--a learning/integration perspective also needed • HR systems/decisions must sustain diversity through critical transitions in business--growth, mergers, layoffs, top management shifts, etc. • Group dynamics and leadership are critical processes that determine whether diversity produces positive or negative results: • communications • conflict management • cohesion

14. Additional Considerations: Alternative “Perspectives” Toward Diversity” • Legal Requirement • Labor or Product Market Necessity • Opportunity for Integration & Learning

15. Four Case Studies • Two Information Processing Firms • A Financial Services Firm • A Retail Chain All large firms with national reputations for a longstanding commitment to diversity

16. Case 1: Information Processing FirmKaren Jehn and Katerina Bezrukova • No direct relationship between race or gender diversity and performance • Different types of diversity have different effects on group processes: • gender diversity--positive • Racial--negative • Training focused on management of group processes reduce these negative effects • Constructive group processes have positive effects on diversity • Gender diversity had positive effects on performance in units with a people oriented culture but not others • Racial diversity had negative effects in units with a competitive culture but not others

17. Case 2: Financial Service BranchesRobin Ely and David Thomas • Few direct effects of diversity on performance • Effective group processes positively associated with sales revenue, productivity, and customer sat. • No evidence that group processes mediated the diversity—performance relationship • Racial diversity had a positive effect on performance in branches with a high integrative and learning perspective and a negative relationship with performance in units with a low integrative and learning perspective

18. Case 3: Information Processing FirmSusan Jackson and Aparna Joshi • Team Level: • No significant negative or positive effects of race or gender diversity on either team processes or performance when teams were analyzed without regard to organizational context. • District Level: Mixed Evidence: • Greater gender and ethnic diversity associated with higher team cooperation • Regions with more gender diversity performed better on some measures • Regions with more racial diversity performance worse on some measures • Additional analyses at the district level revealed that the effects of teamdiversity depend upon the amount of diversity within the district. • Service Teams: Team gender diversity improves team processes & performance in districts with high gender diversity • Sales Teams: Team racial diversity improves team processes and performance in districts with high racial diversity

19. Case 4: Branch Stores of a RetailChainDavid Levine, Jonathan Leonard, and Aparna Joshi • Focus was to test relationship of workforce diversity—customer diversity link • No relationships between workforce and customer diversity observed • Some small, positive effects for racial and gender diversity on sales performance. But this was outweighed by positive effects of percent male and percent white on performance

20. Conclusions: Is the glass half full of half empty? • More evidence for lack of significant direct diversity performance relationship • Some evidence that racial diversity may still have some negative effects on group processes or performance • Negative effects may be reduced or eliminated by training focused on group processes • Some support for an “integration & learning” perspective • Some indications that diversity in the larger organization helps diverse groups perform well

21. Evidence--Building from the Studies • Historical Context: Diversity achieved through sustained effort, external pressure, mgmt. Commitment • External pressure necessary, but not sufficient--a learning/integration perspective also needed • HR systems/decisions must sustain diversity through critical transitions in business--growth, mergers, layoffs, top management shifts, etc. • Group dynamics and leadership are critical processes that determine whether diversity produces positive or negative results: • Communications • Conflict management • cohesion

22. Some Managerial Implications • Modifying the “Business” Case (next slide) • Is it time to Look Beyond the Business Case? • Importance of Group Process Training • Need for a more Analytical Approach to Diversity Management

23. Revised Statement of the “Business Case” for Diversity Diversity is a reality in both labor markets and product markets today. To be successful in working with and gaining value from this diversity requires a sustained, systemic approach and commitment. Success is facilitated by a perspective that views from each other how to better accomplish their work and an occasion that required a supportive and cooperative organizational culture as well as group leadership and process skills required for effective group functioning. Organizations that invest their resources in taking advantage of the opportunities that diversity offers should ooutperform those that fail to make such investments.

24. Research—Lessons Learned • More difficult than we expected! • Many organizations interested but most declined to participate • Data access problems—can be overcome but with lots of work on researchers’ part • Testing the full model is difficult in any single setting • Cross organization designs may be unrealistic

25. Directions for Future Research • High priority to organization-specific experiments • Deeper mix of contextual, qualitative, historical, and quantitative research designs • Great value in building a research network—and keeping it loosely structured • Importance of building collaborative relationships with specific organizations

26. The MIT Case • President Vest: Commitment with Understanding • Visible leader in legal battle for diversity in admissions • Financial support for minority hiring; created Campus Committee on Race Relations; supports women’s study… • Understands need to work to gain value from diversity “The tensions introduced by diversity into the academic community are very real. We need to find ways for our differences of experience, culture and perspective to enrich, rather than divide our community…” Source: 1992-93 President’s Report

27. MIT, contd. • Mgmt. Accountability--still working on this! • Communications--Active MLK day; Women in Science • Compliance Systems--very decentralized to departments • Training--voluntary--some good examples; low coverage • Mentoring/Career Supports--very decentralized; spotty • Diversity Committees/Identity Groups; CCRR; Women in Science; Women in Engineering; Women in Sloan… • Evaluation-Measurement--studies underway on undergrads, faculty, and staff--part of the MIT culture • Informal Culture and Process Skills: Still Problematic

28. Affirmative Action: What it is,What it’s Not & How it Works atMIT Presentation of the Committee on Campus Race Relations (CCRR)

29. Introduction & Overview • MIT’s Position in Summary Form • History of Affirmative Action—where did the concept come from? • Legal History—Background to the Michigan Case • Affirmative Action at MIT—how does it work here?

30. Affirmative Action: Brief History • 1961: JFK E.O. 10925: federal contractors to use AA to insure equal treatment • 1964: Civil Rights Act & creation of EEOC • 1965: LBJ E.O. 11246: federal contractors to use AA to expand minority job opportunities • Labor market analysis • Organizations must designate responsible officer • Plan for utilizing minorities and women

31. Affirmative Action: Legal Overview • 1978: Bakke v U of Cal: Upheld race as one factor in admission but outlawed reserving specific number of slots for minorities • 5-4 decision • “Strict Scrutiny” doctrine established—must be able to show a compelling government interest and means used be narrowly tailored to serve that interest • 1996: California Prop. 209: Abolished all public sector AA programs in ed and employment and contracting • 1996: Texas v Hopwood (U.S. Ct. of Appeals: Law School’s admission policy of considering race unconstitutional under equal protection clause • U of Michigan cases: Can universities add points to admissions scores for underrepresented minorities?

32. Evidence from Industry • Wage & Employment Discrimination still exist • Audit studies find 5-20% differences in housing/job offers favoring whites • Affirm action achieves modest employment share gains of 2-5% • Affirm action has major effect on improving quality of human resource practices—recruiting, selection, training, performance appraisal, etc. • No conclusive evidence of efficiency losses (or gains) due to affirm action

33. MIT’s Position: Summary Form • MIT’s quality of education is enhanced by the diversity of its student body • Suits to limit affirmative action threaten the ability of MIT and other institutions of higher education to serve our nation and its future • We must retain the freedom to consider race as one of many factors in admissions: Race conscious recruiting & selection processes are essential to achieving racial diversity at highly selective colleges and universities

34. From the Brief • “…MIT believes that a diverse student body is essential to its mission. That mission is to serve the nation and prepare graduates to address challenges in a diverse world that is increasingly driven by science, engineering and technology—creative fields that require effective collaboration among individuals of many races, national origins and backgrounds.”

35. Cosponsors of the Brief • MIT • Stanford • IBM • DuPont • National Academy of Sciences • National Academy of Engineering • National Action Council for Minorities in Engineering

36. Co-sponsors’s Statement “As great universities, leading corporations and national academies, we have a profound responsibility to provide for the future economic strength, health and security of this nation. The Court must not block our path to building the diverse scientific and engineering workforce and leadership we need to do the job.” Source: February 17, 2004 Press Release

37. Affirmative Action @MIT—what it is Not • MIT does not use any quotas, targets, or mathematical formulas in admissions • MIT does not lower its standards of admission for underrepresented minorities

38. Affirmative Action @MIT: How it really Works • Extensive outreach to identify qualified minorities and to encourage them to apply • Dual rating of all applicants without regard to race used to identify pool of capable applicants: • Academic Index: Grades, Class Rank, Scores • Personal Index: leadership, extracurricular activities, experiences • Subjective judgments of staff based on each individual’s full range of accomplishments experiences and potential • Race, national origin & ethnicity are considered as one of multiple factors because they are part of the social & cultural contexts of an individual’s life experiences

39. What’s at Stake • Use of test scores, grades, and class rank would reduce the pool of qualified minority applicants • Compared to whites African-Americans are: • 50% less likely to graduate in top 10% of their class • 40% less likely to have an A average • Only 5% score above 600 on math or verbal SATs compared to 24% (math) and 21% (verbal) of whites • Bowen % Bok study estimates: A race neutral standard would reduce number of black students at highly selective colleges to 2% or less

40. A System’s View for Promoting Diversity on Campus • Active outreach to identify qualified minorities and get them to apply • Considering race as one factor among others in choosing among qualified applicants • Active efforts to get those admitted to accept • Special efforts to help minorities and others to succeed at MIT • Active efforts to create a supportive environment and to provide opportunities for all community members to interact, to learn from our diversity, and to develop the skills and capabilities needed to be effective participants and leaders in industry and society

41. The Problem & Task Affirmative Action: What Should MIT do NOW to Prepare the Campus Community for the Supreme Court Case to be Heard this Spring and Announced this Summer? Your Task: Design a Strategy and get Buy-in from key stakeholders

42. Process • Brainstorm Stakeholders & Interests (full group) • Small groups: Design a Strategy in Small Groups—Divide up the Stakeholders • Objective: Get Buy In and Active Support for Your Plan • Role Play: FishbowI Exercise

43. The Fishbowl (1) : Change within the MIT Culture • Approach each Stakeholder— • Freeze at any counter-cultural tactic