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Diversity as a Business Strategy Stakeholder Issues

Diversity as a Business Strategy Stakeholder Issues . Part 4 B. Objectives. To identify and explore stakeholder interests and outcomes related to diverse organizations employees management & directors, suppliers customers. Top Management’s personal intervention

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Diversity as a Business Strategy Stakeholder Issues

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  1. Diversity as a Business StrategyStakeholder Issues Part 4 B

  2. Objectives • To identify and explore stakeholder interests and outcomes related to diverse organizations • employees • management & directors, • suppliers • customers.

  3. Top Management’s personal intervention Internal Advocacy Groups Emphasis on EEO statistics and profiles Inclusion of Diversity in Performance Evaluation goals & ratings Inclusion of Diversity in Promotion Decisions & Criteria Inclusion of Diversity in Management Succession Plans Work & Family Practices Policies against Racism, Sexism, Harassment Internal Audit and Attitude Surveys Active AA/EEO Committee or Office Top 10 “Best Practices” that Assure Accountability to Employees Morrison, Anne, The New Leaders: Guidelines on Leadership Diversity in America. San Francisco: Jossey Bass, 1992, p.294.

  4. Is there Accountability?Tools & Measures • EEO / AA Metrics • Employee Attitude Surveys • Cultural Audits • Focus Groups • Customer Surveys • Management Evaluations • Accountability / Incentive Assessments • Training & Education Evaluations Digh, Patricia. The Next Challenge: Holding People Accountable HR Magazine. October 1998.

  5. Senior Management • Succession Planning (who will step in in emergency; who is being groomed as your next in line; who will be ready in 3-5 years) • Retention of talent

  6. Diversifying the Boardroom • Limited, outdated board networks for finding talent • restrictions that narrow the pool of candidates • lack of women/minorities in the “right” leadership positions. Gotcher, R. Diversifying the boardroom: It starts at the top. InfoWorld. Feb 22, 1999

  7. Stakeholder Focus: Suppliers Misperceptions about M/WBEs Minority & Women-owned Business Enterprises • Have less buying power (that’s changing) • Suppliers are too small (physical capacity) • May be under-capitalized (that’s changing) • Perceived as strictly new companies lacking a track record (a number are well established)

  8. Suppliers: What contributes to M/WBE Success? • Need to know what is expected – communicate performance criteria (for example, price can be negotiated, but not quality.) • Help w/ Physical growth (control rate of growth as key to financial health; don’t go after the Wal*Marts of your industry; find customers that match their capabilities.) • Help w/ Financial Sourcing (more banks issue loans; manufacturers extend credit) • Help w/ Managerial growth (help with maintaining a competitive position in terms of innovation, quality, price, and on-time delivery)

  9. Most common problems for M/WBEs are . . . • Trend toward supply base reduction. • Purchasing depts. are smaller & need to work with fewer suppliers. • Firms are entering into long-term alliances w/ in areas outside their core competency – outsourcing business that required their suppliers.

  10. Most common problems for M/WBEs- - - BANKS - - - • Banks aren’t interested in lending until suppliers have contracts • Banks seem unwilling to lend to companies in capital-intensive industries or non-traditional ethnic or gender-based industries. • National Minority Business Council Certification seems to help.

  11. Most common problems for M/WBEs - - - SBA Definition - - - • SBA’s 51% controlling interest for Minority ownership limits company’s ability to go public. • SBA & Big 3 automakers signed a pilot program to broaden definition of an MBE to include publicly owned suppliers. • Maintaining 51% minority ownership percentage has been a disincentive for banks to approve loans.

  12. Consumers and Diversity • Corporate America often has misunderstood or underestimated minority markets. ($700 billion) Stavraka, C. The Urban Market Is Mostly White Although Its Tastes Are Multicultural, DiversityInc.Com Jan. 12, 2001.

  13. Prof. Service Firms & Customers • Serving diverse constituencies requires a diverse workforce, which in turn brings in new clients with similarly varied backgrounds. • Full-service and varied services under one roof addresses multifaceted needs of clients. • Smaller firms develop around the interests of employees; this also attracts employees who seek to gain a broader range of skills. • Pro-bono work (no fee to client) expands employee opportunity for growth. Carlozzi, C. L. Diversity is good for business.  J. of Accountancy Sept, 99

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