Managing Diversity in Canada's Business Landscape

1. Learning Goals for today • Why manage Diversity? • State of Canada’s businesses & population • Disadvantages of mis-managing diversity • Advantages of managing diversity well • What is Diversity?

2. Why Manage Diversity Current State of Canadian Businesses • Highly skilled labour is a major contributor to labour force growth bec. of technology, globalization, etc. • Existing Canadian population is not replacing itself with skilled labour • Need to import skilled labour from Asia & S. America • Canada competes w/Europe & the US for skilled labour Oliver

3. Immigrants & Labour Force • 54% of immigrants are highly skilled labour • Immigrants will contribute to 100% of labor force growth in 2011 Conf Board of Canada, cited in Oliver

4. Why Manage Diversity State of the Canadian Population • Immigration • 70% of 200,000 immigrants/year are Visible Minorities • Census in 2001 • 11% of Population is Visible Minority • Projections for 2017 • 19-23% of Canadians will be Visible Minority Oliver

5. Why Manage Diversity Visible Minorities in the Labour Force • VMs accounted for 33.3% of Labour force’s contribution to GDP for 1992-2001 even though they made up only 11% of labour force • Visible Minorities (VMs) will account for over 10% of the gains in GDP growth Conf Board of Canada, cited in Oliver

6. Visible Minorities Immigrants Skilled Labour

7. Why Manage Diversity? VMs in the workplace • Wage gap • VMs earn less than Canadian average • 11% less in 1991 • 14% less in 2000 • Asian men immigrating to Canada earn 10-15% less than immigrants to US (even after controlling from experience & schooling) Conf Board of Canada, cited in Oliver

8. Why Manage Diversity? VMs in the workplace • Unfair Treatment • 1 in 5 VMs report discrimination and unfair treatment in the last 5 years (Stats Can) • 4 times more than for non-visible minorities • Poor representation of VMs in key decision making positions (Conf Board of Canada) • 3% of respondents have VM CEOs • 3% of 900 senior executives were VMs • 9 in 10 org do not have a plan to recruit VM to Board even though they believe it is important to have such representation on Board (New Racism) Oliver

9. Why Manage Diversity? VMs in the marketplace • Consumer behavior shaped by cultural and ethnic background (cox) • Implications for marketing to such consumers

10. Physical Consequences of Mis-managing Diversity • Cost of Employee Withdrawal • E.g., Replacing employee, days absent, sick days • Mental health care costs • e.g., costs for coping w/stress • Lowered employee productivity • Health care costs • e.g., negative effects on health from stress • Legal costs • E.g., costs of settling/contesting discrimination and harassment lawsuits • Lowered stock value Stephan & Stephan, Cox

11. Psychological Consequences of Mis-managing Diversity • Increased conflict • Lower social attraction to work group • Lower commitment to work group • Increased & discrimination • Poorer communication • Lower cooperation & cohesiveness (Pelled et al 99) • Higher Turnover (Cox) • Higher stress (Stephan & Stephan) Williams & O’Reilly 98

12. Advantages of Diversity • Improves/increases • Problem solving & decision making quality • Creativity & innovation • Interpersonal skills among employees • Organizational flexibility • Quality of human resources • Marketing strategies • Higher annualized returns • Fulfils organizational values of fairness Stephan & Stephan, Cox, Oliver

13. Advantages of Group Diversity • Improves Problem Solving because… • Problems are approached from broader & richer base of experience (cox) • Increased critical analyses bec. there were more differences in opinion (Cox, Oliver) • Generates more range of perspectives and more alternatives (Conf Board) • Limiting factor • Only when diverse groups are trained on how to understand each others’ attitudes (Triandis et al)

14. Advantages of Group Diversity • Improves Creativity/Innovation • More ideas generated (Oliver) • E.g., In demographically diverse top management teams in the banking industry • Improved performance in task requiring marketing to different cultures (Cox) Member diversity Differences in perspective Better Quality ideas

15. Advantages of Diversity in Groups • Better interpersonal skills among employees • Visible Minority group members score higher on collectivism • Collectivists were more cooperative (cox et al) • But increased employee diversity can also reduce cooperation (Pelled et al 99)

16. Advantages of Employee Diversity • Organizational Flexibility • Different people have different ways of organizing info, responding and reacting to info, and are more or less flexible in their ways of thinking • E.g., Women score higher on tolerance for ambiguity which is linked to cognitive complexity & ability to perform ambiguous tasks • E.g., Bilinguals show more cognitive flexibility & more divergent thinking than monolinguals Cox

17. Advantages of Employee Diversity • Quality of Human Resources • When diversifying implies enlarging the pool of potential employees, it increases organizational performance • Restricting selection of employees to one group reduces pool to choose from and therefore the range of talent • Assumes full range of ability/skill in all groups of employees (e.g., physical strength range in men vs. women) Cox

18. Marketing Advantages of Employee Diversity • Expand to Global Markets • Hiring new immigrants with knowledge (of business norms of markets) & connections to home countries (via personal relationships w/individuals in those countries) helps expand company’s operations to such countries • Public relations advantage of managing diversity well (Cox) • Assumes: That perceptions of organizations w/ predominantly vm employees is also favorable

19. Marketing Advantages of Employee Diversity • When employees match the composition of the market, they • E.g., secure more business from those ethnic groups (e.g., BMO; cited in Oliver) • Understand how people of those ethnic groups buy goods enabling orgs to market to them (Cox) • Are better at providing service to those customers bec. they know better how to do so • E.g., If employee speaks language of non-English speaking customer (Leonard et al, 2004)

20. Marketing Advantages of Employee Diversity • Match b/w employee & customer’s group membership increases likelihood of customer sponsoring organization • Due to customers’ preferences for similarity • Supported in sports memorabilia purchases • Not supported in other retail environments (Leornard et al) • Note: Argument of customer-service provider match was used to discriminate against vms when customer base was white & is now being used as rationale to attract vm customers

21. Marketing Advantages of Employee Diversity • Employee’s cultural group membership implies s/he has knowledge about own culture and cultural group members’ preferences • But see Cultural circles exercise!

22. What is Diversity? • Differences in social & cultural group memberships among people (cox) • E.g., religion, ethnicity, gender, nationality, sexual orientation, • Exercises illustrating these differences: Pie Chart exercise; Cultural circles exercise; Twenty Statements Test • Individual differences on any measurable & valid dimension • E.g., cognitive complexity; cooperativeness; skills • Value of using such dimensions vs. social/cultural group membership differences for • Fairness • Positive organizational outcomes