Diversity as a Business Strategy Stakeholder Issues Part 4 B

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

Top 10 “Best Practices” that Assure Accountability to Employees 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 Morrison, Anne, The New Leaders: Guidelines on Leadership Diversity in America. San Francisco: Jossey Bass, 1992, p.294.

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.

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

Diversifying the Boardroom Limited, outdated board networks for finding talent restrictions that narrow the pool of candidates lack of women/minorities in the “right” leadership positions.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

Stakeholder Focus: Suppliers 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) Misperceptions about M/WBEs Minority & Women-owned Business Enterprises

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)

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.

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.

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.

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.The Urban Market Is Mostly White Although Its Tastes Are Multicultural,

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, 99Diversity is good for business