Managing Global and Workforce Diversity Chapter Two Managing Global and Workforce Diversity

Describe the nature of diversity in organizations. Chapter Objectives Describe the nature of diversity in organizations. Discuss the emergence on international management. Identify and explain key dimensions of diversity. Describe the fundamental issues in managing the multicultural organization. Copyright © Houghton Mifflin Company. All rights reserved.

The Nature of Diversity in Organizations In general, diversity is thought of as relating to gender, racial, and ethnic differences in the workforce. Actually these terms refer to a mixture of items, objects, or people characterized by differences and similarities. Copyright © Houghton Mifflin Company. All rights reserved.

The Nature of Diversity in Organizations (continued) Reasons for increasing diversity in the workforce: As the job market changes in response to economic conditions, it becomes increasingly important to find the best workers and then utilize them to best serve the organization. More companies are focusing their marketing efforts on the increasing buying power in the minority markets. A diverse, or segmented marketing effort requires a marketing team that represents the markets being targeted. Copyright © Houghton Mifflin Company. All rights reserved.

The Nature of Diversity in Organizations (continued) Reasons for increasing diversity in the workforce (continued): More companies are seeking to expand their markets around the world, requiring more diverse thinking to effectively reach global markets. Companies seeking to achieve a global presence via expansion inevitably go through a period of consolidation to reduce duplication of efforts around the world and to capitalize on the synergies of cross-border operations. Copyright © Houghton Mifflin Company. All rights reserved.

What is Workforce Diversity? Refers to the similarities and differences among employees in an organization in such characteristics as age, gender, ethnic heritage, physical abilities and disabilities, race, and sexual orientation Copyright © Houghton Mifflin Company. All rights reserved.

What is Workforce Diversity? (continued) Employees’ conceptions of work, expectations and rewards from the organization, and practices in relating to others are all influenced by diversity. Managers of diverse work groups need to understand how the social environment affects employees’ beliefs about work, and they must have the communication skills to develop confidence and self-esteem in members of diverse work groups. Copyright © Houghton Mifflin Company. All rights reserved.

What is Workforce Diversity? (continued) Stereotypes Rigid judgments about others that ignore the specific person and the current situation Acceptance of stereotypes can lead to the dangerous process of prejudice towards others. Prejudices Judgments about others that reinforce beliefs about superiority and inferiority They can lead to the exaggerated assessment of the worth of one group and a diminished assessment of the worth of other groups. Copyright © Houghton Mifflin Company. All rights reserved.

Who Will Be the Workforce of the Future? All workforce segments will increase as a percentage of the total from now until 2010 (and beyond) except the white male segment. Other dramatic changes are taking place: From 2000 to 2010, the number of females in the workforce is predicted to increase by 15.1%. In the same period, the 16 to 24 age group will grow more rapidly than the entire population. The number of workers in the 55 and older group is also expected to increase sharply. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 2.1: Workforce Composition: 1990-2010 Reference: Bureau of Labor Statistics, Monthly Labor Review, November 2001. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 2.2: Workforce Composition: 1990-2010 Reference: Bureau of Labor Statistics, Monthly Labor Review, November 2001. Copyright © Houghton Mifflin Company. All rights reserved.

Global Workforce Diversity Global Phenomenon Workforce diversity is increasing more dramatically in Europe (than the U.S.), where employees have been crossing borders for many years. The Value of Diversity Workplace diversity has become an increasingly important issue in the last few years as employees, managers, and the government fully recognize that the composition of the workforce affects organizational productivity. Copyright © Houghton Mifflin Company. All rights reserved.

Global Workforce Diversity (continued) Benefits of Valuing Diversity Valuing diversity means giving up the assumption that everyone who is not a member of the dominant group must assimilate. It is not just the right thing to do for workers; it is the right thing to do for the organization, financially and economically. Overall, the organization wins when it truly values diversity because it encourages a greater sense of teamwork and a deeper commitment to the organization and its goals. Valued workers in diverse organizations experience less interpersonal conflict because employees understand one another. Copyright © Houghton Mifflin Company. All rights reserved.

Global Workforce Diversity (continued) Assimilation The process through which members of a minority group are forced to learn the ways of the dominant group. Tends to perpetuate false stereotypes and prejudices Failure to Heed Cultural Diversity Can Be Very Costly to the Organization Can result in tension among workers, lower productivity, rising costs due to increased absenteeism, higher employee turnover, and lower worker morale. Copyright © Houghton Mifflin Company. All rights reserved.

Table 2.1: Attributes Reinforced by the Culture in Typical Organizations Copyright © Houghton Mifflin Company. All rights reserved.

The Emergence of International Management The Growth of International Business A primary source of diversity in organizations is the increasing globalization of organizations and management. In 2000, the volume of international trade in current dollars was almost forty times greater than the amount in 1960. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 2.3: Forces that Have Increased International Business Copyright © Houghton Mifflin Company. All rights reserved.

Cross-Cultural Differences and Similarities General Cultural Issues Behavior in organizational settings varies across cultures. Culture itself is one major cause of the variation. Although behavior within organizational settings (e.g., motivation and attitudes) remains quite diverse across cultures, organizations and the way they are structured appear to be increasingly similar. Hence, managerial practices at a general level may be more and more alike, but the people who work within organizations still differ markedly. Copyright © Houghton Mifflin Company. All rights reserved.

Cross-Cultural Differences and Similarities (continued) General Cultural Issues (continued) The same manager behaves differently in different cultural settings. Cultural diversity can be an important source of synergy in enhancing organizational efficiency. Copyright © Houghton Mifflin Company. All rights reserved.

Specific Cultural Issues Geert Hofstede studied workers and managers in sixty countries and found that attitudes and behaviors differed significantly along with values and beliefs in those countries. He found that workers varied on individual and collectivism dimensions: Individuals is the extent to which people place primary value on themselves. Collectivism is the extent to which people emphasize the good of the group or society. Power Distance – the extent to which less powerful individuals accept the unequal distribution of power. Copyright © Houghton Mifflin Company. All rights reserved.

Specific Cultural Issues (continued) Work of Geert Hofstede (continued) Uncertainty Avoidance – the extent to which people prefer to be in unambiguous situations. Masculinity – the extent to which the dominant values in a society emphasize aggressiveness and the acquisition of money and material goods over concern for people, relationships among people, and the overall quality of life. Long-Term Orientation –people who focus on the future; people with a short-term orientation focus on the past or present. Copyright © Houghton Mifflin Company. All rights reserved.

Table 2.2: Work-Related Differences in Ten Countries Copyright © Houghton Mifflin Company. All rights reserved.

Dimensions of Diversity Primary Dimensions of Diversity Factors that are either inborn or exert extraordinary influence on early socialization. Age Race and ethnicity Gender physical and mental abilities Sexual orientation Copyright © Houghton Mifflin Company. All rights reserved.

Dimensions of Diversity (continued) Secondary Dimensions of Diversity Factors that matter to us as individuals and that to some extent define us to others but are less permanent than primary dimensions and can be adapted or changed. Educational background Geographical location Income Marital status Parental status Religious background Work experience Copyright © Houghton Mifflin Company. All rights reserved.

Managing the Multicultural Organization Managerial Behavior Across Cultures Some individual variations among people from different cultures shape the behavior of both managers and employees. In general, these differences relate to managers’ beliefs about the role of authority and power in organizations. Multicultural Organization as Competitive Advantage Since the workforce is becoming more diverse, the companies that value and integrate diverse employees the most effectively will reap the most benefits. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 2.4: Differences Across Cultures in Managers’ Beliefs About Answering Questions From Subordinates Source: Reprinted from International Studies Management and Organization, vol. XIII, no 1-2, Spring-Summer 1983, by permission of M.E. Sharpe, Inc., Armonk, NY 10504. Copyright © Houghton Mifflin Company. All rights reserved.

Table 2.3: Six Ways Managing Diversity Can Create Competitive Advantage Copyright © Houghton Mifflin Company. All rights reserved.

Creating the Multicultural Organization Pluralism A pluralistic organization has mixed membership and takes steps to fully involve all people who differ from the dominant group. Full Structural Integration Occurs when an organization has minority group members serving at all levels, performing all functions, and participating in all work groups. Integration of Informal Networks Fostered through mentoring programs, special social events, and support groups for minorities. Copyright © Houghton Mifflin Company. All rights reserved.

Creating the Multicultural Organization (continued) Absence of Prejudice and Discrimination Facilitated through equal opportunity seminars, in-house focus groups, and bias reduction training. Equal Identification With Goals When members of different groups participate fully in determining the organization’s direction and how to meet its goals, they better understand the organization and their place within it. Copyright © Houghton Mifflin Company. All rights reserved.

Creating the Multicultural Organization (continued) Low Levels of Intergroup Conflict Intergroup conflict can be minimized in several ways. Some forms of conflict can be healthy if they stimulate creativity in problem solving and decision making. Conflict based on cultural differences is usually unhealthy and detrimental to the multicultural organization. Survey feedback processes can be used to expose beliefs and attitudes toward others and to measure the success of the multicultural effort. Special training in conflict resolution can help managers learn the skills of mediation and listing that are critical for managing conflict. Copyright © Houghton Mifflin Company. All rights reserved.