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Within this essay the pros and cons of business case approach will be discussed and evaluated. Diversity management has been defined as a “management philosophy of recognizing and valuing heterogeneity in organizations with a view to improve organizational performance” (Gobbling and Tail, 2011 Diversity management can be understood as the recognition and management of diversity within the workplace both internally and externally with a purpose of using diversity as a tool of improving business performance.
The use of the business case approach currently suggests that the use of diversity management can both improve business performance and minimize costs. ()Diversity management is viewed by many as an alternative to equal opportunity’s, though it can sometimes be difficult to fully distinguish the difference between the two(). There are many differing factors that can affect the outcomes of diversity management and the actual benefits that can be reaped from using the business case approach.
Through appropriate strategic diversity management planning businesses can improve their performance(). Though there are many different factors affecting what type of strategic diversity plan would be made, the factors affecting this being what type of market the business it’s in, its labor market and current organizational strategies(). This essay will look at the differences between diversity management and equal opportunity, how diversity management can strengthen a wide variety of organizational performance indicators and the elements of a strategic diversity plan.
Following this the pros and cons of the business case approach to diversity management will be discussed , critically analyses and evaluated which will lead to a conclusion Of the findings Of this essay. What is equal opportunity Equal opportunities can be described as a law or governmental regulation that everyone/business has to adhere to, this law or regulation stipulates that everyone deserves an equal opportunity to be employed and treated the same regardless of race, gender or religious beliefs. ) An example of this is the United kingdom’s equality act of 2010, this act protects people from discrimination in regards to age, gender, race ,gender reassignment, disability’, pregnancy or maternity and religion or belief and sexual orientation. ()The first purpose Of this act is” to eliminate unlawful coordination, harassment and visitation”90. The second purpose is to advance equality of opportunity beјen different groups” and lastly to “foster good relationships between different groups of people”().
The differences between equal opportunity and diversity management have been put into separate sections for the purpose of this essay. Firstly the reasoning for their implementation into the business, how the approach is integrated, the focus of the action and the perception of the approach . Equal opportunity is driven by forces outside of a business’s control, there for equal opportunity is driven by external forces. For example equal opportunity is driven by governments and legislation.
It’s also based on a legal and moral argument, for instance it is legally enforced by government and morally enforced by what is considered right within society. Equal opportunity is also seen as a cost to the organization because they are forced to implement it due lawful and moral arguments, when some companies may not want to implement equal opportunity as they think it doesn’t benefit their business. Managing diversity is internally influenced, unlike equal opportunity diversity management is driven by the company itself due to the positive actions from doing so.
Most companies will implement managing diversity due to the business case which indicates that “it will add value to the organization”, an indication of this is that having a more diverse work force can increase innovation within the business as well as many others. Therefore managing diversity is seen as an investment unlike equal opportunity which is considered as a cost. Equal opportunity approach to integration is on an operational level, meaning that equal opportunity is an approach they constantly working on every day.
For instance making sure nobody is discriminated against on a daily basis, it can be defined as a choir that they have to do every day that has been imposed on them from an external source. Diversity management approach in contrast is on an strategic level, this means it is integrated into their long term goals. Diversity management is self-imposed meaning everyone must be included to a further extent than equal opportunity, this means that the business goes further than they have to. /////////// The focus of action of equal opportunity s to make sure that no one is discriminated against where as managing diversity is to embrace preferences and use them to their advantage. Equal opportunity interprets differentiation as a negative issue, it wants everyone to be perceived and treated the same. Whereas diversity management has a parallel outlook and understands differentiation as a benefit.
Both are supported by separate arguments, equality is supported by moral and legal obligations while diversity is supported by the business case. Pros It is proven that diversity management gains many benefits for an organization, one argument used by academics is that it helps cost management. It is believed that failure to appropriately manage diverse roofs can lead to higher cost, the reason being that firms that fail to manage diversity have a higher employee turnover and more miscommunication.
If a company fails retain employees they have to spend more on recruitment and money is wasted on development on staff that leave. (). “People from diverse cultural backgrounds may lead to competitive advantages in cost structures and through maintaining the highest quality of human The quote above explains that people from diverse backgrounds also competitive advantages in cost structure due to the fact organizations are able to retain employees of the highest quality.
Diversity management can increase resource attainment, a company that can effectively retain employees from various diverse backgrounds are going to have bigger talent pool than firms that cannot manage diversity, this can in turn also lead to more innovation within the company as they have more people and a bigger talent pool(). There is also an outlook that by being a diverse company with diverse team it will in turn give the company an advantage when selling and designing products and services for a market place where the customers are them self laterally diverse().
It is also argued that diversity management can lead to greater problem solving skills , this is due to the wider pool of workers from diverse backgrounds. As it can be seen in the previous statements there are many benefits Of having a diverse work force and implementing diverse management within a company. Most of the benefits are due to having diverse workforce that in turn brings a wider talent, a business that does not implement diversity management are basically narrowing their talent pool which could cause them to not hire the right people for the job. Morrison ND Morrison (1991) used Hostess’s (1980) international cultural diversity work to note that customers are more responsive to suppliers with their own traits. Therefore customer service and satisfaction would be enhanced when market and customer diversity is matched by internal service diversity ii language, cultural and ethnic differences are harmonious, in such a way that the customer and supplier may ‘speak the same language’ . (Y’ Not using diversity management can also lead to limited understanding of the market place and its customers.
Take England for example it is a very multicultural entry therefore so is the market place, so lack of diversity can in turn cause a lack of understanding of the marketplace(). In theory an organization having a diverse workforce will lead to higher customer satisfaction as customers from all different backgrounds can have their needs catered to. It is claimed that diversity can improve many aspects of innovation and creativity in an organization, the reason for this being that divergent mentalities all bring different ideas to the table which will lead to greater creativity and innovation (sense,1 990).
Like-minded people are going to bring in the same ideas there or there would be a lack of innovation. All the previous statements are supported by the business case for managing diversity. “appropriate management of a diverse workforce is critical for organizations that seek to improve… Their competitive advantage. (SHRUG, 2005). ” “This challenge puts a premium on value systems that are inclusive, fair and ethical.
We know from the essential characteristics of the psychological contract employees expect with their employers that being valued is vital. This is why managing diversity is so important to enhancing business performance and, as CUPID research evidence shows, is correlated with good people management. “(Cold,2005) The above statements describe that a diverse work force improves business performance, the problem with these statements is that it is hard to monitor the progress and improvements a business is making when using diversity management. Though the evidence reviewed shows that, while the business case for diversity may be difficult to measure explicitly, the balanced scorecard approach may be useful in illustrating and highlighting ‘input’ processes to which diversity contributes indirectly to the financial ‘bottom line’. Gary(2005) Balanced score cards can measure diversity managements effectiveness through demonstrating where it has contributed to improving organizational competitive advantage and overall profit.
Cons of diversity of management As much pros as there are for diversity management there are also many cons, one of the most prominent cons is that diversity management only has positive effects in an organization when the circumstances are right, coachman,(2003) states that research shows that racial and gender diversity do not have a consistent positive effect on an organizational performance on a instant basis and that results differed under different conditions.
An insight into this could Diversity management is supposed to embrace differences and reduce conflict between diverse groups and use it to an advantage, it has been suggested that it could have a considerably opposite effect . The reason for this is that non-minority groups could feel overwhelmed and omitted because they feel that minority groups are treated more favorably. This can cause conflict within the work place and lead to a competitive disadvantage(). The use of diversity management and no correlation to improved organizational performance has been linked to a lack Of appropriate training. Proper training is required for diverse teams to work together effectively. Human beings are naturally inclined to interact with people of similar backgrounds, and merely hiring diverse employees is not sufficient for employees to become integrated into an organization”(evangelic,2000). Therefore adverse effect of diversity management is that even though theory states a positive correlation between it and business performance is that many companies do not train there staff to an appropriate level.
This in turn revived results that show no evidence to say diversity management improves business performance, where in reality it is not that diversity management does not improve organizational performance, it’s that organizations are focusing too much on the apparent effects of using diverse management and not focusing enough on training employees on a big enough scale to reap the awards of diversity management.
There are many examples of problems that diversity management can cause in the work place, communication can be one of the most prominent of all of these. When a company whose main lining cystic language is English hires workers whose iris language isn’t English, this can cause communication problems, if an employee does not fully understand a task due to this language barrier they will not perform it to a poor degree. Diversity management needs to be appropriately implemented, this is where most of the cons of diversity management stem from.
Organizational examples of diversity management Although there is not any straight empirical evidence of diversity management improving organizational performance there are many case studies that show a correlation between the two. For example Compact computers which is a telecommunication business has sold over 6 times the mount of computers than under the previous system used before diversity management was introduced. Another example is Eaten and GAG, they have introduced onsite day care centers, since this post maternity turnover has dropped from 23 percent to 12 percent.