The world is becoming smaller every day.

The Internet, mass media, telecommunications

and mass transportation have all contributed to the shrinking of international market.
Because of these technologies, there is a continuing necessity for companies to address
the needs of a very diverse market so that they can be competitive. Companies must now
ask themselves what they can do to increase the number of customers for which they serve
while determining the needs of these customers. This business process makes diversity a
crucial part of a companys growth and operation.
As companies are becoming more and more diverse its becoming more and more
important for companies to understand and manage it. The people of different background,
races, religion creates diverse workforce. There is an importance of having diverse
workforce to provide better performance. There are perspectives of managing the diverse
workforce, which require organization leaders and managers of being responsible of
attaining better diverse workforce.

Diversity in Workplace
Diversity means differences, difference of age, sex, race, religion and culture etc. People
with different demographic differences working in the organization makes diverse workforce.
And it is becoming more important for the organizations to know about these differences
and how to manage it. Diversity is also the common issue in the workforce environment, in
some companies employees often get discriminated or misunderstood because of the
diverse features. (Sacco, Joshua, Schmitt, Neal, 2005)
Diversity is increasing everyday in everyday in every organization; In America 1 in 4
Americans belongs to a minority or is foreign-born. Women, who currently make up less
than half the work force, are expected to fill 65 percent of the jobs created during this
decade. Whether you are a business owner, executive, salesperson or customer- service
professional, and your success will increasingly depend on your ability to function in a
culturally diverse marketplace. Over the next decade, companies realize that they must
have a diverse workforce and that each member of that workforce must truly embrace
principles of diversity to realize the longevity, growth, and increased profits (Outtz, James L,
2004). Women, people of color, and immigrants will soon hold almost three- quarters of all
jobs in this country
Diversity in the workplace is a topic that many industries and organizations spend an
abundant amount of time and training on in order to ensure its presence. Todays
workplace is more diverse than it has ever been in history. While the workforce has made
strides in the direction of equality, it is still far from attaining total equality in the workplace.
A company must value diversity. The main objectives of valuing diversity include
awareness, education, and positive recognition of the differences among people in the
workforce. Organizations are increasingly emphasizing group work or teamwork as a
source of competitive advantage in a diverse workforce. It has been suggested that such
organizations must target their recruitment efforts at applicants who are both diverse and
amenable to working in teams (Rau, Hyland 2003).
A cultural environment must allow differences to be celebrated instead of merely
tolerated. All employees must understand the competitive and moral advantages of
diversity. They must respect and support cultural diversity through the recognition of cultural
and religious holidays, observances, practices, and diet restrictions. We are not where we
once were, but we are not yet where we should be (Outtz, James L, 2004). In an ideal
world, every person is treated equally when it comes to receiving a job, advancing in their
career, and being treated fairly in the workplace. In reality, we know this is not the case.
Unfortunately our reality is unfair treatment in regards to an individuals gender, race,
culture, ethnic origin and lifestyle. These discriminations still exist in salary decisions,
hiring, firing, and promotions.
In order to effectively manage diversity, and recognize it as a source of strength and not
one of conflict, one would need to be educated and reprogrammed to accept and embrace
diversity. Society as a whole is programmed to embrace sameness and frown upon
assortment. Managers and the powers that be must be taught to appreciate and draw on
differences because unfortunately it does not come naturally for most people. Americas
past should teach Americas today that success lies within diversity. In order to achieve
ultimate success, diversity is a necessity. Workforce diversity is a fact of organizational life.
It is also a key concern for theory and practice in organizational behavior (van-Knippenberg,
De-Dreu, Homan, 2004).
Diversity is important to companies because with a diverse environment people can
benefit and learn from others ideas. Other reasons for the importance of diversity to many
organizations are the recognition of differences as prerequisites for high performance and
continuous improvement, enhancing the effectiveness and creativity of the organization,
and valuing conflicts as opportunities for more effective decision-making and problem
solving (Outtz, James L, 2004). Diversity has a major impact on our behaviors in the work
place.
Many organizations are placing primary emphasis on people who fit their cultures when
hiring. The reasoning is that if the people have the right attitude, they will more than likely
understand and adapt to the goals and expectations of the organization. The necessary
skills can be taught. That is a lot easier than hiring people with the right skills but wrong
attitude probably cannot be changed. Many organizations have determined what it takes to
succeed in their companies.
There is an underlying problem that is promoting racism. It is the fact that a lot of people
believe, and try to make they believe, that racism no longer exists. Many people today live
their lives oblivious to what is happening in the world around them, often trying to convince
themselves that racism is not a problem in their world. (Grano, J. J, (1999)
Diversity calls for the recognition of the contributions that individuals can make as
individuals, not just as members of legislatively designated groups. Diversity requires the
management of organizations to be very inclusive, not just tolerating those who are different
but also celebrating those differences. It calls for the opening of non-traditional occupations
to men and women of all creeds, colors, religions, races and social groupings and for
making reasonable accommodations the workplace and work life for this to happen.
Diversity calls for diversity beyond just gender, race, or physical and intellectual abilities to
include diversity in opinions, sexual preferences, social customs and mores, and other
aspects of the variations in lives and lifestyles. There is a compelling generic business case
for achieving and managing diversity in the workplace. Diversity can help organizations:
identify and capitalize on opportunities.
Diversity programs are considered to be good investments whose returns have been
very beneficial to organization. Successful professionals are learning to demonstrate the
contribution of diversity programs to the business on macro and micro levels. We have to
remember that having a diversified workforce is not something a company should have;
actually it is some thing that has happened or is soon going to happen due to the fact that
we have a more diversified population. Diversity in the workplace is becoming more and
more prevalent. Corporations in all industries are encouraging minorities, women, elderly
workers, and people with disabilities as well as foreign workers to join the dominant
workforce in the workplace. Diversity of the workforce is clearly here to stay. Business
owners and managers, experts say, will still need to maintain or step up efforts to recruit
and advance ethnic minorities each year. Essentially, because having a diverse work force
a gives the company a lot more advantages to their competitors.
People of different ethnic backgrounds possess different attitudes and values. Cultural
differences determine the observed differences in work attitudes. An organizations culture
determines the ability of members from other groups to perform within the organization.
Individuals from minority groups face challenges everyday dealing with prejudice,
discrimination, and stereotyping. Prejudice is defined as an adverse opinion or judgment
formed beforehand or without full knowledge or complete examination of the facts; a
preconceived idea or bias (Sacco, Joshua, Schmitt, Neal, 2005).
Discrimination can include bias towards a person based on their group identity. Minority
group size may determine the level of determination. In fact, a recent survey found that
nearly half of Black job seekers indicated that the racial composition of the prospective
workforce is a factor in their decision making process. (Grano, J. J, 1999)
Workforce diversity is a necessity for clarity and efficiency of all organizations. In order
to make this work, strategies must be put into place to make the each organization become
a multicultural, diverse workplace. This process begins with managers but must include
assistance from employees within the corporation.
In todays global market, diversity is a must. Traditional barriers are being broken down,
and for many companies cross border trade is essential for the companys success and
growth. A decade ago Japan, Europe and North America were responsible for over 80% of
global commerce, but new markets are opening up throughout the world and these have
brought increased opportunity and also competition. In addition, rapid developments in
technology such as the Internet have made new markets accessible to even the smallest of
companies.
The growing markets of Latin America, Asia and Central and Eastern Europe are now
playing an ever more important role in global buying, selling and manufacturing. Diversity
within a company can help the firm better understand the culture, customs, and the way of
doing business internationally. Customers also prefer to do business with a workforce that
which they can identify, and that have a strong commitment to their community.
A company is also encouraged to adopt diversity programs to stay out of legal trouble.
Many companies are under legislative mandates to be non-discriminatory in their
employment practices. Non-compliance with Equal Employment Opportunity or Affirmative
Action legislation can result in fines and/or loss of contracts with government agencies
(Diversity Guidelines). In the context of such legislation, it makes good business sense to
make use of a diverse workforce.
In 1996, Texaco agreed to allocate $35 million for a task force to implement changes in
their human resources programs after being sued for racial discrimination. The plan
included revising company recruitment and hiring procedures to reflect diversity in the
workforce, focusing on career development and retention of current employees, and
increasing the number of women, and minority owned business partners.

Advantages and Disadvantages of Workplace Diversity
Diversity is beneficial to both associates and employers. Although associates are
interdependent in the workplace, respecting individual differences can increase productivity.
Diversity in the workplace can reduce lawsuits and increase marketing opportunities,
recruitment, creativity, and business image. In an era when flexibility and creativity are keys
to competitiveness, diversity is critical for an organization's success. Also, the
consequences (loss of time and money) should not be overlooked.
There are many advantages to having a work environment that is diverse. A company
that is prepared for changes in demographics is prepared for the market changes as well as
the changes in the pool of applicants. Having a diverse workplace creates an increase in
attracting and retaining the most qualified candidates. Diversity programs within
corporations improve corporate culture, help in recruitment, and help foster better client
relations.
Diversity in the workplace is thought to increase shareholder value. Diverse knowledge
and experiences can aid in generating profits. Diversity is a concept that is seen as having
the potential to understand the international market, represent different customer bases,
contribute diverse operational skills and help with decision-making and diverse age and
experience provide different perspectives. Race and gender also provide crucially different
views in the workplace. (Chatman, Jennifer, Charles A, 2004)
Having inside information on how to communicate and what a community wants in a
product is a great asset. A multicultural company can penetrate and widen their markets
with the knowledge of political, social, legal, economic, and cultural environments. Further,
having someone within the organization who can negotiate and speak the language of the
country is a very valuable asset to the corporation.
Despite the powerful advantages possessed by the multicultural organization, diversity is
nevertheless not a panacea and not without its drawbacks. With the benefits of diversity
come organizational costs. Too much diversity in problem-solving groups can be
dysfunctional. Diversity increases ambiguity, complexity, and confusion. Diverse
organizations may have difficulty converging meanings, may find it hard to reach a single
agreement, and have difficulty agreeing on courses of action.
In many organizations, diversity can produce negative dynamics such as ethnocentrism,
stereotyping and cultural clashes. These negative dynamics can in turn combine with
imbalanced power structures to create work disadvantages for women and minorities. In
traditional, assimilationist-oriented organizations, cultural differences between majority and
minority group members create barriers to full participation of minority members. For
example, Tsui, Egan & OReilly (1992) analyze 151 workgroups and find increasing work-
unit diversity to be associated with lower levels of psychological attachment among group
members. If leaders ignore or mishandle diversity, it may detract from performance. Poorer
work outcome includes affective and achievement outcomes and these in turn adversely
influence first-level organizational measures such as productivity, absenteeism, and
turnover. (Grano, J. J, 1999)
Homogeneous groups often outperform culturally diverse groups, especially where there
is a serious communication problem. Heterogeneous work teams often under-perform
homogeneous teams because they do not allow each member to make a special
contribution to the work effort. Cross-cultural training is necessary to enable culturally
diverse groups to live up to their potential and overcome communication difficulties. For
example, a study of the performance of both culturally homogeneous and culturally diverse
groups over a 17-week period initially finds homogeneous groups to score higher on both
process and performance effectiveness.
Over time, however, intragroup communications improve and the differences between
the groups converge. By the 17th week, there is no difference in overall performance of the
two groups, and the heterogeneous group scores higher on two task measures.
The diversity movement has the potential to polarize different social groups and harm
productivity while breeding cynicism and resentment, heightening intergroup frictions and
tensions, and lowering productivity just the opposite of what managing diversity is intended
to accomplish (Chatman, Jennifer, OReilly, 2004). Ignorance of cultural differences is a
source of ineffectiveness in the work performance of diverse work groups. Likewise,
knowledge of the cultural differences in diverse workgroups should enhance work
relationships and work team effectiveness.
Higher turnover and absenteeism are problems faced by diverse organizations.
Research reveals that turnover for blacks in the US workforce are 40% greater than for
whites. Corning Glass reports that between 1980-1987 turnovers among women in
professional jobs is double that of men and the rate for blacks are 2.5 greater than whites.
Schwartz (1989) finds a two-to-one turnover rate of women in management, while Scott &
McClellan (1990) find similar gender differences. Meisenheimer (1990) shows women have
58% higher absentee rates. Using 20 actual work units, OReilly, Caldwell, & Barnett (1989)
explore the relationships among multiculturism, social integration, and individual turnover.
Results suggest heterogeneity in group tenure is associated with lower levels of group
social integration which, in turn, is negatively associated with individual turnover.
Consequently, outgroup members are the individuals more likely to leave the organization.
(Stanford Report, 2000)
With all of the positive aspects that multiculturalism brings a company, there are a few
disadvantages. Many people feel threatened by working with people of a different age, sex,
or culture. First, there is an increase in the cost of training. This increase comes from costs
associated with seminars, programs and lectures given to promote diversity in the
corporation. These types of training are given to all levels of staff within the organization
(Outtz, James L, 2004). They teach employees how to accept the personalities and ideas or
thoughts of others. These programs also teach one how to deal with conflicts and prejudice
in a professional and civil manner.
Another disadvantage a company may encounter is reverse discrimination. This is a
feeling that is associated with affirmative action policies. It is a major argument against such
policies. Reverse discrimination is a claim by white males that they have been unfairly
discriminated against. They claim they are equally or more qualified for the position, yet
were passed over for a minority to receive the job. This can cause lawsuits in some cases,
but mostly a sense of rejection by other workers in the company toward the minority who
received the position.
In the absence of effective diversity management, culturally diverse workgroups may
have certain dysfunctional outcomes such as miscommunications, longer decision times,
lower member morale and lower team cohesiveness than culturally homogeneous
workgroups. The negative consequences of diversity can reduce creativity and innovation,
problem solving, and workgroup cohesiveness. As a result, these negative consequences
can reduce market share, profitability, and achievement of organizational goals. (Outtz,
James L, 2004)
In conclusion diversity in workforce is growing in all countries special USA, Canada and
Europe. With having more diverse work environment organization can produce better
performance. It is important for the companies to know diversity and how to handle the
issues relating to it. Also the need of the diverse workforce is getting more not only because
there are different people but also because they can produce better results with having
different types of people working. Leaders in the organizations should learn diversity
(differences of gender, age, sex and religion in their work environment and also to
communicate will between them) and how to manage it effectively.