Course INDU1031: Human Resource Strategy Course School/Level BU/PG

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000577617 Pravin Kumar Mani

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Serial No. Topic

1. Introduction
2. What Do We Mean by Diversity and Diversity
Management?

3. Business Reasons for Managing Diversity

4.
Diversity management benefits

5 REAL TIME EXAMPLES Management Of Diversity in Leading

INC’s
--5.1 Accenture Diversity
--5.2 Google Diversity
--5.3 Infosys Diversity
--5.4 TCS Diversity
--5.5 Wipro Diversity
6. CONCLUSION
7. REFERENCES

INTRODUCTION
Today, at the beginning of the 21st century, the world is submerged in a wide
range of demographic trends which have the potential to radically change the
demographic, cultural and ethical mixture of the population in many countries
within just a few decades.

Top managers often say that their company's people are its most important
asset. In a tight job market and a global economy a company that puts people
first - regardless of their race, religion, gender, age, sexual preference, or
physical disability - wins.

Companies, especially big multinational players which have to deal with these
changes, are growingly forced to react. Employees, once a homogenous group
in many countries, are increasingly diverse and need to be integrated within and
into working environments. Diversity can present an immense source of
opportunities but it can also mean the opposite, a big threat.

Diversity management is a managerial approach in response to these trends and

can help companies to effectively and efficiently manage their personnel
diversity, i.e. personnel made up of diverse and multifaceted people. To be
successful at creating workforce diversity program involves attracting and
retaining the highest quality individuals in the talent pool. For the HR
professional it means looking beyond obvious recruitment methods and venues
for good people, then learning how to manage human potential sensitively. It
requires an ever-increasing awareness of how people from different
backgrounds deal with authority, communication, overall business etiquette,
and relate to their communities of affiliation.

Promoting workforce diversity is a process that takes place in many stages and
on many levels. It requires HR professionals first to recruit a competent and
qualified staff, then to accommodate individual needs within the context of the
work team and the organization.

In today's world of cultural diversity, our business can't thrive unless we

implement a workforce diversity initiative. Besides tapping into the unique
abilities and talents of people from different backgrounds, we can improve our
image in the community by opening up a place of business to anyone regardless
of race, color, gender, ethnicity, sexual orientation and disability.
What Do We Mean by Diversity and Diversity Management?

Some companies still use the traditional Equal Employment Opportunity Commission (EEOC)
definition of diversity, which deals with differences in gender, racioethnicity, and age. Others
employ definitions that are broader and include different physical abilities, qualities, and sexual
orientation. Still others focus on the heterogeneity of attitudes, perspectives, and backgrounds
among group members. Finally, some businesses have broadened their definition of diversity
even further to include people from different hierarchical levels, functions, and backgrounds.
The Pillsbury Company, for instance, defines diversity as "all the ways in which we differ".
Companies competing in today's fast-paced global market tend to favor the broadest definitions
of diversity-ones that encompasse differences in gender, racioethnicity, age, physical abilities,
qualities, and sexual orientation, as well as differences in attitudes, perspectives and background.

“THE PRESENCE OF MEMBERS OF DIFFERENT AGES, GENDERS, ETHNIC GROUPS,

AND/OR EDUCATIONAL BACKGROUNDS IN AN ORGANIZATION”

----- FRED LUTHANS

Business Reasons for Managing Diversity

Since the publication of the Workforce 2000 study, cost savings and winning the competition for
talent are frequently cited as strong arguments for the pursuit of diversity initiatives.4 More
recently, they have been supplemented with a third, even more forceful arguement-the
opportunity to drive business growth by leveraging the many facets of diversity. All three
reasons surfaced as significant in a recent survey of Fortune 100 company human resource
executives.
Diversity management benefits

General DM benefits
1. Cost Argument As organizations become more diverse, the cost of a poor job in integrating
workers will increase. Those who handle this well, will thus create cost advantages over those
who don't.
2. Resource-Acquisition Companies develop reputations on favorability as prospective
Argument employers for women and ethnic minorities. Those with the best reputations for
managing diversity will win the competition for the best personnel. As the labor pool shrinks and
changes composition, this edge will become increasingly important.
3. Marketing Argument For multi-national organizations, the insight and cultural sensitivity that
members with roots in other countries bring to the marketing effort should improve these efforts
in important ways. The same rationale applies to marketing to subpopulations within domestic
operations.
4. Creativity Argument Diversity of perspectives and less emphasis on conformity to norms of
the past (which characterize the modern approach to management of diversity) should improve
the level of creativity.
5. Problem-solving Heterogeneity in decision and problem solving groups Argument potentially
produces better decisions through a wider range of perspectives and more thorough critical
analysis of issues.
6. System Flexibility An implication of the multicultural model for managing Argument
diversity is that the system will become less determinant, less standardized, and therefore more
fluid. The increased fluidity should create greater flexibility to react to environmental changes
(i.e., reactions should be faster and at less cost).

As we proceed through the article we will deal with the finer points of how Diversity
management acts as a value addition to the organization

Creates opportunities for change that fosters the positive human potential of their
employees.

Populations typically underrepresented in organizations, particularly ethnic minorities and

women, have become an integral part of the workforce.
Leveraging this diversity has important implications for the promotion of positive organizational
change through its facilitation of both individual and organizational performance (e.g., Brief,
2008; Earley & Mosakowski, 2000; Williams & O’Reilly, 1998).
The need to create organizational environments receptive to diversity is therefore greater than
ever. It is argued that workforce diversity—if approached in a way that maximizes inclusion and
minimizes resistance—presents organizations with opportunities to create change that fosters the
positive human potential of their employees.
Heterogeneity paves synergistic outcomes.

Diversity management programs that encourage employees to value diversity may be the most
prevalent in practice and tend to consist of things such as diversity bulletin boards in the office, a
diversity newsletter, diversity workshops and team building, or diversity family days. The idea is
that employees will learn more about each other and value their differences, so that the
differences can be used to the organization’s advantage. Theory suggests that a cultural synergy
can develop when different cultural backgrounds come together at work, such that the final
product produced by a heterogeneous work group will be better than the sum of the talents of the
individual members (Adler, 1980,1983, 2002). The idea is that diversity gets a group away from
the perils of groupthink and toward more creative and effective solutions. Many employees may
view valuing diversity programs as fluffy and without merit; however, if employee interaction is
managed appropriately and diversity is permitted to flourish, high levels of heterogeneity can
lead to synergistic outcomes.

Organizational benefits from diversity programs are well documented and may enhance a
company’s ability to increase market share; compete more effectively; create better
organizational structures and policies; and enhance recruitment, retention, and development
efforts (Wheeler, 1996). These programs enhance personal effectiveness and creativity (C.
Thomas, 1994), improve interpersonal communication among employees, aid in the
responsiveness to social and demographic changes, help reduce the amount of litigation
(Nemetz&Christensen, 1996), speed up the resolution of disputes, and create a climate of
fairness and equality (Overmyer-Day,1995). Additional benefits from diversity management
programs include creating attitudes and behaviors consistent with bias reduction (Dovidio,
1993), and fostering an appreciation of differences between cultures (Brady, 1996).

******Jayne and Dipboye (2004) identify the following four major gaps between diversity and
research findings and conclude that a demographically diverse workforce in and of itself does not
necessarily have positive impact on organizational performance, making diversity interventions
essential:
♥ Without effective training and development to support valid selection processes,
increased diversity does not necessarily increase the talent pool;
♥ Increased diversity does not necessarily build commitment, improve motivation, or
reduce conflict. In fact, there is significant research to show that working with dissimilar
others is often associated with negative outcomes;
♥ Many researchers view diversity as a “double-edged sword” that improves some group
processes and disrupts others. Increased group-level diversity in and of itself does not
necessarily lead to higher group performance;
♥ Although there are a large number of studies of the effects of diversity on individual and
group level performance, there are relatively few that document the relationship of
 diversity to organizational performance. The results of those studies have been mixed,
leading the authors to assert that diversity does not necessarily improve organizational
performance (Jayne & Dipboye, 2004, pp. 412-413).

Role in mergers and acquisitions

Many of the problems encountered when merging two diverse corporate cultures appear in
managing diversity in the workplace (Jackson & Alvarez, 1992). Diversity management refers to
the practices put in place to encourage the assimilation of different people—different in terms of
race, gender, attitudes, and beliefs. The goal of diversity training, according to Noe and Ford
(1992), is to eliminate barriers such as values, stereotypes, and managerial practices that
constrain employee contribution to organizational goals (p. 357). The elimination of barriers that
hinder the ability of employees to create value is what an acquiring firm’s management needs to
do to allow the M&A to be successful. Therefore, if an organization is successful in overcoming
the challenges of accepting diversity, this may position them to successfully manage resistance to
other types of change. Thus, the management of the acculturation process involving diversity
may be similar to that of the acculturation of merging companies and if an organization is
successful in overcoming the challenges of accepting diversity, this may position them to
successfully manage merging and other forms of partnering.( Larry Bellinger and Amy J.
Hillman Business & Society, Sep 2000; vol. 39: pp. 323 - 337.)

Going beyond affirmative action

The major modality through which culture becomes a form of governance is diversity
management. What does diversity management say it is? Diversity management says it will go
beyond affirmative action which, in its view, succeeds in hiring minorities but fails to assure
their promotion. The principal cause of the failure of affirmative action, according to Thomas, is
that its legalistic framework creates a repressive obligatory environment in which expectations of
and demands for assimilation rule. This rule neither values diversity nor manages it and, in the
end, blames minority employees for the failure of corporate policies. Thus, affirmative action is
an "artificial, transitional and temporary" solution to the problem of creating "a diverse work
force and encouraging upward mobility for minorities" (Thomas 1991, 23). Shorn of its
assimilationist tendencies, affirmative action is best viewed as a step on the way to man-aging
diversity.
Diversity management is highly invested in distinguishing itself from affirmative action.12
Affirmative action is seen as rule-bound while diversity is seen as culture-bound, or boundless.
Affirmative action is viewed as social engineering while diversity is viewed as social
representation. Affirmative action is racialized and gendered, diversity is individualized, custom-
made. While affirmative action is juridically enforced, a source of obligation and responsibility,
diversity is positive, a source of communal pleasure. In short, affirmative action puts the
corporation in the business of "helping people who are disadvantaged," but diversity puts "people
from diverse backgrounds" to work "helping companies to succeed" (Perlman 1992, 15). Further,
diversity management assumes that managers do and will value human diversity. It treats as
sincere the putative post-Civil Rights liberal intolerance for cruder forms of racism and sexism,
and presumes that assimilationist demands are a function of the predominant form of American
antiracism, color blindness. For Thomas, the challenge facing corporate leaders is whether they
can bring these private sentiments into work and make them work: "Those at the helm of these
organizations have a choice: they can treat all members as if they were the same (or try to force
them to become the same), or they can view the diversity as an opportunity, a strategic lever"
(Thomas 1991, 3). Even in the absence of strong motivational values at the top, diversity
management insists that, in any case, a diverse work force is a pressing business reality.

The positive benefits of managing diversity

The benefits of diversity indicated in the literature that has been reviewed for this report can be
summarised in the following three broad statements:

• Diversity enhances customer relations and increases market share.

• Diversity enhances employee relations and reduces the cost of labour.

• Diversity improves workforce quality and performance in terms of diverse skills,

creativity, problem-solving and flexibility.

Diversity enhances customer relations and increases market share

Research findings suggest that having a diverse workforce leads to increased market share and
increased sales to minority-culture groups (Fernandez 1991, Cox and Blake 1991, Cox 1993).
This is explained by the preference of many customers to buy from people like themselves and
from organisations that promote diversity (Morrison 1992). Diversity contributes to increased
market share because it enhances an organisation‘s ability ‘to deal more sensitively with
multicultural domestic and foreign customers, thereby increasing customer satisfaction, keeping
and gaining market share‘ (Bhadury et al 2000 p144). In his research on managing diversity at
IBM, Thomas (2004) exemplifies the benefits of responding to customer diversity. At IBM, one
of the positive business outcomes of successful diversity management has been the increase in
revenue from $10 million in 1998 to $300 million in 2001, just through partnerships with a
more diverse group of vendors (Thomas 2004 p98).

Diversity enhances employee relations and reduces the cost of labour

Several studies indicate that employers who successfully manage diversity are better at
attracting and retaining skills and talent ‘because many workers are drawn to companies that
embrace diversity’ (Woods and Sciarini 1995 p19).

As well as recruiting the best people in the labour market by embracing diversity, such
employers can also benefit from cost savings by having a more cost-effective recruitment
process. McEnrue (1993) found that the recruitment expenditure of organisations that value
diversity is 40 per cent less than that of those that don’t and that they suffer less from high costs
of labour turnover, absenteeism and discrimination lawsuits (Fernandez 1991, Cox 1993,
Morrison 1992).
Diversity improves workforce quality and performance in terms of diverse skills,
creativity, problem-solving and flexibility

The effects of diversity on organisational outcomes, such as performance, creativity, teamwork

and problem-solving, are the areas that attract the interest of researchers most of all. In fact, most
of the diversity research focuses on these aspects, although the findings suggest mixed and
conflicting results.
Advocates of diversity management argue that an inclusive diversity climate increases the
performance and productivity level of employees through increased job satisfaction and
commitment (Morrison 1992). They also argue that diversity fosters an adaptability to
environmental change and organisational flexibility
– and provides a competitive edge by doing so (Cox 1993, Cox and Blake 1991, Fernandez
1991).

Another frequently cited benefit of diversity is improved quality of management due to the
effects of anti-discrimination policies (Cox 1993, Fernandez 1991, Morrison 1992).

Additionally, McEnrue (1993) found that embracing diversity leads to decreased levels of
frustration among supervisors who gain the skills to understand and manage groups with diverse
backgrounds.

Similarly, at top management level, several studies indicate that teams composed of diverse
members outperform homogeneous teams and have more capacity for problem-solving and
decision-making (Bantel and Jackson 1989, Hambrick et al 1996, Smith et al 1994).

There’s also evidence that workforce diversity improves organisational effectiveness through
increased organisational and individual creativity and innovation, and improves decision-making
and problem-solving by providing work teams with different and diverse perspectives (Bhadury
et al 2000, Cox 1993, Fernandez 1991, Cordero et al 1996, Cox and Blake 1991, Kirchmeyer and
McLellan 1991, Hoffman 1978).

Watson et al (1993) examined the effect of cultural diversity on interaction processes and
performance in a 17-week experimental study with 173 undergraduate students. They defined
cultural diversity on the basis of ethnic and national differences among the group members and
found that in-group diversity has negative impacts on process and performance in newly formed
groups.

However, at the end of the 17-week study, the culturally diverse groups caught up with the
culturally homogeneous groups and, although the overall
REAL TIME EXAMPLES
Diversity and diversity management does not end with class rooms and research papers. Its
applications have extended its contours to a variety of real life situations helping many
organizations of different arenas improve their human assets. Here are some organizations
which have tapped the art of diversity management to their best.

Accenture

Passionate commitment towards developing a diverse workforce and its efficient management
has been the USP of Accenture’s HR wing. As the ADP Vice President and Chief Diversity
Officer Clyde Jones rightly quotes “We know the markets we serve are growing increasingly
diverse and we are proud of how diversity management has become part of our day-to-day
business practices," said Clyde Jones, ADP Vice President and Chief Diversity Officer. "To
consistently take our business growth to the next level and beyond, we must do the same
regarding our commitment to diversity. This recognition from Diversity Inc is an important
acknowledgement that we are moving in the right direction”

They have even gone one step further in commissioning a study on cross-cultural communication
problems it was found that the chief factors causing problems between onshore and offshore
workers were different communication styles (76 per cent of the times), different approaches to
completing talks (53 per cent), different attitudes toward conflict (44 per cent) and different
decision-making styles (44 per cent). About 200 US business executives whose companies have
outsourced business processes outside the country were interviewed here.

Google

Alan Eustace - Google SVP, Engineering & Research affirms that diversity plays a large role in
developing the organization worldwide. They are building a worldwide network and have a
balanced representation of employees from all nationalities which is buttressed by their opinion
that different perspectives and views leads to their continuous improvement and global presence
and reduces the chances of obsolescence

Infosys

As in many other corporate innovations Infosys has had a pioneering effort in diversity
management also. It takes the credit of being the first Indian company to establish a separate
office for dealing with all company initiatives dealing with diversity and inclusion. As a result
they have employees from over 70 countries and their workforce consists of 32% women.
Infosys announced an intake of 300 graduates from universities in the US in 2006 and about 25
from universities in the UK in 2007 as part of its commitment to create a diversified workforce.
The new employees will develop their engineering skills at Infosys Development Centers across
India for six months before returning to Infosys offices in the US.

One of the other initiatives by Infosys is Infosys Women Inclusivity Network (IWIN) which
promotes a gender-sensitive work environment. IWIN recognizes the unique aspirations and
needs of women. It provides avenues for vocational, personal and psychological counsel to
enable professional and personal development

Infosys by taking a diverse workforce has a versatile employee pool which helps them establish
their global presence and cater to the needs of their global customers. And by helping women
and the disabled they have been able to leverage their social presence and have been eyed as one
of the actively involved CSR companies. Infosys has also won many accolades for this. It has
won the first NASSCOM-India Today corporate award for excellence in gender inclusivity in
2007. Infosys actively seeks to hire and train persons with disabilities. In 2006 and 2007, Infosys
BPO received the Helen Keller award for the best employer from the National Centre for
Promotion of Employment for Disabled People (NCPEDP).

Tata consultancy services (TCS)

Tata also joins the array of DM centric companies with its announcement of its plans to recruit
4000 employees from around the world. They have a different perspective towards Diversity
management which rightly says ‘Diversity management is not about being melting pots but about
being salad bowls’. They argue that their office is nothing less than a global workplace.
Comprising of employees from all possible nationalities TCS takes the credit of sharing the
similarities and leveraging the differences of its diversified workforce.

TCS reemphasizes the fact that a diverse organization is shaped or influenced by the basic
corporate culture, which comes from the vision and mission of the founder-promoter. Then
there's the influence of the geographical culture. The company is largely influenced by the
personal culture of the people at the mid-management and senior management levels.

So this is what many organizations feel about Diversity management. To sum it up I would quote
Mr.Kalyanaraman of HCL. Outlining some of the challenges for companies opting for an
increasingly diverse and global workforce, Kalyanaraman said that as workers are increasingly
relocating and migration is on the rise, organizations need to devise retention strategies with "a
passionate focus on individual, team and geo-wise expectation charts." He recommends that
companies should conduct a deep study of issues such as worldwide compensation and aspiration
benchmarks. and also policies have to be diverse enough to accommodate all demographic and
social fabrics.
Conclusion

The bottom-line focus of today's business environment requires that diversity initiatives be
treated like any other business investment, e.g., technology or advertising. This requires human
resources executives to create a clear, compelling business case for diversity linked to the
company's strategic business objectives. By providing top management with a better
understanding of the expected return on investment, HR executives can more successfully
compete for the company's scarce resources, resulting in better funded and supported diversity
initiatives.

The “business case” for diversity needs modification, with a clear link yet to be established
between diversity interventions and organizational performance. As Kochan et al. (2003, p. 17)
explain, we lack evidence to support the simple assertion that demographic diversity is good or
bad for business. Consequently, there needs to be a more nuanced view focused on the
conditions that can leverage the benefits or mitigate the negative effects from diversity, and then
shift organizational thinking beyond the “business case” to diversity as a “labor market
imperative and a societal expectation and value”(Kochan et al., 2003, p. 18).
Avery Gordon. Social Text, No. 44 (Autumn - Winter, 1995).The Work of Corporate Culture:
Diversity Management.Duke University Press Stable URL: http://www.jstor.org/stable/466904
pp. 3-30.

David W. Pitts. Review of Public Personnel Administration 2006. Modeling the Impact of
Diversity Management.URL: http://www.sagepublications.com. pp. 26,245.

Ellen Foster Curtis and Janice L. Dreachslin. Human Resource Development Review 2008.
Integrative Literature Review: Diversity Management Interventions and Organizational
Performance:A Synthesis of Current Literature URL:http://www.sagepublications.com. pp. 7,
107.

Flannery G. Stevens, Victoria C. Plaut and Jeffrey Sanchez-Burks.Journal of Applied Behavioral

Science 2008. Unlocking the Benefits of Diversity: All-Inclusive Multiculturalism and Positive
Organizational Change.URL: http://www.sagepublications.com. pp. 44 ,116.

Larry Bellinger and Amy J. Hillman. Business Society 2000. Does Tolerance Lead to Better
Partnering?: The Relationship between Diversity Management and M&A. URL:
http://www.sagepublications.com pp. 39, 323.

Pamela Weaver, LaChelle Wilborn, Ken McCleary and Apichoke Lekagul. Journal of
Hospitality & Tourism Research 2003. Diversity Training Management Initiatives in the
Lodging Industry: An Exploratory Analysis of Underlying Dimensions.URL:
http://www.sagepublications.com. pp.27, 237.

Peter Wright, Stephen P. Ferris, Janine S. Hiller, Mark Kroll. The Academy of Management
Journal, Vol. 38, No. 1 (Feb., 1995). Competitiveness through Management of Diversity: Effects
on Stock Price Valuation. Academy of Management Stable URL:
http://www.jstor.org/stable/256736. pp. 272-287.

Taylor H. Cox and Stacy Blake. The Executive, Vol. 5, No. 3 (Aug 1991).Managing Cultural
Diversity: Implications for Organizational Competitiveness. Academy of Management Stable
URL: http://www.jstor.org/stable/4165021. pp. 45-56.

Viktorija Kalonaityte. Organization 2010. The Case of Vanishing Borders: Theorizing Diversity
Management as Internal Border Control. URL:http://www.sagepublications.com
pp. 17; 31.

Rice, F. 1994. How to make diversity pay. Fortune, August 8, 79-86.

Cox, T.H. & Blake, S. 1991. Managing cultural diversity: Implications for organizational competitiveness.
Academy of Management Executive, 3, 45-56.
Hayles, R. & Russell, A. 1997. The Diversity Directive. Chicago: Irwin Publishing. See Chapter 2 for
more definitions of how companies are currently defining diversity. See Chapter 6 for more details
relative to identifying the nature of actions to take in both focused and comprehensive initiatives.
'Johnston, W.B., & Packer, A.E. 1987. Workforce 2000: Work and Workers for the Twenty-First
Century. Indianapolis, IN: Hudson Institute.

Dechant, K. 1995. HR executives cite business reasons for diversity. Unpublished manuscript, University
of Connecticut.

Cipd, MANAGING DIVERSITYMEASURING SUCCESS., change agenda.

www.the-dp.co.uk/CIPD%20Change%20Agenda.pdf –

European commision THE COSTS AND BENEFITS OF DIVERSITY

http://europa.eu.int/comm/employment_social/fundamental_rights/prog/studies_en.htm

www.accenture.com

www.tcs.com

www.wipro.com

www.wordpress.com