Creating the Multicultural Organization: The Challenge of Managing Diversity

• In the U.S. a very tight labor market has intensified the focus on human capital in
recent years.
o To add to this challenge is the increasing diversity of people with the skills
to do the work those jobs require.
o Example – gender diversity:
o 1950’s – 3 of every 4 college degree’s were given to men.
o Today – roughly 54% of college graduates are women.
o 1971 – less than 4% of MBA’s went to women,
o 1990’s – around 30%
o Not limited to gender – work groups are increasingly diverse in terms of
race and national origin.
o More organizations are reorganizing work so that it is performed by teams
composed of people from different organization levels and work
specializations.
o Diversity: “the variation of social and cultural identities among people existing
together in a defined employment or market setting”.
o Social and cultural refer to personal affiliations with groups that research
has shown to have significant influence on people’s major life experiences
(gender, race, national origin, religion, are etc.)
o Employment and market systems (churches, schools, factory work teams,
sports teams etc.)
o MANAGING DIVERSITY MEANS UNDERSTANDING ITS EFFECTS
AND IMPLEMENTING BEHAVIORS, WORK PRACTICES AND
POLICIES THAT RESPOND TO THEM IN AN EFFECTIVE WAY.
o Problems and Opportunities of Diversity
o Challenge of managing diversity is to create conditions that minimize its
potential to be a performance barrier while maximizing its potential to
enhance organizational performance.
o Problems:
o Can reduce effective communication
o Increase conflict among workers.
o Lower levels of social attraction in groups thus leading to lower
levels of commitment.
o Increased potential for harassment and discrimination claims.
o Opportunities:
o Improve problem solving
• Diverse groups have a broader base of experience from
which to approach a problem.
• Diversity enhances critical analysis.
o Increase creativity and innovation
• Studies show that the most innovative schools were the
most tolerant of diversity.

o Increase organization flexibility

 • Changes in the way that employees typically organize and
respond to information.
• Diversifying the workforce increases the presence of
people who speak more than one language – hence more
flexibility of thought.
o Improve the quality of personnel through better recruitment and
retention.
o Improve marketing strategies.
• Globalization
• Why have past efforts failed?
o Many organizations are disappointed in their efforts to meet
challenge. Why?
• Misdiagnosis of the problem.
o Most employers have an organizational culture that
is somewhere between toxic and deadly when it
comes to handling diversity.
o Organizations have a tendency to hire people who
are perceived as fitting the existing culture of their
firm.
• Wrong solutions
• Failure to understand the shape of the learning curve for
leveraging diversity work.