1. Chapter 2 Organizational Diversity
Michael A. Hitt
C. Chet Miller
Adrienne Colella
Slides by Ralph R. Braithwaite

2. Diversity in the LAFD
What are your thoughts about the opening scenario?
Are there jobs that should be left to one gender or the other? Why or why not?
Have you seen discrimination based on race?
Were the consequences as a result of the Los Angeles Fire Department’s actions too lenient, too severe, or just right?
Do you think the “steps to remedy the situation” are enough? Why or why not?
Exploring Behavior in Action

3. Knowledge Objectives
Define organizational diversity and distinguish between affirmative action and diversity management.
Distinguish multicultural, plural, and monolithic organizations.
Describe the demographic characteristics of the U.S. population and explain their implications for the composition of the workplace.
Discuss general changes in the United States that are increasing the importance of managing diversity effectively.
Understand why successfully managing diversity is extremely important for high-involvement work organizations.
Discuss the various roadblocks to effectively managing a diverse workforce.
Describe how organizations can successfully manage diversity.

4. Diversity Defined
A characteristic of a group of people where differences exist on one or more relevant dimensions such as gender.
Diversity is a group characteristic, not an individual characteristic.

5. Common Dimensions Gender Race Ethnicity Age Religion Social Class
Sexual Orientation
Personality
Functional Experience
Geographical Background

6. Quote
“The effects of diversity can result from any attribute that people use to tell themselves that another person is different.”
K. Y. Williams and C. A. O’Reilly
Thoughts?

7. Examples of Definitions
Thoughts?
Texas Instruments – “Diversity is ‘all the ways in which we differ.’ This includes the obvious differences such as race, gender, age, disability, and more subtle differences such as education, sexual orientation, religious affiliation, work styles, and thoughts or ideas.”
Microsoft – “[Diversity] means not only having a workforce balanced by race, ethnic origin, gender, sexual orientation, and gender identity and expression, but also having a workforce that embraces differences in approaches, insights, ability, and experience.”
Banks of America – “Our commitment to diversity is … about creating an environment in which all associates can fulfill their potential without artificial barriers, and in which the team is made stronger by the diverse backgrounds, experiences, and perspectives of individuals.”

8. Strategic Importance of Organizational Diversity
Improves
Corporate culture
Recruitment
Relationships with clients and customers
Builds competitive advantage
Understand and serve diverse customer base
Heterogeneous teams deal better with complex problems and challenging tasks
More commitment to organization’s mission

9. Affirmative Action vs. Diversity Management
Ongoing, permanent changes
Temporary, until representation of disadvantaged groups
Time Frame
Attempts to uncover the root causes of diversity problems
Does not address the cause of problems
Cause of Problems
Allows all associates to reach their full potential
Recruitment, mobility, and retention
Focus
Assumes that managers and the organizations will change
Assumes individuals will assimilate and adapt
Assimilation
Create an inclusive, empowered work environment
Prevent and remedy discrimination
Purpose
Diversity Management
Affirmative Action
Adapted from Exhibit 2-1: Differences between Affirmative Action Programs and Diversity Management Programs

10. Organizational Diversity
Multicultural Organization
Plural Organization
Monolithic Organization
Multicultural organization - An organization in which the organizational culture fosters and values cultural differences
Plural organization - An organization that has diverse workforces and takes steps to be inclusive and respectful of people from different cultural backgrounds, and diversity is tolerated but not fostered
Monolithic organization - An organization that is demographically and culturally homogeneous

11. Forces of Change
Changing workforce demographics – percentage by race, age and sex – Exhibit 2-2
Increase in the service economy
Global economy
Requirements for teamwork
Service jobs will increase by 17% between 2004 and 2014 and by 2014 will make up 78% of all jobs
Global – imports still outpacing exports, increase in the number of working relationships with other countries
Teamwork – one way to provide better goods and services, requires individuals to work well together.

12. High-Involvement Organizations
Individual Outcomes
Commitment to the organization
Job involvement
Satisfaction
Group Outcomes
Decision making
Creativity
Complex tasks
Graphic on the left on mouse click. Words on right – wipe in automatically after one second for each bullet. Issues wipe down after two seconds and hide on next mouse click.
Organizational Outcomes
Productivity
Return on equity
Market performance

13. Societal and Moral Outcomes
$10.5M & $8M
$176M
$508M
$250M
$47M
Ford Motor Company paid out $10.5 million for age discrimination and $8 million for sex discrimination
Coca Cola paid out $192.5 million for race discrimination
Texaco paid out $176 million for race discrimination
CalPERS paid out $250 million for age discrimination
Shoney’s paid out $132.5 million for race discrimination
Rent-a-Center paid out $47 million for sex discrimination
Information Agency and Voice of America paid out $508 million for sex discrimination
$132.5M

14. Laws Preventing Discrimination
Title VII of the 1964 Civil Rights Act,
Civil Rights Act of 1991
Equal Pay Act of 1963
Age Discrimination in Employment Act of 1967
Title I of the Americans with Disabilities Act of 1990
Title VII of the 1964 Civil Rights Act, Civil Rights Act of 1991 – Employers – Private employers, state and local governments, education institutions, employment agencies, and labor unions with 15 or more individuals Employees – Everyone based on race, color, religion, sex, or national origin
Equal Pay Act of 1963 – Employers – Virtually all employers Employees – Men and women who perform substantially equal work
Age Discrimination in Employment Act of 1967 – Employers – Private employers, state and local governments, education institutions, employment agencies, and labor unions with 20 or more individuals Employees - Individuals who are 40 years old or older
Title I of the Americans with Disabilities Act of 1990 – Employers – Private employers, state and local governments, education institutions, employment agencies, and labor unions with 15 or more individuals Employees – Individuals who are qualified and have a disability
Adapted from Exhibit 2-3: Federal Laws Preventing Employment Discrimination

15. Experiencing Strategic OB
The Case of France
Religious discrimination
Discrimination issues in hiring
Promotional issues
Thoughts on the policy of not collecting data on race and ethnicity or no affirmative action laws?
Thoughts on what these companies are doing?
Experiencing Strategic OB

16. Roadblocks to Diversity

17. Prejudice and Discrimination
Modern Racism
Prejudice – Unfair negative attitudes we hold about people who belong to social or cultural groups other than our own
Discrimination – Behavior that results in unequal treatment of individuals based on group membership
Modern racism – Subtle forms of discrimination that occur because people know that it is wrong to be prejudiced against other racial groups and believe themselves not to be racists

18. Stereotypes
A generalized set of beliefs about the characteristics of a group of individuals
What thoughts come to mind when you perceive the individuals in these photographs?

19. People with Disabilities
Common Stereotypes
Women
People with Disabilities
White Men
Black People
Japanese Men
Jewish People
Athletes
Accountants
Arab People
Adapted from Exhibit 2-4: Common Stereotypes

20. Stereotyping – Difficult to Stop
Tough to dispel
Guide what information we look for, process and remember
Seems to be an enduring human quality – everyone has some stereotypes

21. Women, Work and Stereotypes
While things have improved, are there still gender issues in the workplace?
Are the issues faced by the women in the text unique and unusual?
What are your thoughts about the survey conducted by Elle and MSNBC.com?
Experiencing Strategic OB

22. Social Identity
A person’s knowledge that he or she belongs to certain social groups, where belonging to those groups has emotional significance. Key Points:
Person’s social identity becomes more salient and noticeable when in the minority on an important dimension
Having a social identity different than the majority may make people feel they have to behave in ways that are unnatural for them in certain contexts
Minority group members often fear losing their social identity
People often evaluate others based on their membership in social groups

23. Sample Self-Identity Structures
Adapted from Exhibit 2-5: Sample Self-Identity Structures

24. Control Rewards and Resources
Sources of Power
Expert Knowledge
Formal
Position
Control Rewards and Resources
Being Irreplaceable

25. Ascribed Status
Status and power that is assigned by cultural norms and depends on group membership
High-status individuals speak more and use stronger influence tactics than members of low-status groups
People belonging to groups with different amounts of power and status may avoid interacting with one another and may form cliques with members of their own groups

26. Communication Problems
Different languages
Different levels of fluency in the dominant language
Excluding those who don’t speak the language

27. Communication Disagreement Among Cultures
Willingness to openly disagree
Importance of maintaining “face” or dignity
The way “agreement” is defined
Time devoted to establishing personal relationships
Willingness to speak assertively
Mode of communication - written or verbal
Personal space and nonverbal communication

28. Structural Integration
The degree to which minorities and women are represented in all occupations within an organization. Two levels exist – poorly integrated and well integrated.
The next two slides show examples of each – both organizations have approximately 35% of the employees being female and/or minority.

29. Poor Structural Integration
Middle Management 0% 2% 1%
10% 5%
15%
25%
40%
26%
60%
65%
80%
75%
0.5%
3.25%
6.25%
29%
70%
Finance
Marketing HR
Sales
Average All Functions
Top Management
Supervisor
Staff
Line Worker
Percentage of people who are female and/or racial and ethnic minority group members
Adapted from Exhibit 2-6: Examples of Poorly Integrated and Well-Integrated Organizations

30. Good Structural Integration
35%
Top Management
Supervisor
Staff
Middle Management
Line Worker
Finance
Marketing HR
Sales
Average All Functions
Percentage of people who are female and/or racial and ethnic minority group members
Adapted from Exhibit 2.6: Examples of Poorly Integrated and Well-Integrated Organizations

31. Roadblocks
Poor integration creates power and status differentials – become associated with gender and race
Poor integration fosters negative stereotypes
Women and minorities who are successful may be perceived to have token status
Women and minorities perception – impossible to move up

32. Commitment of Leaders Communicate through multiple channels
Personally lead all diversity efforts
Sponsor employee councils
Ensure cross-cultural communication
Be accountable for advancing diversity initiatives
High-ranking leaders send relevant communications through multiple channels, such as intranet postings, policy statements, formal newsletters, meetings, speeches, and training programs.
One high-ranking leader personally leads all diversity efforts. He or she holds town meetings and eats lunch in the cafeteria to talk about diversity.
Multiple high-ranking executives sponsor employee councils devoted to fostering cross-cultural communication. The councils are all-inclusive – anyone who wants to join can do so. Therefore, anyone can “have the ears” of executives on diversity issues.
Managers at all levels are held accountable for advancing diversity issues.

33. Promoting a Positive Diversity Environment
Managerial Advice
Promoting a Positive Diversity Environment
Principles
Pause to short circuit the emotion and reflect
Connect with others in ways that affirm the importance of relationships
Question interpretations and explore blind spots
Obtain genuine support that doesn’t necessarily validate initial points of view but rather helps in gaining a broader perspective
Shift the mindset
Thoughts?

34. Integration With the Strategic Plan
Common measures of diversity effectiveness include:
Increased market share and new customer bases
External awards for diversity efforts
Associates’ attrition rate
Associates’ work satisfaction
Associates’ and managers’ satisfaction with workplace climate

35. Associate Involvement
Discussion groups from a cross-section of staff
Employee satisfaction surveys
Cultural diversity audits
Informal employee feedback hotlines
Develop and support affinity groups – groups that share common interests
Provide training

36. Diversity Initiatives at Denny’s
Recruiting
Retention
Development
External partnerships
Communication
Training
Staffing and infrastructure

37. The Strategic Lens
How does organizational diversity contribute to an organization’s competitive advantage?
What actions are required to create diversity in an organization, particularly in one that has homogeneous membership at present?
How does diversity in an organization affect its strategy?

38. Questions