Diversity and Inclusion in Organizations - Essay Example

? Diversity and Inclusion in Organizations Table of Contents Table of Contents 2 Introduction 3 Background 3 Defining Diversity 4 Defining Inclusion 4 Business Rationale of Diversity and Inclusion 5 Hypothesis 6 Discussion 6 Impact of Diversity and Inclusion 6 Diversity Management at IBM and KPMG 9 Challenges Faced by in implementing Diversity 10 Managing Diversity 11 Fundamental links between the three levels 12 Conclusion 13 Recommendations 13 References 15 Introduction This report entails about the importance of diversity and inclusion in the organizations. In the introduction part the study will present a brief overview of diversity and inclusion. Also the significance of diversity and inclusion in the present business environment will be illustrated. It will also emphasize on how the concept of diversity and inclusion helps in increasing the productivity and improving performance of the organization. In addition, the business rationale behind embracing a diverse workforce will be also underlined. Finally the popularity and benefits that an organization draws for having diverse and inclusive workforce will be portrayed. The discussion section will illustrate the effect of diversity and inclusion on the factors such as -corporate success, profit, innovation, risk, creativity, individuality, experience and personality of employee. Also some of other aspects of diversity an inclusion will be underpinned. The management of diversity at the micro level, macro level and meso level will be also discussed. Furthermore, challenges pertaining to the implementation of diversity will be also examined. Based on the findings from different sources, a conclusion will be drawn that will mark the importance and benefits of a having a diverse and inclusive workforce. Finally some suggestions for managing and encouraging diversity in an organization will be provided. Background There will be only few people in this world who will disagree with the fact that positive relationship with colleagues and having respect for each other promotes better working environment and results in higher productivity. A number of organizations around the world proudly exhibit their espoused values like teamwork, individual dignity, integrity and respect among the employees (Bailne, 2007, p.2). They also have a sense of harmony throughout the organization. However there are also organizations which face several complexities in maintaining the workforce and internal harmony. The employees of those organizations are faced with large number of obstacles in carrying out their day to day activities. These issues do not arises for less qualification or low performance levels, rather it generates for some group membership activities. Several scholars stresses on the fact that the only way to curb such occurrences is implementation of workforce diversity and creating an inclusive workforce. Organizations should try their level best to embrace diversity in their human resources. Thus considering the present business environment there is a need for a shift in paradigm for the way organizations look towards the subject of creating and maintaining a diverse and inclusive workforce. Defining Diversity Diversity is a broader aspect. From the perspective of human resource of an organization, diversity signifies having employees from different segments of the society. It is therefore defined as the element or aspect which is being used by the organizations to differentiate people and group from each other. This comes in the form of national origin, religion, age, gender, sexual orientation, ethnicity, education and disability. Nevertheless diversity in an organization does not remain constrained with those elements only. It also takes into account life style, working experience and culture. Hence diversity is considered as a ‘big idea’ or a ‘big thing’ in a society as well as in a business venture. Moreover, it help organizations to embrace large variety of people within the system (Gatrell and Swan, 2008, p.3). Defining Inclusion Inclusion is the process by which an organization ensures that each of the employees gets respect, value and support. In simpler term, it is about the way company focuses towards the needs and demands of every employee and offer them with the right working condition. Through inclusion both organization as well as the employees are benefitted. This helps individuals to achieve their personal goals. On the other hand, the organizations also succeed in achieving the best possible output from the employees. In this context, some of the eminent scholars stated that inclusion should reflect from the culture of the organization. Also organizational practices, relationship among employees should portray inclusion. Thus, from an overall point of view it can be sated that diversity is the combination and inclusion is getting the combination to perform well. Additionally, Inclusion helps the organization as well as the society to work together in a dissimilar world (Bruce, 2006, p.129). Business Rationale of Diversity and Inclusion In the present business environment diversity and inclusion is extremely important. The primary rationale of a business behind implementing diversity is to gain competitive advantage in the market place. It has also become necessary for some of the below mentioned reasons:- In order to remain compliant with the anti-discrimination laws, companies embrace diversity and an inclusive workforce (Kaul and Singh, 2012, p.123). With rapid globalization, the world is becoming multicultural and companies have to deal with diversified clients. Hence having diversity in the workforce, allow the companies to cater to large segment of clientele. Figure 1 (Source: Kaul and Singh, 2012, p.123) Hypothesis The rationale of the project is that whether managing diversity and promoting inclusion improves organisational performance or not. If not what are the challenges faced by an organisation and to address it what can be done further. Now in this context of the study a hypothesis needs to be drawn to accomplish the study in a suitable manner. Based on the objectives or research aims the hypothesis can be formulated as below:- H0 - managing diversity and promoting inclusion improves organisational performance. H1 - managing diversity and promoting inclusion do not improve organisational performance. Discussion The primary notion about diversity and inclusion is witnessing rapid transformations in the last few decades. Companies around the world are getting more focused on the issues pertaining to multiplicity. Nowadays the concept of diversity therefore does not only remain limited in having a heterogeneous workforce, but using the workforce to design and develop innovative goods and services and also practices of the business that distinguishes it from the competitors and provides a competitive advantage to the company in the market place. Similarly as the companies starts competing on a global level, inclusion and diversity needs to shift frequently. This is primarily because of the fact that in different markets, companies have to deal with various cultures and different definitions or forms of diversity. Impact of Diversity and Inclusion Diversity also plays a major role in some of the organizational aspects. The areas where diversity plays a part are corporate success, Profit, Innovation, Risk, Creativity, Individuality, Experience and personality of employee. The effete of diversity on the mentioned areas are detailed below:- Corporate success: - In the present century, diversity and inclusion play a crucial role towards the success of an organisation. It helps an organization to gain broader perspective of the world, through its diverse workforce. It brings along huge experience to the organization and based on that experience, companies are able to face the challenges with ease. In addition, it also offers intangible benefits to the organization. Now in the context of inclusion, the success of a firm also depends upon how these diverse workforces are effectively utilized. It helps an organization to recruit the finest and brightest, retain important team members, and also boost the bottom line thereby impacting in the success of the organization. With widespread globalization, the workforce is becoming increasing diverse in nature. The successful organizations have understood the landscape of environment is shifting and have also understood that the success will also depend upon the ability to properly utilize the opportunity of having diverse workforce. Prominent organization IBM is one such company that remains highly focused towards the establishemnet of diverse workforce. The primary rationale for the company in having a diverse workforce is satisfying the diverse client base. They also perceive that an employee is the face of the organization and is the only element which can bring success to the company. Therefore making proper utilization of diversity or having inclusion highly assists the company to taste success and satisfy the customers. Profit: - Diversity and inclusion has a direct impact on the bottom line of the organization. A company that succeeds in developing the skills and expertise level of the organization and fosters creativity gets highly benefitted. Besides, an organization that enhances the contribution of the majority of its employees gains a true competitive advantage. Now implementing inclusion and diversity as a program within the organization, increases the productivity and profit by gaining contribution from the group of talents. Also initiative pertaining to inclusion within the workforce supports development of the employees, enhances the performance level of the employees, increases the productivity level of the organization, diminishes the turnover rate, and makes the company more striking to the potential customers and employees thereby impacting the profit levels of the company (Konrad, Prasad and Pringle, 2006, p.77). Innovation: - Organizations around the world have understood that diversity is a crucial driver of innovation within the organization. Moreover it is also a critical factor to gain success in the international business market. Managers and executive have identified that embracing diversity in the human resource offers different perspectives, cultural backgrounds and diversified set of experience. This brings new ideas to the organization thereby making innovation as a part of the organization. Similar inclusion ensures that relevant and thoughtful ideas generates within the organizations. Eminent researchers in this context have agreed to the fact that diversity and inclusion are the key elements towards encouraging innovative ideas within the organization. Thus to foster creativity and drive innovation, an inclusive and diverse workforce is obligatory (Schewick, 2010, p.349). Risk: - An organization has to face different type of risks. It can come in the form of a financial risk or may generate in the form of reduces sales or risk pertain to the human resources. Having a diverse and inclusive workforce highly reduces the risks pertaining to disputes and tribunals. Such risk sometime impacts in the total revenue and reputation of the company. In addition, by developing an inclusive workplace, organizations can set up an environment where there will not be any issues pertaining to discrimination, and any challenges from this field can be easily resolved. Also political and social risks are minimized. Companies such as Deutsche Bank have strong diversity programs and having this the bank has been able to minimize many organizational risks. Creativity: - Creativity is a vast area of study. Standing in the 21st century, organizations have understood that in order to foster and develop a culture of creativity organizations need to implement diversity and inclusion. It also helps in guiding the business strategies. Diversity brings ideas of new services, new products and highly persuades out of the box thinking. Also it provides a sense of creativity within the organization culture. Companies nowadays do not consider inclusion and diversity efforts as spate business factions, rather they consider it as one of the central function of organization. They further recognized that through diversity creativity is achieved which in turn help the companies to attract the most talented employees and also attract potential clients for the company. For example in this context IBM has been hugely successful in tapping new customer segments, by holding diversity in their organization. Additionally, company like Nike believes that inclusion and diversity are the crucial drivers of innovation and creativity. Individuality: - The efforts related to the diversity and also inclusion encourages all the people of an organization to come up with their individuality and uniqueness. It offers independence to the employee and helps them to function properly. Since it offers large amount of independence, employees utilizes their self imagination and may come up with some better idea. It also impacts in the experience and personality of an employee. The findings are presented blow in a tabular form. Element/Aspect Impact of Diversity and Inclusion Corporate Success highly assists the company to taste success and satisfy the customers Profit Enhances the profitability by increasing the productivity and quality. Innovation Encourages innovation throughout the organization Risk Reduces various types of risks an organization faces. For example disputes and tribunals risk and financial risks are minimized. Creativity Fosters creativity throughout the organization. Individuality Encourages uniqueness and offers independence. The next segment of the report will portray a picture of diversity at IBM and KPMG. Diversity Management at IBM and KPMG From the time of its inception IBM has given highest priority to diversity. The commitment of the company towards diversity can be cited as one of the prime reasons why IBM is specified as the “world‘s leading globally integrated enterprises”. The company believes that diversity is not only facilitates fair recruitment but also creates an integrated and innovative working environment. The diversity of the company comes in the form of Asian, blacks, Latino, Native American heritage, women, people with disabilities and GLBT (Gay, Lesbian, Bisexual and Transgender population. They believe that having diversity within the origination will allow them to cater to a diversified group of customer and also embrace corporate resources. The company has also won several awards and recognition for being one of the most diversified organizations of the world (IBM, n.d.). Now KPMG is another organization that also fosters diversity and inclusion within the organization. The company promotes diversity and encourages the employees to share their outlooks as well as their lifestyle so that the awareness of the whole organization broadens. This also acts as an advantage to the firm. The company believes that considering the present business world, diversity within the workforce is extremely important. The company undertakes diversity programs to ensure innovation, economic growth and enhanced engagement of the employees. The company diversifies its workforce on the basis of culture, age gender, ethnicity, religion, disability and also sexual orientation. In addition the company also makes embraces diversity through the language employees speaks. The spokesperson of the company illustrated that the company has around 40% employees from the foreign countries and together they speak 24 different languages. The company also has a diversity advisory board to ensure diversity and inclusion is maintained within the organization (KPMG, n.d.). Hence there are almost similar diversity programs in both the organizations, but IBM also recruits the GLBT group. Challenges Faced by in implementing Diversity The challenges faced by the organizations in creating and managing an inclusive and diversified workforce are as follows:- Women in the workplace: - Globally, the number of working females have increased substantially. Especially, Iceland has the highest percentage of female workers. It has around 78 % working female. However the growth is only limited in the developed countries. Age diversity: - In some organizations there are many people who are over 55 and even outnumbered below 30 employees. This possesses a serious threat to the growth, migration patterns and financials (pension scheme). Income diversity: - Diversity of income can also act as a resistance towards the implementation of diversity within the workplace (Mitchell and Creary, 2009). Management of Diversity: - One of the biggest challenges is the management of diversity in the organization. It involves a series of tasks such as combating discrimination, erasing any form of biasness, promoting inclusiveness, recognizing the value associated for having diversity and finally controlling the workforce for better productivity. Negative attitudes and behaviours: - Negative attitudes and behaviours acts as one of the strongest barriers of diversity. It comes in the form of discrimination, stereotyping and prejudice. It can harm the professional relationship, reduce productivity and damage the morale. Managing Diversity The implementation process of diversity and inclusion within an organization is extremely complex. Organizations around the world faced large number of difficulties and faces different kind of challenges in implementing it. However once the diversity is implemented the next step is the management of diversity. Managing diversity in an organization is also a complex job. Diversity management can be termed as a strategy by which organizations acknowledges promotes and manages diversity. The primary concern of diversity management is to make the program visible to others (UCSF, n.d.). In addition to manage the diversity in a suitable way, companies have to consider different approaches and establish certain policies. Diversity needs to be a managed at the micro level, organizational level and also national level. The management of the three aspects are detailed below:- - Individual (micro) level aspects – Diversity based on the individual aspirations and attributes are the elements of macro level analysis. Therefore it is important to understand the micro level factors in order to achieve success. Aspects such as conflict, job satisfaction falls in the micro level category. Now in order to manage those issues people of the organization must be treated uniformly irrespective of the ace, ethic, gender, sexual, orientation or other social rewards. For example P&O Ferries has employee strength of 35,000 and among the 34 % people are from other countries. Also there is diversity on other forms, but still the company has been successful in managing diversity at the micro level. - Organisational (meso) level aspects – Researchers highlight that organizations faces different type of problems in the everyday business. It includes problems for the lack of proper internal communication, unproductive meeting, appraisal and cultural differences etc. Such issues must be analysed from a different point of view. Most of the organizations around the world perceive that the foreign employees will get easily accustomed with the culture of the host country, but it is the responsibility of the management to ensure diverse workforce comes into a single frame and perform effectively. - National (macro) level aspects – The management of diversity does not remain constrained within the organizational or individual level, but the management also needs to be done at the macro level or the national level. Multinational organizations nowadays have employees from different parts of the world. For example P&O Ferry's has staff from Scotland, Spain, Italy, Ireland and France among others. The key towards the management of diversity at the national level is to understand the “social difference codes”. To manage it properly focus should be given to the social stratification. Hence from an overall point of view integration of both macro and micro diversity management must be carried out to get effective results. Also management should consider designing a polycentric strategy to manage the diversity. Fundamental links between the three levels The fundamental link between the levels of diversity management is that all the approaches are dedicated towards the promotion of diversity. The approaches are however mostly suitable for the organization that have multicultural and diverse workforce. Also the three approaches will improve the productivity and creativity within the organization. Thus it can be concluded that managers need to be more active than just managing the people, and needs to be active in managing diverse group of people. Conclusion The report was about the significance of managing diversity and inclusion in the organizations. The report was also about analysing the impact of diversity and inclusion on the factors such as corporate success, Profit, Innovation, Risk, Creativity, Individuality, Experience and personality of employee. On carrying out the study by considering various literatures and studies by earlier scholars, it has been found that diversity has a positive impact on all the aforementioned aspects. For example, it highly assists the companies to taste success and satisfy the needs of the customers, enhances the profitability level by increasing the productivity & quality and also reduces various types of risk that an organization faces. The study has also analysed the management of diversity. In this context all the three levels of management that is micro level, macro level and meso level have been considered. The study uncovered that an organization should consider integration of both macro and micro diversity management in order to get the effective results. It has also underpinned that management should consider designing a polycentric strategy to manage the diversity at all the levels. Finally based on all the outcomes and analysing the impacts of diversity on various factors it can be concluded that managing diversity and promoting inclusion improves the organisational performance to a large extent. Therefore the null hypothesis holds true for the project. However to implement it organizations faces some kind of challenges. Recommendations In order to promote diversity and address the challenges faced by the organization in implementing diversity and inclusion, the following are recommendations: - Employees of the organizations must be trained properly and should be informed about the benefits of having diversity in the work force. The employees must be also encouraged to maintain harmony and openness within the organization (Alphameasure, n.d.). It is recommended that managers must understand the fact that diversity is not about disparities among the groups, rather it is about the differences that every individual possesses. Each individuals of an organization is unique and they do not symbolize or stands for any particular cluster. This will allow the organization to manage the diverse workforce more effectively (Green, Lopez, Wysocki and Kepner, 2012, p.2). The organization should also promote diversity at the managerial position. This will offer higher visibility to the company in terms of being a diverse organization. Encourage participation of employees in planning and implementing diversity. References Alphameasure, No Date. Diversity in the Workplace: Benefits, Challenges and Solutions. [online] Available at: [Accessed 24 November 2012]. Bailne, B. E. 2007. Understanding the Psychology of Diversity. London: Sage. Bruce, T., 2006. Early Childhood: A Guide for Students. London: SAGE. Gatrell, C., & Swan, E. 2008. Gender and Diversity in Management: A Concise Introduction. London: Sage. Green, K. A., Lopez, M., Wysocki, A., and Kepner, K., 2012. Diversity in the Workplace: Benefits, Challenges, and the Required Managerial Tools. [pdf] Available at: [Accessed 24 November 2012]. IBM, No Date. Diversity and Inclusion. [online] Available at: [Accessed 24 November 2012]. Kaul, A., and Singh, M., 2012. New Paradigms for Gender Inclusivity. New Deslhi: PHI Learning Pvt. Ltd. Konrad, A. M., Prasad, P., and Pringle, J., 2006. Handbook of Workplace Diversity. London: SAGE. KPMG, No Date. Diversity. [online] Available at: [Accessed 24 November 2012]. Mitchell, C., and Creary, S. J., 2009. Diversity and Inclusion: Global Challenges and Opportunities. [pdf] Available at: [Accessed 24 November 2012]. Schewick, B. V., 2010. Internet Architecture and Innovation. Massachusetts: MIT Press. UCSF, No Date. Chapter 12: Managing Diversity in the Workplace. [online] Available at: [Accessed 24 November 2012]. Read More