Diversity as the New Ethical Business Strategy - Essay Example

11 February Going Beyond the Call of Law: Diversity as the New Ethical Business Strategy Diversity is widely considered as an important process for achieving equality in its different forms, such as gender and racial equality (Eagley and Carli 110; Sandel 169). Some societies, including the United States, are actively promoting diversity through affirmation action, in order to address social inequalities that have been historically embedded, because of centuries of prejudice and discrimination against women and minority groups, among others. People also differ on how businesses should approach diversity efforts. Some say that firms should manage diversity for legal compliance, while others assert for greater proactive initiatives (Eagley and Carli 110; Sandel 169). I believe that businesses should go beyond following laws that prohibit discrimination, and instead, they should exceed the requirements of the law and actively encourage diversity as the new ethical business strategy, because promoting diversity is a “common good” and provides multiple benefits for concerned stakeholders. Businesses have a moral obligation to promote diversity as a common good. Firms understandably aim to reduce costs and maximize profits, because those are some of the obvious purposes of having a business. Companies aim to turn profits, so that they can grow either locally or internationally and improve shareholder wealth. However, past and present experiences have shown that these goals should not be the only aims of businesses, because they should also be held accountable for the social, economic, environmental, cultural, and political consequences of their actions. They should be aware that the Machiavellian principle is not always ethical; not all means justify the end. For instance, it is not right to prefer promoting male candidates, because of the belied that women are often divided between family and work roles and responsibilities, and so they may be less reliable than men. It is not also right to hire female workers and pay them less than male counterparts, so that the company can save money. Companies should also be responsible for promoting and contributing to the “common good” and they can do this through seeing diversity as an ethical business strategy for their good and the good of society. The common good represents what is good for the society in general and not only for individuals. In Chapter 7, Sandel argues for affirmative action. He stresses that affirmative action can serve the common good, because it corrects the testing gap, balances the wrongs of the past, and supports diversity (169). There is evidence that standardized tests are possibly biased. The Scholastic Aptitude Test (SAT) and other standardized tests are disputed for not being able to accurately predict academic and professional success, as well as measure different forms of intelligence (Sandel 169). Martin Luther King, Jr. had mediocre scores on the Graduate Record Exam (GRE) and even scored below average in verbal aptitude (Sandel 169). Studies also show that African Americans and Hispanics generally score lower than white students in standardized tests and scholars argue that test scores should also be properly interpreted in the context of the students’ social, family, cultural, and educational conditions (Sandel 169). In the same way, firms should also promote diversity, because standardized HR practices and measures are not always fair to minorities. In “Women and the Labyrinth of Leadership,” Eagley and Carli describe the labyrinth of challenges for women in and vying for leadership positions. They reveal that only 6% of the top positions in corporations on the Fortune 500 list belong to women with only 2% holding the position of CEO (Eagley and Carli 105). They argue that the main causes of gender gap in leadership positions are not the “glass ceilings,” but because organizations have created a “labyrinth” for female employees. Firms can address this by changing norms, values, and practices that impact HR systems of recruitment, selection, development, promotion, and retention (Eagley and Carli 110). For instance, there should be more objective testing standards for evaluation and promotion decisions to avoid subjectivity that bias test results (Eagley and Carli 105). Firms should go beyond legal compliance, by doing proactive measures that correct the inefficiencies of past and present HR tools. Businesses should also promote diversity, because it addresses the wrongs of the past (Sandel 170). The minority groups have faced intense prejudice and discrimination, which closed many opportunities for them before. As a result, they must now be given the opportunity to “catch up,” by providing them some form of special privilege over the dominant groups. The problem with this is that it is arguable that the ones who are paying for these actions are not the actors of past “sins.” An example is Cheryl Hopwood, who worked her way to college, until she applied for the University of Texas Law School, one of the leading law schools in the nation (Sandel 167). The main problem is that she was not admitted, because there was a quota system for minority groups and they were preferred over Hopwood (Sandel 167). Hopwood, by not being admitted, and who is also not exactly part of the privileged white society, is being disadvantaged by affirmative action (Sandel 168). However, she should also take note that she may not have been party to the discriminative practices of the past, but she should, as a good citizen, respect the ideals of diversity. Businesses, in relation, should also correct the wrongs of discrimination against women and minorities. Women, according to a study in 2005, still earn 81 cents for every dollar earned by men (Eagley and Carli 106). Evidently, these wrongs continue to persist and there is an urgent need to correct such wrongs through affirmative action. If not, businesses will be perpetuating social injustice and will contribute to present social problems of poverty and discrimination. Finally, firms should support diversity, because it is a common good for all (Sandel 171). Diversity enhances the chances of people from different backgrounds, cultures, and races to interact and studies show that diversity improves the quality of decision making through enhancing the diversity of ideas and opinions (Sandel 171). Businesses will benefit from removing homogeneity in thinking and enhance creativity in the organization through diversity management efforts. Different perspectives can improve how problems and challenges are perceived, analyzes, and resolved. In addition, diversity also ensures that women and minority groups are hired for top positions in firms, which advances the civic purposes of firms and promote the common good (Sandel 171). The common good is good for all and not for certain individuals. Rawls makes a good point, by saying that it does not matter what a person’s academic or other merits are. Diversity is not about protecting blacks over whites, for instance. It focuses on ensuring that social missions are comprehensively achieved (Sandel 178). Firms should contribute to the social mission of addressing deep-seated oppression of minorities, by making proactive actions that will expand opportunities for them. Some Hopwoods would feel indignant, but diversity efforts are not meant to advance their careers, but to generally promote the social good, a good that will benefit the society is a whole, where people from all races, genders, ages, and other groups, are free and provided the opportunities to advance their personal, academic, spiritual, economic, social, cultural, political, and environmental goals. I have personally experienced that diversity is good for business, because it is for the common good and it makes business sense. I worked for a company, which serves culturally and gender diverse customers, but employs predominantly white employees. Managers and executive positions are also mostly composed of white males. My female supervisor told me that once in a meeting, she did something outlandish. There had been a company meeting, where they were analyzing the causes of their declining competitiveness. She told the upper management why the competition is creeping up on them. She said: “Well, we don’t have to look hard. We have a white male company serving diverse customers. And that is what is so wrong with us.” At first, she said that managers looked shocked at her. Then the CEO stood up and clapped his hands. He said: “Finally, we have a solution. Our next strategy should not be about making profits, but it should be about managing diversity for success.” She added quite bravely: “And we have to remember that diversity management is not solely about making money. It is about doing the right thing, so that every race and gender will have equal opportunities in life. We are corporate citizens and we should contribute to socio-economic development too.” After that short speech, everyone clapped their hands. Of course, work was not done overnight and many managers were either fired or resigned. In the end, the company transformed inside-out and became more racially and gender diverse. This experience made me realize the power of diversity in changing minds and hearts, both individually and collectively. I also learned that diversity is not mere rhetoric, but a series of interconnected communication, attitudinal, and behavioral changes inside the organization. Businesses should not treat diversity efforts as “for compliance” only. More than that, they should remember that they are human beings who have responsibilities to their society. Businesses should promote diversity, because it is a common good and it provides multiple benefits for concerned stakeholders. Diversity can make more money for firms, indeed it can. But I believe that businesses should not just use diversity as a business strategy. Diversity, more importantly, should also be seen as a strategy for creating a more equal and humane society. Works Cited Eagley, Alice H. and Linda L. Carli. Women and the Labyrinth of Leadership. Business Ethics Article 30, 105-111. Sandel, Michael. Justice: A Reader. New York : Oxford University Press, 2007. Read More