Managing Diversity and Equal Opportunities: of Pennymart Ltd - Case Study Example

Managing Diversity and Equal Opportunities Table of Contents Introduction 3 Diagnosis and Analysis of the Problem 4 Conclusion 11 Recommendations 11 References 13 Introduction Pennymart Ltd. is a chain business which is operated in North America offering domestic goods. It was established in the year 1984. The company saw various changes in the management due to the diverse issues. Since the year 2002, the Chief Executive Officer (CEO) of Pennymart is Julia Perch who believes in managing people efficiently. She through her strategies and business operations have facilitated in ascertaining an annual turnover of $1 billion for the company. The CEO in the initial years initiated the ‘innovation through diversity’ program, wherein she believed in diversity for the success of the business. In this regard, the CEO of Pennymart appointed a Chief Diversity Officer (CDO) named Kim Merchant in order to make the diversity plan visible throughout. Diversity is a framework irrespective of the gender, caste, race and creed. In the modern paradigm, diversity means an environment wherein people of various races irrespective of their colour work together to attain one common goal of the organisation. The concept of diversity is large and includes various factors such as geographical location, marital status, gender, appearance and ethnicity. It is observed that the integration of diversity along with the organisational change leads to the enhancement of the business and the people. Diversity helps in respecting cultures and differences of opinion for ensuring a long-term sustainability of the organisation (Bogda, 2004). The workforce diversity leads to the emergence of equal opportunity and long-term sustainability of the employees. Nonetheless, in order to be managing diversification effectively, it is important for the organisations to implement policies and plans (Salleh & Sulaiman, 2012). In this regard, the company i.e. Pennymart Ltd. maintained the diversity in the workforce by appointing people of different races and cultures. However, in the higher level management, the diversity was not followed to that extent as amid the workforce in the lower management. Moreover, the company initiated ’diversity forums’ wherein people can share their views and get proper justice. The company Pennymart in the present day context dropped the practice of diversity as it was unable to maintain the notion of ‘unity in diversity’ in the organisation. With this consideration, the objective of the report is to analyse the reason for such decline in the business even after following the best practice of diversity. Also, an evaluation will be made regarding best diversity practices as a part of determining the solutions that could get the company back on track. Diagnosis and Analysis of the Problem Diversity is the workforce is an important concept which was initiated in Pennymart by the CEO. One of the key issues in the organisation which resisted the best practise of diversity to flourish effectively was the concern related to leadership. This was apparent as the company initiated the diversity concept at an early stage and created diversity forums for the employees of different races and cultures to put their views forward. The other problem identified from the case of Pennymart is its recruitment strategy. The organisation recruited people of different castes and races in the workforce at the ground level. However, the recruitment style in the management level was not diversified as they focused on appointing people of white origin. The implication was that the white people in the management level were dictating the people at the lower level. This was weakening the organisation as the diversification implemented for the betterment of the company was not being conducted effectively. Diversifying the recruitment process is a vital concept which can be implemented through the use of strategic recruitment plan for effectiveness of the organisation. The scenario determined in case of Pennymart highlighted a lack of strategic recruitment plan and thus the good practice of diversification did not work for the benefit of the organisation. As per the concept of diversity, people management is an important constituent which signifies managing people equally irrespective of their gender and caste effectively. The company employed various women employees in the workforce but did not restructure the organisation which was the need. It is observed that diversification is effective only if the company restructuring is done simultaneously. The structure of Pennymart needed change and the management required to focus on restricting the operational activity rather than expanding at the initial stage after the implementation of diversified workforce. The main issue regarding the failure of the organisation was a lack of communication between the management and the workforce. Moreover, with the diversification, the CEO should have implemented the diversity management training programs to help the workers in acquiring knowledge and increasing the rate of productivity. The implementation of diversification requires organisational change and effective management by efficient monitoring of the people (Green & et. al., 2003). One of the other vital issues faced by the organisation was a lack of policies and strategic plans. It is observed that for effective management of people, it is important to have certain skills. The manager needs to recognise the importance of discrimination as well as its consequences. Also, she must realise the importance of cultural biases while taking initiatives for the business (Green & et. al., 2003). Thus, it can be stated that managing diversity is not only about ascertaining equal opportunity for employment but also about taking affirmative actions. Another vital need of the organisation is to provide the employees with a forum for communicating their thoughts. Pennymart initiated forums for people wherein they could discuss their issues and put them forward to the management. However, the forums did not work for the organisation as the management tools adopted by the managers were not effective. The management should have initiated a monitoring program to make the associates well informed regarding the plans of the organisations. Regular meetings and social gatherings would have been of effectiveness for the company. Thereby the views of the diversified workforce would get communicated to the management, reducing the concerns associated with a lack of communication (Golembiewski, 1995). Effective communication is of great relevance for the success of the business. The communication and the way of expression are different in diverse cultures. People from different backgrounds have distinct ways of communication and any miscommunication can lead to the failure of the organisation. In this case, the communication within the people of the organisation was weak. There was gap amid the management and the workers due to the ineffectiveness in the communication and lack of commitment of the management. This was hindering the concept of equal opportunity in a diversified workforce. Communication is essential in an organisation in order to increase the productivity and quality of relationship in the workplace especially in managing diversity. The CDO responsible for managing diversity had a lack of efficiency in coordinating with the CEO and the HR manager due to a lack of communication within the people (Golembiewski, 1995). The CEO of Pennymart Julia Perch believed in the concept of diversity for the wellbeing of the organisation. The conceived perception of the leader was to provide diversity in the workforce by recruiting people of different genders and races. On the contrary, the leadership style was not effective and proper as the CEO did not follow the diverse culture while recruiting top level management. The leadership style was not appropriate as the CEO was not clear regarding the prospective of diversification in every level of the organisation. The CEO implemented useful strategies such as diversity forums for the people but did not manage them effectively. The CEO did lack in the proper implementation of the leadership theories and practices. The concerned theories highlight that a leader will be effective when following the style of leadership without being bias and taking effective decisions regardless of ethnicity and race. With regard to the case, the CEO was not sure about her management style as diversification was only implemented in the lower level than in the higher level of hierarchy. This behaviour of the CEO did not illustrate the diversity concept. Also, the CEO did not take into consideration the importance of people management but believed in expansion. Thus, it can be stated that leadership approach taken by the CEO was not effective, which is an important aspect of a business while managing diversification and equal opportunities. Diversification in an organisation will be effective only when a pattern is followed throughout the organisation and not only in the lower level. This would lead to discrimination of the higher management in the workforce and with regard to the case the discrimination of the white over the black natives. Therefore, it can be stated that the CEO was not effective in her approach in exhibiting true leadership of diversity. The CEO wanted to implement change and so the transformational style of leadership would have been the most effective style. Besides, the leader needs to be focused and clear towards what are the objectives and goals that the organisation is aiming to accomplish (Golembiewski, 1995; U.S. Department of Labour, n.d.). Organisational culture is a vital aspect for the sustainability of the organisation. The culture of the organisation is important for the people in the workforce to behave in a certain way by keeping in view the organisational goals. Different people have diverse ways of working due to their culture, thus to have a diversified culture it is of relevance to have a proper skilled leadership approach and way of management. The organisational culture is important to analyse the internal and external environment effectively in order to ensure a profitable business with motivated employees. A strong organisational culture would lead to the reduction in the rate of attrition and increase dynamism through diversity. In this regard, Pennymart did not emphasise the organisational culture after bringing diversification. The culture in the management level did not change and thus the effectiveness of the diversified workforce in the lower level did not sustain the recession. Pennymart brought into practise one of the best policies, which are diversification in the early stage but was unable to effectively implement the policies. It is important to follow best practices for managing the organisational diversity. This can be well evaluated through the example of The Hong Kong and Shanghai Banking Corporation (HSBC) which believes in the concept of diversity. The principle of HSBC is unity in diversity along with valuing every individual irrespective of the caste and creed. Moreover, HSBC has a set standard wherein they believe in the concept of “Different People Different Views” (HSBC Group, 2014). The people of HSBC believe that they are different and that diversity is the root of their success. The company operates in various regions and works effectively with the people of various cultures in every level. The prime reason for such effectiveness and success of the business is due to the best management practice followed by the business. The management practice is that it creates a working environment that is open and supportive at every level of the management. The people of the executive level and the management have a proper interaction with each other which helps in the process of sharing the ideas. The management practice followed is respecting and valuing every individual by bringing change in the social, legal along with economic backdrop in the workplace. The organisational culture changes while dealing with diversity. Correspondingly, one of the most important parts to alleviate the concerns due to diversity is training and learning to make the people of every culture and race to have same level of understanding. Another practice that is followed by HSBC and other leading companies is related to the recruitment policy. Diversity is maintained in every level of the hierarchy which is helping the management to take corrective decisions keeping in view the diverse cultural and racial workforce. Maintenance of fairness, equality and opportunity without being bias is another aspect of managing diversity. HSBC has launched Diversity Committee as an initiative to bring prosperity in the workforce. They also have the Diversity Council to look into the issues regarding the employees and to answer their queries. The pattern of employment changes with the diversified workforce (HSBC Group, 2014). For a company to be successful, it is important for the management to have a forum wherein the people can come forward with their issues for a solution. All the aspects of the people, regarding the gender issues, racism and culture will be answered without hurting the sentiments of the people. This will help in bringing change, certainty and sustainability for the business. The diversity management technique is another important aspect for the long-term sustainability of the business. The sustainability of the business depends on the people and the management implementing certain techniques and policies. The management needs to evaluate the people and the executives as well as create awareness among the people during the recruitment process. Besides, the management needs to educate the managers and leaders as they will be the main point of interaction for the employees. The level of communication must be open and easier so that the people can put forward their queries and issues in front of the management. The management must be a part of the diversity forum so that they can take feedbacks from the people and understand their problems. Moreover, equal opportunity for every employee is a key part of best management practices. Every individual must be given equal space in the organisation irrespective of their skin colour. Diversity and inclusion initiative is another good employment practice in order to respect and value every individual by the management. The initiative takes into concern giving awards to the people of the management who provide better service to the people irrespective of their colour. This helps in bringing equality and a sense of togetherness among the staff. The most vital dimension of all is diversity training among the people of the organisation for the success of the business. This facilitates in lowering the rate of attrition as the business is united even though there are cultural differences. If the diversity is managed well, it can create wonders for the business. The reason is that different people from diverse cultures have their own ideas which if implemented and well collaborated can make the business effective and sustainable. The style of management is an important aspect for the long-term sustainability of the organisation. The Human Resource Management (HRM) diversity practices are another facet for attracting people from various cultures in order to have sustainable future. This is possible through the proper recruitment and selection process which is unbiased. One of the other good employment practices is diversity training and management development to maintain a well diverse culture with equal pay and without any distinction (Shen & et. al., 2009). Managing diversity is like managing positive force, dynamism and spurring creativity which leads to refining the bottom line. This is possible by following the best diversity practices, which is by incorporating a situational leadership approach with proper effective management style for controlling people in the right manner. The forums, committees and the diversity programmes are the practices which help in bringing proper coordination amid the people and the management for the long-term sustainability of the organisation. As per the derived analysis, it can be stated that the best practice for Pennymart is to manage the people by valuing their ideas and by cultivating an atmosphere wherein cultural awareness, sensitivity, fairness and integrity are considered (David, 2002; Reichenberg, 2001). Conclusion Pennymart Ltd. under the leadership of CEO Julia Perch focused on ensuring a diversified organisation which values people of different races and ethnicities. However, despite the organisation’s focus on involving a Chief Diversity Officer, it had suffered certain complexities after an inappropriate approach towards managing diversity which resulted in disbanding its beneficial initiatives such as diversity forums among others. Moreover, it has been determined that diversity management approach was primarily applied amid the lower level management and the top level management was shielded from such initiatives. Moreover, there was a lack of proper coordination within the different levels of management including the top level comprising the CEO and the CDO. These complexities resulted severe decline in the organisational employee turnover, particularly amid the black and minority ethnic employees. These aspects required serious consideration to ensure stability of the organisation in the competitive industrial sector. Recommendations Pennymart has every potential to be successful by bringing diversity effectively. The reason for the downfall of the company was due to a lack of best management practices to manage diversity. The diversity in the organisation can be managed effectively if the management takes extra initiatives in following a better leadership style. The management needs to give importance to the opinion of every person like that of HSBC. Pennymart to be the leader in the global context needs to introduce a formal process that is comprised in the laws to be followed by the people and the management. The CEO needs to be more focussed towards people management and training as well as needs to understand their requirement. A motivated employee workforce would eventually lead to a sustainable business and global expansion with quality. Furthermore, it is recommended that the recruitment process must be diversified in every level to have a proper coordination among the people. This will provide a better outlook while strategizing the policies (Reichenberg, 2001). Another recommendation in order to be the leader in the field of diversity is to incorporate proper training and development programme to every individual in the organisation to have the same understanding and goal. This will lead to the increase in the mutual respect among the employees and the level of discrimination would be reduced. The ethicality will be maintained in the organisation if these best practices of diversity management are followed. This will ensure equal opportunity for the people irrespective of gender, caste and race. The culture of the organisation also changes with the implementation of diversified management practices. Therefore, these practices will assist Pennymart to be the leader by maintaining a diversified well-coordinated workforce. References Bogda, G.L., 2004. Diversity and Organizational Change. The 1998 Annual, Vol. 2, pp. 1-6. David, A., 2002. Managing the Diversity Revolution: Best Practices For 21st Century Business. Diversity Today. [Online] Available at: http://www.highbeam.com/doc/1G1-106647784.html [Accessed on March 13, 2014]. Green, K.A. & et. al., 2003. Diversity in the Workplace: Benefits, Challenges, and the Required Managerial Tools. University Of Florida, pp. 1-3. Golembiewski, R.T., 1995. Managing Diversity in Organizations. University of Alabama Press. HSBC Group, 2014. Diversity and Inclusion. HSBC. [Online] Available at: http://www.hsbc.com/citizenship/diversity-and-inclusion [Accessed March 13, 2014]. Reichenberg, N.E., 2001. Best Practices in Diversity Management. Cornell University ILR School, pp. 1-7. Salleh, K.M. & Sulaiman, N.L., 2012. Diversity and the Changing Role of Human Resource in Malaysian Organization. International Journal of Human Resource Management and Research, Vol. 2 Issue 4, pp. 1-8. Shen, J. & et. al., 2009. Managing Diversity through Human Resource Management: An International Perspective and Conceptual Framework. The International Journal of Human Resource Management, Vol. 20, No. 2, pp. 235-251. U.S. Department of Labour, No Date. Diversifying Your Workforce. Competence and Flexibility, pp. 2-11. Read More