Kenya Commercial Banks - Impacts of Diversity in Multicultural Organization - Research Paper Example

Impacts of Diversity in Multicultural Organization Chapter One: Introduction Diversity in organization is basically defined as the methodical and deliberate commitment to recruit, reward and promote a heterogeneous mix of people. Emergence of diversification is for the purpose of creating equal opportunities to people thus enabling an organization get the best out of the diversity rather than being confined to one particular culture. The purpose of this study is to explain the effects of workforce diversity in over the organizational effectiveness in a commercial bank of Kenya. In particular, the study will analyses the degree of demographic diversity, social –cultural diversity, the management of diversity and how management of this diversity affect the effectiveness of the organization. A descriptive study of all Kenya Commercial Banks (KCB) will be carried out in all branches of KCB located in the five countries within East African region. KCB is financial service providers whose headquarter are in Nairobi, Kenya. According to asset possession, it ranks third in the financial industry with more than $2 billion of assets, with Barclays Bank and Standard Chartered Bank in the first and second positions respectively (Mott, 4). Statistics taken in the 2013 indicate the bank has a wide network of banking branches across the entire East Africa with around 170 branches Kenya, Rwanda South Sudan and Tanzania. This bank is proud to employee more 3000 workers in all the 170 branches. This clearly shows that the company is diversified in terms of workers and in its operations. Chapter Two: Literature Review As it has been defined above, diversity is a systematic and planned commitment for a particular organization to recruit, train, reward and promotes employees coming from different diverse groups. Theories and techniques pertaining to management of diverse workforce have been put in place and they have been enthusiastically supported by several groups of people ranging from CEO’s, consultants and scholars. Organization that effectively manages diverse workforce earns good reputation which makes it attract even better personnel. Diversity, being the co-existence of workers from different cultural and demographic setups, it includes race, color, language, religion, physical appearance, educational level, lifestyle, language among others (Strauss, 7). As a result, an organization should provide an environment that enables workers pursue their career without hindrances by factors that are irrelevant to performance. Managing this diverse workforce is thus ensuring that they give their best in an equitable way where one group is not disadvantaged or advantaged. According to Boesch (3) this topic has become a hot button in corporate, political and social spheres. This is to say the managing diverse workforce in any given organization is an extremely challenging issue and therefore managers both in the private and public sectors have to come up with effective strategies of managing this intriguing issue of diverse workforce. It is therefore important to understand the evolution of diversity management so that one can get the idea of about how interests evolve in a diverse workforce. However, the issue of diversity has undergone major transitions and transformations and many managers have come to understand the benefits of a culturally diverse workforce. From a diverse workforce, an origination can reap the benefits of different viewpoints that can facilitate unique and creative approaches to problem solving and as a result increase innovation which in turn lead to better performance of the organization. Take an instance of Botswana, its population is becoming more of multicultural owing to migrants this simply means that market share, efficiency, international competitiveness and the level of innovation of organizations will depend on the ability of managers to effectively manage that diverse workforce within and without the organization boundaries. Hartel (15) on other hand argue that due to diversity, some vulnerable category of people face discrimination. Women for instance have faced this kind of discrimination since time immemorial. In some companies, women face dismissal from companies once the fall pregnant yet the men who impregnated them retain their jobs. In some other instances, women are discriminated in terms of salary payment. Research has revealed that in U.S., on average basis, there is a substancial gap in how the level of pay between men and women. This is an issue that should be addressed for an organization to enjoy the benefits of a diverse workforce. The free movement of labour that is a product of globalization and the fight for human rights is compelling manger adopts diversity management both for government and in the private sector. Kandola, Fullerton and Ahmed (10) says this is a tool that cannot be underscored given the transformation that are sweeping the nation and globe at large. Chapter Three: Methodology This study focuses on KCB Ltd and limited itself to the following variables: workplace diversity and effectiveness of the branches was measure in by investigating the level of satisfaction shown by employees. Other factors that were put into consideration were stereotyping, ethnocentrism, unfavorable treatment of workers and denial of access and any cases of conflict within the organization. The main method of data collection was survey that was done on the top managers. Mail survey was used to collect data from then. In addition to that, they were sent questionnaires as mail attachments and they replied using mailing system. All samples were collected from all the branches in the five countries: Kenya, Uganda, Tanzania, South Sudan and Rwanda (Wentling and Palma-Rivas, 8). Out of the 170 branches in all the five countries, a sample of 100 managers was chosen at random based on the Sudman rule of the Thumb. This rule postulates that if the population under investigation consist of less than 10000 people, then a population of less than or equal to 100 people will be enough to for the study. In this study the total number of KCB branches is 170 which is less than 10000 and therefore a sample size of 100 was enough. Results of the survey were tabulated in the table below. Country Proportion Sample size, n =100 Kenya 83.74% 83 Uganda 4.93% 5 Tanzania 3.94% 4 Sudan 2.46% 3 Rwanda 4.93% 5 Total 100% 100 The data collected was focused on diversity issues related to the employees and those which affect attainment of goals set by the organization. Generally the data focused on social cultural diversity and demographics and how each manager from the different KCB branches managed this workforce in order to achieve the objectives of the firm. The above data was analyzed using descriptive frequencies and a correlation between the variables. Chapter Four: Discussion Outcome from 26 branches out of the possible 170 studied indicated that the total number of male employees accounted to between 51% - 75% of all the employees in the organization. This is a clear indication that there is diversity as far as gender is concerned with female workers being the minority group. This scenario indicates gender imbalance hence diversity. In addition to that, the study also revealed that there was imbalance as far as age was concerned. In 43 branches that were surveyed, 71.6% percentage of the population indicated that 31-40 years while the other population accounted for 26%-50% of the entire workforce. Based on academic qualifications, it was realized that 2-3% of the employees in 18 branches that were studied, had MBA qualifications, 1-2% in 15 branches and below 1% in 12 branches. On the other hand, there was a great deviation in study on 9 branches where 3-4% of the employees had MBA. From the results above, it is clear that less than 5% employees in KCB are holders of MBA meaning that the remaining 95% are degree holders or have other qualifications (Taylor, 23). Furthermore, it was revealed that in 28 branches that were studied, the non-black accounted for 1-2% while in 30 branches, they accounted for 0-1%. In other words, this is to say that more than 98% of the workers in KCB are blacks. In addition to that, around 2% indicated people with different skin color thus solidifying the fact that there are diverse races working in KCB. As far as diversity is concerned, the non-white people may group together owing to their similarity or be segregated against the blacks. Moreover, then non-Christian accounted for 0-1% in the 30 branches and in other 12 branches they accounted for 1-2%. Since this level is less than 5%, it can be concluded that 95% of the workers are Christians. However, in countries dominated by Muslims, the percentage of non-Christians, especially that of Muslim was found to be 26-50%. According to the study, KCB has diverse workforce, however it was revealed that only 65% of the banks studied practiced diversity management practices. In some instances however, in 12 branches (20%), such practices were not carried out despite the diversity of workers in KCB. Correlation between the three variable indicated that they were either positively or negatively related but at varying strengths and magnitude. There was a strong negative correlation, to the effectiveness of the organization, in socio cultural diversity. Its correlation was found to be (r= -0.697, p= 0.013) and this was done on a significant level of 5%. In relation to the organizational effectiveness, the demographic diversity was found to have as strong negative correlation of (r= -0.596, p= 0.020). As to conclusion, in relation to organizational effectiveness, diversity management was found to be positively related buy the correlation was weak (r= +0.232, p= 0.021) though this was done at significant level of 5%. Chapter Five: Conclusion It can be concluded that there is gender diversity in KCB. In addition to that, MBA holders are few compared to employees with other academic qualifications and this may affect human management as far as promotion, compensation and career development activities are involved. On the other hand, it has also been revealed that non-blacks in the company are few as compared to blacks. This may result to segregation or grouping of the non-blacks amongst them. In doing so management will have to come up with strategies of ensuring that such things don’t occurs since they slow down company’s performance. Owing to the fact that non-Christians are fewer that Christians, cases of prejudice and discrimination may arise. This may occur in countries or societies that are highly sectarian and where Muslim population is the minority. If proper diverse management is not done in such places and branches there may be cases of disrespect for individual’s faith leading to religious clashes. In general, KBC bank has a diverse workforce that extensively affects functioning and cohesiveness of the company. It is also important to understand such problems emanating from diversity of workers are intermittent. The negative correlations as indicated by socio cultural and demographic diversities, if not well managed, they would work against the effectiveness of the organization and the situation may become worse to manage at a future date as indicated by the weak positive correlation in diverse management culture found in KCB. Even though KCB is trying to adopt such a culture, the pace at which is adopting it is really slow and this negative diversity may adversely affect effectiveness of the organization if not properly addressed. In order to improve power in the existing diversity, the company should come up with policies meant to control and enhance all activities conducted by the human resource thus minimizing the differences that may exist within the diverse workforce. In addition, diversity planning ought to be emphasized by the top management. Also, the top management should also undergo training on how to manage diverse workforce. Finally, the bank itself must accept to embrace change by moving from its lukewarm position and incorporate diversity in their strategic planning and channel all their resources towards achieving effectiveness in the organization. This study however limited itself to studying one company in Kenya and therefore in order to comprehensively understand how diversity impacts management, studies should be done in other banking industries in the banking sector. This is because, such as study will clearly bring out how diversity and diversity management impacts the effectiveness in organization as far as banking industry is concerned. Works Cited Boesch, Christophe. Behavioral Diversity in Chimpanzees and Bonobos. Cambridge: Cambridge UP, 2002. Print. Hartel EJ. Towards a Multicultural world: Identifying work systems, practices and employee attitudes that embrace diversity. San Francisco: Willey and Sons, 2004. Print. Kandola R, and Fullerton, and Ahmed Y. Managing diversity: succeeding where equal opportunities has failed. Nairobi, Kenya: Act Press, 2005. Print. Mott ,Paul E. The characteristics of effective organization. Harper& Row; New York, 1995. Print. Strauss, Mang. Culture shocks in intercultural service encounters? Richard D Irwin: Homewood Illinois, 1999. Print. Taylor CL. Dimensions of Diversity in Canadian Business: Building a Business Case for valuing ethno cultural diversity, the conference board of Canada. Ottawa: HR Magazine, 1995. Print. Wentling RM and Palma-Rivas N. Current status of diversity initiatives in selected multinational corporations. New York: SAGE, 2002. Print. Read More