Diversity Strategy and Organisational Effectiveness - Assignment Example

Managing Diversity Broadly, diversity management can be defined as, recognizing, appreciating, valuing, encouraging and utilizing the unique talentsand contributions of individuals from across a wider spectrum of society'. The diversity could be there1 on account of age, career experience, color, communication style, culture, disability, educational level or background, employee status, ethnicity, family status, function, gender, language, management style, marital status, national origin, organizational level, parental status, physical appearance, race, regional origin, religion, sexual orientation, thinking style, speed of learning and comprehension, etc. Maintaining such a delicate balance is indeed a challenging task in itself. The guiding principle behind this thought is that the world is a rich and diverse place, full of interesting cultures and people who should be treated with respect. Organisations take up this challenge in varying degrees. Successful organisations take pride in implementing diversity at work places and they devote some resources as well for taking care of this challenge. The changing demographics of UK further compound this challenge. There are a large number of ethnic minorities in UK, and a recent study projects that, by 2020 half of UK's population will be over-50, and a third of those between 50 and retirement age will be classified as disabled. Government of UK has also realized the need for paying more attention towards the diversity in the society and managing it. The 'Commission for Equality and Human Rights (CEHR)' has been set up by the Equality Act 2006, which emphasizes2 that 'Equality, diversity, and respect for the human rights and dignity of every man, woman and child are core values that define our lives in Britain.' The vision for the CEHR is based on the Government's view that equality is not a minority concern - it matters to every citizen. The commission will be fully functional by October 2007. While the spirit behind this act has got an overwhelming support from HR practitioners, apprehensions3 are also expressed by many speakers during a conference on race, held in London in November 2006. while HR professionals are taking a sigh of relief that the legislative mess of dealing with 35 Acts, 52 statutory instruments and 13 codes of practice on equality issues will be over with the implementation of CEHR, there are other speakers during this conference, who believe that racial concerns will slip down the agenda once they become just one part of the body's work, as it gears up to fight discrimination on seven fronts. A survey4 of 112 HR practitioners by Personnel Today's sister publication IRS Employment Review, shows that respondents hope the CEHR will make things simpler. It is worthwhile here to note that implementation of any law in letter and spirit depends on the intentions of the organisation and how seriously it values the corporate social responsibility. Therefore CEHR will have more of a guiding and nudging role in carrying out the tasks. In fact the survey findings also point out that 81% respondents would be happy if the commission just issued advice on good practice and tools for employers, rather than carry out investigations (40%) and legal enforcement (31%). Diversity Strategy and Organisational Effectiveness The global economy has made it almost mandatory for international corporations that an effective strategy is adopted for managing the diversity. Companies are moving towards flatter organizational structures, and the global economy is allowing the movement of the workforce across national boundaries, effective interaction amongst diverse workers becomes more critical for the smooth organizational functioning. In fact now that debate has started whether the concept of 'managing diversity; forms an alternative to 'equal opportunities' based on gender bias. In the UK, human resource practitioners and academics alike are becoming more aware of the emergence of managing diversity. There is now a view that, after twenty years of the ' stick' of legal compliance (which has achieved little), the 'carrot' of underpinning the business case for equal opportunities will perhaps achieve more (Dickens 1994). Thomas5 (2000) argues that, with the growing number of mergers and acquisitions, workforce diversity will become more of a priority for organizations and, therefore, in the future, people will become clearer on what diversity is and how to manage it. The business case for managing diversity therefore offers a way to operate equal opportunities as a strategic issue, a core value linked to organizational competitiveness (Dickens 1994). Diversity consists of visible and non-visible factors, which include personal characteristics such as sex, race, age, background, culture, disability, personality and work-style. Harnessing these differences is bound to create a productive environment in which everybody feels valued, their talents are fully utilised and organisational goals are met Therefore, the way to place this on the corporate agenda is to see the concepts as providing both tangible as well as intangible benefits, besides being socially and morally right. Considering these factors, the underlying philosophy of managing diversity tends to imply that an organization can gain massive competitive advantage, resulting in enhanced performance with the help of a satisfied human capital. It rests on the premise that the organization will be able to serve increasingly diverse customers, meet increasingly complex business and management problems by actively seeking and managing a diverse workforce (Stephenson and Lewis 1996; Cox 1991). The IT era has given rise to huge technological boom in some of the countries and the 'digital divide' too also presents a diverse scenario. For example not all bank customers can take advantage of e-banking/ i-banking concepts introduced by most of the banks. Even if this customer base is in minority the bank cannot take it for granted and make it compulsory for all its customers to make only online transactions. Even in some of the most developed economies, minorities are lagging far behind the national averages in holding jobs in the computer and other high-tech industries, in owning computers, and in using computers in schools. Although corporate Europe remains far more of an all-white clubhouse compared to corporate America, that situation is changing as immigration from Africa, Asia, and the Arab world continues to rise6. The industry too has taken cognizance of the diversity. In the East Midlands, the Food and Drink Forum has become the first organisation in the area to offer a training course in cultural diversity, which it hopes will help firms to deal with the implications of employing workers from a range of different countries. According to Chartered Institute of Personnel and Development (CIPD), the UK needs to do lot more in the field of Diversity management. Some of the figures released by CIPD7 state that; Unemployment is twice as high among people from ethnic minorities, although there are relatively more Chinese, Indian and Black African graduates than white graduates. Only 12 per cent of white men are in professional occupations, as opposed to 21 per cent of Chinese and Indian men. White men have the lowest rate of participation in full-time education between the ages of 16-24 (37 per cent), followed by white women (40 per cent). 41 per cent of white women in employment work part-time, but only 7 per cent of white men do so, as opposed to 38 per cent of Bangladeshi men. Black and Asian people are 2.5 times less likely to have jobs than whites. Ethnic minorities account for 8.1 per cent of the overall population. Because they are relatively younger, it is projected that ethnic minorities will account for half the growth in the working population to 2009. In the past ten years, the employment of the over-50s has risen by almost 25 per cent. The number of people aged over 60 is forecast to rise by 40 per cent in the next 30 years. HSBC: Role in Diversity and equal opportunities Despite the discouraging reports for UK in general, HSBC takes pride in the fact that The Hong-Kong and Shanghai Banking Corporation Limited was established in Hong Kong in 1865 by Thomas Sutherland, a Scot who was then working for the Peninsular and Oriental Steam Navigation Company. Initially the bank was set up to finance the growing trade between Europe, India and China. After establishing some more branches in Asian region, HSBC entered into Europe, North America and gradually towards the rest of the world. It has a reputation of a premier bank in the Asian region. In Japan, HSBC was an advisor to the government of Japan in 1866 while in 1888 it started printing Thailand's banknotes. HSBC Holdings plc took shape in 1991, creating a holding company for the entire Group with its shares quoted in London and Hong Kong. This was part of the strategy of HSBC to establish itself in Europe, and particularly in UK as a leading bank. The bank has shown consistent growth through strategic acquisitions in both the developed and emerging markets like, US, UK, India, China, Argentina, Brazil etc. The bank marked its 140 years of existence in China in 2005. Today HSBC Holdings (HSBC) is one of the world's largest banking and financial services organization. Today The company's international network comprises8 over 9,500 offices in 76 countries and territories in five regions: Europe, Hong Kong, rest of Asia-Pacific( including the Middle East and Africa) North America, and South America. Banking as such is a business about people. Its' a customer driven business with people from all walks of life forming the clientele of a bank. Employees being at the very basis in dealing with customers, managing diversity becomes all the more important. To operate successfully9, HSBC Bank plc, a principal member of the HSBC Group has clearly identified the needs to understand the local communities and spreading that understanding around the world. The bank considers itself in a unique position for being able to do that. HSBC takes pride in the fact that by being part of the local culture it has been able to build its business for around one and half century. This inclination and the acquired expertise in managing diversity help HSBC in developing the advice, products and services that it offers to the customers all around the globe. HSBC's Diversity strategy says; Employing diverse people makes it more adaptable to new situations. This is not simply about gender, ethnicity, disability, religion or age; it is about respecting individuals and treating everyone, customers and colleagues, with dignity. HSBC considers that diversity reaches far beyond compliance with legislation and equal opportunities initiatives. As an international bank, HSBC values the diversity of the markets in which it operates. HSBC's diversity strategy is based on the premise that the most important competitive differentiators are the quality of individual service that it provides to the individual customers and the way its individual employees are treated. HSBC has a number of senior general managers who champion the initiatives, specifically focusing issues like disability, race, gender and sexuality. Their role is to help every one of its people to increase their understanding of communities and customers and to ensure that the understanding is shared throughout the bank. One of the ways in which these senior general managers do this is by forging partnerships with organisations like; Business in the Community (BITC) initiatives in the United Kingdom Race for Opportunity Opportunity Now Employers' Forum on Age Employers' Forum on Disability Today HSBC proudly boasts of over 125 million customers around the world, with a diverse workforce of more than 260,000 people. Today UK has the biggest share of its operations with over 55,000 employees serving the bank customers. Headquartered in London, the bank has shown its commitment to diversity10 starting from the top, as is exemplified by the following steps. The governing board of HSBC has three female directors, more than most of the world's leading companies. An executive director is in place, who is exclusively responsible for diversity at a global level. Most areas of the bank are in the process of evaluating their branches and cash machine locations to ensure that disabled people have easy access. HSBC is in the process of building ramps and other facilities for physically handicapped employees in its offices and branches in Hong Kong, India, Sri Lanka, Taiwan and Thailand. Its managers are using the new Diversity Toolkit to develop diversity strategies at the local level. HSBC's first global women's summit, Accelerating Group Strategy, was launched in 2005 with the help of HSBC's senior women's business forum. HSBC plans to expand the toolkit content to provide more commercial case studies to show clearly the business case for diversity. It has also decided that the content will be accessible to all its employees. HSBC's diversity intranet has been re-designed and expanded. It includes a series of practical checklists designed to enable managers to enhance business performance and personal effectiveness by capturing different perspectives and points of view. HSBC recognizes that there's good diversity' as well as bad bad diversity. Diversity across dimensions like functional expertise, education or personality - can enhance creativity or group problem solving potential. On the other hand, more visible diversity- such as race, gender or age, if not handled properly-can actually have a negative effect on the group initially. The secret lies in managing diversity well, which HSBC has done quite well so far. In April 2004, HSBC was ranked at 24th place amongst the top 50 companies for diversity management. HSBC also operates according to certain key business values, which includes a diverse team underpinned by a meritocratic approach to recruitment/selection/promotion. With the launch of the HSBC Life Amanah Pension Fund, HSBC became the first UK high-street bank to offer a pension fund that meets the requirements of Shariah (Islamic law). Of the six official languages of the UN, more than 10,000 HSBC employees are native speakers in four of them, and another five thousand in a fifth. HSBC recognizes that there are more than 30 different linguistic communities of over 10,000 people in London alone. While on the one hand diversity calls for a mixed workforce, it also requires the corporate houses to respect the cultures and feelings of local communities. To this end, HSBC bank in Saudi operates a number of women-only branches. Some 14 per cent of its workforce there is female, which may appear a miniscule if we compare it to Western standards. But it is actually more than three times the national average and the highest in the financial services industry in that country. In its pursuit for recruiting from all across the globe, this year's intake comprises 50 nationalities. HSBC makes available flexible working practices, as there the bank feels that there is an appreciation that not everyone can and will work the same hours and in the same way. This removes disadvantage and discrimination to participation in work. HSBC has created and encouraged an environment where the insights of diverse groups are sought and welcomed; where people are not alienated or sidelined because they don't 'fit' into a set expectation. i.e. a climate where people feel that their background and lifestyle does not affect perceptions of them as a professional, or affect their opportunities for development Adopting and committed and effective diversity management policy has helped HSBC in; Embedding diversity into the values and practices of the organisation In attracting, understanding and retaining customers. Attracting and retaining talented staff. This way the best people are available to help HSBC in meeting its business priorities. In discovering the potential employees and untapped skills amongst the existing workforce. Demonstrating that HSBC is a socially responsible organisation. Image and brand value is enhanced when HSBC is seen to treat employees, customers, communities and shareholders the way they want to be treated. Reputation and image is a valuable asset, and strong stakeholder relations will have a positive impact on bottom line results Placing it in an excellent position to face the competitive future with confidence. It helps develop decision-makers that see opportunities, have the courage to innovate and who are able to lead change. The ability to think differently and openly, to see beyond established parameters, becomes part of HSBC's competitive advantage. Meeting the obligations of the law and regulatory bodies References: 1. Magazine Publishes of America (MPA), http://www.magazine.org/diversity/Defining_Diversity/ 2. Commission for Equality and Human Rights, http://www.cehr.org.uk/ 3. Workplace diversity is more rhetoric than reality, http://www.hrmguide.co.uk/diversity/diversity_rhetoric.htm 4. HSBChttp://www.hsbc.co.uk 5. Dickens, L. (1994) 'The business case for women's equality: is the carrot better than the stick' , Employee Relations 16(8). 6. Thomas, R. Jr. (2000) 'Profiles in managing diversity', American Institute of Managing Diversity, http://www.aimd.org/proles.htm#Dr. Thomas. 7. Sharon Mavin and Gill Girling, What is managing diversity and why does it matter Human Resource Development International; Dec2000, Vol. 3 Issue 4 8. Stephenson, K. and Lewis, D. (1996) 'Managing workforce diversity, macro and micro level HR implications of network analysis' , International Journal of Manpower 17(4). 9. Cox, J.T. and Blake, S. (1991) 'Managing cultural diversity: implications for organisational competitiveness' , Academy of Management Executive 5: 45-56; in E. E. Kossek and S. A. Lobel (eds) ' Introduction' , Managing Diversity: Human Resource Strategies for Transforming the Workplace, Oxford: Blackwell, 1996. 10. David L. Ford, Jr., George L. Whaley, 'The Digital Divide and Managing Workforce Diversity: A Commentary', APPLIED PSYCHOLOGY: AN INTERNATIONAL REVIEW, 2003, 52 (3), 476-485 11. Greens, Rebecca, 'Culture shock', Food Manufacture; Mar2006, Vol. 81 Issue 3, p50-51, 2p 12. CANNELL Mike (June 2006), Diversity: an overview, available online at http://www.cipd.co.uk/subjects/dvsequl/general/divover.htmIsSrchRes=1 Read More