Managing Diversity within the Work Place - Research Paper Example

Managing Diversity within the Work Place Introduction A concept of purpose and a sense of direction strengthen an organization’s ability to survive in changing circumstances and environment. In organizations, large numbers of people congregate under one roof in a joint pursuit of purpose. The organization then sets itself up to harness the creativity of the people for maximum effectiveness. A primary business objective is being profitable, and managers must explain and justify business performance and decisions in light of this objective (Toulmin, Rieke, & Janik, 1984). In this regard, there have been several studies which support that managing diversity in organizations contribute to profitability. Research Objectives According to DiTamaso (1999), “knowing how to successfully manage in diverse business situations will undoubtedly have effects on both the corporate bottom line and on one’s own career prospects”. In this regard, the objective of this essay is to proffer issues pertinent to managing diversity within the work place. Specifically, this paper aims to answer the following questions: (1) what specific aspects make an organization diverse? (2) What value does a diverse, versus a homogenous, organizational culture have to the bottom line? (3) What value does a diverse workforce offer individual workers? And finally, (4) what organizational policies and procedures need to be in place to create and support a diverse workforce? Research Design and Methodology To address the concerns, the organization to be examined in the light of policies on diversity of work force is the HSBC Bank, a global financial institution with vast customer reach. Initially, a brief description of the company would be presented along with its strengths and weaknesses. The current status of diversity in its work force would be examined and evaluated in terms of its contribution to the achievement of organizational goals. The research would be undertaken using secondary sources of authoritative literature on the subject of diversity in the work place. A review of literature would be presented initially to differentiate definitions of diversity, including one which is defined specifically by HSBC Bank. Further, authoritative sources from diverse publications, books, and electronic sources would discuss aspects of making an organization diverse, diverse versus homogeneous organizational culture, the benefits of a diverse workforce, policies and procedures that support a diverse work place, and issues pertinent to diversity at HSBC – including SWOT Analysis and challenges faced by diverse organizations. Barriers and Ethical Considerations To be discussed through secondary sources, the barriers and ethical considerations are proffered under challenges of supporting a diverse workforce, to wit: : (1) communication issues, (2) resistance to change, (3) implementation of policies incorporating diversity, and (4) managing diversity in the workplace (Greenberg, 2006). Gantt Chart DATES August September Research Proposal 2 – 15 Data Gathering 15 – 30 Writing Chapter 1 Introduction and Review of Literature 1 – 10 Diversity at HSBC 11 – 15 DATES August September SWOT Analysis Barriers/Challenges 16 – 20 Analysis 21 – 25 Recommendations and Conclusion 26 - 30 Definition of Terms Greenberg (2006) defines diversity in the workplace as “the variety of differences between people in an organization…Diversity encompasses race, gender, ethnic group, age, personality, cognitive style, tenure, organizational function, education, background and more” (par. 1). In another research, Green, Lopez, Wysocki & Kepner (2009) provided a definition of diversity as “acknowledging, understanding, accepting, valuing, and celebrating differences among people with respect to age, class, ethnicity, gender, physical and mental ability, race, sexual orientation, spiritual practice, and public assistance status (Esty, et al., 1995)” (par. 4). Diversity has also been closely linked to the concept of pluralism. By pluralism, it is defined as “an organizational culture that incorporates mutual respect, acceptance, teamwork, and productivity among people who are diverse in the dimensions of human diversity” (Maurice, n.d.). HSBC Bank specifically defines diversity as “a source of opportunity, whether in employment or customer markets. Appreciation of the rich mosaic of difference within the workforce fuels group dynamics and helps create an environment where teams can perform to their full potential. A generalized market approach will not reach the many pockets of value to be found in diverse groups of customers. Competitive edge can be gained from the variety present in our workforce and customer base, and specific attention to market variation, in, for example: age, (length of) experience gender, sexuality race, religion, culture, nationality physical ability and appearance outside, non-employment, activity and interests personality educational background regional or other accents” (HSBC: Diversity, 2010, par.7). Finally, seen as a barrier to effect the smooth implementation of policies supporting workforce diversity is communication. Communication is the “process of transmitting thoughts, feelings, facts, and other information” through verbal or non-verbal means. (Delaune& Ladner, 2006) Verbal messages are messages communicated with the use of words and language. These messages can either be spoken or written. Non verbal communication, on the other hand, is the process of transmitting messages without words, that is, through body language (Delaune & Ladner, 2006). The ways of communication using traditional verbal means are often insufficient to transcend cultural barriers. There is always this tendency to misinterpret messages due to cultural variances. Aspects that Make an Organization Diverse DiTomaso (1999) revealed that there are several factors which influence diversity in organizations, to wit: “(a) the changing demographic structure of the U.S., (b) the increased importance of globalization to profits and long-term survival in many companies, and (c) changes in the structure of how work gets done”. An organization, being composed of different people should take into account the following diversity attributes: race, ethnicity, gender, class, sexual orientation, physical abilities, age and generation, region, industry, occupation, function, department, project, educational background, work experience, dominant/non-dominant culture and religion, from among others. Given the cultural diversity inherent in the generation and maintenance of values and mental programmes, it is inevitable that cultural groups with different mental programmes will hold different values, leading them to frame work related experience in different ways (Martires & Fule, 2000, 233). For HSBC, a diverse organization is “one that invites, embraces and manages difference in the changing workforce to gain the best from its people and to provide the best service to its customers. It encourages the breaking down of barriers of the past to look at things in a new way, to find effective business and customer solutions. In such organizations diversity is regarded as a competitive differentiator, in both employment and customer markets” (HSBC: Diversity, 2010, par. 10). For the organization, the relevant characteristics for workforce diversity are summed as: diversity being duly recognized, the existence of a set of values, an encouraging environment, a recognition given for creativity and innovation, a conducive climate, a working condition that is flexible and participative, and the presence of a highly visible diverse workforce (HSBC: Diversity, 2010). Diverse versus Homogeneous Organizational Culture In a study conducted by Davis & Bryant (2008), diverse teams outperform homogeneous teams in all aspects. Accordingly, “diverse environments also yield more effective collaboration and teamwork than homogenous teams. There are a variety of ways to solve a problem; leveraging the input of a diverse staff population helps organizations arrive at better decisions. You can’t underestimate the value of the creativity and ingenuity elicited from a team of varying experience, knowledge, and background.” In addition, by encouraging diversity, organizations were found to attract and retain top talents since it promotes training and development of diverse potentials to contribute to a unified goal. Benefits of a Diverse Workforce Through diversity, individual workers are given the opportunity to learn from experiences of various cultures. They are exposed to diverse sources of creativity in problem solving. Further, challenges posed by diversity create positive environments for individual competition in terms of improving one’s skills and advancing competencies. These values enhance the accomplishment of organizational goals. Kirby and Harter (2003) presented an appropriate conclusion regarding diversity and the bottom-line. They argued that “the dominant metaphor of managing diversity, with its emphasis on competitive advantage and a quick-fix orientation, has the potential to emphasize the concerns, values, and perspective of management while marginalizing the perspectives and uniqueness of diverse employees”. In this regard, its direct contribution to increased productivity and profitability is hereby validated. The article written by Greenberg (2006) likewise identified the following benefits of supporting a diverse workforce: “increased adaptability, broader service range, variety of viewpoints, and more effective execution”, among others. Policies and Procedures to support a Diverse Workforce According to McArthur (2006), an organization needs to create a plan for the implementation of policies and procedures to support diversity in the workplace. The components of the plan would depend on several factors: “corporate strategic goals, size of the organization, time for committee work, and human and financial resources” (McArthur, 2006, par. 11). The successful implementation of the plan requires proper communication, an assessment of diversity issues through solicitation of feedback from employees, setting of clear-cut goals on diversity, and the provision of orientation and training for all personnel in the areas of diversity affecting various stakeholders. Diversity at HSBC HSBC Bank has been operating in England and Wales at the registered office located at 8 Canada Square, London E14 5HQ. It offers a diverse portfolio of financial instruments including savings and current accounts, investment accounts, credit cards, loans, mortgages, insurance and international services. It supports a wide range of education projects and initiatives throughout the communities where they do business. In addition, “HSBC supports a wide range of projects and initiatives that underline their commitment to UK businesses.” (HSBC, 2010, 1) The management of HSBC promotes diversity and equality of opportunities through programs where they establish partnerships with other business organizations. Accordingly, “representatives of HSBC Bank plc can provide advice on investment and pension products from selected providers, including companies within the HSBC Group, and on life insurance products from HSBC Life (UK) Limited.” (HSBC, 2010, 1) Eva Freedman, the HR Manager of HSBC Australia averred that diversity became part of their global strategy of managing human resources through its “HSBC’s Managing for Growth strategy” where the organization “built a business case around four factors, including competition and the need to maintain a leading position in our target markets; developing and motivating the best talent; engagement of our workforce and good governance – a brand that stands for exceptional customer experience; and corporate social responsibility” (Freedman, 2008, pars. 6 & 8). HSBC took the issue of diversity seriously be organizing a diversity committee chaired by the CEO himself together with a variety of personnel from different cultural orientations. The team initiated new policies and improved old ones to ensure that diversity is incorporated in their organizational structure and processes. An important realization emerged from the team’s regular discourse: “we recognized that a fundamental barrier to diversity is culture, so we launched a strategy of ‘inclusiveness’ that aimed to create a shift in attitude among our management and our people” (Freedman, 2008, par. 14). SWOT Analysis With the extent of drastic effects that the financial crisis have wrought, HSBC Bank remains strong in the market due to its strengths, as presented: (1) diversity of financial portfolio; (2) a strong customer relations skills; (3) a competent and professional management; (4) extensive global reach; (5) substantial resources. The multitude and variety of products and services enable HSBC to tap a wider range of clientele base from children to retirees. Their strong customer relations skills make their management and staff adept and competent to address customer relations issues and impending threats in the environment. An extensive global reach is a plus factor to tap potentials in diverse markets where HSBC currently holds corporate banking offices. Finally, the substantial resources (money, man, and materials) equip HSBC in employing the necessary marketing strategies to meet competitive pressures and to innovate in the market. The weakness which can be seen is the effect of competition in its continuing operations. With the number of banks currently existing and fighting for market shares, HSBC is not except from competitive threats. This threat is exacerbated by the effects of the financial crisis on personal funds that investors have and are willing to put in the financial institutions. Clients are more cautious to release their funds and to rely solely on the advice of financial organizations. However, instead of dwelling on these as threats or weaknesses, HSBC Bank sees these as opportunities and challenges to improve on their products and services, especially on the quality of mortgages that they offer. It offers specialist mortgages and a variety of payment options. In addition, by offering financial advice, HSBC presents various investment alternatives which would assist clients in determining which options would yield higher returns. Challenges of Supporting a Diverse Workforce Despite the obvious and eminent advantages of openly supporting a diverse workforce, there still remain several challenges on diversity for organizations, to wit: (1) communication issues, (2) resistance to change, (3) implementation of policies incorporating diversity, and (4) managing diversity in the workplace (Greenberg, 2006). 1. Communication Issues The issue of communication as a barrier to workforce diversity comes in the light of the development of language as a means to enhance the growth of culture all over the world. Language facilitated the replacement and expression of behavior with concrete and concise messages. The concept of culture which incorporates language as one its critical elements has a rich theoretical background. Its definition, framework, interpretation and application differ according to perspective. Language and communication plays an important role in ensuring that all aspects of an organization’s policies, procedures, and operating details are relayed appropriately and effectively. The United Kingdom has been considered home to various migrants of diverse descent from all over the world. Most migrants have assimilated into UK’s traditions and ways of life. Although conventional cultural values and beliefs have been preserved by the originating migrants, most immigrants have completely adapted and adjusted to Western culture. However, language remains to be a predominant problem in organizations where English remains to be the first language: spoken and written by majority of the personnel. Any personnel from one country to be assigned to another would have to incorporate diversity in culture especially during committee meetings, orientations, review of company policies and procedures, following codes of discipline and applying safety and security procedures, where the manager will have to communicate with various personnel from other nationalities. It was clearly emphasized that “to succeed in this country in a business sense, in a career sense, you must master English. The global commerce language is English, so we think it’s very important for every immigrant to make every effort to learn English” (Cranford, 2010, par. 14). 2. Resistance to Change The issue of resistance to change is a natural reaction to any change process. The employees in any organization develop an adherence to organizational systems which had been used for a long time. To manage this possible resistance, management can employ the following strategies: (1) information and communication prior to the change to prepare the employees of the new technology, process or policy; (2) consultation and participation by soliciting employees’ comments, suggestions, apprehensions, and the like; (3) emphasis on benefits of the new system; (4) orientation and training to show easy use of the new technology, process or policy; and (5) assurance that the change would not disrupt employee’s security but rather contribute to a higher level of productivity and morale (Martires & Fule, 2000). 3. Implementation of Diversity Policies At HSBC, management has been explicitly clear in its indication that “diversity is not just a policy—it is a key driver to our success. We honor diversity within our organization by building an inclusive work environment and by embracing proactive diversity supplier policies. As the worlds local bank, we recognize and appreciate the unique contributions that each employee, supplier, and customer brings to our business success (HSBC: Workplace Diversity, 2010, par. 1). With the assistance of the diversity council composed of members from various cultural orientations and levels in the organizational hierarchy, different corporate issues would be addressed from a multitude of perspectives. In addition, HSBC has designed employee networks to look into specific interests and diversity issues. From among the diversity groups supported by management, the following have been actively participating to resolve and address diversity concerns: “African Heritage, Asian/Pacific Islander, GLBT (gay/lesbian/bisexual transgender employees), Hispanic/Latin Diversity Committee, HSBC Indian Employee Network for Diversity, Native American, People with disAbilities, and Womens Forum” (HSBC: Employee Networks, 2010). 4. Managing Diversity in the Workplace The discourse proffered by McArthur (2006) stipulated a four-step process in ensuring success in managing diversity in the workplace, to wit: “(1) recognizing the economic consequences to the business; (2) developing an effective strategy for managing diversity; (3) implementing an action plan for organizational change; and (4)evaluating the diversity strategy” (par. 4). All of the first three steps have already been recognized and implemented by HSBC in the previous sections on the essay. Evaluation is the final step to assess the effectiveness of the diversity program. Freedman (2008) averred that “our managers don’t see diversity as an obligation; they see it as an opportunity. But we still have a long way to go. As we strategize about diversity and tirelessly try to effect cultural shifts to produce tangible results, the old adage ‘what gets measured gets done’ comes to mind” (pars. 17 & 18). Further, Green, et.al. acknowledged the following additional challenges or barriers in implementing diversity in the workforce: “negative attitudes and behaviors can be barriers to organizational diversity because they can harm working relationships and damage morale and work productivity (Esty, et al., 1995). Negative attitudes and behaviors in the workplace include prejudice, stereotyping, and discrimination, which should never be used by management for hiring, retention, and termination practices (could lead to costly litigation).” (Green, et.al., 2009, par. 12). Analysis With the marked benefits of supporting a diverse organizational culture, corporations like HSBC should incorporate recruitment and hiring of a more diverse work force. Its policy on diversity must incorporate the following statement: “to value diversity is to respect and appreciate race, religion, skin color, gender, nationality, sexual orientation, gender identity, physical abilities, age, parental status, work and behavioral styles and the perspectives of each individual shaped by their nation and experiences”. Therefore, HSBC is continually encouraging hiring and recruiting personnel from diverse cultural orientation and background consistent with supporting a diverse organizational culture. Training, development and performance evaluation methods should continue to work with diverse programs and audiences. A motivational system based on incentives and rewards should be placed to acknowledge personnel who provide affective educational programs for diverse audiences. Mentoring programs should be installed and implemented to orient current staff of supporting a diverse culture. (Maurice, nod.) The policies and procedures should emphasize the value of diversity and pluralism. According to Davis & Bryant (2008), “diverse environments also yield more effective collaboration and teamwork than homogenous teams. There are a variety of ways to solve a problem; leveraging the input of a diverse staff population helps organizations arrive at better decisions. You can’t underestimate the value of the creativity and ingenuity elicited from a team of varying experience, knowledge, and background.” In addition, by encouraging diversity, organizations were found to attract and retain top talents since it promotes training and development of diverse potentials to contribute to a unified goal. In the latest news on HSBC’s profits, Sen (2010) reported that the bottom-line of the organization globally has increased by 121% to $11B for the first half of 2010 as compared to the same period last year. The study of Kirby & Harter (2003) proffering the relationship between managing a diverse workforce and its effect of the organization’s bottom-line confirms the effect of diversity at HSBC. By encouraging open-communication, innovativeness, active participation from diverse cultural background of all personnel, productivity was enhanced and resulted in the substantial increase in the organization’s profits. HSBC’s diversity mission was to “promote the development and growth of our diversity by strengthening our existing relationships and building new collaborative relationships between our workforce and the diverse communities we serve” (HSBC: Workplace diversity, 2010, par. 4). By taking into consideration the welfare of various stakeholders through the incorporation of diversity issues, HSBC was successful in attaining its corporate objectives for growth. The value of taking into account cultural dimensions in day-to-day operations of global organizations, like HSBC, must be viewed by management as training grounds for managers and leaders. Cobb emphasized that “there is a special need for this awareness when the managers are working in border areas between two countries with different cultures and ethical norms when the norms of the two societies have integrated. The end result will be that the MNC will be perceived to act ethically, both in word and deed, in the host country” (Cobb, 2000, 10). By emphasizing corporate values such as long term ethical client relationships; high productivity through teamwork, its personnel would remain confident in delivering high standards of service ensuring customer satisfaction. A confident and ambitious sense of excellence exemplified and manifested by management and the rest of the human resources of HSBC is required to continue looking for ways to adapt and adjust to the competitive environment. It is an effective strategy to focus on international issues and be global in outlook and character. Finally, prudence, creativity and customer focused marketing helps establish the leadership that HSBC gained in their respective markets. HSBC must be aware that strategies on managing diversity in the workplace must be monitored in light of both the external industry globalization drivers and internal organization factors. The external drivers were identified as market factors; cost factors; competitive factors; technology factors; and environmental factors (Zou & Cavusgil,1995, 62). The internal organizational factors, on the other hand, are market orientation, managerial orientation and commitment, organizational culture, organization capabilities and international experience. These factors are classified as difficult to imitate, hard to substitute for, and the value of which is more internally than external. Finally, global business performance assimilates financial and strategic goals of the organization. Conclusion Contemporary issues on managing diversity in the workplace must be continually reviewed and evaluated in the light of changes, both in the internal and external environment, with interests of the stakeholders at heart. The strategies employed by HSBC in evaluating and examining the ways to manage their workplace diversity needs to be improved and developed to survive in the increasingly competitive global market. The tools focused on examining their strengths in products and services, place, promotions and pricing strategies – and enhancing these strategies to benefit its wide range of clientele. The use of a SWOT analysis helps in identifying the organization’s weaknesses and threats and finding ways and means to develop strategies that would effectively address them. Society is becoming more aware and demanding of the significance of business ethics in global organizations’ operations. Those firms who are perceived to operate under high standards of ethical and cultural values have the capacity to increase profits. Organizations like HSBC who are committed to incorporate policies on diversity in the workplace have been proven to be successful in their endeavors. In addition, the relevance of training managers and employees on issues of diversity could not be underestimated. The value of training on ethical and cultural dimensions would enable managers and employees to increase awareness of the differences in ethical and cultural values and make them more appreciative of the diversity. In so doing, Cobb averred that “the manager will be able to interact effectively with people in the host country whether they are government officials, suppliers, customers, or the workers in the operation in the host country” (Cobb, 2000, 11). Finally, with the proliferation of organizations going global, business schools must recognize the importance of incorporating ethical and cultural dimensions in their curriculum to prepare professionals in the field in the practical applications of these concepts to the needs of their organizations, especially of global companies. 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