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CHAPTER TWELVE

Diversity in Organizations

CHAPTER SUMMARY

This chapter includes a discussion on diversity in the workplace. Specifically, the chapter
presents information on changing demographics in the workplace as well as benefits
and challenges of diversity.

Managing diversity commonly refers to ways in which organizations seek to ensure that
members of diverse groups are valued and treated fairly within organizations in all areas
including hiring, compensation, performance evaluation, and customer service activities.

Workplace discrimination occurs when an employee or an applicant is treated unfairly at

work or in the job-hiring process due to an identity group, condition, or personal
characteristic such as age, race, national origin, sex, disability, religion, or pregnancy
status. The Equal Employment Opportunity Commission enforces laws and legislation
related to individuals with those protected statuses.

Organizations that are committed to equality and inclusion must take steps to combat
discrimination and harassment. Recommendations are provided to ensure organizations
value applicants, employees, and customers from all backgrounds. By approaching
diversity in a thoughtful, purposeful way, managers can mitigate the challenges posed
by a diverse workforce and enhance the benefits a diverse workforce can offer.

LECTURE OUTLINE

I. An Introduction to Workplace Diversity

Diversity refers to identity-based differences among and between two or more

people that affect their lives as applicants, employees, and customers. Groups in
society based on these individual differences are referred to as identity groups.
Managing diversity refers to ways in which organizations seek to ensure that
members of diverse groups are valued and treated fairly within organizations in
all areas including hiring, compensation, performance evaluation, and customer
service activities.
 Principles of Management

Inclusion, the degree to which employees are accepted and treated fairly by
their organization, is one way in which companies demonstrate how they value
diversity. Diversity presents advantages such as broader perspectives and
viewpoints. Diversity also presents challenges that may include managing
dysfunctional conflict that can arise from inappropriate interactions between
individuals from different groups. Knowledge about how to manage diversity
helps managers mitigate some of its challenges and reap some of its benefits.

II. Diversity and the Workplace

The U.S. workforce is becoming increasingly more diverse, a trend that presents
both opportunities and challenges. These demographic shifts in the labor market
affect the workforce in a number of ways due to an increasing variety of workers
who differ by sex, race, age, sexual orientation, disability status, and immigrant
status.

A. Gender

More women are increasingly entering the workforce. However, while women
are entering the labor force and earning bachelor’s degrees at a higher rate than
men, they continue to face significant challenges at work. The glass ceiling refers
to the invisible barrier women face in organizational decisions that keep them
from moving beyond certain levels within a company.

Another factor that greatly affects women in organizations is sexual harassment.

While illegal based on based federal legislation, women continue to face both
quid pro quo and hostile environment.

Lecture Tidbit. A 2018 study conducted by the non-profit Stop

B. Race Harassment reported that 81 percent of women and 43
Street
percent of men say they have experienced some form of sexual
harassment in their lives. Forty-one percent of women and
twenty-two percent of men reported harassment by text, phone,
or online. People with disabilities were more likely than others to
report experiencing harassment, and gay and bisexual men were
more likely to report these experiences than straight men.
Source: North, Anna. “Measuring #MeToo: More than 80 Percent
of Women Have Been Sexually Harassed or Assaulted.” Vox, Vox,
21 Feb. 2018,
www.vox.com/identities/2018/2/21/17036438/sexual-
harassment-me-too-assault-hollywood.

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Another important demographic shift in workforce diversity is the distribution of

race. While the White non-Hispanic share of the workforce continues to shrink,
the share of racial and ethnic minority groups will continue to grow. With the
workforce changing, managers will need to be mindful of issues employees
encounter that are uniquely tied to their experiences based on race and
ethnicity; including harassment, discrimination, stereotyping, and differential
treatment by coworkers and decision makers in organizations.

Lecture Tidbit. Does Harvard University intentionally discriminate

against Asian-American applicants? Harvard is facing a race
discrimination suit based on its use of race in admissions decisions as
a way to bring a diverse mix of students to campus. The lawsuit
accuses Harvard's admissions office of holding Asian-Americans to a
higher standard than it does applicants of other races in order to limit
their admission. Students for Fair Admissions (SFFA), a group of
anonymous Asian-American plaintiffs who were rejected from
Harvard, first filed its lawsuit in 2014. The case is based on a Duke
University professor's analysis of Harvard admissions records which
concluded that the university's rating system works against Asian-
Americans while favoring Black and Hispanic students. The case
further charges that Harvard uses a quota to cap the percentage of
Asian-American admissions to maintain a certain racial breakdown on
campus. Regardless of the outcome of the Harvard case, the case
carries heavy implications for universities that consider race in
admissions decisions.
Source: Rinaldi, Jessica. “Affirmative Action Lawsuit against Harvard
in Judge's Hands.” NBCNews.com, NBC Universal News Group, 14 Feb.
2019, www.nbcnews.com/news/asian-america/affirmative-action-
lawsuit-against-harvard-judge-s-hands-n971776.

C. Age

The age distribution of an organization’s workforce is an important dimension of

workplace diversity as the working population gets older. Studies have found
support for the proposition that age negatively relates to cognitive functioning. If
managers offer fewer opportunities to older workers solely because of declining
cognitive functioning, it can be detrimental to organizational performance
because older workers outperform younger workers on a number of other job
performance measures.

D. Sexual Orientation

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Sexual orientation diversity is increasing in the workforce. While only 22 states

and Washington D.C., prohibit discrimination based on sexual orientation, many
employers are beginning to understand that being perceived as inclusive will
make them more attractive to a larger pool of job applicants.

Lecture Tidbit. As a result of more large companies providing

workplace protections, many LGBTQIA+ employees are choosing to
reveal their authentic self. Research shows that coming out provides
increased job satisfaction, retention, and productivity; while passing
results in social stress and depression.

Source: Brown, Raymond TrauJane O’Leary Cathy. “7 Myths About

Coming Out at Work.” Harvard Business Review, 19 Oct. 2018,
hbr.org/2018/10/7-myths-about-coming-out-at-work.

E. Immigrant Workers

Every year a new record is set for the time it takes to reach the U.S. cap of H-1B
visas granted to employers. H-1B visas are a type of work visa, a temporary
documented status that authorizes individuals to permanently or temporarily
live and work in the United States. Although a huge demand for immigrant labor
exists in the United States, immigrant labor exploitation occurs.

F. Other Forms of Diversity at Work

Workers with disabilities are projected to experience a 10 percent increase in job

growth through the year 2022. This means that more public and corporate
policies will be revised to allow greater access to training for workers with
disabilities and employers.

III. Diversity and Its Impact on Companies

Due to trends in globalization and increasing ethnic and gender diversity, it is

imperative that employers learn how to manage cultural differences and
individual work attitudes. As the labor force becomes more diverse there are
both opportunities and challenges to managing employees in a diverse work
climate.

A. Reaping the Advantages of Diversity

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Six opportunities that companies may receive when pursuing a strategy that
values diversity include cost advantages, improved resource acquisition, greater
marketing ability, system flexibility, enhanced creativity, and better problem
solving.

B. Aligning Diversity Programs with an Organization’s Mission and

Strategic Goals

Diversity helps organizations perform best when it is aligned with a specific

business strategy. When companies use heterogeneous management teams that
are directed by an entrepreneurial strategy focusing on innovation, the
companies’ productivity increases.

C. Using Human Resource Tools Strategically

Using a strategic human resources management approach to an organization can

successfully integrate diversity with the organization’s goals and objectives.
Strategic human resources management (SHRM) is a system of activities
arranged to engage employees in a manner that assists the organization in
achieving a sustainable competitive advantage.

D. Diversity and Organizational Performance

Research indicates that having diversity in an organization produces mixed

results for its success. Some studies show a positive relationship, some show a
negative relationship, and others show no relationship between diversity and
performance. Some researchers believe that although findings regarding a direct
relationship between diversity and success in the marketplace may be
inconsistent, the relationship may be due to other variables not taken into
account.

IV. Challenge of Diversity

Although diversity has it benefits, there are also challenges that managers must
face that can only be addressed with proper leadership. Some of the most
common challenges observed in organizations and studied in research include
lower organizational attachment and misunderstanding work diversity initiatives
and programs.

A. Lower Organizational Attachment

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Although diversity programs attract and retain women and minorities, they
may have the opposite effect on other, nonminority employees. When
diversity is not managed effectively, White and male employees can feel
alienated from or targeted by the organization as diversity programs are put
in place.

B. Legal Challenges and Diversity

The legal system is used to combat discrimination. Legal challenges related

to diversity include reverse discrimination, workplace discrimination,
harassment, age discrimination, disability discrimination, national origin
discrimination, pregnancy discrimination, race/color discrimination,
religious discrimination, sex-based discrimination, and other forms of
discrimination.

V. Key Diversity Theories

Many theories relevant to managing the diverse workforce center on an

individual’s reactions to people who are different from the individual.

A. Cognitive Diversity Hypothesis

Cognitive diversity refers to differences among team members in

characteristics such as expertise, experiences, and perspectives. The
cognitive diversity hypothesis suggests that multiple perspectives stemming
from the cultural differences between group or organizational members
result in creative problem solving and innovation.

B. Similarity-Attraction Paradigm

Similarity-attraction theory states that individuals are attracted to others

with whom they share attitude similarity; therefore, diversity can have
negative outcomes for an organization.

C. Social Cognitive Theory

Social cognitive theory also seeks to explain how diversity can result in
negative outcomes in a group. Social cognitive theory suggests that people
use categorization to simplify and cope with large amounts of information.
These categories allow us to quickly and easily compartmentalize data, and
people are often categorized by their visible characteristics, such as race,
sex, and age.

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D. Social Identity Theory

Social identity theory is another explanation of why diversity may have a

negative outcome. Social identity theory suggests that when we first come
into contact with others, we categorize them as belonging to an ingroup
(i.e., the same group as us) or an out-group (not belonging to our group).

E. Schema Theory

Schema theory explains how individuals encode information about others

based on their demographic characteristics. Based on schema theory,
employees develop schemas about coworkers based on race, gender, and
other diversity traits. Schemas formed can be positive or negative and will
affect the attitudes and behaviors employees have toward one another.

F. Justification-Suppression Model

The justification-suppression model explains the circumstances in which

prejudiced people might act on their prejudices. People experience their
prejudice against a certain group or individual but experience conflicting
emotions regarding that prejudice and are motivated to suppress their
prejudice rather than act upon it.

VI. Benefits and Challenges of Workplace Diversity

Managers must approach diversity in a thoughtful, purposeful way to mitigate

the challenges posed by a diverse workforce and enhance the benefits a diverse
workforce can offer.

A. Three Perspectives on Workplace Diversity

The integration-and-learning perspective suggests that the different life

experiences, skills, and perspectives that members of diverse cultural
identity groups possess can be a valuable resource in the context of work
groups. Members of a culturally diverse workgroup can use their collective
differences to think critically about work issues, strategies, products, and
practices in a way that will allow the group to be successful in its business
operations.

The access-and-legitimacy perspective focuses on the benefit that a diverse

workforce can bring to a business that wishes to operate within a diverse set

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of markets or with culturally diverse clients. Under this perspective,

workgroups gain access to diverse markets because their diversity affords
them some level of legitimacy when attempting to gain access to these
markets.

The discrimination-and-fairness perspective suggests that a culturally

diverse workforce is a moral duty that must be maintained in order to create
a just and fair society. This perspective is characterized by a commitment to
equal opportunities in hiring and promotions and does not directly link a
work group’s productivity or success with diversity.

VII. Recommendations for Managing Diversity

Organizations that are committed to equality and inclusion must take steps to
combat discrimination and harassment.

A. Interview Selection Process

To ensure fairness for all applicants, organizations should use highly

structured interviews during the selection process to avoid bias based on
race or gender.

B. Diversified Mentoring Relationships

Diversified mentoring relationships are relationships in which the mentor and

the mentee differ in terms of their status within the company and within
larger society. Research has found that these types of relationships are
mutually beneficial and that the mentor and the mentee both have positive
outcomes in terms of knowledge, empathy, and skills related to interactions
with people from different power groups.

C. Visible Leadership

Another key to ensure that employees are treated fairly is utilizing

appropriate leadership strategies. Leadership must sincerely value variety of
opinions, and organizational culture must encourage openness and make
workers feel valued.

D. Strategies for Employees

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Individuals of any race or ethnic background can take steps to eliminate

discrimination by being aware of their own personal stereotypes or biases
and taking steps to challenge and address them.

CHAPTER REVIEW QUESTIONS

Students’ responses will vary.

MANAGEMENT SKILLS APPLICATION EXERCISES

Students’ responses will vary.

MANAGEMENT DECISION EXERCISES

Students’ responses will vary.

CRITICAL THINKING CASE: Uber Pays the Price

1. Based on Cox’s business case for diversity, what are some positive outcomes that
may result in changes to Uber’s leadership team?

Student’s responses will vary. Uber may experience reduced costs as a result of
decreased liability and expenses related to lawsuits. Cost savings may also result
if the climate of diversity reduces turnover among women and minorities. In fact,
Uber may attract more women and minority job applicants as a result of a
climate of diversity. Uber may enhance its reputation with the market they
serve, thereby attracting new customers.

2. Under what form of federal legislation was Fowler protected?

Fowler was protected under Title VII of the Civil Rights Act of 1964.

3. What strategies should have been put in place to help prevent sexual
harassment incidents like this from happening in the first place?

Students’ responses will vary. Suggestions could include ensuring employees are
treated fairly. There should be a thorough investigation of any claims of
harassment and zero-tolerance policies which are enforced if harassment is
shown to occur.

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