MANAGING DIVERSITY

Co-Authors: Tony Vickers-Willis, Anthony Connelly, David Halliwell

Business environments are increasingly becoming heterogeneous and one of the biggest
challenges facing managers in coming years will be adapting to people who are different
- that is, coping with diversity within the workplace.

So, what is diversity?

Research indicates that diversity is today being used as a term to refer to anyone that
varies from the norm (Patrickson & OBrien, 2001).
Traditionally, diversity was used to refer to differences due to sex, race and ethnicity.
However, this definition is broadening to include people who are physically
disadvantaged, gay, seniors, even people who are obese, plus more. In fact, any
characteristics that differ between individuals.[and] may refer togender, age,
language, ethnicity, cultural background, sexual orientation, religious belief, marital
status, family responsibility, educational level, work, experience, socio-economic
background and geographic location (Patrickson et al, 2001, p.22).
Also, managing diversity can be described as " ... a Company's efforts to minimise
tensions relating from ethnicity, gender, or other differences among workers, while
getting supervisors to understand and appreciate those differences" (Nixon J C & West J
F, 2002).

Why has diversity become important to manage in Australian enterprises?

Diversity has become an important issue for Australian business to address as a result of
changes in three key areas: legal obligations, social obligations and financial/profit
opportunities.

1. To Comply with Legal Obligations

Increasingly, businesses around the world are being required to comply with laws that
discourage discriminatory practices. Like the USA, Australia has introduced many Acts
of Parliament that outlaw discrimination and encourage equal opportunity. These
laws include:
Racial Discrimination Act (1975)

Racial Discrimination Act (1975)

Sex Discrimination Act (1984)
Equal Opportunity for Women Act (1999)
Human Rights and Equal Opportunity Commission Act (1986)
Disability Discrimination Act (1992)
Occupational Health & Safety Act (1991)
Workplace Relations Act (1996)
Public Service Act (1999)at (1984)

2. To Adapt to Change in Social Attitudes, Demographics & Business Globalisation

Legal changes are to a large extent a response to changing community attitudes about
discrimination and opportunity within Australian society. In this respect, many
organisations have taken heed of the potential damage non-compliance would have on
corporate reputation and are in fact now expending considerable marketing dollars to
communicate that they are living up to community expectations doing the right thing
and being the good corporate citizen. It is apparent that this is good for business.
There are also significant demographic changes occurring to which business needs to
respond. The following demographic trends specific to Australia illustrate this point:

40% of people in Australia are now migrants or children of migrants,

Indigenous Australians represent less than 2% of the national population,
25% of Australias workforce was born overseas,
Women now comprise 44% of Australian workforce up from 36% 10 years ago,
Workers over 50 are on the increase

Importantly, increasingly participative work practices are requiring this diverse

workforce to mix with each other, adding to the complexity of management. This is a
particularly apparent consequence of business globalisation, which is creating multiracial corporations. For any Australian business that goes global it is important for their
leaders to recognise and adjust their behaviours to the character of the The Global
Village (refer Appendix 1) that shows that the global marketplace is very diverse.

3. To Extract Financial Benefits

The Australian Centre for International Business (Morris, 2002) cites four financial
benefits companies can gain from diversity:
1. Better human resources performance [such as lower absenteeism and
recruitment of better quality candidates from a wider pool],
2. Enhanced ability to operate in overseas markets,
3. Enables improved marketing to segmented markets,
4. Creation of a better knowledge firm [breadth/diversity of thinking)

In other words, proactive diversity management can then be more beneficial than either
equal employment opportunity or affirmative action concepts, which tend to simply be
reactive to social needs. Diversity management utilises the differences in people to
business advantage. The benefits (or potential pitfalls if managers fail to grasp this
opportunity) are well illustrated in the following case:
Would you employ this person? This boy could not talk until aged 4;
he did not learn to read until 9; his teachers considered him mentally
slow, unsociable, a dreamer; he failed the entrance exam for college,
Yet this person was Albert Einstein, a genius who developed the Theory
of Relativity.
Therefore, poor diversity management costs business money. In addition to the financial
cost, this can also manifest itself through increased employee stress, increased
absenteeism or potentially missing the selection of a genius knowledge worker like
Einstein.

So, how are organisations managing diversity in their workplaces?

Typical responses include a mix of corporate policy, employee training and monitoring
change, as summarised below:
1. Corporate/HR Policies
Most medium to large organisations have been required by law to publish corporate
statements indicating their enterprises policies toward addressing the potential for
discrimination and equal opportunity. Various media are used to disseminate the message
to stakeholders which typically includes letters, brochures (eg. Monash University
Diversity brochure refer Appendix 2) and website statements (eg Berris Celebrating
Diversity refer Appendix 3).
These corporate policies are typically embedded in the companys human resource
policies and strategies, and although many policy changes have been implemented over
the past 20 years, current policies typically only address statutory obligations, like
maternity leave. It remains rare that specific HR policies address the unique needs of
different work groups the dilemma to business is in responding to diverse needs whilst
maintaining the perception of equity and fairness.
It is notable however that despite the reported benefits of diversity, benefit realisation
remains elusive because HR strategies [policies] to manage diversity have largely been
introduced piecemeal, lacking integration.Consequently, they do not change the culture
to support heterogeneity (Kossek & Lobel, 1996, p.3).

2. Training Programs
Training is a common activity adopted by business to improve diversity awareness and
management within the workplace.
A meeting with Telstras specialist diversity manager identified some of the diversity
training initiatives that Telstra and other Australian organisations adopt. These include:

Specific pre-requisite diversity skills training especially for managers (e.g.

professional staff selection and also performance feedback skills). There is also
diversity training provided to outsourcing partners (e.g. disability training for
Telstras recruitment agencies),
General diversity awareness training for all staff via Telstras induction course
(a typical awareness exercise called headbands was demonstrated by the
authors during the class),
Telstras support for staff participation in community volunteering.

Research also uncovered that some companies found mentoring programs to be an

especially effective training method which Robbins (2001) suggests have proven very
effective career progress tools, especially for women and minorities.

3. Monitoring Progress
Progress monitoring takes the form of measuring workforce changes with respect to
workforce composition (e.g. number of women in executive positions) and in some
organisations measurements are also taken of changing workforce attitudes towards
diversity issues through staff opinion surveys Telstra conducts staff surveys annually.
Statistical reporting has been a mandatory requirement of discrimination and equal
opportunity law, with the potential threat of exposure in parliament for companies that do
not comply or who are not redressing imbalances.
Moore (2002) proposes the following key questions should be asked to evaluate whether
diversity is really being practiced by organisations:

Do women and minorities report directly to senior management ? Are they

rising though the ranks, or are they kept at the middle level or below ?
Do women and minorities get key task force assignments ? Do these workers
get overseas assignments ?
Are women and minorities in the management pipeline ?
Is there high turnover among women and minorities ? Is their turnover higher
than for white male managers ? If so, what is being done to improve
retention ?

Very little measurement currently occurs on the economic value to business of pursuing
diversity policies. However, this area of research seems to be gaining some momentum

and recently Australian organisations like Telstra, Ford, BHP~Billiton, AMP,

Bristol~Myers Squibb and Alcoa amongst others collaborated in a Department of
Immigration and Multicultural and Indigenous Affairs symposium where they shared
intelligence on their companys efforts to measure the business benefits of diversity
(DIMIA, 2002).

What can Managers do to manage diversity in the workplace?

Importantly, diversity is occuring and managers cannot ignore it. Diversity can provide a
business with advantages but it can also add a degree of complexity. Some key diversity
issues for managers to consider should be:
1. The difference in individual employee needs should lead to different motivations.
Managers need to try and respond to these differences if they are going to maximise
employee motivation, which will require increased flexibility in management. A very
practical tool to help managers in a multicultural business setting is the use of a
multicultural diary (refer class exercise) that highlights significant cultural, religious
and national anniversaries. HR Press produces a multicultural diary that includes
holidays for 35 cultures and religions and 85 different countires (HR Press, 2002).
2. Belbins team roles have highlighted the importance of diversity in thinking within
groups. Research has shown that the more diverse a team in terms of age, sex, ethnic
background and personalities, the greater the creativity and decision-making
effectiveness. Often, however, it also produces disadvantages it adds complexity,
confusion and ambiguity. Diversity may add fresh perspectives but it makes it more
difficult to unify the team and reach agreements; group cohesiveness is less, although
this will reduce over time (Robbins, 2001, p.344).

Some remaining diversity dilemmas for Australian business?

1. Management wants new employees to accept the organisations core values (i.e. fit
in) yet may seek out and hire people with diverse backgrounds to bring alternative
strengths to the workplace (i.e. be different). Hence, the culture may neutralise the
strength.
2. Migrant qualifications are often not recognised in Australia (Morris, 2002).
3. Social attitudes have changed meanings and can have major impacts. A comment to
a co-worker 20 years ago that may have been meant and taken as a compliment, is
today a career-limiting episode. For example, a wog yesterday was a derogatory
term, whilst in some quarters today it has become a compliment.

4. There remain significant areas of Australian business that are yet to reflect the
diversity of Australia. A joint study by an executive search company and the
Melbourne Business School (Egon Zehnder & Melbourne Business School, 1997)
researched the boards of 25 Australian owned publicly listed companies, each with
annual sales exceeding A$1.5b and operating internationally. This research found that
diversity in the boardroom is the exception not the rule, with Australian boards
dominated by residents of the head office city of the company as noted below:
o 92.5% of board members are Australian residents
o 67% are residents of the HQ city

Relevance of diversity in Asia: Some Issues

Most writings on diversity are dominated by US publications/authors, focusing on
western values and structures. In order to provide some diversity in our research we
undertook some brief research on diversity in Asia.
There appears a difference in approaches to diversity between West and East due to
underlying differences in values. Although each country in Asia presents as a different
melting pot of race, culture, language and religion, Patrickson and OBrien (2001)
suggest there are some generalisations that can be made about the key differences
between Australia and Asia on diversity matters. These include:

Asian countries rarely have laws against discrimination

Management policies often reinforce paternalistic family cultures
Social values are different. Asian societies often value group reference for
behaviour, conflict avoidance, face saving, respect for authority and seniority,
paternalism, credentialism, nepotism, and lower status for women.
Generally in Asia, discrimination against women is not unacceptable and is seen
as reflecting deeply embedded social norms. Access to types of employment is
still deeply gender segregated. Much of the discrimination is invisible,
unremarked and unchallenged. Even women who believe their treatment is unfair
rarely confront injustice. To do so would be an isolating action in a society that
places high value on harmony and cooperation. (Patrickson, 2001, p.9). Despite
this, opportunities are slowly opening up.
It is only wealthy countries that fund financial support for their ageing population.
In most Asia countries (especially Chinese/Confucian populations) it is normal
practice for the family to look after ageing relatives. The problem of older worker
discrimination is more a Western problem, as these workers tend to work until
later in life.

There are of course significant differences between countries within Asia, often reflecting
the different history and ethnic mix of their countries. Countries that have had recent

colonial controls tend to show more signs of western influences (eg Philippines,
Singapore, Hong Kong). Examples of differences between some countries in Asia are
shown in Appendix 4.

Summary
The key diversity issues and benefits to managers of effectively encouraging diversity
neatly summarised and demonstrated in the slide show A Peacock in the land of
Penguins which was shown during class.
But how far is too far? Chang summarises pending legislation that the authors consider
may be a tad too far:
A bill awaiting the governor's signature [in California] would
require all large companies and unions to annually report to the
state the ethnic and gender makeup of their employees. The state
would use that information, which the public could access, to put
pressure on companies whose work forces are not representative
of their communities (Chang J, 2002).

Appendix 4

Diversity between some Asian Countries.

Japan
In Japan, diversity is largely ignored/unacknowledged

Priority to own citizens, system of patronage (caste system remnants)

Island country, insular
Deeply entrenched belief in homogeneity
Strong belief in supremacy of everything Japanese
Women, older workers, non-Japanese and disabled are outsiders in the
workplace

Malaysia

Only 60% of population is urbanised

Main focus of diversity is race, not sex with ethic Malays increasing in nonagricultural sector with government pressure
No discrimination laws against women, older workers or the disabled

Taiwan

Economically progressive, expanding hi-tech industry

A large proportion of family-style enterprises

Thailand

High proportion of non-indigenous people

Women comprise 50% of workforce, mainly in cottage industries, with reduced
promotion opportunites and relatively lower pay
1997 constitution prevents discrimination against women in employment, and
promote equality of race, religion, age, gender, origin, health.

China

One quarter of the worlds population

Emerging from centrally planned, state-owned system; large scale change
occurring
54 officially recognised minority nationalities
No recent history of colonial rule; Confucianism is strong values
Values founded in the family, underpinned by harmony, unity and conformity
Women play a subordinate role
80% of women work, and they earn 86% of male wages
Some laws were passed to protect disabled (1990)

Indonesia

Despite motto Unity in Diversity, it is least unified Asian nation

Over 200 dialects, over 200 ethnic groups,
200 million people, scattered over 13,000 islands; Less than 30% urbanisation
Uniform, national policies difficult
High unemployment, many children working to supplement family income
Plethora of employment conditions
Discrimination is actively practiced against racial minorities
Legislation exists to promote rights of women and children but rarely enforced

India

Strong British heritage with English as the language of commerce

Degree of diversity is greater in India than anywhere else in world, due to caste
Caste (even when outlawed) plays significant role in access to education and jobs
Labour market is segregated with women having restricted access to jobs,
promotion below males, lower salaries than males
Child labour is often used, despite child exploitation laws.

References
Chang, J (2002) Workplace Bill awaits Davis.Contra Costa Times, 31st August, 2002
(p12)
Department of Immigration and Multicultural and Indigenous Affairs (2002) Company
reports from DIMIA symposium titled Productive diversity and corporate sustainability
The business case (copy obtained during Telstra interviews) April, 2002.
Egon Zehnder and the Melbourne Business School (1997) Corporate Governance &
Globalising Business Reconciling competing pressures. A study of major international
Australian based companies. Egon Zehnder International, Melbourne.
HR Press (2002) at www.hrpress-diversity.com/worklife.html
Kossek, E and Lobel, S (1996) Managing Diversity: Human resource strategies for
transforming the workplace. Blackwell Publishers, Massachusetts.
Moore, M (2002) Business News Editorial, Associated Press. 14th May, 2002.
Morris, J (2002) Diverse Challenges. Business Review Weekly, July 25-31, P. 64 to 66.
Nixon, J.C and West, J.F (2002) America addresses workforce diversity; growing
importance. California State University Business Forum, 22nd June, 2002.
Patrickson, M and OBrien, P (2001) Managing diversity: An Asian and Pacific focus.
John Wiley & Sons, Queensland.
Robbins, S. Millett, B. Cacioppe, R. & Waters-Marsh, T (2001) Organisational
Behaviour Leading and Managing in Australia and New Zealand. Prentice Hall,
Australia.