Organizations have been becoming increasingly diverse in terms of gender, race, ethnicity, and nationality. This diversity brings substantial potential benefits such as better decision making, greater creativity and innovation, and more successful marketing to different types of customers. But, increasing cultural differences within a workforce also bring potential costs in higher turnovers, interpersonal conflicts, and communicational breakdowns. The utilities of diversity training and the essential managerial skills required for effectively managing diversity will also be discussed.
Diversity Management vs. Organizational Performance
Diversity of skills among individual members will increase the combined skills of the team. It is assumed that a team of people collectively having a diversity of skills will perform better than a team of people all having similar skills, Brakefield (1999).
In an empirical study of military tank crews, Tziner and Eden (1985) observed that crews consisting of all high-ability individuals performed more than additively better than expected, and that those consisting of all low-ability individuals performed even worse than expected.
The possible benefits which could be brought to organizational performance through diversity management can be related to six catalogues including cost, resource acquisition, marketing, creativity, problems solving and system flexibility. Here are some discussions for every catalogue.
1.Cost: As organizations become more diverse, the cost of a poor job in integrating workers will increase especially for those labor intensive jobs. Those who handle this well will thus create cost advantages over those who don't. 2.Resource Acquisition: Companies develop reputations on favorability as prospective employers for women and ethnic minorities. Those with the best reputations for managing diversity will win the competition for the best personnel. As the labor pool shrinks and changes composition, this will become increasingly important. 3.Marketing: For multi-national organizations, the insight and cultural sensitivity that members with roots in other countries bring to the marketing effort should improve these efforts in important ways. The same rationale applies to marketing to subpopulations within domestic operations. 4.Creativity: Diversity of perspectives and less emphasis on conformity to norms of the past should be able to improve the level of creativity. 5.Problem-Solving: Heterogeneity in decision and problem solving groups could potentially produce better decisions through a wider range of perspectives and more thorough critical analysis of issues. 6.System Flexibility: An implication of the multicultural model for managing diversity is that the system will become less determinant, less standardized, and therefore more fluid. The increased fluidity should create greater flexibility to react to environmental changes, for example, with greater speed and less cost.
But the impact of diversity management practices on company performance could go either ways. Because diversity does not come into organizations and businesses in a single dimension, employees bring several types of diversity with them into an organization simultaneously. It may not be only one or even two dimensions that make a difference; it may be the sum of the whole. One thing for certain is that diversity is not a substitute for ability. To get the highest possible performance from a team, all the best individuals should be gathered together.
Relationship between Diversity and Creativity
From Susan (1989), attitudes, cognitive functioning and beliefs are not randomly distributed in the population but tend to vary systematically with demographic variables such as age, race, and gender. When one manages a diverse combination of population in the organization will increase cultural diversity in organizations by the...