Influence of diversity management on the working environment of German and American companies

Table of Contents

II List of figures

1 Introduction

2 Theoretical basics
2.1 Definition diversity and diversity management
2.2 Dimensions of diversity
2.3 Hofstede's cultural dimensions

3 Implementation of diversity management
3.1 Arguments for diversity management
3.2 Risks
3.3 Implementation of diversity management
3.4 Consideration of the cultural dimensions according to Hofstede

4 Diversity management in german and american companys
4.1 German companies for example Lufthansa Group
4.2 American companies for example Mastercard

5 Conclusion

III Reference List

II List of figures

Fig. 1: Four Layers of Diversity

1 Introduction

Today's companies are exposed to changeable market conditions. As a result of globalisation, the issue of diversity can no longer be ignored by companies. As societal conditions change, the issue of diversity is coming to the fore (Ernst & Young 2016, p. 7). Demographic change is leading to a reduction and ageing of the labour force. Topics such as gender role understanding, changing values or understanding of disabled people are also coming more to the fore. All these developments make diversity management to a key issue in organisations. Groups of people with less attention are moving into the focus of organisations. This concerns for example people with disabilities, migrant backgrounds or older people. Due to the shortage of skilled workers, the potential of people's diversity should be exploited (ifaa 2016, p.37).

This paper will look at the influence of diversity management on the world of work. Using the example of German and American companies, it will be shown which measures are taken in companies with regard to diversity management. First, the terms diversity and diversity management will be defined. After that several approaches to dimensional models will be presented. Then it will show the process of the Implementation in the company. Then the development of diversity management in German and American companies will be presented. Finally, the conclusion will show the main insights of the paper.

2 Theoretical basics

By way of introduction, the terms "diversity" and "diversity management" are defined. Subsequently, the diversity dimensions are presented on the basis of various theoretical approaches, as well as the cultural dimensions according to Hofstede, in order to obtain a comprehensive introduction to the topic of "Diversity Management".

2.1 Definition diversity and diversity management

Diversity comes from sociology and social psychology. It means the recognition and conscious handling of the diversity of people. This must be promoted in order to avoid disadvantages and achieve equal opportunities (Dreas 2019, p. 5). Loden and Rosener (1991) defined diversity as follows:

"From an objective point of view, it is this vast array of physical and cultural differences that constitute the spectrum of human diversity. From the subjective point of view, diversity is otherness or those human qual­ities that are different from our own and outside the groups to which we belong, yet present in individuals and group (p. 18). " An infinite number of characteristics can be assigned to different people. Essentially, however, diversity refers to the characteristics of disability, age, ethnic origin, gender, religion and sexual identity. It is actually a concept for distinguishing and recognising group and individual characteristics. The focus is on what people have in common fosters trust and relationships with each other. Diversity does not try to point out solutions to problems. It is about understanding people's diverse achievements and using different potentials. The ultimate goal is to reduce discrimination and promote equal opportunities (Krell 2004, p. 43-44). In the context of companies and the world of work, companies today are exposed to economic changes in sales markets, procurement markets, labour markets and employee structure. The concept of diversity management, which originated in the USA, was first applied in the 1960s. As the American civil rights and women's rights movements developed. Over the years, the concept has evolved. Today, diversity management means the part of strategic human resource management and is an instrument to improve the work. It helps to respond to changing social and economic trends. Diversity management takes many perspectives into account. It allows working groups with different characteristics to work together successfully. The employee is to be developed in the process. People with their different characteristics, such as age, religion or gender, should be used as a resource and with their different abilities for the company. It includes all measures that aim to achieve a change to an appreciative culture. It is about valuing and tolerating the individual differences of employees. In summary, the goal of diversity management is to perceive, understand, value and manage the existing diversity within an organisation for the benefit of the organisation (Plummer 2003, pp. 51-60).

2.2 Dimensions of diversity

The diversity dimensions are part of diversity. They describe the characteristics of the differences and similarities of a person. Potential disturbances caused by cultural differences can be avoided at an early stage. It is important to know which characteristics can be assigned to a person. There are countless characteristics that can be assigned to someone, which is why a categorisation is necessary (Voigt 2013, pp. 31-32). A uniform definition of the classification of characteristics does not yet exist. In many approaches, the characteristics are divided into three levels. For example, the German Society for Diversity Management divides into primary, secondary and tertiary dimensions. The primary dimensions include the visible aspects of a person, for example gender, age or religion. The secondary dimension includes invisible aspects of a person, such as income, professional career or marital status. The tertiary dimension includes characteristics that can be attributed to the organisation, such as position or function in the organisation (Dreas 2019, pp. 8-10). Vedder has given another example of the division of the dimensions. He also divides the dimensions into three levels. The first level includes demographic differences. These include, for example, gender, age or religion. The second level comprises the division into individual differences, for example attitudes, values or attitudes. The last level includes the characteristics of the organisation, for example status or responsibility in a department (Vedder 2011, p. 6). The different dimensions can be assigned visible and invisible characteristics. However, this categorisation of characteristics is often criticised because of the danger of the "similar-to-me effect". This effect means that someone evaluates another person more positively if that person has similar physical or intellectual characteristics to the evaluator (Voigt 2013, p. 31).

Another model for categorising characteristics was developed by Lee Gardenwartz and Anita Rowe. The "Four Layers of Diversity" model includes four levels. The layers allow for differences and similarities from several perspectives (Launikari 2016, n. p.).

Abbildung in dieser Leseprobe nicht enthalten

The first level is the individual personality. This shows the interaction of a person and how they act, for example active, passive or introverted. The second layer contains the "internal dimensions". These are aspects that a person cannot choose and influence themselves, for example age, gender or religion. The third layer, "external dimensions", represents a person's life experience and choices, such as education or income. The last dimension, "organisational dimensions", includes all characteristics related to work. The first layer is of particular importance in diversity management (Launikari 2016, n. p.).

In summary, there are many models that describe the diversity dimensions. What is striking is that the models differ fundamentally, but overall make the same categorisation. So, the characteristics of a dimension can be infinitely expanded. Therefore, diversity must be considered multidimensionally (Voigt 2013 p.34).

2.3 Hofstede's cultural dimensions

There are various approaches to classifying cultural differences. One of the best- known researchers was the Dutchman Geert Hofstede. Hofstede developed the model of cultural dimensions as part of an empirical study. For Hofstede, culture was the collective programming of the mind. This means that the programming contains specific patterns of thinking, acting and feeling that characterise a particular culture. The model offered an understanding of cultural differences (Hofstede 1993 p. 20).

Hofstede distinguishes six dimensions of culture. The first dimension "power distance" describes the extent of power relations in a culture. It is common in cultures with higher power distance that decisions are followed and that the decision-making process runs from "top to down". This can be seen, for example, in the hierarchical position in the company. Low power distance describes cultures with flat hierarchies (Hostede & Hofstede 2011, p. 51). The second dimension describes the relationship between "individualism" and "collectivism" in the culture. In collectivism, the group (the collective) is in the foreground. This is characterised by mutual loyalty and group bonding. In individualism, the individual is in the foreground and his or her own self-realisation. The interests of the individual are above the group (Hofstede & Hofstede 2011, pp. 95-96). The third dimension, femininity vs. masculinity, describes the acceptance of gender roles. Gender roles are loosely distributed in feminist cultures. This means that men and women are equal. These cultures are characterised by empathy and caring. Women are allowed and encouraged to have careers. The opposite are the cultures of masculinity. Here there is a clear distribution of roles. These cultures are characterised by assertiveness, power and status (Hofstede & Hofstede 2011, pp. 153-155). The fourth dimension, "uncertainty avoidance", describes the extent to which society is prepared to accept new situations and innovations. Cultures with high uncertainty avoidance try to control everything and reduce uncertainties to a minimum with the help of rules. Health and money are of particular importance in this culture (Hofstede & Hofstede 2011, pp. 215­217). The fifth dimension "long-term orientation vs. short-term orientation" describes whether the culture tends to plan for the long term or is characterised by spontaneous action. In long-term cultures, for example, the focus is on long­term relationships and building personal contacts. In short-term oriented cultures, the focus is on "profit in the shortest possible time" (Hofstede & Hofstede 2011, pp. 274).

3 Implementation of diversity management

This chapter describes the possible implementation of diversity management in a company. First of all, factors that speak for the introduction as well as the risks are pointed out. Subsequently, the implementation process and the consideration of the cultural dimensions according to Hofstede are explained.

3.1 Arguments for diversity management

There are many arguments in favour of implementing diversity management in an organisation. Cox and Blake list six arguments that speak for the effectiveness of diversity management. The first argument relates to costs. Costs can arise from violations of equal treatment of employees. Furthermore, a demotivating atmosphere arises within the employees. This has an impact on work performance. The result in a more satisfied team is higher than in a team with lower satisfied. Furthermore, satisfaction binds employees and saves costs. The second argument involves the marketing and human resource marketing activities of an organisation. The marketing of diverstity can have a decisive influence on future applicants. This could be a decisive aspect for applicants from minority groups. Also, a broader and more diverse clientele will be addressed and attracted. Another argument is the existing flexibility. Diversity management promotes operational procedures and a more flexible way of working. A routine way of working that is not effective can be avoided. Diversity management also helps organisations with creativity and problem solving. The diversity of teams leads to different perspectives and points of view. The diverse pool of knowledge contributes to creative approaches to solutions. This leads to increased innovation and competitiveness in organisations (Cox & Blake 1991, p. 45-50). The German researcher Gertraud Krell added two more arguments to those of Cox and Blake. The first argument is the internationalisation of the organisation. Multicultural cooperation makes organisations more capable of acting in the context of globalisation. The second argument relates to the financing aspect. A good implementation of diversity management can, for example, attract future investors. Financing decisions are often made according to social criteria (Krell & Sieben 2011, p. 161-162).

Vedder also highlighted other important arguments. Diversity management ensures the recruitment of highly qualified staff. Diversity management ensures highly qualified applicants. Internal cooperation within the organisation is also improved through creativity, flexibility and problem-solving quality. However, the prerequisite is good organisational leadership that tries to avoid "stereotypes", pressure and communication barriers. Furthermore, diversity management as a corporate strategy has been active in the USA for over 30 years. That is why its effectiveness can no longer be denied (Vedder 2011, pp. 5-12).

3.2 Risks

Like any other business strategy, diversity management has its risks. One possible risk is the rejection of differences between people based on socio­cultural characteristics such as gender or origin. This could lead to the exclusion of part of the workforce and reduce the interest of minority groups as well as opportunities for promotion. At the same time, this also represents a risk in management if the problems of exclusion, for example, are ignored. Banning religious symbols in the workplace, for example, could also pose a risk. So could the splitting off of groups and the resulting group formation. The result is that heterogeneous groups do not work together. Homogeneous teams are formed, which has nothing to do with diversity management. The adaptation of minority groups could also be another risk. This could lead to a compulsion to adapt, the development of individuals cannot take place. Skills and knowledge cannot be utilised. This is a risk of homogeneous groups. Another risk is the toleration of minority groups. According to this, minority groups are tolerated, but interaction and cooperation is kept to a minimum. ThisA is a risk of homogeneous groups forming. All these risks are due to faulty management of an organisation. It is important to try to avoid such risks (Dreas 2019, p. 21-22).

Diviersity within an organisation can also inhibit innovation and lead to fluctuations in staff turnover. Heterogeneous groups can have a negative impact on employee motivation and satisfaction (Vedder 2011, p. 6). In summary, there are numerous arguments in favour of implementing diversity management, but also some risks. New markets, for example, should always be understood in order to be able to adapt to changeable situations. A careful analysis of the extent to which homogeneous and heterogeneous employee groups should be distributed is needed, taking into account the company's goals. Effective implementation requires training to achieve the best possible performance and returns for a company. The top priority is to gain a competitive advantage over the competition (Schmitz 2015, p. 281).

[...]