Theoretical Approaches to Manage Diversity
Practical Implementation and Challenges
Organizational Best Practice
Institutional Anchoring in the German Sector
Step 1: Analysis of Diversity Charter
Step 2: Content Analysis of Websites
Directions for Future Research
The present work gives an overview of the current situation of diversity management in Germany and brings together the most comprehensive base of knowledge. The aim of this study is to gather the state of research on theoretical approaches, organizational best practice and practical implementation. To rate the current implementation in Germany, companies, especially all 30 DAX-listed companies, were evaluated and Diversity Charter signatures and the appointment of a diversity manager were used as central evaluation criteria. Furthermore, a deductive content analysis examined components of implemented diversity practices. The Diversity Charter was signed by 28 companies and 29 have a person in charge as a diversity manager. This is a slight increase over the previous year, but the number of new signatories in total shows a step backwards. The content analysis shows that almost all DAX 30 companies have established a strategic integration and a focus on themes of gender and cultural diversity were identified. The results are discussed, taking into account theoretical findings, and implications for the business environment are added.
Keywords: diversity management, diversity management approaches, implementation of diversity concepts, Diversity Charter, benchmark values
Germany and the whole world are currently facing the major challenge of large refugee numbers to accommodate and care for (Varga, 2015). While the media portrays primarily a political debate, however, it is inevitable that the topic of diversity management is gaining importance in companies as well. “Immigrants need Europe, but Europe also needs immigrants” said Annan in 2004 (Wernicke, 2010). The advantages of a targeted diversity management as, for example, job satisfaction on the individual level and productivity and work quality on the organizational level (Cox, 1995, p. 7) should be familiar to most of the companies, but the specific implementation is challenging. The numbers of refugees are in accordance with the studies on demographic change, globalization and the debate about women's quota further evidence that the workforce in the future is becoming more diverse and therefore the concepts are gaining importance (e.g. Choi & Rainey, 2014; Lorbiecki & Jack, 2000). “In a nation that is becoming increasingly multiethnic and in a world that is ever more interconnected diversity has become an inescapable business reality” (Aronson, 2002, p.62). Hence, companies have to react to the rising diversity and create a working environment that is free from prejudices. It is without question that most of the organizations are significantly more homogeneous than the available and qualified working population (Avery, McKay, & Wilson, 2008), thus companies have yet to fully confront the topic of diversity management. Despite all the positive characteristics and the increasing popularity of the subject “inequality and discrimination still widely exist” (Shen, Chanda, D'net, & Monga, 2009, p.235). Some of the DAX 30 companies in Germany demonstrate how diversity management can be established, and in 2011 the companies self-committed to decreasing women’s underrepresentation in management. It is unclear whether this is mainly promotional and holds an alibi function or whether the concepts are virtually ingrained (Köppel, 2014). An amount of studies show that the development and implementation of diversity management still holds potential for improvement (e.g. Ivancevich & Gilbert, 2000; Shen et al., 2009) and that announcements by companies were not followed by implemented measures (Köppel, 2014). Therefore, it is important to know where exactly the development to date is and how the current state of German companies with respect to the implementation of diversity management is. The specific research question driving this study is therefore:
- What is the current state of research of diversity management concept and what is the up to-date status of diversity management in companies of the German sector
Theoretical Approaches to Manage Diversity
“Diversity includes all differences that comprise the human experience and make up, i.e. race, gender, culture, ethnicity, physical and mental capacity, size, sexual orientation, religion, education, economic status” (Caines, 2003, 256 ff.). Diversity management is to utilize this diversity (Köppel, 2014). Phillips (2008) points out that without a reflection of the four important layers, which explain the differences between people, it could be lead to “unexplained and frustrating barriers” (Phillips, 2008, p. 32). The author explains that the personality is the central core and influences the other layers. Internal dimensions, such as age and gender, cannot be influenced by individuals. External dimensions can be the educational background and personal habits. The fourth layer is the organizational dimension which includes, for example, the management status (ibid.).
To manage diversity in an organizational context an integrated framework and or policy contributes a key component in order to make the process more transparent and to transport the effectiveness of the content (Galinsky et al., 2015; Kirton, 2003; Yang & Konrad, 2011). The research field of theoretical approaches has undergone a number of adoptions over the last 90 years and concepts have been evaluated over time (Janssens & Zanoni, 2005). Researchers in the field of diversity research believe that an even better theoretical foundation is required (Becker, 2006, p. 12; Olsen and Martins, 2012). One still often-quoted model to implement diversity management is the interactional model of Taylor Cox (1994, p.7) which distinguishes between individual level factors, group factors and organizational factors and shows the importance of structural and informal integration of the diversity climate. A supplementary research frame mentioned by Pringle (2009) is the theory of Bourdieu for workforce diversity. It describes the layering of macro and micro levels. The macro level refers to the country context including the socio-political environment and the labor market, while micro level characterizes intra- and interpersonal attributes. Organizational policies and practices are intermediary, the meso level (Pringle, 2009, p.81). Contradictions on side of macro and meso levels have an impact on the micro level (Pringle & Ryan, 2015). Thomas and Ely (1998) point out that there are two diversity approaches- assimilation paradigm and differentiation paradigm - which both leave room for improvement and suggest that a combination of both make sense. The assimilation paradigm upholds that people are all the same and uniform behavior should be the aim of the diverse workforce. In contrary to that, differentiation celebrates the differences. The transcendence of these paradigms is the integration paradigm, which promotes “equal opportunity and valuing cultural differences” (Thomas & Ely, 1998, p.2). To achieve that integration in an organizational context the authors propose that the management should encourage discussions and eliminate all forms of dominance to generate a culture where all contributions are valued. Additionally organizational trust should be secured and commitment to diversity should be communicated by solving tensions rapidly. Subsequent studies show the continued importance of the paradigm (Janssens & Zanoni, 2014; Podsiadlowski, Gröschke, Kogler, Springer, & van der Zee, 2013).
Kirton (2003, p.10 ff.) suggests that organizations who strive for a change should consider the social, economic and legal context and the organizational culture before implementing a diversity approach. Hence, he distinguishes between two types of diversity approaches: The proactive diversity policy and the reactive diversity policy. In the proactive case companies see diversity as a long-term strategy and are focused on their social, ethical and environmental responsibilities. The reactive diversity policy tends to see diversity more as a short-term solution and based on actual business interests. Which of the strategies are followed depends on the organizational identity (Cole & Salimath, 2013). Another approach which focuses on culture diversity is called the multicultural diversity approach and considers the importance of individuals’ different demographics resulting in an image as an integral whole. The model “promotes the notion that differences associated with social identities should be valued and even celebrated” (Plaut, Garnett, Buffardi, & Sanchez-Burks, 2011, p.338). Even the colorblind model should not be disregarded in this context. Colorblinding means avoiding categorizing people to respective groups, e.g. racial and ethnic. With the consequent disregard of differences in all processes it is hoped that discrimination will not be applicable (Rosenthal & Levy, 2010). Jansen, Otten and van der Zee (2015) point out in their current study that diversity management should be more than the focus to include minorities in an organization because it can lead to a lack of interest and integration for the majority members. The all-inclusive diversity approach (Stevens, Plaut, & Sanchez-Burks, 2008) could be the solution. It claims that the cultural group of majority members should be integrated in the conception, e.g. the mission statement. In comparison to the multicultural approach, the all-inclusive approach emphasizes the individual’s demographic group membership for members of all groups. Therefore Jansen et al. (2015) examined the effectiveness of an all-inclusive diversity approach in two studies. In the first study they compared a standard model of diversity management with the all-inclusive model among prospective employees. The result was that the explicit inclusion of the majority leads to higher expected inclusion. In Study 2 the same relation could be shown for current organizational members.
Practical Implementation and Challenges
The presented diversity approaches imply that there are various challenges which inhibit the consequent implementation. Previous research has demonstrated that the challenge to create effective working relationships in diverse workplaces is more difficult than in homogeneous workplaces (van Knippenberg, De Dreu, & Homan, 2004). People are reduced to members of a social group and stereotypical thinking and behavior is expressed. Organizational members classify diversity management as difficult to concretize and causes fear. This perception generates resistance and a lack of commitment (Schwabenland & Tomlinson, 2015). Furthermore, it is not enough to fulfill political requirements because structural and informal integration is the ultimate but challenging goal (Cox, 1994). Nevertheless, affirmative action can become manifest as reverse discrimination, because the majority opposes the regulations (Cox, 1994; Kalev, Dobbin, & Kelly, 2006). Köppel (2014) says that an unconscious bias, which is described as a distorted perception, considers diversity not as a resource can hinder implementation as well. “The key is to find ways to maximize the gains and minimize the pains of diversity- to harness innovation and economic growth without producing counterproductive forms of conflict” (Galinsky et al., 2015, p.8). Herdman and Mcmillan-Capehart (2010) claim that the establishment of a diversity concept is insufficient and other research must go further and mention that companies conduct only a good promotion management without having established any program (Köppel, 2014). The implementation is a change process, which has, according to Lewin three steps: unfreezing, movement and refreezing (Burnes, 2004). The process shows that approaches have to be integrated into a comprehensive strategy, which is crucial to navigate through human resource management (Kreitz, 2008; Lu, Chen, Huang, & Chien, 2015; Starostka-Patyk, Tomski, Zawada, 2015). Definitions of objectives are an important angle to consider in this case (Aronson, 2002; Köppel, 2014). Additionally, the importance of leadership approaches is described in that research field (Aronson, 2002; Cox, 1994; Richard, 2000), but bottom up processes have to be considered as well to gather new inputs and receive acceptance (Kim, 2006; Sabharwal, 2014). Aronson (2002) illustrates that three critical elements should be considered during the application of an approach: The compelling analysis of the business case to identify the specific advantages for the organization, recommendations to involve the
whole workforce, and defining of responsibilities. Based on the change process, Kalev et al. (2006) summarize three mechanisms for reducing workplace discrimination: (1) structures of responsibility: creating specialized responsible positions to realize diversity goals, (2) education and feedback: using training and feedback to reduce bias of inequality, (3) networking and mentoring: the development of programs that target the isolation of minorities to provide useful contacts and information. Harvey (2012, p. 329) adds two ways to strengthen diversity initiatives: having diverse members on the board of directors and appointing a Chief Diversity Officer. In addition, a variety of studies show that it makes sense to make the effectiveness of the outcome of diversity visible (Alhejji, Garavan, Carbery, O'Brien, & McGuire, 2015; Kochan et al., 2003; Richard, Johnson, 1999). While this is also associated with difficulties, it increases the acceptance and thus supports the process of integration of diversity approaches. The following paragraph shows in detail the factors and requirements that must be fulfilled in order to achieve best practice.
Organizational Best Practice
Best practice describes techniques or methods, which under certain circumstances and driven by economic or political demands, lead to the optimum result. (Dictionary of English in Kreitz, 2008) Best practice based on both research as well as practical experience. There are only small bodies of research that occupy best practice in the field of diversity management (e.g. Kalev, Dobbin, & Kelly, 2006; Kossek & Pichler, 2006). A core researcher in this field is Aronson (2002), who concludes that there are four important principles to implementing diversity management on a best practice level:
1) Commitment from the top—focus on communication and demonstration
2) Bringing people on board- defining diversity as inclusiveness
3) Diversity audit- evaluating where an organization currently stands
4) Development of a strategic plan to promote diversity