Workforce diversity management is fast becoming a significant component of human resource management practices in Multinational Corporations (MNC’s), as it fosters an inclusive workplace climate leading to improved work outcomes. Within the MNC’s strategic HR, an in particular in the promotion of organisational culture change, senior management perceptions on diversity management and the possible ways of achieving diversity goals.
There is a gap in the academic inquiry in bringing together the DM (diversity management) and IM (inclusion management) threads and clearly presenting each with all the implications. There is also a scarcity of papers by practitioners presenting clear methodological guidelines on the design and delivery of research on the efficiency of diversity management and inclusion.
The central tenet of the paper is the assumption (or hypothesis) (and supported by ample examples from relevant literature) that DM and IP within it is essential for the well-being of the workforce and the well-being of the workforce will define and result the performance of the company. It will also increase the capacity for innovation and finally result in the enhancement of the competitiveness of the company.
More specifically, this study aimed to:
(1) offer a conceptual framework on diversity and inclusion in the firm;
(2) explore the relationships between diversity and inclusion characteristics, surface (or visible) and deep-level (or invisible) diversity, having regard to beneficial and detrimental outcomes;
(3) suggest a unique type of methodology enabling researchers to explore the above characteristics
(4) present a research design and framework that is centred on the employees’ perception of DM and IM.
This paper is unique also in the sense that is proposes „insider” research approach of the DM and IM within MNC’s. A hypothesised assignment will lead the researcher/employer to advise on the implementation of the DM and IM. Through his understanding of the company by the participation of its day-to-day operation, the employee is best situated to both assess present practices and, combining experience with the conceptual background represented by the literature review, conduct research that will enable him to inform his advice to the senior management of the firm.
2. Literature review
The following section will provide a conceptual framework of the topics of diversity policy and inclusion, applying a narrowing perspective, that is, progressing from a wider to a more concrete and focussed perspective. The academic inquiry of the company culture is vast, and it is not in the scope of the paper to discuss all its facets, rather to grasp the framework and concepts leading to the analysis of the central topic of the research.
2.1. Diversity management
2.1.1. Definition and challenges
The concept of diversity management which originated in the United States in the 1980s, has gradually become a strategic business issue for many organisations in other countries (Farndale et al., 2015). Workplace diversity is broadly defined as a mixture of differences and similarities among individuals within a given dimension that includes a whole range of individual and organisational components (Ponce, 2015). The term „diversity” itself refers to the quality of being different or unique at the individual or group level. According to Mor Barak et al. (2016), diversity characteristics can be described as belonging to two distinct layers, one observable and the other hidden: surface-level diversity including age; ethnicity; gender; gender identity; nationality language differences;; parental status; physical, mental and developmental abilities; race; religion; sexual orientation; skin colour; socio-economic status; education; work and behavioural styles; the perspectives of each individual shaped by their nation, experiences and culture—and more. Even when people appear the same on the outside, they are different.
In the past, workforce diversity was thought to bring net value added to organizational processes and give organizations a competitive advantage in important business functions such as recruiting top talent, improving customer relations, fostering innovation and creativity, and generating a positive image in the community (Mor Barak et al., 2016)
While relevant academic scholarship stipulates that „diversity improves the quality of management’s decisions and provides innovative ideas and superior solutions to organizational problems” (Shen et al., p.236), it is also argued that potential benefits and performance increase is not the result of greater workplace diversity per se. Contemporary non-hierarchical, flexible, collaborative management systems massively rely on tolerance for individuality, as it is the only way forward to the implementation of organisational development initiatives (Farndale et al., 2015).
The field currently faces three major challenges that can be summarised as follows:
- the strive for the definition of diversity and inclusion within a given national context and related HRM practice implications (e.g. talent management, recruitment and selection policy, performance management, flexible working practices);
- extension of diversity in skills to include values;
- tap into the national context when linking diversity and inclusion practices to performance outcomes.
The levels of academic or practitioner inquiry on DM are the national, organisational and the team level. On the national level, DM inquiry includes gender empowerment characteristics of nations in which diversity and inclusion practices are being implemented. At the organisational level, the mainstream observations rely on how national cultural and institutional characteristics affect patterns of practices (Farndale et al., 2015). At the team level, the unit of observation is the range of performance outcomes as evidenced by the diversity within teams. It is agreed amongst various authors that diversity can either be based on nationality, or national culture can affect the relationship between other forms of diversity and their outcomes (i.e. gender diversity and team performance) (Farndale et al., 2015). It is also worthwhile adding the individual level of inquiry which offers a platform for the employees’ attitudes and reflections in the matter of DM, as well as their feedback on the organisational efforts for the efficient implementation and delivery of such policies.
2.1.2. Peculiarity and challenges of DM in MNC’s
Different countries and organisations outside of the US have a variety of diversity management approaches that are not always acknowledged because of the US-centric assumptions of diversity or simply because of the small body of research supporting it. The notion of diversity management is popular mostly among MNCs and represents a key issue in their human resource management agenda (Sippola and Smale, 2007). It is of rapidly growing interest among MNCs, from whom it has become common to be implementing some form of diversity management on an international scale.
It is paramount to the MNC’s performance how the diversity practices are transferred from the home office of MNC to its regional offices, as MNC’s are faced with the competing forces of global practice and local responsiveness (Ponce, 2014). Consequently, and to successfully integrate HR practices, „MNCs adopt strategies for managing the workforce and integrating polices in the host country which are different from the strategies that they may use in their home country” (Ponce, 2014).
On the other hand, the concept of workplace diversity signifies different meanings to different groups and individuals within an organisation and to the broader society within which it is studied. Each culture or nation is defined by its own unique diversity characteristics. According to Hofstede (1981), work-related attitudes must be understood within their cultural context. MNC employees tend to align themselves, at the very least, with the country where they work thereby producing a sub-culture of how members relate to each other, accomplish work and respond to changes.
While the intentions might to be to encourage equality among employees, issues generally crop up, usually ensuing from cultural embeddedness. Many organizations, especially those operating in the USA, align themselves with the cultural heritage and regulations of the country they are embedded in (Harrison et al., 2006; Hofstede, 1981; Nishii and Özbilgin, 2007). Many operate on the concept of „color-blindness”, which is treating all people equally irrespective of their skin colour, deploying a kind of „positive discrimination„ (Pringle, 2006; Lauring, 2013; Kochan et al., 2003). „Constitutional colorblindness„ is stipulated by the United States Supreme Court case evaluation, stating that „skin color or race is virtually never a legitimate ground for legal or political distinctions, and thus, any law that is ’color conscious’ is presumptively unconstitutional regardless of whether its intent is to subordinate a group, or remedy discrimination.” (Kull, 1998, p. 35). In the case of diversity management though, treating all the employees alike would be detrimental to the purpose of appreciating diversity which is thought to be the source of innovation, creativity and increased performance (Harrison and Sin, 2006; Farndale et al., 2015; Kochan et al., 2003).
Without understanding other cultures, and without that knowledge, it would be difficult to understand equality. In addition to that, the initial cost of the mandatory training provided to each employee on how to manage Workplace Diversity is very high (Ratnam and Chandra, 1996). This training extends to the supervisors and managers, and at time, clients. The programs involve a lot of traveling and investing productive hours.
Recognising these behaviours provides a powerful impetus for companies to adopt diversity management practices. Cross-border implementation of diversity management in organisations becomes more challenging due to fundamental differences in national cultures, legislation, language, or ethnicity that affect industrial relations and interactions (Ponce, 2014).
The other major issue of implementing diversification in the workplace is that, it invites discrimination from both managers and employees. Many employees find it hard to work with a manager who is from a different background.
The act of including; a strategy to leverage diversity. While it is a well-known adage that diversity is omnipresent in whichever size communities, for its members to feel part of the community and have a sense of belonging or included, this sense must be created.
Inclusion refers to „the individual’s sense of being a part of the organizational system in both the formal processes, such as access to information and decision making-channels, and the informal processes, such as ‘water cooler’ and lunch meetings where information and decisions informally take place” (Mor Barak, 2011, p. 166). A climate for inclusion, therefore, promotes employee perceptions of the organizational context that leads to the full acceptance of all employees and provides an environment in which the full spectrum of talents of individual employees are used.
There are constant elements in the definitions relating to this research. First, there is a focus on belongingness, second is the focus on organisational environment, while the third is the focus on valuing employees. The inclusive workplace as defined by Mor Barak (2005) included collaboration with individuals and groups which are outside of the organisation and across national and cultural boundaries. It is interesting to note that this definition of inclusion expands to external linkages beyond organisational concerns. It places a strong value on inclusion through workplace policies and practices and synthesizes a comprehensive framework for understanding inclusion that includes corporate community collaboration, national and state collaboration, and international collaboration.
Mor Barak (2005) noted five areas of inclusion covered within the organisation. These areas are: a) management leadership, b) education and training, c) performance and accountability, d) work-life balance, and e) career development and planning. Among these five areas, the most common approaches to inclusion are education and training, work-life balance, and career development and planning, which are key areas in human resource management.
3. Methodology to research DM and IM
The following section will focus on the methodological considerations of conducting research from the „inside”. This type of research is gaining more and more popularity as it is not only innovative in its approach but has several advantages over outsourcing the same work. The framework of analysis will therefore be a conjured scenario when an employee of the MNC has been given the brief and permission to design and deliver a research in view of exploring the current modus operandi of the DM and IM in the firm.
3.1. Characteristics and Challenges of Insider Research
Insider-research means research done by members of the organisational system and communities in their own organisations (Farndale et al., 2015). It is becoming popular among individuals who are on full-time employment and enrolled in an academic programme. Individuals undertake this arrangement on the assumption that they are familiar with the site and have ready access to data, making insider-researcher work a process of reflexivity with the researcher/employee in the centre. The various challenges required proactive and conscious efforts to maintain the credibility of the researcher and integrity of the research.
An insider-researcher is privileged to possess knowledge, insights and experience before engaging in the actual research. Raelin (2008) recognizes that work-based projects may prove immensely beneficial to the long-term success of companies by making significant contributions to work practices. While potentially beneficial for the overall improvement of the organisational culture and performance, insider situatedness and prior knowledge and insights could also lead to biases (Lave and Wenger, 1991). Biases may be manifest in subject matter regarding the policies but also the organisation dynamics (Raelin, 2008). In response to this dilemma, two distinct strategies can be followed (Harrison and Sin, 2006). Firstly, it is suggested that the researcher/consultant keep an open mind on opinions and findings that were different from his/her fundamental and practical understanding of the subject. Secondly, it is advised to seek confirmation from peer research (external or internal) advisors to caution against statements in favour of the company’s practice without solid research objectives and questions with empirical data and more information.
An additional burden or hardship for the researcher/employee is to attend to the demands imposed by the distinct roles (organisational role and researcher role). Maintaining high credibility both at the company and at the university is probably the most challenging experience (Harrison and Sin, 2006). Therefore, the researcher/consultant must carefully monitor the impact of organisational politics on the process of inquiry, to identify the major players involved both in the enabling and the delivery of the research, and to try to engage them in the processes (Wentling, 2000). The best way for this is an open and frank presentation of the benefits that the organisational culture can gain from the research both in terms of improved involvement (inclusion) of the workforce and the subsequent increase in the performance quality. Approval should be sought for the phases of the research and information must be channelled throughout all stages, especially during data collection. In case ethical considerations prevail, they must be cleared even in the design phase of the research. The best way to manage organisational politics and maintaining credibility of stature lies in the humility of positioning the researcher/employee within the bounds of professional and academic activities, understanding the power and interests relevant to stakeholders, knowing how to work within the changes happening in the organisation, and always seeking cooperation and support from superiors and colleagues.
3.2. Consultancy assignment
The hypothetical Consultancy consists of the Consultant (employee/researcher of the MNC) assigned the particular task to design and deliver the research on the modus operandi of the DM IM in the firm. It is believed that the Consultant, by his insider role is best situated to both investigate and to provide an assessment of the current conditions that prevail in the MNC. His internal role, combining experience with the conceptual background represented by the literature review, enables him to offer a feedback and set of recommendations to the senior management, without exposing the company to external observations. While the internal role could be a disadvantage as it prevents the Consultant from keeping distance and being entirely objective, it is believed that in this case it will be a distinct advantage having regard to the confidentiality of the survey.
3.2.1. The Brief
Hypothetically, and for the purposes of this study only, it is presumed that the Consultant has been asked by the International HR department to carry out a survey regarding the feasibility of the introduction of a DM and inclusion scheme to the firm. His Consultancy task consists of the following phases:
- scanning the international literature on the topic of diversity management and inclusion
- find some examples of diversity management as implemented by MNC’s
- devise a way of assessing senior management as well as workforce perceptions on diversity management and inclusion
- deliver the survey
- evaluate and aggregate the findings
- present a set of recommendations for the introduction of diversity management and inclusion to firm senior management
3.2.2. Research design
The first phase of the Assignment is the design of a survey to assess workforce perceptions of diversity management. Originally, the sample population would have consisted of two groups of respondents that were targeted, the senior management and the employees which are not part of the senior management. It was hypothesised, that these two stakeholder groups will have significantly different views on the topic, having regard to their different roles and responsibilities within the company. While the senior management members would have been able to report on issues such as the expectations and obstacles to the introduction of DM, employees with lower levels of management responsibility will not have such perspective. However, owing to the sensitivity and the initial decline of participation by senior management members, only the employee sample remained.
Equally owing to the sensitiveness of the topic of the DM, it is foreseen that not many respondents would be willing to return the questionnaire. The study design therefore deploys two types of data analysis methods, quantitative and qualitative. From a methodological perspective, the use of mixed methods is a new research paradigm that evolved in response to the persistent antipathy between quantitative and qualitative approaches.
Mixed methods allow the researcher to elaborate, enhance, or clarify the results from another method and discover different concepts that could lead to reframing of the research questions and expanding the range and breadth of inquiry (Ponce, 2014). Third and most importantly, mixed methods allow the researcher the potential to triangulate in data gathering and analysis. It is suggested that the study design (exploratory, combination of quantitative and qualitative methods and based on a small number of study population), does not establish hypotheses, rather formulates research questions, the answers to which will be derived from the results. The research questions use the conceptual foundation that has been laid in the Literature Review section.
In the quantitative section, means of scales will be analysed while in the qualitative section some representative answers will be presented. In exploratory research such as this one, a combination of the two methods sheds more light on the perceptions by the employees, than a purely quantitative analysis (Mor Barak et al., 2016).
The third method of data collection may be gathering and analysing secondary data, company history, policies available on their website.
Research topics have been created with a pool of individual Research Questions each addressing a distinct aspect of the topic. The items have been formulated having regard to the essential stipulations of the studies portrayed in the Literature Review.
Research Question Group 1: DM
This topic is divided into the following sub-topics:
How can the employees attitude and perception of the DM within the company culture be grasped and described? Are they aware of the existence of such policy and how do they see its implementation? What are their personal reflections on the ways and solutions that the company culture is offering to them? What are the strengths and weaknesses of the current DM as seen by the lens of the employees? Do they experience any kind of discrimination in the company?
Research Question Group 2: Inclusion (organisational level)
This topic is divided into the following sub-topics:
How can the employees attitude and perception of the IM within the company culture be grasped and described? Are they aware of the existence of such policy and how do they see its implementation? What are the strengths and weaknesses of the current IM as seen by the lens of the employees? How is the IM embedded in the DP and how does it impact the overall performance of the company?
Research Question 3: Inclusion (individual level)
What are their personal reflections on the ways and solutions in IM that the company culture is offering to them?
3.2.3. Questionnaire Development
Questionnaire questions were developed in order to target areas which are covered by the research questions. They are based on the conceptual introduction and research done on the topic of diversity management and inclusion. The analysis of the firm’s Code of Ethics and Conduct (CEC) will be indicative of certain already accepted company culture norms and behaviours, and the questions pointed in the direction of them. Amongst the questionnaire questions there is a dominance of the questions pertaining to the ‘inclusion’ topic as it is believed that the workforce will have more detailed opinion and feedback in this regard. Diversity management, its characteristics, design and implementation are more a strategic HR management issue and therefore it is more a domain and competence of the management. Inclusion, on the other hand, is directly involving the subjective well-being and performance of the workforce, and therefore they have more stakes in it. Furthermore, they may have more impact in the shaping of the inclusion policy (Mor Barak et al., 2016).
The suggested Employee questionnaire consists of the following sections, as presented in Table 1. Its rubrics comply with the survey research design thinking as defined in the previous section and carry all the characteristics of the questionnaire questions.
The questionnaire questions and the corresponding responses have been grouped into constructs such as DP, Inclusion (Organisational level), and Inclusion (Individual level).
Control questions such as age, gender and seniority (number of years spent within the company) should be also asked. The questionnaire contains explanatory definitions of both diversity and inclusion as well as well-being so that the respondents could reflect upon them. The sources of these definitions are the same as above in the conceptual introduction. As it is a sensitive topic and involves the direct criticism of the senior management’s efforts (or the absence of it) on the DP and inclusion, it is essential that no respondent may be subsequently discriminated for having responded in any way, critical or not. Questionnaires can be sent out by email to a select number of the employees making sure that there is an anonymity in the replies so that the identity of the respondents could be kept unidentifiable.
The data collection can be followed by the data treatment and analyses. A detailed presentation of the research findings can then be made available to the senior management, together with the views and opinions of the researcher/employee.
The implications of diversity in the workplace are manyfold, but the most significant one is the increase in turn-over as well as the reduction of absenteeism, which, in today’s world, is a huge advantage for companies in the drive of recruiting, retaining and motivating talent which is in shortage.
Managing for inclusion is a dynamic and cyclical two-stage process. The first stage is reactive and includes efforts to recruit and employ a more diverse workforce. The second stage is proactive and requires „instituting policies and procedures that give every member of the workforce a sense of being valued for who they are and engenders a sense of belonging” (Mor Barak, 2015; Mor Barak, 2011).
The study addressed this second stage by preparing the ground for policy institution or the modification of current policies. It proposed a method enabling senior management to verify the efficiency of existing policies that basically focused on the analysis of the perception of the employees. To this end, the study utilised a scenario of hypothetical assignment, or brief from senior management to explore the implementation of DM and IM with the help of insider research, which is concurrently explored and deployed by management practitioners (e.g., Mor Barak, 2014; Mor Barak et al., 2016; Nishii, 2013; Roberson, 2006). Future research threads include the actual delivery of the research and the verification of the usefulness and robustness of the research instruments set out in the research design.
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