1. Introduction to diversity mgmt Flashcards
What are examples of things to have in your office to make it inclusive?
- Different light sources (natural/artificial)
- Adjustable desks
- Individual chairs/areas
- Larger tables/meeting spaces for teamwork
- Quiet rooms
- Gender neutral rooms/cafes
- Reception for guests
- Plants (connection to nature has calming effect)
- Wood (visually pleasing, calming)
- Call it holiday celebrations instead of Christmas celebration
What is the definition of diversity?
Host of individual differences that make people different from and similar to each other. Represents the multitude of individual differences and similarities that exist among people.
What is surface level diversity?
- Generally immutable (can’t change them)
- Almost immediately observable (can see them)
- Measured in simple and valid way
- EXAMPLES: skin color, gender, age
What is deep level diversity?
- Subject to more construal (not visible)
- Generally mutable
- EXAMPLES: values, attitudes, beliefs
→ Need to talk to others to know these things about them. “One thing you cannot tell just by looking at me is …”. People often see the surface level diversity and make assumptions for the deep level behavior.
What are the four overarching reasons why organizations should pay attention to diversity?
- To avoid lawsuits/reputation loss
- To improve company reputation
- For moral reasons
- For business reasons, i.e. to (hypothetically) improve performance
In what way can paying attention to diversity avoid lawsuits/reputation loss?
Costly to treat employees differently → May take action just because they are afraid someone might take action against them.
Goldman Sachs (2010-2023):
- Accused of lower pay to and promotion rate of equally or more qualified women
- Pay $215M to settle the suit, and “review their advancement processes”
Coca Cola (1999-2001):
- Racial discrimination in pay (Blacks made ⅓ less than Whites), promotions and performance evaluations
- $192M and “make changes to the personnel policies”
Google:
- 2018: 20,000 employees walked out after $90M was paid to an employee as he left the company over sexual assault allegations
- 2023: owes $1M to executive after losing gender bias lawsuit
In what way can paying attention to diversity improve company reputation?
EXAMPLE: GAP
- Disclosed that it pays men and women equally for the same jobs, as part of a national move toward transparency around the gender wage gap
- An external consulting firm confirmed the 1-to-1 ratio
- 70% of GAP’s workforce is female
- Has larger share of women than other top companies across all levels/roles
BEWARE OF: Diversity washing.
- The office example similar to Obama picture where non-associated people are dragged into the picture with a politician to make him look inclusive.
- Human Rights Campaign is an example of an organization that gives ratings on diversity.
In what way can paying attention to diversity be linked to moral reasons?
Thomas & Ely (HBR, 1996): “Prejudice has kept members of certain demographic groups out of organizations. As a matter of FAIRNESS, we need to work toward restructuring the makeup of our organization to let it more closely reflect that of society. We need managerial processes that ensure that all of our employees are treated equally and with respect and that some are not given unfair advantage over others”.
- Glenn Murphy (former GAP CEO): “Removing gender bias from pay practices is the right thing to do and it is good for business”
- 1000&1 signes: French restaurant with only deaf employees
- The Blind Cafe: Employees are blind. Customers experience what it is like to be blind, eat in complete darkness.
How can paying attention to diversity (hypothetically) be good for business reasons?
- Richer pools of information and perspectives → better decision making
- More learning (i.e. cognitive and behavioral variability)
- More complex problem representations
- More specialization and division of labor
- Creativity and innovation (example: Nike - hired opposite of the first plan)
- Access to diverse markets
What are the actual effects of organizational diversity (research)?
- Organizations with more women on boards are perceived as less committed to shareholders and more committed to diversity
- Congruence between racial diversity in upper and lower management positively impacts firm productivity (intergroup social identification)
- Meta-analysis: more women in TMT positively (but weakly) predicts long-term performance and negatively predicts stock price
- Firms with female CFO are less likely to misreport
- After women enter TMT, the teams become less risk seeking and more change-oriented (i.e. less M&A and more R&D), because change is central to women’s ascension to TMT
- The more that gender diversity has been normatively accepted in a country or industry, the more that gender diverse firms experience positive market valuation and increased revenue
- Employees put in fewer hours under a female founder
Why may there be a discrepancy between what theory suggests and what actually happens regarding business performance and diversity?
Diversity does not always increase performance since:
- context matters
- how we MANAGE diversity matters, not just the existence of diversity
- differences in e.g. education for men and women in developing countries impact performance of different people
What is the equation for the benefits of diversity?
BENEFITS associated with diversity = Diverse workforce - Problems associated with diversity
What are some associated problems with diversity and how can these be minimized?
- Stereotyping
- Discrimination
- Conflict
- Prejudice
Minimize problems by MANAGING diversity
What is the definition of managing diversity?
Creating organizational changes that enable all people to perform up to their maximum potential. (minimizing the diversity associated problems)
How has the demographic composition of the French labor force changed over the past years?
- Labor force participation rate increased: 71% (2011) to 74% (2023)
- Greater number of people aged 65+ than ever
- Stable presence of foreign citizens but more so in physically difficult jobs or jobs with more restrictive conditions
- Increase in female employment: 58% (1990) to 71% (2023)
