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Cultural Diversity in Organizations

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--Cultural Diversity in Organizations provides the most comprehensive base of knowledge yet assembled on the topic of cultural diversity. It captures the enormous complexity of the topic by examining diversity on three levels of analysis-individual, group, and organizational and addressing diversity from multiple perspectives-theory, research, and practice. Winner of the 1994 George R. Terry Book Award given by the National Academy of Management to "the book judged to have made the most outstanding contribution to the advancement of management knowle

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1. A Conceptual Model of the Impact of Diversity

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Several major workforce-related trends highlight the magnitude of cultural diversity that characterizes the workforces of organizations in the 1990s. First, the workforce in many nations of the world is becoming increasingly more diverse along such dimensions as gender, race, and nationality (Fullerton, 1987; Johnston, 1991). For example, in the United States roughly 45 percent of all net additions to the labor force in the 1990s will be non-White (half of them first-generation immigrants, mostly from Asian and Latin countries), and almost two-thirds will be female. These trends go beyond the United Slates. For example, 5 percent of the population of the Netherlands (de Vries, 1992) and 8-10 percent of the population in France are ethnic minorities (Horwitz & Forman, 1990). There are also substantial and growing non-Caucasian segments of the workforce in many parts of Italy and Germany. Moreover, the increases in representation of women in the workforce in the next decade will be greater in much of Europe—and in many of the developing nations of the world—than it will in the United States (Johnston, 1991).

 

2. Why Managing Diversity Is at the Core of Leadership Today

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In Chapter One, I suggested that a series of environmental forces have combined to make managing diversity a high priority issue for contemporary organizations. By managing diversity I mean planning and implementing organizational systems and practices to manage people so that the potential advantages of diversity are maximized while its potential disadvantages are minimized. Further, I view the goal of managing diversity as maximizing the ability of all employees to contribute to organizational goals and to achieve their full potential unhindered by group identities such as gender, race, nationality, age, and departmental affiliation.

In this chapter, I wish to develop more thoroughly the idea that managing diversity is crucial to the accomplishment of organizational goals and therefore should be of paramount concern to managers. Three types of organizational goals facilitated by managing diversity are (l) moral, ethical, and social responsibility goals; (2) legal obligations; and (3) economic performance goals.

 

3. Review of Research on Diversity and Organizational Performance

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Chapter Two discussed the moral, legal, and economic performance factors that make working and managing diverse workgroups a core competency issue for leaders in the 1990s. With regard to the economic performance of organizations, the logic of the EOMC and VID perspectives was explained. Although the logic itself should provide substantial motivation for investment in organization change to create a positive diversity climate, I have found that individuals often ask for empirical evidence of the relationships discussed in Chapter Two. This chapter will provide some assistance by responding to this concern.

There is research evidence to support the idea that affective and achievement outcomes of individuals are influenced by dimensions of diversity such as gender, racioethnicity, and age. For example, in a recent study of compensation among 503 MBAs of various industries, Cox and Harquail (1991) found that female MBAs earned less than male MBAs from the same business school even after controlling for seniority, industry, job performance, and other factors that determine salaries. Other researchers have found similar results (Reder, 1978; Strober, 1982; Devanna, 1984; Olson & Frieze, 1987).

 

4. Group Identities in the Self-Concept

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A group identity is a personal affiliation with other people with whom one shares certain things in common. Such identities are central to how cultural diversity impacts behavior in organizations. Nevertheless, one of the questions that frequently comes up in training sessions on workforce diversity is why people need to be understood as members of groups. Some ask, “Can’t we simply treat people as individuals and not as members of groups?” Others feel that by paying attention to group affiliations, we simply reinforce the tendency to stereotype. While these views raise legitimate concerns, they are somewhat insensitive to several key facts about the role of group identities in human behavior. First, social identity theory informs us that individual identity—the self-concept in psychological terms—is partly defined by various group affiliations (Tajfel, 1978; Ashforth & Mael, 1989). For example, in responding to the question “Who am I?” an individual might say: (1) “I am an inquisitive person” (individual trait), and (2) “I am a Christian” (a group identity).

 

5. Prejudice and Discrimination

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In this chapter we will consider bias in personal attitudes and behavior toward others based on differences in group identity. It should be noted that the personality factor in the IMCD framework will be addressed here as a source of prejudice. Prejudice refers to attitudinal bias and means to prejudge something or someone on the basis of some characteristic. In the abstract, prejudice may be manifested as either a positive or negative predisposition toward a person; however, most experts on the subject define it in terms of negative attitudes toward certain groups and their members (Pettigrew, 1982, p. 28). Prejudice may also entail negative emotions or feelings toward a person or group (Bobo, 1988). For our purposes here, we will focus on prejudice based on culture group identities such as gender, physical ability, racioethnicity, nationality, and work status/discipline.

Discrimination refers to behavioral bias toward a person based on the person’s group identity. It should be emphasized that this chapter addresses bias at the individual level of analysis. The manifestation of bias at the organization level of analysis, sometimes called institutionalized bias, is addressed in Part Four. Although prejudice and discrimination are conceptually distinct, they are so closely interrelated that they will be considered together here.

 

6. Stereotyping

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Stereotyping is a perceptual and cognitive process in which specific behavioral traits are ascribed to individuals on the basis of their apparent membership in a group. Although closely related to prejudice, especially in its effects, we may distinguish between the two terms. Stereotyping is a process by which individuals are viewed as members of groups and the information that we have stored in our minds about the group is ascribed to the individual. Thus while the emphasis in prejudice is on attitudes and emotional reactions to people, the emphasis here is on processes of group identity categorization and on the assumed traits of these categories. One way in which the distinction becomes meaningful is that while prejudice does not necessarily decrease (and may even increase) with increased time of contact, the use of stereotypes is normally expected to decline as the duration or closeness of association lengthens (Eagly, 1983).

Stereotyping is widely practiced as a means of simplifying the world and making perceptual and cognitive processes more efficient (Allport, 1954). Research has demonstrated that stereotyping is a pervasive human tendency and that in socially diverse settings, people routinely process personal information through mental filters based on social categories (Taylor, Fiske, Etcoff, & Ruderman, 1978). Extensive research has shown that stereotyping impacts interpersonal relations based on gender (Hoffman & Hurst, 1990), age (Cleveland & Landy, 1983; Rosen & Jerdee, 1976), physical ability (Lester & Caudill, 1987), and racioethnicity and nationality (Allport, 1954; Lobel, 1988). There is even evidence that stereotypes of overweight people exist and that such stereotypes do impact their career opportunities (Everett, 1990).

 

7. Cultural Differences

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If the immigrant who comes here in good faith becomes an American and assimilates himself to us he shall be treated on an exact equality with everyone else. But this equality is predicated on the man’s becoming in very fact an American and nothing but an American. There can be no divided allegiance here. Any man who says he is an American but something else also, isn’t an American at all.

The above quotation from a 1919 speech by the president of the United States, Theodore Roosevelt, exemplifies a perspective on cultural difference that I find is still widely embraced today. The quotation indicates that “American” meant a monolithic culture identity based on nationality and nothing else. In contrast to this philosophy, a major principle of this book is that America, like many other nations of the world, is really a macroculture within which many microcultures exist. In many situations, these microcultures provide alternative norm systems for guiding behavior. A knowledge of intergroup cultural differences has often been cited as important for understanding diversity in organizations, but exactly what these differences are and how they are relevant to behavior in organizations have not been well articulated in the literature. Therefore, in this chapter, numerous examples of specific cultural differences are provided.

 

8. Ethnocentrism

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In Chapter Seven, evidence was given of cultural differences among different gender, racioethnic, and nationality groups of the workforce. In this chapter we discuss one of the phenomena of social relations that make such differences important in organizations. Ethnocentrism has been defined as a proclivity for viewing members of one’s own group (in-group) as the center of the universe, for interpreting other social groups (out-groups) from the perspective of one’s own group, and for evaluating beliefs, behaviors, and values of one’s own group somewhat more positively than those of out-groups (Shimp & Sharma, 1987). Like many of the sociopsychological phenomena discussed in this book, ethnocentrism has been extensively addressed in the social psychology literature but not in the context of organizations.

Previous research indicates that ethnocentric attitudes and behaviors are widespread in human society. For instance, some research on Caucasian Americans indicates that they tend to be highly ethnocentric about nationality in their thinking (Sigelman, 1982). Likewise, there is evidence that the Chinese are strongly ethnocentric on nationality (Fitz, 1985), and studies of Black college students revealed evidence of racioethnic ethnocentrism among Black Americans (Chang & Ritter, 1976). Indeed, some writers characterize ethnocentrism as a universal tendency (e.g., Shimp & Sharma, 1987).

 

9. Intergroup Conflict

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While the presence of cultural diversity offers a number of potential benefits for organizations, it also presents certain difficulties that must be given attention in the management of diverse workgroups. One important way that this occurs is that group identity-based conflict may occur in diverse groups. In this chapter I will first provide a definition of intergroup conflict in the context of diversity in organizations. I will then discuss various sources of conflict among culture identity groups with specific examples of each. Finally, ways that intergroup conflict is manifested in organizations will be explored and some suggestions for their minimization will be offered.

Although writers have offered numerous different definitions of conflict, they seem to agree that conflict is an overt expression of tensions between the goals or concerns of one party and those of another. Thus the core of conflict is opposing interests of the involved parties (Rummell, 1976). In this chapter we are concerned with conflict between groups. Since all groups are composed of individuals and conflict behavior is frequently enacted by individuals, intergroup conflict may be conceived as a special case of interpersonal conflict. Intergroup conflict in the context of cultural diversity has two distinguishing features: (1) group boundaries and group differences are involved, and (2) the conflict is directly or indirectly related to culture group identities.

 

10. Organizational Culture and Acculturation

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In this chapter we will consider how the culture of organizations and the processes of member socialization and acculturation combine to explain certain effects and implications of cultural diversity in workgroups. First, organizational culture will be explained. Then, the closely related processes of organizational socialization and member acculturation will be explained. Next, we will consider how these three organizational factors interact with the culture identity of organization members to determine employee behavior and individual career outcomes. Finally, in line with the other chapters of the book, we conclude with a set of propositions that summarize the major points presented.

The concept of culture was defined in Chapter One as the system of values, beliefs, shared meanings, norms and traditions that distinguish one group of people from another. A group’s culture is manifested in what members of that group think, believe, understand, and do. As the discussion in Chapter Four made clear, boundaries of culture groups may be defined on the basis of many dimensions, including nationality, socioeconomic class, gender, and racioethnicity. Likewise, the organization itself may be specified as a group boundary.

 

11. Structural Integration

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In the context of the IMCD framework of diversity in organizations, structural integration refers to levels of heterogeneity in the formal structure of an organization (Cox, 1991). As one of the organization-level variables of the model, this term captures the type of organizational profile analyses that have traditionally been emphasized in equal opportunity/affirmative action work. Levels of structural integration are typically measured along two principal dimensions: (1) overall employment profile and (2) participation in the power structure of the organization. This chapter will discuss structural integration using these two dimensions.

The overall employment profile refers to proportionate representation of various culture groups in the total work force of an organization. Traditionally, in the practice of equal opportunity efforts, organizations have been analyzed in terms of percent women, percent Hispanic, and so on. We may also describe organizations on the basis of structural integration of other group identities, such as by percentage of persons with disabilities and age demographics.

 

12. Informal Integration

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In the previous chapter we were concerned with the integration of persons of different group identities into the formal structure of the organization. In this chapter attention is turned to the informal organization. Previous theory and research has indicated that participation in informal groups in organizations plays an important part in the career success of individuals (Shaw, [1976] 1981; Burke, 1984; Gouldner, 1954; Blau, 1955). In one study, supervisors’ level of personal acquaintance with subordinates was positively related to both performance ratings and actual sales productivity (Kingstrom & Mainstone, 1985). Research has also shown that persons who have low access to informal networks are less likely than those with high access to provide ideas on how to improve work quality or to believe that they can make a difference in how the organization is run (Pearlin, 1962). Thus access to informal networks has direct implications for the contributions of employees to total quality initiatives that depend heavily on employee involvement.

 

13. Institutional Bias

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When you talk about my experiences with racism, I have problems with that term because in a way, it glosses over the more subtle issues of how cultural groups interface with institutions which operate according to implicit cultural assumptions. Nobody has to personally discriminate, it’s simply that if work has to be done a certain way, it’s based on certain cultural assumptions of how the work gets done, how do you write up a proposal for example. There are certain procedures, certain cultural ways of putting together a proposal.… If you think in a Western linear fashion, you go a-b-c. This is the way I make an effective argument. When you’re from another background, the arguments get made in a different way, following a different kind of logic. That’s real subtle (Khoo, 1988, p. 88).

The above quotation taken from a colleague’s interview of a third generation Chinese American is one of the best expressions I have run across to capture the meaning of institutional bias. The term bias simply means a preference for a particular thing, person, style, and so on, compared to other possible things, persons, or styles. In the context of intergroup dynamics, an unfavorable bias toward one group implies a favorable bias toward another. Institutional bias refers to the fact that preference patterns inherent in how we manage organizations often inadvertently create barriers to full participation by organization members from cultural backgrounds that differ from the traditional majority group. That this phenomenon exists is easily understood when one considers organizational histories. Most large organizations were created decades or even centuries ago, and have subsequently been managed at the top level, at least until very recently, by a fairly homogeneous group of people. These “founding fathers” naturally reflected their own cultural biases and value systems in establishing the rules, policies, and practices that have shaped the organizations. For the most part, their rules, policies, and practices remain intact today despite the enormous changes that have occurred in the workforce during this century. In addition, when the attitudes, beliefs, and behaviors of many of the founders and senior managers of today’s organizations were shaped (1930s-1950s), intergroup relations based on racioethnic, gender, nationality, and other group identities were overtly less tolerant and inclusive than they are today. Institutional bias evolved as a natural consequence of such organizational histories. Commenting on the phenomenon of institutional bias in U.S. organizations, Loden and Rosener (1991) explain: “As a result of our colonial history, most American businesses and institutions have been shaped primarily by the values and experiences of Western European white men. These ‘founding fathers’ were responsible for institutionalizing many of the norms, expectations … that are the stuff of contemporary organization cultures. One major consequence of these historical events has been the continual undervaluing of others with core identities different from those of Western European, white, heterosexual, physically able-bodied men” (p. 28).

 

14. A Model to Guide Organization Change

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Like other major organization changes, enhancing organizational capability to manage a diverse workforce should begin with creation of a vision that specifies, in broad terms, the objective of the change. As indicated previously, the objective of managing diversity work is to create organizations in which members of all sociocultural backgrounds can contribute and achieve their full potential. I will use the term multicultural to refer to organizations that achieve this objective. Organization change work can be facilitated by explicitly identifying the characteristics of multicultural organizations. Toward this end, the conceptual framework of organization-level factors introduced in Part Four along with the intergroup conflict factors from Part Three may be used here to form a typology of organizations in terms of climate for diversity.

Three organization types will be discussed: the monolithic organization, the plural organization, and the multicultural organization. The application of the six-factor conceptual framework to describe the three organization types appears in Table 14.1.

 

15. Tools for Organization Development and Change

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In this final chapter, specific tools and techniques that have been successfully used by pioneering American organizations to begin the transformation from the monolithic or plural organization to the multicultural model will be discussed. Table 15.1 provides a list of tools that organizations have used to promote change toward a multicultural organization. The table is organized to illustrate my analysis of which tools are most helpful for each of the six dimensions listed in Table 14.1, in which the goals of change are specified.

The process of changing organizational cultures is a long-term and difficult process. There is inevitable resistance to alterations of fundamental ways of doing business, which in many companies have changed little in half a century. As difficult as it is, however, it is clear that excellence in managing diverse workgroups will require changes in culture for many organizations. Once the organization has the leadership commitment to change and a vision of what the goal of change is, there are three primary means by which organizational cultures are changed: (1) by selection processes, especially of managerial personnel, (2) by changes in management systems, especially of evaluation and reward systems, and (3) by ongoing education and communication activities. Points 2 and 3 are adequately explained elsewhere; however, a clarification of the first point may be needed. Very simply, I mean that cultures are changed by changing the type of people who work in the organization. People vary a great deal in their personal attitudes and value systems related to diversity issues. In the long run, behaviors will depend greatly on what these attitudes and values are. By hiring and promoting people who are tolerant of differences and who embrace the value-in-diversity philosophy on a personal level, organizations can go a long way toward creating the multicultural organization. In addition to the three primary methods of selection, rewards, and education, virtually all of the other techniques mentioned in Table 15.1 will impact organizational culture to some degree.

 

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