Managing Diversity in Organisations - Literature review Example

Managing Diversity in Organisations Table of Contents Literature Review 2 Equality at work: Global Perspective 3 Managing Diversity in Hotel Industry 5 Conclusion 7 Reference 8 Introduction The study has decided to conduct a literature review in order to answer the title question “what is the significance of managing diversity among employees in context to global hotel industry”? In the next section the study will try to address the research questions by conducting a literature review on the topic. The researcher has selected hotel industry in order to understand the role of diversity management in fulfilling the strategic objectives of hotels. The study will try to analyze the literature on selected topic from the view point of strategic human resource management. Literature Review Taylor Cox, who is a renowned US diversity scholar, has expressed both annoyance and frustration on issues like misuse of the term diversity in the field of management. Cox (1994) has argued that, managing diversity in organization was never an American issue because in today’s world, organizations of other countries face the same challenge as American companies do when it comes to managing a diversified workforce. According to Cox (1994), non-American companies need to understand the importance of key issues associated with managing diversity such as knowledge sharing, team work, lattice communication path etc. According to Seidl and Becker (2006), organizations need to take help of guidelines or best practices suggested by other successful companies in order to maintain diversity in business place. The scholar duos have stated that the term “managing diversity” should be used in order to address complexity and cross culture perspective of business practices. Research works done by various management scholars on the topics like diversity management have influenced the researcher to write this literature review. Equality at work: Global Perspective Many companies across the globe face challenges regarding maintaining provision of equality in the workplace despite the presence of national legislative frameworks in many countries. There are evidences regarding the gender discrimination in the workplaces in many countries across the world, such examples are not good sign for management researchers and managers who are supporters of the agenda named as “managing diversity in the workplace.” According to Singh and Vinnicombe (2003), pie for women in the management position is comparatively low in comparison to male counterparts. Becker and Haunschild (2003) have pointed out that many companies ignore the complex issues regarding managing diversity in the organization. According to recent survey, rate of termination for disabled people is twice in comparison to able-bodied people in the UK. Such examples are showing that organizations need to rethink about discriminations related to gender, race, disability, colour and nationality in order to match steps with global trend of bringing and managing diversity in the organizations. Research scholar Korabik and Abbondanza’s (2004) have stated that women are equally capable of modifying organizational policies and taking part in business policy determination. Hence, it is evident from the above discussion that managing a workforce which is diversified in terms of gender, race, physical ability, nationality and colour can help organizations not only to achieve equality but also to improve their service quality. Equal Opportunities and Managing Diversity During early 1990s, management researchers have introduced the term “managing diversity” in order to define characteristics of equal opportunities (EO). Research scholars such as Jackson and Schuler’s (2003) have stated that organizations need to adopt the managing diversity strategy in order to use potential human resources available in the global marketplace. Definition of managing diversity in organization can be stated as “understanding that there are differences among employees and that these differences, if properly managed, are an asset to work being done more efficiently and effectively” (Bartz et al., 1990, p. 321). Other research scholars have argued that there is significant difference between managing diversity in organization and bringing equal opportunities in the workplace. Orton and Rowlinson (2007) have defined that there is a fine line between managing diversity and equal opportunities, for example, the concept of equal opportunities is driven by exogenous forces such as social justice to unprivileged section, legislative compliance, human rights and ethical issues whereas managing diversity is driven by factors like organizational issues such as profit maximization, new product development, managerial effectiveness etc. Zanoni and Janssens (2004) have bluntly stated that employing diversified workforce can increase profitability for organizations due to the fact that organizations can encourage employees to maximise their potential by adopting diversification in terms of human capital policy. Supporters of the concept of managing diversity have stated that organizations need to recognize diversified potential among employees rather ignoring or viewing employees as liabilities. There is direct linkage between strategic perspectives of organizations and organization’s capability to manage its diversified workforce. According to Leonard et al (2004), Zanoni and Janssens (2004) and Hubbard (2004) organizations can achieve economic benefit and competitive advantage by strategically diversifying its workforce. Other research scholars have used the concept of managing diversity while they are going through transformational process or change management. In such cases managers use cultural transformation strategy for employees who are not ready to accept the change. An Interesting fact is that, supporters of traditional equal opportunities have criticized managing diversity for its inability to fulfil collective needs. Fleming (2004) has stated that organizations with diversified workforce are likely to achieve breakthrough innovation in comparison to organizations with standardized work force. Key responsibility of human resource department is to develop line managers to handle responsibilities, whereas developing line managers is not possible while human resource department is busy in diversifying human capital in organization. Unfortunately majority of research scholars have failed to prove statistical correlation between job satisfactions among employees and diversity in organization. Managing Diversity in Hotel Industry Research scholars such as Randel and Jaussi (2003), Hoegl et al (2007), Wee and Morse (2007) and Zhang et al (2007) have stated that managing diversity provides multitude of benefits such as, 1- it helps organizations can survive in changing market conditions by using the potentials of different employees, 2- increases return on investment in terms of retention of key employees, 3- decreases resistance from employees who are not supporting the change management process in organizations, 4- decreases cost related to employee absenteeism and turnover, 5- increases flexibility and resilience among employees. There is no doubt that these benefits are seductive for an industry like hotel sector which is dependent on employees in order to improve their service quality matrix. Global hotel industry faces problems like high staff turnover, changing consumer demand, demographic changes, shortage of skilled staff etc. Although very few researchers have tried to explore the benefits of managing diversity in hotel sector but it is evident from the limited researches on the topic that there is immense scope for hotel sectors to harness the benefits of managing a diversified work force. According to Lockwood (2007), most of the managers find it challenging to align diversified workforce with the knowledge based organizational environment. Janssens and Zanoni (2005) have stated that managing diversity has direct linkage with cultural perspective of organizational performance. Offering service to customers is affected by cultural and social diversification and hotels are facing challenges regarding satisfaction of the needs of culturally and socially diversified customers. Managing a diversified workforce can help hotels to provide quality service to customers which can decrease the gap in the service profit chain. Now the question is whether there is any link between managing service and increase in sales. The answer is yes, because according to researchers, managing diversity can help hotels to meet demand of minority market groups. A particular section of research scholars have argued that there is no commercial evidences are available regarding the role of diversity in terms of gender, nationality, race, physical ability on improving profit matrix for hotels. Aligning the benefits with managing diversity with service profit chain can give hotels some real competitive advantage. The study will cite example of Scottish Highland Hotels in order to clarify the benefits of managing diversity. Mission statement of Scottish Highland Hotels is to identify and exceed expectations of customers, hence the hotel recruited staff irrespective of their gender, nationality, race or ethnicity in order to cater to the demand of customers who belong to various parts of the globe. The hotel has clarified its business aim to employees and encouraged them to perform in a team in order to deliver good quality service to customers. Conclusion It is evident from the above discussion that managing diversity in the organization in terms of human resource management can not only increase service quality for hotels but can also)increase economic benefits, return on investment by shareholders. Hotels can achieve its strategic objective of decreasing gap service profit chain by infusing diversity in the workplace. Hotels are a pure form of service industry where customers pay for luxury and exotic experience; and the success of hotel industry is dependent on people factors. Hence bring diversity in the workplace can help hotels to match steps with ever changing requirement of customers. According to Polzer (2008), “diversified team are prone to dysfunction because the very differences that feed creativity and high performance can also create communication barriers”, it is a critical challenge for organizations to achieve competitive advantage by managing diversified workforce. Reference Bartz, D. E., Hillman L. W., Lehrer. S. and Mayhugh, G. M., 1990. A model for managing workforce diversity. Management Education and Development, 21(5), pp. 321-6. Becker, K. H. and Haunschild, A., 2003. The impact of boundaryless careers on organizational decision making: An analysis from the perspective of Luhmann’s theory. International Journal of Human Resource Management, 14(5), pp. 713-27. Cox, T., 1994. A comment on the language of diversity. Organization, 1(1), pp. 51-8. Fleming, L., 2004. Perfecting cross-pollination. Harvard Business Review, 82(9), pp. 22-4. Hoegl, M., Ernst, H. and Proserpio, L., 2007. How teamwork matters more as team member dispersion increases. Journal of Product Innovation Management, 24(1), pp. 156-65. Hubbard, E. E., 2004. The Diversity Scorecard. Butterworth-Heinemann, Oxford: Elsevier. Jackson, S. E. and Schuler, R. S., 2003. Managing Human Resources Through Strategic Partnerships. Cincinnati, OH: South-Western. Janssens, M. and Zanoni, P., 2005. Many diversities for many services: Theorizing diversity (management) in service companies. Human Relations, 58(3), pp. 311-34. Korabik, K. and Abbondanza, M., 2004. New theory supplants queen bee notion of woman in Management. Office of Research, Ontario Ministry of Education & Training. Leonard, S., Levine, D. and Joshi, A., 2004. Do birds of a feather shop together? The effects on performance of employees’ similarity with one another and with customers. Journal of Organizational Behavior, 25(6), pp. 731-54. Lockwood, N. R., 2007. 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Zanoni, P. and Janssens, M., 2004. Deconstructing difference: the rhetoric of human resource managers’ diversity discourses. Organization Studies, 25(1), pp. 55-74. Zhang, D., Lowry, P. B., Zhou, L. and Fu, X., 2007. The impact of individualism-collectivism, social presence, and group diversity on group decision making under majority influence. Journal of Management Information Systems, 23(4), pp. 53-80. Read More