Workforce Diversity And Competitive Advantage Commerce Essay

The intent of this paper is to analyze the tendency of leading manner over the relationship between organisation ‘s work force diverseness and its competitory advantage with mission and vision statements as step ining variable which shows the concern of organisation leading towards the diverseness direction. Most organisations are following “ diverseness ” into their policies and processs to encompass its benefits and there is a turning acknowledgment that it makes concern sense to take diverseness earnestly. The demographics of working population has changed in last two decennaries with more mature work force staying in the workplace and at the same clip more female employees are seen in higher places while holding fluctuation in their cultural backgrounds. Therefore, it seems good for organisations to engage diverse work force to run into the demands of client outlooks. Organizations that are flexible and antiphonal to a demanding market place require the service of multi-skilled and adaptable work force. One clear “ competitory advantage ” for organisations holding diverse work force is that it provides an environment that values differences among employees and encourages them for different ways of thought and behaving during work to to the full lend to organisational purposes and aims. Employers supplying such an environment acquire the support of their employees and develop a positive public image. It must be understood that each member of diverse work force holds his differences and similarities ; hence, valuing and pull offing diverseness is about acknowledging the alone part each employee can do to the organisation. It is about making an environment in which everyone feels valued, welcomed, and able to do an of import part toward the attainment of corporate aims. Additionally, companies confronting challenges in viing planetary market place for market portion can utilize diverseness as “ competitory advantage ” in a multicultural environment with a diverse pool of talented and experient persons who can convey invention and creativeness to the organisation. ( U. Yozgat and F. Oben, 2009 ) studied the effects of leading manner on creativeness which leads to the competitory advantage in organisations. This paper is to place the organisational attitude towards the work force diverseness globally and comparing to Pakistan based organisations. The consequences showed the great concern of US and UK based organisations towards diverseness direction and no concern in Pakistan based organisations.

Literature Review

In this subdivision, literature of work force diverseness is reviewed in correspondence with competitory advantage. Further, different types of leading are discussed from the literature and so the function of leading to accomplish competitory advantage is reviewed.

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Workforce Diversity

Diversity is non merely associated to limited properties that can be observed but besides to those unseeable features such as differences in educational background, creativeness, apprehension, larning manner, and problem-solving ability ( Nafukho et al. , 2011 ) .So organisational public presentations and procedures can be influenced by an person or a group stand foring different classs of diverseness within a workplace. ( van Knippenberg and Schippers, 2007 ) . Diversity is defined as “ any dimension that can be used to distinguish groups and people from one another ” ( Giovannini, 2004, p. 22 ) . Hence, diverseness affects the organisations ‘ effectivity and public presentation in footings of competitory advantage. ( Joshi and Roh, 2009 ; Klein et al. , 2011 ) . This presumes that public presentation has a relation with organisation ‘s ability to accomplish ends with regard to its mission or vision ( Devine and Philips, 2001 ) . In other words, public presentation is deemed as an result which is a consequence of some purposeful activity to accomplish competitory advantage as mentioned in mission or vision statements of an organisation ( Swanson and Holton, 2009 ) . As the organisation strives to accomplish its ends or aims, struggle may originate within the diverse groups to get by up the challenges of differences among them which maintain them from accomplishing organisational public presentation ( Ostergaard et al. , 2011 ) . Since, Human Resource Department ( HRD ) trades chiefly with public presentation of persons, groups and organisation at big to accomplish competitory advantage, so diverse work force demands the attending of HRD bookmans and practicians on the issues that arise in organisation basing on the differences. It can be observed in modern tendencies for companies to utilize diverse work force for finishing particular undertakings which help accomplish competitory advantage ( Garrison et al. , 2010 ) and there is ever possible for the happening of struggle among such diverse groups which can derail the organisation from accomplishing effectivity. Hence, it becomes the duty of HRD to turn to such struggles in progress and utilize the cognition of how to construct the high acting and productive squads of diverse work force who can to the overall competitory advantage of organisation ( Klein et al. , 2011 ) .

In the past two decennaries several academic research workers have conducted research on assorted issues associating diverseness. Richard ( 2000 ) examined the impact of diverseness on organisation and its productiveness while Jackson ( 1993 ) found the positive relationship between diverseness and creativeness. Diversity research has besides addressed the factors involved in absorbing new employees into an organisation ‘s civilization ( Berry and Sam, 1997 ) . However, some argue that by its cardinal nature, absorbing new employees to obtain greater tantrum between the individual and organisation is achieved at the disbursal of diverseness ( Powell, 1998 ) . In other research, Tsui et Al. ( 1992 ) showed that race and gender has negative relationship with diverseness as compared to age. Other surveies have besides systematically found that discernible properties have negative effects on results such as designation with the group and occupation satisfaction at both the person and group degree of analysis ( Milliken and Martins, 1996 ) . Further, Milliken and Martins ( 1996 ) supported the statement of Tsui et Al. ( 1992 ) that racial and gender diverseness can hold negative influence on person and squad results in some instances irrespective of age. As an illustration, they referred to those groups members who differ from the larger group tend to demo less commitment, more turnover and absenteeism while at the same clip this consequences in extra costs, such as, group coordination cost, communicating cost and preparation and development cost. So, harmonizing to them, diverseness consequences in addition in coordination and control costs.

Workforce Diversity and Competitive Advantage:

Most companies find diverseness as a manner to derive “ competitory advantage ” by increasing concern competence, bettering net income, constructing the effectivity to vie in planetary markets, bettering concern public presentation, accomplishing higher employee satisfaction, heightening corporate administration, pulling diverse endowments and accomplishments and retaining the work force that maintains the client base ( McCuiston et al. , 2004 ) . Furthermore, culturally diverse work force brings benefits to concern economic system ( Ferley et al. , 2003 ) and leads to better public presentation of the concern ( Richard, 2000 ) . Harmonizing to Adler ( 1997 ) , a company with a diverse work force has greater opportunities for constructing an advanced working environment. This statement is attractively expressed in the words of White ( 1999 ) , who states that creativeness thrives on diverseness. These benefits can be derived from the proper execution of diversity-promoting policies ( Jamrog, 2002 ) . Many houses today seem to be progressively encompassing racial, cultural and gender work force balance, non for legal or ethical duties, but as a affair of taking a progressive position on economic opportunism ( Coil and Rice, 1993 ) .

It has been recognized late that increasing diverse work force has presented both chances and challenges for organisations which are endeavoring for efficiency, innovativeness and planetary “ competitory advantage ” ( Barak, 1999 ) . As the planetary markets are acquiring more complex, use of organisation ‘s cognition, accomplishments and abilities is acquiring even more important in this quickly increasing competition where organisations want to be more originative and advanced ( Ng and Tung, 1998 ) . In order to pull off the turning diverseness of the work force, organisations need to implement such systems and patterns so that the possible advantages of diverseness are maximized and the possible disadvantages are minimized ( Cox, 1994 ) . Directors in the organisations prove to be uneffective when covering with a diverse work force and linguistic communication is reported as chief hurdle when communicating fails between the different subjects in employment Dadfar and Gustavsson ( 1992 ) . However this negativeness of the diverse work force can be handled successfully by taking effectual and rational determinations Watson et Al. ( 1993 ) .

Those who decide to hold diverseness as a beginning of creativeness and invention, this proves to be much disputing to pull off a diversified work force. Many concerns experience failure when effort to use the diverseness in its full image to see its consequences on operations of the organisations ( Farrer, 2004 ) , as it demands the much energy and attending to pull off the diverseness. Effective diverseness direction have to get by with many of challenges like work moralss, authorization, work dealingss, civilization and ethical criterions ( McCuiston et al. , 2004 ) .


In the literature, many writers which have involvement in analyzing subject of leading, offered definitions of leading and defined this construct as a complex procedure by which a individual influences others, using his/her leading attributes like belief, values, moralss, character, cognition and accomplishments, to carry through a mission, undertaking or nonsubjective and directs the organisation in a manner that makes it more cohesive and coherent ( Greenberg & A ; Baron, 2000 ) . In add-on to, it is seen that there are differences in connexion with the types of leading. Burns ( 1978 ) was one of the number ones to place two types of leading manners, transformational and transactional.

Leadership remained the individual most of import issue in one-year studies for placing top direction issues during all times ( HRI, 2002a ) . To pull off a diverse work force, organisations need airy leaders but handiness of them is scarce. Harmonizing to the survey by Diversity Inc. ( 2002 ) , it is forecasted that many top direction of several taking companies will lose one in five top directors due to retirement. Let entirely, US companies will lose 40 per centum or more of their top executives till 2015 ( Wellins and Byham, 2001 ) . One solution offered to this scarceness is to develop leaders at every degree and in every map in an organisation ( Hesselbein, 2002 ) . For this solution, Kappa Omicron Nu Honor Society ( 2002 ) advised the most effectual leading constituents to pull off diverseness, which are:

Sensitivity and consciousness about diverse work force.

Resources to beef up and better the quality of diverse persons

Inter-communication accomplishments to work out common differences

Schemes to maximise the effectivity of diverse work force.

The end should be to develop cross-cultural leaders and bring forth a new harvest of multicultural professionals ( Yukl, 2002 ) . These leaders are provided with the needed resources and governments to pull off work force. The focal point should be to heighten their hearing, acquisition, networking, communicating, and experimenting accomplishments to pull off a diverse work force ( Melymuka, 2001 ) . Finally an effectual scheme must be developed to include diverseness at all degrees of direction, and there must be commitment to diverseness at senior degrees where it is strategically more of import ( Conklin, 2001 ) . This scheme must be apparent in organisation ‘s mission and vision statement and should affect a systemic, results-oriented, business-based attack ( Fitzpatrick, 1997 ) . Yet companies do non seek diverseness unless this concern competence consequences in increased net income and prosodies that substantiate the necessity to spread out the accent on diverseness ( Diversity Inc. , 2002 ) . Incontrovertible mensurable benefits can be derived from decently implemented policies to advance diverseness ( Jamrog, 2002 ) . The most apparent mensurable benefits are improved bottom line, “ competitory advantage ” , superior concern public presentation, employee satisfaction and trueness, strengthened relationship with multicultural communities, and pulling the best and the brightest campaigners. Competitive advantage defined in diverseness as, “ Recruiting and retaining people of diverse backgrounds who can portion a common set of values. . .and attack to concern – is a precedence for today ‘s competitory organisation ” ( McCormack, 2002, p. 1 ) .

Jamrog ( 2002 ) suggested three-point attack to heighten effectivity of leading to pull off diverse work force: premiss, guidelines and actions. There are three premises that leaders need to value diverseness: ( 1 ) One size does n’t suit all – leaders need to utilize different attacks for work outing jobs and developing workers as all state of affairss and persons are non the same, ( 2 ) Not everyone can be a leader – organisational should concentrate merely on persons who have the ingredients of going a good leader, and ( 3 ) Leaderships can be at any degree or map – anyone who can animate, influence and usher others in the organisation is a leader regardless of place. The five guidelines that leaders need to value diverseness are: ( 1 ) Communicate, communicate, and pass on – portion freely your thoughts, suggestions, sentiments ; listen to thoughts of others with involvement, ( 2 ) Build contact into your day-to-day actions and responsibilities – Plan your actions, meetings, and responsibilities so as to maximise contact with multiple people in the organisation. ( 3 ) Manage and lead by walking around – Be outside the office often and interact informally with others of different degrees, maps, backgrounds and experience, ( 4 ) Champion diverseness – Bring in the part of everyone to increase committedness, invention and creativeness, and ( 5 ) Sponsor diverseness – Defend the determinations, actions and interactions while back uping everyone in the organisation. Last, the five actions that leaders need to value diverseness are: ( 1 ) Appraisal of leading potency within the organisations, ( 2 ) Provision of preparation and tools, ( 3 ) Inclusion of diverseness at all degrees, ( 4 ) measurement and rewarding attempts, and ( 5 ) promoting the organisation to be patient. ( Daniel Goleman, 2000 ) explored different leading manners to impact the organisations in successful mode. ( Malini Janakiraman,2011 ) identified the concern of the concern leaders in handling the diverseness direction as a beginning of achieving and prolonging the competitory advantage. Organizational vision and mission is strongly related with leading manners ( John J. & A ; Sandi L. , 2007 ) , which includes the mentioning of competitory advantage explicitly. ( John A. Pearce II Fred David, 1987 ) identified the competitory advantage as a major constituent in the organisation ‘s mission statement.

Conceptual Model:

The literature reviewed therefore far indicates that there is a positive relationship between work force diverseness and the benefits derived by organisations in the signifier of competitory advantage ( McCuiston et al. , 2004 ) . Mission statement should advert the competitory advantages ( John A. Pearce II, Fred David, 1987 ) so that the ends and aims can be aligned to achieve or prolong the competitory advantage of the organisation. Organizations utilizing the diverseness direction as a competitory advantage or footing for so the organisation are to advert the diverseness in their mission statement. This survey goes around happening the different state based organisations covering the diverseness direction as a competitory advantage and the states non taking it as strength to capitalise for competitory advantages.

Data Collection:

The information in this paper is based on top 100 companies of Forbes Global 2000 ( 2012 ) . The mission, vision and scheme statements of these 100 companies are studied carefully. The website links of these statements are provided at the terminal of this paper in Appendix I. During the survey, two of these companies are omitted from the list because both were in Lusitanian linguistic communication and farther two are added to finish the list. Furthermore, 50 companies of Pakistan from KSE-100 Index ( 2012 ) are besides studied. The website links of the mission, vision and scheme statements reviewed are besides provided in Appendix II of this paper. During the informations aggregation, it was made certain that a company from every sector with gross over Rs.1 billion is included. Those transnational companies that are working in Pakistan and listed at KSE-100 index were omitted to avoid dual entry. The day of the month is shown in following tabular array.



No Diversity
















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The standard set to analyze these statements is to happen the exact word “ diverseness ” in the mission, vision or scheme statements of these companies. The information collected is shown in following graph. The American part consisting North and West Continents seems to hold more consciousness about work force diverseness, as shown in the tabular array. While there is no surprise that merely one company ( KAPCO ) in Pakistan references diverseness in its vision statement.

Findingss and Decision:

The consequences depict that those companies which are transnational require a clear vision and scheme about work force diverseness. North and South American states including USA, Canada, Brazil, and Chile have more consciousness of work force diverseness while European states are besides inclined towards it. Findingss besides indicate that Asiatic companies are non every bit diverse as remainder of planetary participants because most of these are located in China, Japan and South Korea. Furthermore, companies ‘ leading plays a considerable function in inclusion of diverseness because normally the top brass establishes the vision, mission and scheme of the company. So, the function of top leading may non be ignored here.

This paper began with the reappraisal of diverseness and its function in accomplishing competitory advantage. Further traveling through the literature it linked to leading because to include diverseness for accomplishing competitory advantage, managerial leading demands to hold better vision. This grounds in literature was besides shown that leading moderates the affect of diverseness to accomplish competitory advantage. The demands of going a airy leader are further discussed which can act upon the mission, vision and scheme of the organisation.

The restriction in this survey was the time-frame due to which the exact leading manner could non be established. In future research, a leading study can be conducted to find the manner of leading which can be good for diverseness inclusion.


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