Workforce Diversity And Competitive Advantage Commerce Essay

Workforce Diversity And Competitive Advantage Commerce renderThe purpose of this paper is to interpret the trend of leading mien all over the relationship between cheeks custody multifariousness and its agonistic profit with bearingary station and slew statements as intervening vari open which shows the head ache of organisation leadinghip towards the salmagundi cookment. intimately governing bodys argon adopting miscellany into their policies and procedures to embrace its benefits and there is a growing recognition that it makes production line sense to take conversion seriously. The demographics of works population has changed in last two decades with untold mature men remaining in the workplace and at the same time more female employees ar seen in higher(prenominal) positions while having variation in their cultural backgrounds. Therefore, it seems beneficial for organizations to hire versatile custody to meet the demands of guest expectations. Org anizations that atomic number 18 flexible and responsive to a demanding marketplace require the portion of multi-skilled and adaptable hands. One clear emulous utility for organizations having several(a) workforce is that it provides an environment that values differences among employees and encourages them for different ways of thinking and behaving during work to fully contri b arelye to organisational aims and objectives. Employers providing much(prenominal) an environment get the support of their employees and take a positive public image. It must be understood that each(prenominal) member of respective(a) workforce holds his differences and similarities hence, valuing and managing mixture is about recognizing the unique section each employee ass make to the organization. It is about creating an environment in which everyone feels valued, welcomed, and able to make an important contribution toward the attainment of corporate objectives. Additionally, companies fa cing challenges in competing global marketplace for market parcel out finishnister use diversity as free-enterprise(a) returns in a multicultural environment with a divers(a) pool of talented and experienced individuals who can sustain innovation and creativity to the organization. (U. Yozgat and F. Oben, 2009) studied the effects of leadership style on creativity which leads to the competitive utility in organizations. This paper is to happen upon the organizational attitude towards the workforce diversity globally and comparing to Pakistan based organizations. The results showed the giant concern of US and UK based organizations towards diversity wariness and no concern in Pakistan based organizations.Literature ReviewIn this section, literature of workforce diversity is reviewed in correspondence with competitive advantage. Further, different types of leadership are discussed from the literature and then the subprogram of leadership to achieve competitive advantage i s reviewed.Workforce DiversityDiversity is not only associated to limited attributes that can be observed but also to those invisible characteristics such as differences in educational background, creativity, understanding, learning style, and problem-solving ability (Nafukho et al., 2011).So organizational operations and processes can be influenced by an individual or a radical representing different categories of diversity within a workplace. (van Knippenberg and Schippers, 2007). Diversity is defined as any holding that can be used to differentiate themes and people from one or so other (Giovannini, 2004, p. 22). Hence, diversity affects the organizations in force(p)ness and performance in terms of competitive advantage. (Joshi and Roh, 2009 Klein et al., 2011). This presumes that performance has a relation with organizations ability to achieve goals with respect to its mission or stack (Devine and Philips, 2001). In other talking to, performance is deemed as an outco me which is a result of some purposeful activity to achieve competitive advantage as mentioned in mission or raft statements of an organization (Swanson and Holton, 2009). As the organization strives to achieve its goals or objectives, conflict whitethorn arise within the diverse groups to cope up the challenges of differences among them which keep them from achieving organizational performance (stergaard et al., 2011). Since, piece Re fountain Department (HRD) deals primarily with performance of individuals, groups and organization at large to achieve competitive advantage, so diverse workforce demands the attention of HRD scholars and practitioners on the discerns that arise in organization basing on the differences. It can be observed in modern trends for companies to use diverse workforce for completing special(prenominal) tasks which help achieve competitive advantage (Garrison et al., 2010) and there is always latent for the occurrence of conflict among such diverse group s which can derail the organization from achieving efficaciousness. Hence, it becomes the responsibility of HRD to address such conflicts in advance and use the companionship of how to build the high performing and productive teams of diverse workforce who can to the overall competitive advantage of organization (Klein et al., 2011).In the past two decades several academic researchers commit conducted research on various issues relating diversity. Richard (2000) examined the match of diversity on organization and its productivity while Jackson (1993) assemble the positive relationship between diversity and creativity. Diversity research has also addressed the factors involved in assimilating new employees into an organizations culture (Berry and Sam, 1997). However, some argue that by its fundamental nature, assimilating new employees to obtain great fit between the person and organization is achieved at the expense of diversity (Powell, 1998). In other research, Tsui et al. ( 1992) showed that race and gender has negative relationship with diversity as compared to age. Other studies have also consistently found that patent attributes have negative effects on outcomes such as appellative with the group and job satisfaction at both the individual and group level of analysis (Milliken and Martins, 1996). Further, Milliken and Martins (1996) supported the argument of Tsui et al. (1992) that racial and gender diversity can have negative influence on individual and team outcomes in some cases regardless of age. As an example, they referred to those groups members who differ from the larger group tend to show less commitment, more turnover and absenteeism while at the same time this results in accessoryal costs, such as, group coordination cost, communicating cost and training and educatement cost. So, according to them, diversity results in enlarge in coordination and control costs.Workforce Diversity and Competitive AdvantageMost companies find diversity as a way to gain competitive advantage by increasing disdain competency, improving net income, twist the effectiveness to compete in global markets, improving business performance, achieving higher employee satisfaction, enhancing corporate governance, attracting diverse talents and skills and retaining the workforce that maintains the customer base (McCuiston et al., 2004). Moreover, culturally diverse workforce brings benefits to business economy (Ferley et al., 2003) and leads to better performance of the business (Richard, 2000). consort to Adler (1997), a company with a diverse workforce has greater chances for edifice an innovative working environment. This statement is beautifully expressed in the words of White (1999), who states that creativity thrives on diversity. These benefits can be derived from the proper carrying out of diversity-promoting policies (Jamrog, 2002). Many firms today seem to be increasingly embracing racial, pagan and gender workforce balance, no t for legal or good obligations, but as a matter of taking a progressive position on economic self-interest (Coil and Rice, 1993).It has been recognized recently that increasing diverse workforce has presented both opportunities and challenges for organizations which are striving for efficiency, innovativeness and global competitive advantage (Barak, 1999). As the global markets are getting more analyzable, utilization of organizations noesis, skills and abilities is getting even more crucial in this rapidly increasing controversy where organizations want to be more creative and innovative (Ng and Tung, 1998). In rig to misrepresent the growing diversity of the work force, organizations indispensableness to implement such systems and practices so that the potential advantages of diversity are increased and the potential disadvantages are minimise (Cox, 1994). Managers in the organizations prove to be ineffective when dealing with a diverse workforce and language is report ed as main hurdle when confabulation fails between the different nationals in employment Dadfar and Gustavsson (1992). However this negativity of the diverse workforce can be handled successfully by taking effective and rational decisions Watson et al. (1993).Those who decide to have diversity as a source of creativity and innovation, this proves to be much challenging to manage a alter workforce. Many businesses experience failure when attempt to employ the diversity in its full picture to see its results on operations of the organizations (Farrer, 2004), as it demands the much energy and attention to manage the diversity. Effective diversity trouble have to cope with many of challenges like work ethics, authority, work relations, culture and ethical standards (McCuiston et al., 2004).LeadershipIn the literature, many authors which have interest in analyse billic of leadership, offered definitions of leadership and defined this concept as a complex process by which a person in fluences others, applying his/her leadership attributes like belief, values, ethics, character, knowledge and skills, to accomplish a mission, task or objective and directs the organization in a way that makes it more cohesive and coherent (Greenberg Baron, 2000). In addition to, it is seen that there are differences in connection with the types of leadership. Burns (1978) was one of the firsts to identify two types of leadership styles, transformational and transactional.Leadership remained the single close to important issue in annual check outs for identifying top management issues during all times (HRI, 2002a). To manage a diverse workforce, organizations need tedious leaders but accessibility of them is scarce. According to the study by Diversity Inc. (2002), it is forecasted that many top management of several leading companies will lose one in fin top managers due to retirement. Let alone, US companies will lose 40 percent or more of their top executives till 2015 (Well ins and Byham, 2001). One firmness of purpose offered to this scarcity is to develop leaders at every level and in every function in an organization (Hesselbein, 2002). For this solution, Kappa Omicron Nu Honor Society (2002) sure the most effective leadership components to manage diversity, which areSensitivity and awareness about diverse workforce.Resources to strengthen and improve the quality of diverse individualsInter-communication skills to crystallize mutual differencesStrategies to maximize the effectiveness of diverse workforce.The goal should be to develop cross-cultural leaders and generate a new crop of multicultural professionals (Yukl, 2002). These leaders are provided with the required resources and authorities to manage workforce. The focus should be to enhance their harking, learning, networking, communication, and experimenting skills to manage a diverse workforce (Melymuka, 2001). Finally an effective dodge must be developed to include diversity at all level s of management, and there must be commitment to diversity at senior levels where it is strategically more important (Conklin, 2001). This strategy must be transparent in organizations mission and vision statement and should involve a systemic, results-oriented, business-based approach (Fitzpatrick, 1997). Yet companies do not seek diversity unless this business competency results in increased profit and metrics that substantiate the exigency to expand the emphasis on diversity (Diversity Inc., 2002). Irrefutable measurable benefits can be derived from properly implemented policies to promote diversity (Jamrog, 2002). The most evident measurable benefits are improved bottom line, competitive advantage, superior business performance, employee satisfaction and loyalty, strengthened relationship with multicultural communities, and attracting the best and the brightest candidates. Competitive advantage defined in diversity as, Recruiting and retaining people of diverse backgrounds who can share a common set of values. . .and approach to business is a anteriority for todays competitive organization (McCormack, 2002, p. 1).Jamrog (2002) suggested three-point approach to enhance effectiveness of leadership to manage diverse workforce premise, guidelines and actions. There are three premises that leaders need to value diversity (1) One size doesnt fit all leaders need to use different approaches for solving problems and developing workers as all situations and individuals are not the same, (2) Not everyone can be a leader organizational should focus only on individuals who have the ingredients of turn a good leader, and (3) Leaders can be at any level or function anyone who can inspire, influence and guide others in the organization is a leader regardless of position. The five guidelines that leaders need to value diversity are (1) Communicate, communicate, and communicate share freely your ideas, suggestions, opinions constituteen to ideas of others with in terest, (2) Build contact into your daily actions and duties Plan your actions, meetings, and duties so as to maximize contact with multiple people in the organization. (3) Manage and lead by walking about Be outside the office frequently and interact informally with others of different levels, functions, backgrounds and experience, (4) Champion diversity Bring in the contribution of everyone to increase commitment, innovation and creativity, and (5) Sponsor diversity Defend the decisions, actions and interactions while financial support everyone in the organization. Lastly, the five actions that leaders need to value diversity are (1) Assessment of leadership potential within the organizations, (2) Provision of training and tools, (3) comprehension of diversity at all levels, (4) measuring and rewarding efforts, and (5) encouraging the organization to be patient. (Daniel Goleman, 2000) explored different leadership styles to affect the organizations in successful manner. (Ma lini Janakiraman,2011) set the concern of the business leaders in treating the diversity management as a source of attaining and sustaining the competitive advantage. Organizational vision and mission is strongly related with leadership styles (John J. Sandi L., 2007), which includes the mentioning of competitive advantage explicitly. (John A. Pearce II Fred David, 1987) identified the competitive advantage as a major component in the organizations mission statement.Conceptual FrameworkThe literature reviewed thus far indicates that there is a positive relationship between workforce diversity and the benefits derived by organizations in the form of competitive advantage (McCuiston et al., 2004). Mission statement should mention the competitive advantages ( John A. Pearce II, Fred David, 1987) so that the goals and objectives can be aligned to attain or sustain the competitive advantage of the organization. Organizations using the diversity management as a competitive advantage or basis for then the organization are to mention the diversity in their mission statement. This study goes around finding the different country based organizations dealing the diversity management as a competitive advantage and the countries not taking it as strength to capitalize for competitive advantages.Data CollectionThe entropy in this paper is based on top 100 companies of Forbes Global 2000 (2012). The mission, vision and strategy statements of these 100 companies are studied carefully. The website links of these statements are provided at the end of this paper in Appendix I. During the study, two of these companies are omitted from the list because both were in Portuguese language and further two are added to complete the list. Moreover, 50 companies of Pakistan from KSE-100 Index (2012) are also studied. The website links of the mission, vision and strategy statements reviewed are also provided in Appendix II of this paper. During the data collection, it was made sure that a company from every sector with gross over Rs.1 billion is included. Those multinational companies that are working in Pakistan and listed at KSE-100 index were omitted to avoid double entry. The date is shown in following table. officeDiversityNo DiversityAmerica308 europium2512Asia1015Pakistan149 boilers suit6684Source http//www.forbes.com/global2000/list/The criterion set to study these statements is to find the exact word diversity in the mission, vision or strategy statements of these companies. The data collected is shown in following graph. The American arena comprising North and West Continents seems to have more awareness about workforce diversity, as shown in the table. While there is no surprise that only one company (KAPCO) in Pakistan mentions diversity in its vision statement.Findings and expiryThe results depict that those companies which are multinational require a clear vision and strategy about workforce diversity. North and South American countries including US A, Canada, Brazil, and cayenne pepper have more awareness of workforce diversity while European countries are also inclined towards it. Findings also indicate that Asian companies are not as diverse as rest of global players because most of these are located in China, Japan and South Korea. Moreover, companies leadership plays a considerable role in inclusion of diversity because usually the top brass establishes the vision, mission and strategy of the company. So, the role of top leadership may not be ignored here.This paper began with the review of diversity and its role in achieving competitive advantage. Further going through the literature it joined to leadership because to include diversity for achieving competitive advantage, managerial leadership needfully to have better vision. This evidence in literature was also shown that leadership moderates the affect of diversity to achieve competitive advantage. The requirements of becoming a visionary leader are further discussed which can influence the mission, vision and strategy of the organization.The limitation in this study was the time-frame due to which the exact leadership style could not be established. In future research, a leadership survey can be conducted to determine the style of leadership which can be beneficial for diversity inclusion.