Diversity Management: A New Organizational Paradigm

Author(s): Jacqueline A. Gilbert, Bette Ann Stead and John M. Ivancevich

Source: Journal of Business Ethics, Vol. 21, No. 1 (Aug., 1999), pp. 61-76
Published by: Springer
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Diversity Management:
Jacqueline A. Gilbert
A New Organizational Bette Ann Stead

Paradigm John M. Ivancevich

ABSTRACT. Currently, an increasing number of To manage diversity effectively,

a cor

organizations
are
attempting to enhance inclusiveness poration must value
diversity; it must
of under represented individuals through proactive have diversity, and it must change the
efforts to manage their diversity. In this article, we organization to accommodate diversity
define diversity management against the backdrop of and make it an integral part of the
its affirmative action. Next, selected
predecessor, organization.

examples of organizations that have experienced Sessa (1992), p. 37,

specific positive bottom line results from diversity Diversity in theWorkplace
management are discussed. The
strategies present

paper also provides a conceptual model to examine

antecedents and consequences of effective diversity In the past few years, a seemingly endless stream

management. Additional research areas identified from of academic literature and advertisements, as well
the model and literature review result in a number as
popular books and videotapes which tout the
of research propositions intended to enhance the benefits of diversity1 in the workplace have filled
exploration and understanding of diversity manage bookshelves and the airwaves. Increased diver
ment.
sity has been
suggested to enhance problem
solving capabilities of a group, to provide better
service to a diverse customer base, and to boost

organizational creativity. To harness all of these

activities into a cogent
plan, it has further been
suggested that organizations engage in 'diversity
management.' management is a volun
Diversity

tary organizational program designed to create

inclusion of all individuals into informal
Dr. Jackie Gilbert is Assistant Professor at Middle greater
Tennessee State University. She conducts research in the social networks and formal
company programs.
areas
of diversity management, cross-cultural relations, Voluntary organizational diversity initiatives
and genetic psychology. may be particularly important in an era in which
Bette Ann Stead is Professor ofMarketing and Director of the of affirmative action is changing.
concept
the Institute for Business Ethics and Public Issues at a number of as well as the
Currently states,
the University ofHouston, and co-chair of the Greater are the future fate of affirma
courts, debating
Houston Business Ethics Roundtable. Her articles have
tive action. The end result may be the disman
appeared in such journals as the Journal of Business of which are as
tling programs perceived
Ethics, Business Horizons, Sex Roles, Academy of
providing advantage for
any specific group.
Management Journal, and the Journal of Nonprofit
Consequently, it may be necessary for organiza
and Public Sector.
tions desiring a diverse workforce to cultivate
Dr. John M. Ivancevich holds theHugh Roy and Lillie
Cranz Cullen in their own unique methods for addressing diver
Distinguished Professorship
Organizational Behavior. His many research interests sity. While diversity management is popularized
include goal setting, withdrawal, in the literature as a necessary for
and training. Dr. program
Ivancevich is an Academy ofManagement Fellow. organizations desiring to remain competitive, the

Journal of Business Ethics 21: 61-76, 1999.

W ? 1999 Kluwer Academic Publishers. Printed in theNetherlands.

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 62
JA. Gilbert et al.

asso
concept of diversity management remains examples of the word 'quota' being used in
nebulous. ciation with affirmative action can be found
The purpose of this paper is to further delin (Smith, 1978; 'The New Bias,' 1981; Whitmire,
eate and refine the diversity management 1984; Yang et al., 1995). The Carnegie Council
concept. In doing so, we will outline ways in on Policy Studies in Higher Education distin
which management is different from between 'quotas' and as follows:
diversity guished 'goals'
affirmative action. We will also explain diversity
-
in terms of an share, a result, a
management concepts currently Quota assigned proportional
theories to promote a fixed division of numbers, must remit, precise (no
accepted management
variation below or
better understanding of the complexities inherent above), rigid, permanent.

in diversity management implementation and -

Goal a purpose, to meet, to varia
try subject
organizational cultural change. Lastly, we suggest
tion depending on circumstances, subject to change
a model or framework for examining
conceptual over time, can be abandoned when no
longer
critical antecedents and consequences of diver
needed (Smith, 1978).
sity management. Previous researchers have

provided models of diversity and related variables

Goals, unlike quotas, do not require hiring
(Cox and Blake, and Smolinski,
1991; Cox 1994; or hiring
workers when there are no vacancies,
Barry and Batemen, 1996; Milliken and Martins,
unqualified workers (DeWitt, 1973).
1996; Triandis et al., 1994). The model presented Even though the intent of affirmative action is
in this paper attempts to provide an integrative
to ensure equal employment opportunity for all,
view of diversity management by identifying
negative perceptions, combined with
poor
antecedents and consequences of an
suggested at the organization level, have
implementation
organization-wide diversity program. A research
resulted in a social policy which is considered
based on gaps identified from the model
agenda ineffective and unjust by some. Specific negative
and review is offered as a guide to further study
perceptions of affirmative action are illustrated by
in this important area. Pertinent literature, as well the following:
as examples from practitioners, will be used
the manuscript to illustrate relevant Affirmative action has created a
throughout spoils
points. system in which people who actually have
never discrimination are
experienced
reaping benefits at the expense of white

Perceptions of affirmative action males (Robinson, 1992).

Lower hiring and performance standards
Title VII of the 1964 Civil Rights Act was an have been applied to minorities (Wynter,
important impetus that gave minority2 individ 1994).
uals the hope of equal employment opportunity. Compensatory awards administered under
Title VII was articulated as a mission statement. affirmative action stigmatize beneficiaries
There was no specific strategy until April 2, through lowering of merit based admis
1972, when Executive Order 11246, which sions/hiring criterion (Cohen, 1996).
outlined affirmative action, was signed by Minorities have achieved their professional
President Lyndon B. Johnson. The goals and goals and no longer need affirmative action.
timetables for affirmative action were contained According to the Small Business
in a later executive order signed by President Association, in 1992 minority owned firms
Richard M. Nixon. (which make up 9% of the business popu
Although affirmative action still receives
strong lation) only obtained 4.1% of federal

support from many, inaccurate perceptions of government contracts ('Minority Set-asides,'

affirmative action stem from incorrect use of the 1995). Although women are not a numer
term 'quota,' and the omission of the word ical minority in the population, they have
Throughout the 70's, 80's, and 90's, retained the minority label because they
'qualified.'

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 Diversity Management 63

comprise a small representation in the power In addition, recent studies have found that

hierarchy of organizations (See Table I). those hired under the auspices of affirmative
action are perceived as less competent than
The above
perceptions have contributed to affir majority workers (Heilman et al., 1992) and less
mative action being construed by some members qualified for the position they hold (Summers,
of both majority and minority groups as a flawed 1991). Negative reactions toward affirmative
initiative. action are apparent from several reverse discrim

TABLE I
Why women are considered a minority

Management opportunities
In 1996 Price Waterhouse appointed its first female senior partner. Only about 6.6% of Price Waterhouse's 957
partners are women. Coopers & Lybrand has 7.5% and KPMG Peat Marwick, 8.1%. Women account for
13% of the partners in the 900 biggest law firms (Berton, 1996).

Only 14% of sales managers are women (Shellenberger, 1995).

The Glass Ceiling Commission's research showed that 95% of senior-level managers in the largest U.S. organi
zations are men ('An Unbreakable Glass,' 1995).
The number of women serving on corporate boards is slightly under 7% of total membership of the Top 1000
organizations ('Survey Shows,' 1995).
At the current pace, female managers will not achieve advancement parity with male managers for another 20
to 30 years (Sharpe, 1994).

Women as a percent of officials and managers are less than 10% at the following organizations: Nucor 2.6%,
Ford Motor 4.4%, Halliburton 6.3%, Loews 17.4%, Conrail 4.5%, General Electric 8.5%, Archer-Daniel
Midland 6.2%, Raytheon Company 9.5%, Ohio Edison 3.3% ('Women Make,' 1994).

Salaries

The International Labor Organization estimates that at the present rate of progress it will take 475 years for
parity to be achieved between men and women in top level managerial and administrative positions ("Women
paid," 1995).
Women who earned just 60 cents for every dollar men made in 1980 were up to 70.6 cents a decade later
(Reitman, 1994).

Only 400 000 women in the U.S. earn more than $75 000 a year, about one-eighth of the number of men
making that much (Salwen, 1994).
Women average $17 924 and men $31 346 in sales. Women earning over $50 000 in 1992 numbered 141 000
with men numbering 801 000 ('The Gender Gap,' 1994).

Female mid-level hospital managers earned only 68% asmuch as men in similar positions. Women selling secu
rities made 55% as much as their male counterparts ('Women Beware,' 1996).

Other opportunities
Of five prominent executive education programs, women represented between 2%-9% of the participants
(Banerjee, 1993).

Only 3% (1986) and 6% (1994) of the managers working overseas from U.S. and Canadian organizations were
women ('Female Managers,' 1994).
Less than 3% of federal government contracts go to women (Jenkins, 1996).

Only about 15% of roughly 101 500 stock brokers nationwide are women (Siconolfi and Jacobs, 1996).

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 64
JA. Gilbert et al.

? vs. a competitive
ination suits Wygnant Jackson Board of diversity advantage will formulate
Education (1986), U.S. v. Paradise (1987), their own programs to capitalize on an increas

Johnson v.
Santa Clara County (1987), ingly heterogenous workforce. efforts
Voluntary
Firefighters v. City of Cleveland (1986), and to deal with related issues have been
diversity
Adarand Constructors, Inc. v. Pena (1995). termed diversity management (Jackson, 1992;
Although affirmative action was designed to Cox, 1991; Thomas, 1991).
redress past discrimination and injustices perpet
uated by society, inaccurate perceptions persist,
in part because affirmative action outcomes are Diversity management compared with affirmative
presumed to violate basic tenets of social justice action
(Nacoste, 1987, 1989).
Possible reasons for negative reactions stem affirmative action and its consequences
Although
from the belief that affirmative action hires are are in some cases the suc
negatively portrayed,
recruited on the basis of irrelevant cessor of affirmative action, manage
workplace diversity
characteristics (Heilman et al., 1987). As such, ment, has been suggested a crucial element in
affirmative action is regarded by some as a
organizational survival. Cox and Blake (1991)
'handout' program which presumably does not argue that effectively managed workplace diver
take into account the
capabilities of targeted sity can create a competitive advantage in the
groups. This phenomenon is described in the areas of cost, resource acquisition, marketing,
affirmative action literature as the 'discounting' creativity, and organizational
problem-solving,
principle (Heilman et al., 1992) in which flexibility. This argument is reiterated by Cox and

phenotype is the dominant screening criterion. Smolinski (1994), who further suggest that

Surprisingly, empirical studies have suggested managing diversity may result in higher organi
that some of the most staunch resistance to zational productivity, and ultimately in higher
affirmative action policies has come not from In terms of individuals, the diversity lit
profit.
dominant workplace groups, but rather from erature states that effectively managed diversity
minority groups whom the were can lead to decreases in frustration and turnover
policies
intended to benefit. Empirical research has shown for women and of color (Cox and
people
that women who perceived that they were hired Smolinski, 1994; Cox and Blake, 1991). At the
as a result of affirmative action mandates suffered group level, effectively managed diversity has the
greater stress, experienced less job satisfaction, potential to lead to increased
problem solving
and selected less demanding workassignments capabilities (Nemeth, 1986, 1985; Nemeth and
(Heilman, 1994; Heilman et al., 1991; Chacko, Wachtler, 1983). Empirical research supports the
1982) than women who felt that their sex was notion that diversity management can have a
not responsible for their hire. Female profes positive spillover effect in the workplace. In a
sionals hired under affirmative action were more recent replication of the Heilman et al. (1992)
harsh in their formal evaluations of women and study, Gilbert and Stead (1996) found that
in their affective reactions toward other women women hired in
organizations which valued

(Heilman, 1994; Heilman et al., 1993). Research diversity were seen as more
qualified for the jobs
has suggested, however, that the negative impact which they held. In this same study, the affir
of preferential selection is also dependent upon mative action label stigmatized women regardless
the self-esteem of the hiree
(Heilman, 1994). of job type. A perception of enhanced compe
Negative perceptions may lead to the eventual tence should mitigate employment discrimina
downfall of affirmative action. Recently, the tion against minority individuals.

validity of affirmative action as a Creating a culture which values and appreci

hiring technique
has been questioned both by individual states as ates differences requires systematic,
major,
well as the Federal government, leaving its con planned change efforts (Bowens et al., 1993),
tinuance unsure. If the courts invalidate affirma which are typically not part of affirmative action
tive action, then organizations which consider plans. Diversity management has been considered

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 Diversity Management 65

a new et al., Studies have also shown an increase in

organizational paradigm (Bowens
a a
1993; Giraldo, 1991) in that it moves beyond workers' average age, shortage of skilled
human resource model based solely on legal workers, and a more diverse consumer base in

compliance to one that suggests there is inherent the United States. People of color in the U.S.
value in diversity. now buy more as a group than any of our inter
Cox (1991) describes an organizational con national trading partners. African Americans,
tinuum in terms of diversity initiative Asians, and Hispanics are expected to reach 25%
imple
mentation, comprised of three types: monolithic, of the nation's consumer base and are forecasted
and multicultural. In monolithic organi to have annual spending power of $650B by the
plural,
zations, the extent of commitment to affirma year 2000. Cox and Blake (1991) state that just
tive action is the existence of an affirmative as minorities may prefer to work for an employer
action plan. In plural organizations, minorities who values diversity, they may also prefer to buy
may be more recruited and from such an organization. The diverse work
aggressively
but are ultimately to assim force's perspective serves to
identify products,
promoted, expected
ilate into the dominant culture. Plural organiza services, and marketing strategies appropriate for
tions espouse affirmative action to the exclusion a diverse consumer base (Griggs, 1995), and may
of initiatives which promote true employee result in better quality ideas for goods and

integration (Cox, 1991). The multicultural orga services (Milliken and Martins, 1996).
nization represents the ideal, a place in which Robinson and Dechant (1997) note that the
differences are appreciated and used to gain com presentation of a solid business case increases the
are likelihood of obtaining commitment
petitive advantage. Multicultural organizations leadership
to promote both attitudinal and struc and resources needed to successfully
suggested implement
tural integration of minorities (Larkey, 1996) and diversity initiatives.
to effectively manage corporate diversity.
Ethical considerations

Diversity issues have ethical considerations as

Organizational benefits their underpinnings. Business decisions that differ
in approach to ethical actions stem from indi
Cox and Blake (1991) identify the following vidual, and societal
professional, organizational,
arguments for managing cultural diversity to values. The ethical are
following principles
achieve competitive advantage. as relevant:
proposed
1. cost-reducing turnover and absenteeism
The Golden Rule is one of the most
2. resource acquisition-attracting the best
popular as it is rooted in both and
as the labor shrinks and history
personnel pool several world If you want to be
religions.
changes treated treat others
3. marketing-bringing and cultural fairly, fairly (Carroll,
insight The inclusiveness in diver
to the effort 1990). implicit
sensitivity marketing cannot succeed without
4. creativity?increasing and innova sity management
creativity fair treatment of all employees.
tion
The Disclosure Rule provides some strong
5. problem a wider range of
solving-bringing indication of how actions may be viewed.
perspectives and more thorough critical
If you are comfortable with decisions after
analysis if you would mind if others
6. to environmental asking yourself
system flexibility-reacting were aware of them, the decision is probably
changes faster and at less cost (Cox and ethical (Carroll, 1990). The openness nec
Blake, 1991) in administering
essary diversity manage
The results of these arguments are reflected in ment a unique window for
provides
the experience of organizations identified in assuring
success.

Table II. The Rights Approach assumes that people's

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66 J. A. Gilbert et al.

TABLE II
Bottom line results from effectively managing diversity

- a minority
Vought Aircraft Company Increased output from 70-101% after several minority replacements,
supervisor, and some team building (Allen and Appeldoorn, 1995).
- Calculated
Ortho Pharmaceuticals $500 000 savings from managing diversity due to lower turnover among minori
ties (Cox and Blake, 1991).

Avon Corporation - Turned formerly unprofitable inner-city markets into among the most productive U.S. markets
by giving Black and Hispanic managers substantial authority over those markets (Cox and Blake, 1991).
- the polyester textile division from an loser to posting a substantial
Hoechst Celanese Changed 18-year money
profit after recruiting an African American director and a diverse business team (Rice, 1994).
? and profitability with more
Suquet Insurance Agency Received Equitable's agency award for overall effectiveness
than a dozen different nationalities represented in its sales force (Lindenberg, 1991).
?
MONY Financial Services Drew on to hire and train a sales force that under
immigrant manager's experience
stood the concerns
of the Asian-Indian community in which the office has significant sales (Pradhan, 1989).
?
Toyota Dealership (Miami) Integrated cultural awareness through respect, targeted advertising, bilingual sales
people, and special events to break down barriers. Increased sales by 400% over six years; captured more
than 50% of the Miami Hispanic market (Kotkin, 1987).
-
Volkswagen Dealership (San Francisco) Used cultural sensitivity training to achieve a five-fold increase in overall
sales per month. Understood role of Chinese family elders as ultimate decision makers for major purchases
(Kotkin, 1987).
-
Inland Steel Moved people who brought different perspectives (women, Hispanics, Blacks) into key positions
at Ryerson Coil Processing. Ryerson became profitable for the first time in its history (Weiss, 1992).
-
Rank Organization PLC Let new mothers phase in their return to work as away to cut recruitment and training
costs. After five years, saved $1.5M by raising its retention rate for skilled women from 20% to 80% (Dwyer
et al., 1996).
-
Dupont African American employees recently opened up promising new markets for its agricultural products
by focusing on African American farmers. The multicultural team gained about $45 million in new business
world-wide by changing the way DuPont develops and markets decorating materials. The team recommended
an of new colors that to overseas customers (Labich,
array appealed 1996).

dignity their ability

is based on to freely An integrative model of effecgive diversity
choose will
what
they do with their lives, management
and they have a fundamental moral right to
have these choices respected (Valasquez, et Diversity has been conceptualized in a variety of
al., management allows all different ways in the literature: as a 'social trap'
1996). Diversity
to reach their fullest (Barry and Batemen, 1996); as one of many
people potential by
career paths to their spheres of activity to be managed (Cox and
choosing according
interests and abilities. Blake, 1991); and as a precursor to enhanced

organizational performance (Cox and Smolinski,

If these ethical are removed, diver
principles on the preceding literature
1994). Based review,
sity management initiatives will collapse. we define as a complete
diversity management
Management that is uninterested in recognizing
organizational cultural change designed to foster
these principles will not provide the leadership
appreciation of demographic, ethnic, and indi
and support diversity management to succeed.
vidual differences. Accomplishing cultural change
designed to value diversity involves modification
of existing procedures and practices, beginning

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 Diversity Management 67

with human resources function. The conceptu a perspective of justice and a perspective of
alizationpresented in this paper integrates com improving the 'bottom line.'
ponents from existing models with interview data The diversity program at Xerox was initiated
and anecdotes from actual business practice. The at the top. From the founder, Joseph Wilson, to
end is a parsimonious presentation of CEO Paul Allaire, managerial attention to
product
antecedent elements and organizational outcomes increased work force diversity has been
of effectively managed diversity. The integrated mandated. CEOs at Xerox have considered
model (See Figure 1) suggests that specific factors proactive attention to diversity both a social
are for positive results. As and a sound businessstrategy.
responsible diversity responsibility
illustrated, CEO initiation and continuation Xerox's approach has gone far beyond the limits
leads to transformation of the human resource of affirmative action. Xerox was one of the first
function, positive individual level outcomes for organizations to use caucus groups (discussion
minority and majority individuals, and positive and advocate groups representing ethnicity, sexual
attitudes toward diversity. Benefits of effectively orientation, gender, and race) to advance the

managed diversity in turn ultimately affect platforms of minority employees through direct

important organizational outcomes. communication with top management. Diversity

training for managers, compensation equity,
career and human resource
development,
CEO initiation and continuation strategic planning are also Xerox is
emphasized.
committed to achieving a balanced workforce,
Organizations featured as diversity leaders view with the goal of parity in representation of all

valuing differences as a total cultural change, employees in all job categories. Through planned
rather than as an isolated
component of organi change efforts, the diversity of Xerox's workforce
zational policy designed to satisfy governmental has been maintained even though downsizing has
mandates. CEOs of these organizations believe occurred.

that diversity management makes sense both from J. C. Penney has also changed its culture

TRANSFORMATION
OFHR FUNCTION
CAREER PLANNING
MENTORING
RECRUITMENT
COMPENSATION
ACCOUNTABILITYTHROUGHAPPRAISALS organizational!
EDUCATION/AWARENESS ORGANIZATIONAL OUTCOMES
FAMILYFRIENDLY POLICIES BENEFITS
DIVERSITYCOUNCILS N
BETTERDECISION
J^ PROFIT
&
INITIATION MAKING
^MARKET SHARE
CONTINUATION
REPRESENTATIONOF STOCKPRICE
k ^
CEO CONTINUING INDIVIDUAL
LEVELOUTCOMES QUALIFIEDMINORITIES
INVOLVEMENT
RETENTIONOF
PENETRATIONOF GLASS CEILING k
MORAL PERSUASION QUALIFIEDMINORITIES
A INTEGRATION I
MISSION STATEMENT BUSINESSWITH DIVERSE
A ORGANIZATIONALATTACHMENT & MULTINATIONAL
& STRATEGICPLAN A PUBLIC
f PSYCHOLOGICALDISSONANCE CUSTOMERBASE
RECOGNITION
PRODUCT LINE
DEVELOPMENT OFCCP AWARD

ATTITUDESTOWARDDIVERSITY
GLASS CEILING
ACCEPTANCE
COMMISSIONAWARDl
APPRECIATIONOF DIFFERENCES
MULTICULTURALISM
REGIONALAND
LOCALAWARDS

Figure 1. A model of effective diversity management.

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 68
J. A. Gilbert et al.

because of CEO initiated change. The organi Since 1989, Shoney's has added 83 black
zation hopes to achieve a goal of 46% represen 2 of 24 vice pres
dining-room supervisors,
tation of women within most management levels idents, 1 of 9 board members, 13 franchise
in the near future. In addition to diversity and owners, and has spent an estimated $17M
sensitivity J. C.
training, Penney's offers formal annually to buy goods and services from

mentoring programs, seminars on (Gaiter, 1996).

networking minority-owned companies
career as well ? over
skills, on-site child care, pathing, Fleet Financial Group After spending
as internal and external programs designed to $100M lawsuits for biased
settling allegedly
promote gender equality (Duff-Bloom, 1996). lending practices, CEO Terrence Murray
At Xerox, and J. C. Penney's, organizational told shareholders at the annual meeting that
commitment to diversity was initiated by the he and Chairman Joel Alvord "cannot
CEO. The transformational leadership skills of change the past, but we certainly can and
these CEOs acted as a catalyst to organizational will our future." A plan to improve
reshape
were able to convince their orga to ties
change. They employee sensitivity diversity
nizations that managing diversity was a business bonuses to these efforts. A
managers'
imperative and amoral obligation, and not simply "diversity council" has been created and
a mandate. CEOs at the above hundreds of managers have been enrolled in
governmental
mentioned organizations galvanized their work diversity training (Hirsch, 1996).
forces to take diversity seriously through moral
persuasion (Barry and Bateman, 1996), through Konrad and Linnehan (1995) found that legal
personally surveying change efforts, and through interventions were most
strongly associated with
concerted efforts to change employees' awareness those organizations that had the lowest percent
of key issues. J. C. Penney's and Xerox changed ages of either females or people of color.
their mission statements and strategic plans to However, lawsuits do not have to be the moti

incorporate diversity related goals, and subse vating factor for firms to act. Newly appointed
quently demonstrated their commitment to CEO at Procter and Gamble, John Pepper, is

diversity through initiating organizational cultural committed to increasing organizational diversity

change.
as a means of attracting the best talent and
Other CEOs who now
advocate valuing diver serving diverse markets (Labich, 1996).
sity as a corporate came to that realization
goal
as a result of legal battles. The following diver
were initiated after resource function
sity programs litigation: Transformation of the human

?
Denny's Denny's
was once an
example
of As Figure 1
suggests, diversity as a strategic
entrenched prejudice. To change corporate imperative will result in structural organizational
culture, Jim Adamson, CEO, devised a four changes, specifically in augmentation of the
part strategy: (1) make organizational struc human resource function. An inclusive descrip
ture less hierarchical; (2) make diversity a tion of diversity management initiatives is found

performance criteria for all managers; (3) in Morrison's 1992 book, The New Leaders.
all employees to attend workshops interviews with an array of
require Through in-depth
on racial sensitivity; (4) continually empha managerial personnel from 16 organizations,
size the importance of diversity (Rice, Morrison uncovered 52 diversity practices and 23

1996). accountability practices used in organizations

- were a culture
Shoney's Shoney's settled a $134M class which trying to promote of
action suit that named more than 200 differences. These initiatives suggest that
valuing
current and former
executives, supervisors a one- or two-day diversity training
simply
and managers who had disparaged blacks, program is insufficient to create the cultural
blocked their or fired or necessary for minority individuals to feel
promotions, change
declined to hire them for racial reasons. fully integrated in the workplace. Under the

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 Diversity Management 69

rubric of diversity management, entire enees are becoming more inclusive. At Exxon
personnel
systems (e.g., Baytown, special accommodations were made for
compensation, performance
mentoring, career are an Asian woman whose culture dictated that she
appraisal, pathing)
modified (Morrison, 1992; Cox 1991) to wait for silence
before speaking. To ensure that
promote inclusion. 1 presents a she is ableto contribute, her team members now
employee Figure
sampling of the more common human resource provide her time to speak at the end of each
systems targeted in a diversity change effort. group meeting (Sheridan, 1994). Her work team
underwent extensive communications
training
under the supervision of an experienced team
Individual level outcomes and attitudes toward facilitator. Not is she now able to contribute
only
to her team, but she is also able to provide a
diversity
reflective viewpoint of what transpired in each
The intent of diversity management is to foster meeting. According to the Exxon Baytown plant
enhanced employee integration. As Thomas manager, "... the result is that the company

(1992) argues, integration (based on valuing has a high-performing individual who is now a
as opposed to assimilation team member . . .
differences), (resulting completely engaged Taking
from organizational will become a care of all the in a way that values them
compliance), people
strategy for the fol as individuals and values the special contributions
sought-after organizational
lowing reasons: (1) employees are less to that they make is integral to engaging all people
willing
assimilate into the dominant as valued and members of the
organizational contributing
culture, and (2) some factors may be beyond business team (Sheridan, 1994, p. 24). Exxon's
assimilation. Thomas (1992) further suggests that acceptance of difference is an attempt to
assimilation of diverse employees may actually be
overcome cross-cultural ignorance
and cross

dysfunctional, resulting in inability to attract cultural inexperience (Barry and Bateman, 1996).
and retain qualified people. Although some Since social identity theory (Tajfel and Turner,
researchers argue that assimilation is beneficial 1979) predicts that an individual's identity derives
[See LaFramboise et al., 1993, for a review], from memberships in cultural
groups, honoring
recent accounts from corporations suggest that differences which result from group memberships
retention of one's cultural identity at work may and equitably rewarding employees for dissimilar
be advantageous for the individual and the orga contributions is important. Organizations which
nization. have committed to valuing the diversity, or

Ely (1995) has also suggested that expected uniqueness of its workforce, have not allowed
behavior conformance of minority individuals to dominant or traditional patterns to interfere with
majority norms may have negative consequences. full participation in organizational processes.
In her study of female law partners, Ely (1995) Instead of individual accommodation to the
found that Stereotypie behavior of women was organization, what is beginning to take place is
particularly prevalent in organizations in which organizational accommodation to the individual.
there were fewer female partners. Women in Utilizing multiple means to accomplish the same
these found it more necessary to results in "Multiculturalism . . .
organizations objective [which]
conform to male expectations within their means one culture the mixture of
reflecting
organizations (i.e., flirting with the boss), and diversity in an organization, rather than several
to display more of what were considered minicultures the different elements in
reflecting
'masculine' traits, such as aggressiveness. the mixture" (Thomas, 1992, p. 307).
Expected Stereotypie behavior often resulted in
women their
organization.
leaving Conversely,
women
reported feeling more comfortable in law Organizational outcomes and public recognition
firms which had greater numbers of female
partners. Wright et al. (1995) examined the impact on
Some organizational attitudes toward differ corporate stock returns of OFCCP (Office of

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 70
J. A. Gilbert et al.

Federal award winners vs. obtained a source of competitive advantage

Compliance Programs)
those sued for discrimination. Findings indicated (Pfeffer, 1995).
that labor awards were
positively associated with
stock returns. In addition, a study outcomes
by the EEOC Ethical
of Standard and Poors 500 organizations found "A Process of Ethical Decision making" (Carroll,
that companies ranked in the top fifth in terms 1989) and the "Ethical Decision Making
of compliance with regulatory requirements Checklist" used by McDonnell Douglas
an average stock return of 18.3%, while 1988) both a consistent strategy
enjoyed (Murphy, provide
in the lower fifth an that includes taking ethical principles (an ethics
organizations experienced
average stock return of 7.9% ('Affirmative screen) into consideration. These decision
Action,' 1996). Another study by Covenant making models provide ways to include diver
Investment Management noted that the 20% of sity management in business decisions. For
rated highest for recruiting women example, the process may include:
companies
and minorities outperformed the stock market by
Identifying facts relevant to the decision
2.4 percentage points from 1988 through 1992,
while the worst 20% trailed Assigning responsibility
by eight points and
Articulating benefits, rights, justice
("Equal Opportunity," 1993).
The visionary stance of CEOs committed to implications
Analyzing available solutions
diversity has manifested itself in award winning
Identifying the solutions that would do the
programs and in national recognition as diver
most to maximize benefits, reduce harm,
sity leaders. Xerox has received the OFCCP
and increase fairness
to increase respect rights,
award for innovative efforts employ
Communicating to those involved
ment opportunities for people of color, women,
Assuring that decisions will have the
individuals with disabilities, disabled veterans, and
intended outcome
veterans of the Vietnam era. In addition, Xerox
Implementing the decision
is the first
recipient of the Glass Ceiling
Evaluating whether the decision maximized
Commission award, officially named the Perkins
benefits, reduced harm, respected rights,
Dole National Award for Diversity and
and treated all people fairly.
Excellence in American Executive Management.
The award was created under the Civil Rights Both the corporate mission statement and
Act of 1991 to recognize that have code of ethics can be a valuable source for
organizations
shown a sustained commitment to diversity in the an ethics screen. But management must
building
and have made substantial progress in make a conscious effort to use ethical decision
workplace
that goal. Performance areas consid making. Lip service will not bring about diver
achieving
and Carroll out that
ered include: (1) demonstrated leadership sity management. (1990) points
sustained commitment to diversity; (2) recruit all the ethical principles in existence will not
ment, selection, and retention of under repre suffice if an individual decision maker is not
sented groups; (3) employee development interested in being ethical.

practices; and (4) successful diversity initiatives.

Xerox (Houston) was a 1994 winner of the Glass

Ceiling Award conferred by the Greater Houston Future research directions

Women's Foundation. In addition, Exxon
was a winner of Industry Week's 1993 Popular literature, which is both non-empirical
Baytown
Plant of the Year Award, in large part for its and speculative, comprises the vast amount of
efforts at valuing diversity. Although it is too individual level diversity related information.
to assess long term benefits of these awards There is a pressing
thus need for empirical
early
and honors, wide-spread positive public recog research that examines important individual level
nition will be associated with increased variables, such as withdrawal of minorities in
likely
sales, and a perception that winners have monolithic, plural, and multicultural organiza

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 Diversity Management 71

tions. Resulting evidence may aid organizations panies of varying sizes could offer important
in deciding whether diversity management is insights. Proposition 1: Promotions will be more
effective in influencing employee affective states frequent in monolithic and plural organizations for
and behavioral outcomes, as well as in reducing those demographically similar with top management.
undesirable organizational consequences. In multicultural organizations, promotions will be
While the preponderance of diversity litera approximately equal for all
demographic groups.
ture examines women and/or Proposition 2: Pay inequity in minority-dominated
primarily people
of color, management scholars have suggested subunits will exist between whites and minorities in
that research of diversity's impact on majority monolithic and plural organizations, but not in multi
members is also important. Tsui et al. (1992) and cultural organizations. Regarding pay, we assume
Milliken and Martins (1996) argue that diversity that no differences in performance exist, and that
has a greater negative impact on whites than on individuals in comparable positions with approx
people of color. However, all employees within imately equal education, work experience, and
a multicultural organization perceive their are examined. In organizations
might job knowledge
work place more positively than those in mono in which political minorities are dominant
lithic, or plural organizations. Relatedly, white throughout the organization, the above proposi
male backlash (Mobley and Payne, 1983) may not tions may be invalid. For example, since polit
exist in organizations which proactively manage ical minorities have
typically adjusted to
their diversity. For example, upon discovering dominant norms
and value systems, biculturalism
that white males were under-represented at the suggests that such an experience may act as a type
entry salesperson level, Xerox adjusted recruiting of diversity education. Consequently, historically
so that a greater number of white males was under represented individuals in dominant orga
hired. As Milliken and Martins (1996) suggest, nizational positions may be more sensitive to
the tendency of the dominant group to drive out those in the numerical minority.
diversity may abate if diversity is properly The 1996 Catalyst report identified exclusion

managed.
from informal networks of communication as
Entire organizations, as well as subunits within one of three
top factors contributing to women's

organizations, must be explored to learn more lack of progress in attaining executive positions.
about pay and advancement inequity. For Stereotype reduction (through diversity educa
example, women in female-dominated profes tion) may actually increase the involvement of
sions (such as teaching and clerical) still earn less minority employees in social networks, since they
salary than men in comparable positions be more readily included in informal social
(Saltzman, 1991). Although subunits may be gatherings and functions. Although informal
dominated by minority members, members of social integration has been recently examined
by
the dominant group at the organizational apex several social network scholars (Ibarra, 1992,
may exert pressure so that similar others in 1993; Burt, 1992, 1995), none of these studies
subunits are better compensated and more rapidly has examined social integration in the context

promoted. Kanter (1977) describes this phe of diversity management. Since diversity man
nomenon as 'homosocial reproduction,' or the agement has the potential to change organiza
tendency to recruit/advance others similar in tional culture, greater social integration of
appearance or background. We would expect minority result. Field research
employees might
homosocial reproduction within
organizations conducted across organizational contexts could
or provide to
which mismanage lip service provide beneficial information about the effec
diversity, but not from those which have made tiveness of diversity initiatives in problem diag
valuing differences a top priority. In an organi nosis andin employee integration.
zation which effectively manages diversity, we much of the pro-diversity lit
Unfortunately,
not erature on
would expect demographic favoritism with is heavy rhetoric and light on empir
regard to pay or advancement. Testing the fol ical findings (Rynes and Rosen, 1995). Lack of
lowing propositions across industries and com empiricism has made it difficult for managers in

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72 J. A. Gilbert et al.

the past to judge whether attention to diversity integration occurs for all minority
equally
an actual competitive
provides advantage. More groups. Preference for homophily suggests that

fundamentally, academicians have not provided those who most resemble the dominant group
practitioners with amethod to numerically assess will be most and the 'double
easily accepted,
diversity management within their organizations. whammy' effect (Nkomo and Cox, 1989)
A first step in conducting research on diversity suggests that African-American women may be
management is development of measurement doubly disadvantaged in the workplace by their
instruments to assess diversity acceptance. Armed race and gender. However, our model suggests
with reliable and valid indices, researchers could that no integration differences should exist for
then study interactions of demographic variables organizations which effectively manage their
with important organizational outcomes across diversity. Between group examination in an
different organizational contexts. In order to inter-organizational comparison could shed light

project the significance of diversity management on whether differences exist in

integration
to top executives, future empirical testing which multicultural organizations. Exploration of
includes a measure of valuing differences is observable diversity, as well as less visible attrib

imperative. Modification of the instrument utes such as mental disability, education, socio

developed by Konrad and Linnehan (1995) economic status, organizational tenure, functional
(which measured the extent to which EEO/AA speciality, values, personality, or birth order
initiatives were present in organizations) with (Milliken and Martins, 1996), and combinations
items from the extensive survey conducted by of observable and unobservable traits is also
Morrison (1992), is a suggested step in this direc necessary.
tion.
Lastly, the model assumes that change is initi
Examination of the above research agendas in ated from the top, and is only successful if
a variety of organizations could provide essential supported by the CEO. The concept of organi
information for practitioners and academicians zational change has been discussed with regard
alike. Additional research which specifically to corporate culturalchange (Dalton and Enz,
addresses diversity management is necessary to 1987; Dalton and Enz, 1988). This literature

provide understanding of diversity interventions, suggests that in order to change employee

and to provide information to the practitioner on behavior, a change in corporate philosophy and
the impact of diversity management. subsequent practice is needed. In other words,
piece-meal attempts by individual supervisors or
even departments may be
ineffective, since policy
Limitations and conditions changes may not continue
past the manager or
boundary
group leader in charge. Qualitative research could

Recipients of the OFCCP award have developed examine the success ratio of diversity efforts (and
a multi-faceted affirmative action program other organizational change efforts) initiated at
directed toward the changing demographics of the top versus those which originated from
the labor force. Actions of recipients include (but departments or divisions.
are not limited to) involvement in community
based projects that assist in the development of
a diverse work force in the future. Wright et al. Conclusion

(1995) refer to these organizations as 'exemplary

affirmative action.' As such, we acknowledge that Management must have both an
understanding
organizations which have received the OFCCP and a commitment to ethical princi
including
award but have not attempted to change corpo ples in the decision making process. A clear view
rate culture may be closer to the 'plural' of these principles and how they relate to diver
of the diversity continuum. sity management can facilitate appropriate and
midpoint
Empirical tests of the theoretical model pre relevant diversity management decisions. In
sented in this paper could examine whether recent years, the U.S. Sentencing Guidelines

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 Diversity Management 73

provide a solid business reason for the develop Notes

ment of company ethics programs by offering 1
reduced fines to companies who come forward, Although diversity encompasses a myriad of
state their problems and their and observable and non-observable traits, in this we
solutions, paper
focus on race and since these attributes are
demonstrate an ongoing ethics (compliance) gender,

program. These have been a successful

most likely to engender negative stereotypes (Milliken
guidelines
and Martins, 1996).
government initiative by providing companies 2
The term 'minority' in this paper denotes lack of
with strong incentives. However, diversity man numerical both in governmental and
cannot on representation
agement depend solely laws, since as to sheer numbers
private organizations, opposed
compliance represents only minimum acceptable in the population. Specifically, in this paper we refer
standards of behavior. Ethical behavior focused to women and of color as minorities.
people
on diversity management takes knowledge, com
mitment and work beyond the law.

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