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Diversity Management in India: A study of leading organizations in different

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 Diversity management in India: A study of organizations in different ownership forms and

industrial sectors

Professor of HRM and Chinese Studies

School of Management, RMIT University

Dr. Debi S. Saini

Professor of HRM, Management Development Institute
Gurgaon

Abstract

Strategically managing workforce diversity is a value-adding HR function that enhances organizational

performance. Managing diversity is a complex and unique HR issue in India due to its religious and

cultural diversity and the use of legislation by the Indian state to tackle societal inequities and

complexities. This paper contributes to existing knowledge on diversity management and strategic HRM

in the Indian context through an in-depth case study of 24 firms of different ownership forms in a

number of industries in India. The main method of data collection was semi-structured interviews with

110 managers at various levels and 102 non-managerial employees. Each interview was conducted

individually. This paper takes the US-originated concept of diversity management in the HRM context

as a starting point. It uses this as a guide to investigate how the concept is understood and

operationalized in several leading business organizations across different ownership forms and industrial

sectors in India. Results reveal the differences between Western MNCs and Eastern firms as well as the

varying views of Indian managers and employees on issues related to diversity management.

Key words: diversity, inclusiveness, equal opportunity, MNC, strategic HRM, India

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Introduction

The concept of diversity management (DM) is increasingly promoted as a strategic people management

technique that will enhance organizational competitiveness. Some US-owned multinational corporations

(MNCs) have been rolling out domestic-designed DM programs to their global operations (Nishii &

Özbigin, 2007). This is occurring in spite of the fact that some researchers have questioned the utility of

DM (as a US-originated concept) in other societal contexts (e.g., Agocs & Burr, 1996; Ferner, Almond,

& Colling, 2005; Healy & Oikelome, 2007; Nishii & Özbigin, 2007).

A growing number of studies have emerged in the last decade that investigate DM practices at

country and organizational levels (e.g., Dameron & Joffre, 2007; Ferner et al., 2005; Kramar, 1998;

Maxwell, Blair, & McDougall, 2001; Nishii & Özbigin, 2007; Sippola & Smale, 2007; Soni, 2000;

Subeliani & Tsogas, 2005). These studies, however, often focus on Western countries, using survey

studies or case studies of a very small number of firms. Few studies have investigate systematically the

extent to which DM has been deployed as part of strategic HRM across different ownership forms in a

less developed country, where the approach to HRM may be less sophisticated and the DM context

may differ significantly from that in the West. This study aims to fill a portion of this research gap

through in-depth, multiple case studies of 24 companies of different ownership forms in a number of

industries in India. We do so for three reasons.

First, a comparative study of several ownership forms and industrial sectors is helpful in

illustrating various operating environment and hence firms’ HR strategies. This is because firms in

different ownership forms are subject to different business environments and may interact with

institutional environments in diverse ways (Boisot & Child, 1996; Brewster, Wood, & Brookes, 2008;

Peng, Tan, & Tong, 2004; Shenkar & Von Glinow, 1994). This is particularly the case in developing

countries, where the state is both the regulator and a main employer. Also, public sector firms in these

countries retain strong bureaucratic and monopoly features despite an increasing level of market forces.

In contrast, managers in private firms may have more autonomy and competence in making strategic

2
business decisions. They may also take more risks in pursuing profit and therefore more receptive to

HRM practices that will enhance the firm’s competitive advantage. Consequently, the personal

preferences of senior managers in private firms may play an important role in shaping HRM practices.

As Brewster et al. (2008) noted, “organizational outcomes will reflect the real choices made by

individual actors” (p. 325). Indeed, the impact of ownership forms on HR practices has been observed in

studies of HRM in East and Southeast Asia (e.g., Barlett, Lawler, Bae, Chen, & Wan, 2002); China (e.g.,

Cooke, 2009; Wei & Lau, 2005); and India (e.g., Amba-Rao, Petrick, Gupta, & Von der Embse, 2000;

Budhwar & Khatri, 2001). MNCs differ in their HRM practices from domestic firms, particularly public

sector firms. MNCs tend to be more strategic and systematic in their HRM, followed by domestic

private firms.

It is worth noting that not all private firms are strategic in making various business decisions. In

addition to senior managers’ characteristics and the firm’s strategic intent, the firm’s positioning in

terms of its product market and labour market are also important factors in influencing HRM practices

(e.g., Brewster et al., 2008). Further, the characteristics of the firm’s industrial sector help define

managerial behavior and choices of HRM practices. Where firms enjoy a monopoly position in the

industry for whatever reasons (e.g., government protection, high entry barrier), incentives to adopt

progressive HRM practices to enhance organizational performance may be reduced. In contrast, firms

operating in knowledge intensive and highly competitive industries may be keen to adopt strategic HRM

practices to remain competitive (e.g., Boxall & Purcell, 2008).

Second, we selected India as a venue for study as it is a rising economic powerhouse in the

global economy with sustained high growth rates (see Astill, 2008; United Nation Conference on Trade

and Development UNCTAD, 2005). MNCs are attracted to India not just because of the less expensive

resources it offers for production activities, but also because its vast potential markets (Khanna, 2007).

A major HR challenge to MNCs operating in India, however, has been the shortage of a

skilled/professional workforce (Budhwar, 2009). They are increasingly involved in a “war for talent”

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and some have deployed DM as one of the key HR initiatives to attract and retain talent (Cooke, in

press). On the domestic front, the opening up of the Indian economy since 1991 has led to the dramatic

rise of several privately-owned Indian firms that have been growing into globally competitive MNCs.

Meanwhile, heightened market competition has resulted in public sector enterprises restructuring their

organization and reconfiguring their business strategy (e.g., Khanna, 2007; Som, 2007). This requires a

new way to manage human resources. Despite major organizational changes, however, key

characteristics that define public sector firms may persist, albeit continuously diluted by market forces.

In addition, India is a diverse nation with multiple religions, languages, social classes, and ethnicities

(Budhwar, 2009; Venkata Ratnam & Chandra, 1996). It thus offers a rich ground for studying DM. It

also makes DM an important HR issue. Conducting a study on DM in India, therefore, responds to

Tsui’s (2004) call for more high-quality indigenous (context-specific) studies to produce contextualized

knowledge and make a value-added contribution to our global management knowledge. It also responds

to Tung’s (2008) call for more attention to intra-national diversity and the dynamics of cultural changes

when conducting cross-cultural research.

Third, a multiple case study method was adopted because studying DM issues at the firm level

requires detailed information, making the case study approach more suitable than quantitative survey

study (Yin, 2003). Existing studies on HRM in India have primarily adopted a quantitative method,

often with a single-respondent from each surveyed firm (e.g., Amba-Rao et al., 2000; Biswas & Varma,

2007; Bhatnagar, 2007; Björkman & Budhwar, 2007; Budhwar & Boyne, 2004; Chand & Katou, 2007;

Rao, 2007; Singh, 2003). Survey studies offer useful statistical information of HRM practices across a

relatively large number of organizations surveyed. It does not, however, reveal organizational nuances

and complexities in the process of adopting and implementing HR policies or perceptions of these

practices from different groups of employees. A case study approach is therefore needed to address our

research questions.

In the light of the paucity of empirical studies on DM practices across different ownership forms

4
in a less developed country, this paper investigates how diversity is managed in firms of different

ownership forms and the extent to which DM has been adopted as a strategic HRM technique for firms

to gain competitive advantage in India. In particular, we address the following research questions:

1. How are diversity management issues understood and managed at workplaces in India?

2. To what extent have business organizations in India developed a strategic approach to

managing diversity to enhance their performance?

3. What, if any, are the differences in the approach to DM between firms across different

ownership forms, particularly between domestic firms and MNCs operating in India?

4. Are there any differences in the perception between managers and non-managerial employees in the

way workforce diversity is and should be managed in their organization?

Diversity management as part of strategic HRM

Despite growing academic interests in DM, it has been noted that “diversity management” is a poorly

understood, increasingly slippery, and controversial concept that is used “in an all-embracing fashion to

include not just the social categories of AA [affirmative action] such as race and sex but a wide range of

personal characteristics” (Ferner et al., 2005, p. 309). For this paper, we adopt the broad definition of

DM Arredondo (1996) suggested and Wentling (2000) adopted: “diversity initiatives are defined as

specific activities, programmes, policies, and any other formal processes or efforts designed to promote

organizational culture change related to diversity” (p. 436). Examples of DM initiatives we looked for in

the case study organizations included: flexible working arrangements, work-life balance initiatives,

education and training programs to raise cultural awareness, and equal opportunity (EO) policies and

practices.

It has been suggested (e.g., Cox, 1993; Soni, 2000) that the objective of DM is for organizations

to increase awareness of cultural differences; develop the ability to recognize, accept, and value

diversity through organizational intervention to minimize patterns of inequality experienced by those not

5
in the mainstream; and modify organizational culture and leadership practices so that “members of all

socio-cultural backgrounds can contribute and achieve their full potential” (Cox, 1993, p. 225). It has

also been argued that there are three important reasons for DM: effective people management, tackling

market competition, and enhancing corporate reputation (e.g., Chartered Institute of personnel and

Development (CIPD), 2006; Jayne & Dipboye, 2004; Konrad et al., 2006). DM is regarded as a better

approach than equal opportunity (EO) as it “focuses on valuing people as unique individuals rather than

on group-related issues covered by legislation” (CIPD, 2007, p. 6). In line with proponents of the

importance of strategic HRM to organizational performance, advocates of DM have argued that

organizations committed to DM out-perform those that do not (e.g., CIPD, 2006; Cox, 1993; Jayne &

Dipboye; 2004; Konrad et al., 2006; Soni, 2000). Indeed, existing studies have provided some evidence

to support the assumption that strategic DM can lead to enhanced HR outcomes, such as attracting talent

(e.g., Ng & Burke, 2005).

Other studies, however, have revealed that the benefits of DM rhetoric can be overstated (e.g.,

Williams & O’Reilly, 1998; Wise & Tsehirhart, 2000) and that DM initiatives may actually undermine

efforts in EO programs (e.g., Subeliani & Tsogas, 2005). Kochan et al. (2003) questioned whether or not

the business case rhetoric of DM has run its course. Nevertheless, they argued that while one may be

skeptical about the positive impact of DM on organizational performance, diversity is a labor market

imperative and as a societal value and expectation. Therefore, “managers should do their best to

translate diversity into positive organizational, group and individual outcomes” (Kochan et al., 2003, p.

18).

Furthermore, authors on strategic HRM (e.g., Bowen and Ostroff, 2004; Nishii, Lepak, &

Schneider, 2008; Purcell, 1999) have argued that the way firms adopt HRM practices has a significant

impact on employees’ perceptions of the intention of these practices. This perception will in turn affect

the outcomes of the practices implemented. The employees’ voice, however, is often unheard in studies

related to strategic HRM. This is partly because existing studies on HRM have often relied on

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quantitative studies with senior/HR managers as the key informants (Nishii et al., 2008). This study,

therefore, targets both managerial and non-managerial employees as the two key groups of our

informants in order to compare and contrast their perceptions on DM in their organizations in order to

evaluate its likely impact as an HRM practice.

Diversity management in the global context

A number of country-specific studies have revealed unique societal contexts in which diversity issues

are embedded. For example, Jones, Pringle, and Shepherd (2000) showed that the language used to

describe diversity and the perception of diversity issues in New Zealand were markedly different from

those manifested in the dominant discourse of DM embedded with US cultural assumptions. In African

countries, politics assumes supreme importance in DM, while ethnicity dominates “most national

debates on diversity” as the central issue (Healy & Oikelome, 2007, p. 1,923). This is because some

disadvantaged ethnic groups have been oppressed historically and there are now increasing calls for

radical remedial actions to address racial grievances. In contrast, ethnic groups in Japan and Korea are

relatively homogenous; as a result, gender, women’s marital status, and their related employment status

may be the key source of workforce diversity (Cooke, in press).

In the US and UK, workforce diversity may include: gender, race, ethnicity, religion, age,

disability, immigration status, social class, political association, marital status, parental status, sexual

orientation, and ex-offenders, among other categories. Society accepts many of these differences,

protecting them by law and acknowledging them in company policy. Some characteristics, however,

may not be acceptable socially or legally in oriental countries such as China and India (Cooke, 2010).

Furthermore, significant differences may exist even within oriental countries. For example, caste,

ethnicity, religion, and gender are the main sources of diversity in India; whereas age, gender,

disability, and place of origin (e.g., rural vs. urban) are the main causes of social inequality in China.

India is a democracy in which “inclusiveness” is the major politico-economic discourse at present. In

7
furtherance

8
of this thinking, the talk of empowerment to socially disadvantaged groups is emerging as a powerful

weapon for political parties to connect with their constituencies.

It is perhaps not surprising that studies on DM in MNCs have found that attempts to roll out US

domestic diversity programs globally often meet with strong resistance in the host country and fail to

achieve their objectives (e.g., Ferner et al., 2005; Nishii & Özbigin, 2007). This is mainly because the

US-specific program fails to reflect the specific demographic profile and the legal, historical, political,

and cultural contexts of equality in the host countries. Many US-owned MNCs studied, in fact, made

little attempt to adapt their US-designed diversity programs to capture local characteristics (Nishii &

Özbigin, 2007). As a result, MNCs may encounter “regulatory, normative and cognitive challenges” (p.

1,895) when designing and implementing their global DM initiative (Sippola & Smale, 2007). While the

diversity philosophy may be accepted globally within the corporation, a more multi-domestic approach

has been found necessary to implement the diversity initiative, as was revealed in Sippola and Smale’s

(2007) study.

Company-based case studies of DM in various countries have further revealed the distance

between the reality and the aspiration projected in DM’s rhetoric. For instance, Dameron and Joffre’s

(2007, p. 2,053) study of the integration team established to manage the post-merger integration of

France Telecom Mobile and Orange UK found that the co-existence of the French and English cultures

was “never seen as an opportunity, a differentiation, and a source of creativity.” Rather, “cultural

diversity was always experienced by the members of the integration team as a difficulty to overcome”

(Dameron & Joffre, 2007, p. 2,053). Subeliani and Tsogas’s (2005) study of DM in a large bank in the

Netherlands showed that diversity initiatives were designed and implemented in large cities whereby the

bank could benefit from a large ethnic market that existed. Employees with immigrant backgrounds

were mostly recruited for lower positions, where they could be visible to customers, but promotion for

them was very difficult, if not impossible. They were trapped at the lower end of the organizational

9
hierarchy, with little freedom to express their cultural and religious views. In this case, it was clear that

business motives had taken precedence over moral concerns when adopting the DM program.

Societal context of diversity in India

To understand the organizational context for DM in India, it is important to first understand its societal

context. India has a markedly different societal context for diversity from Western countries and is one

of the most diverse nations in the world (Sowell, 2002). The country must address a range of diversity

issues, including age, education, religion, caste, socially disadvantaged (e.g., scheduled castes,

scheduled tribes, and other depressed classes), gender, language, regional background, ethnicity,

economic well-being, and life-style (e.g., vegetarian vs. non-vegetarian) (Som, 2007; Venkata Ratnam &

Chandra, 1996). India is a multi-religious country, with Hinduism being the dominant religion practiced

by 81% of the population (Society for Human Resource Management (SHRM), 2007). Hundreds of

languages are spoken by the Indian people; 18 of them are officially recognized by the Constitution

(Venkata Ratnam & Chandra, 1996). Gender inequality in education is relatively high, even in urban

India. Dowry payments for marriage and the loss of return on human capital investment upon marriage

make parents unwilling to invest in their daughters’ education and health (Kingdon, 2002; Patel &

Parmentier, 2005). Women make up around 20% of the workforce in urban areas. For personal or

family-related reasons, a large proportion of women will opt out of the workforce by age 30. Religion,

caste, and language remain major determinants of social and political organization, despite economic

modernization and laws countering discrimination against the lower end of the class structure (SHRM,

2007; Som, 2007). As Sowell (2002) noted, diversity is not just a matter of demographics, but also a

matter of identity and identity politics. These sources of social diversity may feature prominently in

some workplaces.

In addition, managers and other categories of employees, especially those belonging to the

higher castes, resent reservation policies and concessions through which socially disadvantaged people

1
may enter organizations (Kundu, 2003). Consequently, despite the fact that three rounds of anti-caste

legislation have been passed in India since 1955, caste stratifications continue to play a dominant,

though diminishing, and divisive role in governing Indians’ lives (Foster, 2007). This is, to some extent,

reflected in organizational life as well. For example, Kundu’s (2003) survey of 1,083 male and female

employees across categories regarding their perception of workforce diversity in Indian organizations

revealed “the prevalence of gender and category (racial) discrimination” (p. 225) in workplaces. This

finding suggests that workplace inequality and potential discrimination are a reality that is accepted and

to some extent re-enforced by groups of employees.

Research methods

A qualitative (case study) approach was adopted using multiple methods, including semi-structured

interviews, document analysis, and on-site observations to collect data. This approach allowed us to

collect data from different sources, explore the issues by seeking views from different groups of

employees, and validate the data (Denzin & Lincoln, 2000). In-depth case studies were carried out with

24 business organizations based in India in 2007 (see Table 1). In view of the broad consensus among

researchers that strategic HRM will lead to better organizational performance and that DM is

increasingly being considered an important part of strategic HRM, we purposefully targeted companies

that were well-performing when selecting case study firms. This was done with the assumption that

well-performing firms are more likely to adopt a strategic approach to HRM, are more likely to be aware

of the notion of DM, and more likely to take action on it. We define “well-performing” organizations by

looking for firms that meet at least one of the following criteria: listed in the Fortune 500; listed in BT

500 (by the Indian magazine Business Today); ranked as industry leaders by business magazines in India;

or have won national awards (e.g., best quality, innovation) sponsored by the Indian government or

associated bodies. In addition, the companies we chose were all profit-making at the time of the research.

1
 A total of 47 firms in Delhi and Gurgaon areas were contacted for access for this study; we

restricted the geographic range to minimize regional effects, given India’s vast regional differences in

culture and economic development. Only 24 companies agreed to participate and all wished to remain

anonymous (see Table 1). The majority of these organizations have been in business at least ten years,

some much longer. All organizations are relatively large employers, although subsidiaries of foreign

MNCs in India generally have a much smaller number of employees than Indian firms. It should be

noted that the number of employees in the Indian firms included employees from all sites in India, not

just the number employed at the site where interviews were conducted. Only one site for each case study

company was visited to collect data due to resource constraints. The companies represented a range of

business areas, including telecommunications, pharmaceutical production and research and development,

automotive production, commercial, hotel and tourism, health care products, and transportation. Many

of them are leaders in their industry. They were selected from both public and private sectors.

Specifically, there were five US-owned MNCs, one UK-owned MNC, one Australian-owned MNC, one

Japanese-owned MNC, one Japanese-Indian joint venture, seven Indian-owned MNCs, five Indian-

owned private firms, and three Indian public sector enterprises. Given the difficulty in getting access for

academic research, we have not been able to provide equal numbers of companies in each business

ownership category. This study is of exploratory nature, therefore, we felt that the number and spread of

the cases we obtained were sufficient to provide information needed for discussion in this paper.

A total of 212 semi-structured interviews were conducted. Twenty-six were conducted with HR

director/managers/officers; 84 with vice president/line managers/supervisors; and 102 with non-

managerial employees to obtain views from different groups. As far as possible, the HR manager, line

managers, and non-managerial employees were interviewed in each case study organization to elicit

their perception of DM policies and practices in their organization. Given that a large proportion of these

organizations operate in high-tech or knowledge-intensive business areas (e.g., telecom, consulting, and

laboratory), the majority of the non-managerial employees interviewed were professionals. They were

1
selected for interview by their line managers, often on the basis of availability on the day interviews

were conducted with the line managers. We specified that employees selected for interview must have

worked for the company for at least two years, which would allow them to have a sufficient

understanding of the firm. With the exception of one Australian expatriate, all interviewees were Indian.

A prepared list of interview questions guided the conversations with managers and a similar list was

adopted for non-managerial employees. Issues explored included formal HR and DM policies and

initiatives the company adopted and informal DM practices managers deployed. Interviewees’

perceptions were sought regarding the need for and effectiveness of DM schemes, if existed.

Interviews with managers typically lasted between 40 and 50 minutes, whereas interviews with

non-managerial employees lasted between 20 and 30 minutes. All interviews were conducted face-to-

face on site. The majority of interviewees were unwilling to be taped recorded for the interviews,

therefore, no tape recording was used for the interviews. Instead, extensive interview notes were taken

and written up as soon as possible after each interview. With the exception of 17 interviews with

employees, interviews were conducted by two researchers. This allowed one researcher to focus on

asking questions and the other on taking notes, although both researchers were taking notes during the

interviews. A limited amount of observation was carried out during site visits for interviews. Interview

information is supplemented with company documents, particularly HR policy statements, when they

existed and were made available. These documents were either in hard copy or taken from company

Web sites. The researchers visited all company Web sites prior to the interviews for background

information and after the interviews to confirm interview data. Written-up interview reports were then

analyzed by the authors independently. Qualitative data were highlighted to identify emerging themes.

Quantitative data were processed to provide support to qualitative analysis. The authors then met to

discuss and agree upon the interpretation and use of data for the paper. No major differences were found

between the two authors when interpreting the data.

1
 Insert Table 1 here

Findings and analysis

This study’s findings reveal a spectrum of practices in the study’s organizations in terms of the

availability of formal DM policy, implementing DM initiatives and informal practices, and the

managers’ and employees’ perspectives on diversity management (Table 2). The differences displayed

are to some extent influenced by the nationality, ownership form, and age of the organizations, as well

as the industrial sector in which they operate and the nature of their business. Senior managers’ attitude

toward DM is also an important factor in deciding whether to adopt a DM initiative, and if so, how it is

implemented.

Insert Table 2 here

Adopting a formal DM policy

Sixteen of the 24 case study organizations have embraced some form of diversity management policy

statements (Table 2). Nine of the firms have explicit DM/EO policies; the other seven have included

DM elements in their general HR policy statements. The eight organizations that do not have a clear DM

policy statement are spread across different ownership forms, including a US-owned firm. Reasons put

forward by managers interviewed for the lack of an espoused DM policy vary. Some held that India is

already a diverse country where people are accustomed to living and working alongside others with

diverse backgrounds. It is part of their daily life and therefore there is no need to make a special policy

to address this accepted aspect of life (e.g., USA MNC2). Others see DM as a relatively low priority of

their business activities and believe in a pragmatic approach to dealing with DM issues as and when they

occurred (e.g., Indian Private1). Still others doubt the efficacy of a DM policy (e.g., Australian MNC1)

in the Indian context.

1
 Whether a DM policy statement exists or not, however, does not necessarily mean that the policy

is fully supported by practices. Likewise, the absence of a formal DM policy statement does not

necessarily mean that the organization does not take an active approach to managing diversity (e.g.,

Japanese MNC1). We found that the majority of organizations have some form of DM initiatives or

programs in place, including those that do not have a formal DM policy statement. In other words, some

DM practices are there, but may not be consciously articulated as a strategic HR tool.

Approaches to DM and major initiatives

Based on management’s attitude and the extent and types of DM initiatives the organizations have

adopted, we divided them into five categories, each indicating the organization’s approach to DM

(Table 3). More specifically, the strategic DM approach is close to the business (value adding) case

approach in which organizations design DM initiatives deliberately to harness greater productivity and

performance from employees. Six organizations are allocated into this category. Four companies

adopted a social justice approach to DM in which they emphasize their corporate social responsibility

and introduce DM policies to regulate behavioral norms, such as fair treatment and dignity in the

workplace. These policies go beyond the legal obligations of EO, but are not used in a utilitarian manner

aimed primarily at enhancing organizational performance. We found that firms that adopted these first

two approaches are mainly MNCs.

We also found six firms whose DM approach focuses on gender equality and to a lesser extent

ethnic/religious equality. These DM initiatives are typically affirmative action plans that go beyond

legal requirements. Two organizations adopted a legal compliance approach to DM and do no more

than comply with the equal opportunity requirement. Six organizations were found to have an ad hoc

approach to DM. In these cases, neither DM policies nor initiatives exist and no plans were made to

introduce DM policy. As they emerge, any DM issues are to be dealt with by line managers. This range

of five DM approaches falls within what is argued in the DM literature (e.g., Mor Barak, 2005). That is,

1
there is an escalation from the legal compliance approach and social justice approach to the business

case approach to strategic DM, assuming strategic DM is the most progressive.

Interesting and revealing from the findings is that within the social justice category, three firms

(Australian MNC1, Indian MNC1, and Japanese MNC1) have no formal DM policy. They do have,

however, relatively extensive employee welfare and well-being programs and mechanisms aimed to

satisfy employees’ diverse needs, including work-life balance. In particular, Japanese MNC1

(automotive) exhibited a high level of oriental cultural value – egalitarianism – in its DM programs.

Although there is no formal HRM and DM policy in the company, as all interviewees revealed, there

are a range of mechanisms in place to ensure that all employees are treated fairly and all needs are taken

care of as effectively as possible. In monthly meetings, the senior management team addresses fair

treatment and equal opportunity issues. The company adopts an egalitarian approach that bans any

differential treatment as a result of organizational hierarchy. All employees are called “team members,”

equal rules apply to all, which includes a common canteen and the same uniform and welfare for all. In

addition, various workplace welfare committees with representatives from each group address

workplace welfare issues regularly to ensure that the diverse needs and preferences of all employees are

met as far as possible. Despite these efforts, interviewees pointed out that equal treatment for everyone

is a major issue in that if one person is given something, for example training, others would expect and

demand the same treatment. Japanese MNC1’s documents reflect a typical Japanese technical firm that

focuses on quality, technology advancement, and customer service. It also adopts a unitarist approach

with rituals and ceremonies specifically designed to elicit employees’ identification with the firm,

including a company song. In the meantime, it appears to be adapting to the local culture effectively.

This is notably through its paternalistic policies such as engagement with employees’ families and local

communities. The company has a “Family Open Day” that aims to build a strong mutual bonding

between employees’ family members and the company. Cultural performances and sports events are also

held periodically. Interviewees readily admitted, however, that the company’s HR policy is not well-

1
developed. Line managers only began to be involved in people management issues through the “HR

partner” training program about a year ago. . This is in contrast to the notion of HR professionals

needing to be strategic business partner as is promoted in Western HR literature (Ulrich, 1997).

Insert Table 3 here

From the range and content of DM initiatives the case study organizations implemented, it is discernible

that the majority of them have not reached the “strategic DM” stage. The DM content is largely equal

opportunity focused and targeted at groups of employees rather than catering to diverse needs at the

individual level. Our findings also reveal the inherent difficulty of satisfying diverse individual needs

without being seen as “unfair” by other employees who might demand similar treatment. As a result,

companies appear to be focusing on equal opportunities to all instead of allowing for diversity. This

finding echoes that of existing studies in different parts of the world that firms are still focusing on equal

opportunity and affirmative action legislation rather than valuing, developing and using diversity for

advantage (e.g., CIPD, 2006; Shen, Chanda, D’Netto, & Monga, 2009).

Factors influencing firms’ approach to DM

We discovered a number of factors influential in the way organizations adopted their DM approach and

initiatives.

Industrial factor. A first factor is the industrial sector in which the firm operates. In heavy

manufacturing, engineering, and energy industries, the vast majority of the workforce is men. For

example, Japanese-Indian Joint Venture (automotive manufacturing) is a male-dominant organization in

which men were given preference in recruitment. The HR manager explained that the nature of work is

such that men tend to be more suitable and hence the male-dominant environment. Similarly, women

made up only 4% of the workforce of Indian Public2 (energy). While this firm is strategic in using DM

initiatives to enhance employees’ work experience and hence productivity, it is not making proactive

1
efforts to recruit more women or other socially disadvantaged groups of people into the workforce. By

contrast, banking (e.g., Indian Private5) and low-skilled manufacturing jobs (e.g., Indian MNC1) are

staffed by a higher proportion of women, although women still make up no more than a minority of the

total workforce in the organization. For example, only about 30% of the workforce of Indian Private5

(banking) are women. These organizations tend to implement gender-specific DM initiatives to

accommodate women’s family care commitments. For instance, Indian MNC1 has introduced flexible

shift, crèche (day-care center), maternity leave, and career breaks (Table 2).

At the other end of the skill spectrum, firms that operate in the high-tech environment, notably

those in IT/telecom businesses typically have a highly educated and young workforce. Individual

diversity may be promoted more compared to group diversity and equal opportunity of disadvantaged

groups. These organizations tend to develop a high-performing culture that might be difficult for certain

disadvantaged groups to follow. Merit-based recruitment and promotion means that disadvantaged

groups may be grossly under represented in the high-tech and knowledge-intensive firms because

members from these groups are also under represented in higher education. Indian MNC7 (telecom) is

an example.

Background of leadership. A second factor that influences the adoption of DM policy and initiatives is

the personal background and attitude of the CEO and management toward DM. For example, Indian

Private5 (banking) has a high-profile campaign to support women employees, including increasing the

presence of women on the executive board. Indeed, India Private5’s CEO is a woman and strongly

believes that women have a unique advantage of creative thinking that is helpful to the organization’s

performance. Despite the apparent passion for DM of a small number of CEOs and HR

directors/managers, however, the majority of non-HR managers interviewed appear to hold the view that

“DM is not an issue” in their organization and that there is no need for a formal DM policy. DM is seen

as being already embedded in the organizational culture. As one manager from Indian MNC1 observed,

“India is a diverse population, the Indian workforce in general are said to be tolerant. Therefore, we

1
don’t see the necessity for introducing a formal policy to address diversity issues.” This finding is in line

with that of Barlett et al.’s (2002) study, which suggested that top management’s perception of the

relative value of human resources and the degree of empowerment of the workforce are positively

related to the firm’s HRD strategy and activities. It also supports studies by Rao (2007) and Björkman

Budhwar, Smale, & Sumelius (2008), which found that managers’ background and organizational

profile are important to effectively implementing HRM practices in India.

Firm ownership. A third factor relates to the ownership form of the organization. It is noticeable that

Indian public sector organizations and private firms tend to lag behind foreign MNCs and Indian MNCs

in their DM, with the majority of them (five out of eight) taking a legal compliance approach or no

approach at all. This is perhaps also related to the age of the firms. Our study found that younger Indian

firms appear to be more innovative and more proactive in their HR and DM policy than traditional

Indian firms, which are primarily public sector and private firms with a long company history. This is

perhaps due to the fact that a large proportion of the younger firms are in the high-tech sector and other

fast-growing industries. Managers in these firms may be more innovative and strategic, with rewards

being more performance-based. These firms may be more likely to introduce DM initiatives such as

flex-time in order to maximize the productivity of key employees and to project an “employer of choice”

image. By contrast, while traditional Indian firms are also expanding due to the country’s overall high

economic growth, conventional thinking appears to persist in these firms with respect for age seniority

and organizational, gender, and social class hierarchies. These firms are more likely to follow the

affirmative action or legal compliance approach to DM. MNCs, both US-owned and Indian-owned,

appear to have the most comprehensive approach to DM compared with other organizations in the study.

This is evidenced in the fact that firms that treat DM as a strategic management tool and have developed

relevant DM initiatives are mainly MNC firms.

This finding confirms observations from Brewster et al. (2008) which suggested that MNCs tend

to manage their human resources distinctively from indigenous firms. It also supports findings from

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Amba-Rao et al.’s (2000, p. 76) survey that MNCs/joint ventures and private firms were more likely

than public sector firms to adopt a strategic approach to HRM, such as using merit-based performance

appraisals to determine pay and promotion. Our findings, however, do not seem to lend full support to

Aycan’s (2005) proposition that the “impact of culture on HRM practices is less evident in large

organizations, operating in industries that make use of sophisticated technologies, public sector

organizations or multinational corporations, compared to small organizations, operating in the service

industry, owned privately or by families” (p. 1,113). In particular, we found that firms in the Indian

public sector are more likely to perpetuate national and organizational cultural norms than those in the

private sector. They are comparatively more sheltered from, and therefore more resistant to, external

forces of change, including adopting Western HRM techniques, particularly if such techniques require

significant behavioral changes.

Country-of-origin of MNCs. A fifth and related factor is that an MNCs country-of-origin seems to

emerge as a factor that influences the way diversity issues are managed. While data from our study does

not allow us to provide a systematic comparison due to the limited number of sample firms, we do find

that US- and UK-owned MNC subsidiaries are far more articulate in their DM policies compared with

MNCs from other countries. These firms’ DM policy statements are also strongly influenced by their

corporate statement. This is perhaps not surprising given that DM as a strategic HR concept was

initiated in the US and followed by the UK. In addition, the DM content of MNCs appears to be heavily

influenced by their country-of-origin. Despite being the fore-runners of DM, US- and UK-owned MNCs

have been cautious in developing new DM initiatives that suit the local diversity environment. They tend

to adapt their corporate DM policy and initiatives to local operations and focus typically on gender,

disability, and ethnicity.

The difference in country-of-origin is most prominent between MNCs that have a Western

culture (e.g., US and UK) and those with an oriental culture, particularly India and Japan. In the latter,

oriental values such as egalitarianism and respect for age are still prevalent in management style. For

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example, in Japanese MNC1, fairness and equality are emphasized and achieved by removing

hierarchical differences and offering full opportunities for all in sharing the company’s resources. HRM

practices in Japanese-Indian Joint Venture also display typical oriental culture that respects age seniority,

much to the frustration of the younger workforce.

Perceptions of DM between HR managers and line managers

This study observed some differences between the HR managers and line managers in their perceptions

about the existence of, and the need for, DM policies and initiatives in their organization (Table 2). At

least 37 managers reported that there was no need to introduce a formal DM policy because DM “is not

an issue” at their workplace. For those organizations in which the HR managers interviewed reported

having an espoused DM policy as part of the HR policy, line managers did not seem to be aware of this;

in fact, only a small number admitted having only a vague knowledge of the concept. For example,

according to the HR manager from Indian MNC6 (IT), there is a formal DM policy in place:

We face diversity due to our global operations. Conduct surveys, reports, changes in policy are

made accordingly. Line Managers are instrumental in managing diversity and the way they

handle such issues depends on the context of each case. We have a formal set of policies to

handle workforce diversity (HR Manager, Indian MNC6).

Her statements were contradicted by one of the line managers interviewed. When asked if the company

had a formal HR policy in place for DM, he replied, “There is no policy in place as of now. If there is,

we have no knowledge of its existence…Yes, having a formal DM policy would be beneficial.” His

further comments, however, revealed that some DM initiatives were, indeed, in place:

There is a bias towards the female workers. Women are over protected to the extent that it may

be unfair on the male counterparts… Mechanisms used by the company to handle workforce

diversity include: Cultural Integration Committee and Cross-Cultural interactions.

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This incident suggests that the company’s DM policy has not registered in the manager’s mind and

that he actually holds a somewhat negative view about the fairness and effectiveness of the company’s

DM initiative.

More than 70% of managers at the mid/low ranking interviewed were not receptive to the idea of

having a formal HR policy on flexible work arrangements for employees in order to enhance work-life

balance. They prefer to deal with it informally on a case-by-case basis rather than institutionalizing the

arrangement. Managers did give examples when they used their discretion to accommodate individual

employees’ family commitment. They see this as a moral commitment that is informed by their societal

culture (e.g., Budhwar & Khatri, 2001). They also see it as a reward or a reciprocal gesture to better

performing employees. Not adopting a formal flexible-working policy safeguards against employees

who are deemed uncommitted and take advantage of the policy; thus, the power of awarding this

preferential treatment remains at the managers’ discretion.

In addition, there are differing views between HR managers and line managers as to who should

be driving the implementation of DM policy. Given the less than enthusiastic attitude of a relatively

large number of non-HR managers, it is perhaps not surprising to find that even in firms that have an

articulated DM policy and that demonstrate DM commitment at the corporate level, implementing DM

policy may not be integrated with the HR function or handled by managers at the operational level. As a

line manager from UK MNC1 (telecom) revealed, “Managers at the operational level don’t deal with

diversity issues, it’s all done by project managers [i.e., team leaders].” This implies that the DM spirit

may not have been internalized as part of the everyday life at all levels of the organization, but is seen as

a low-level issue to be dealt with by managers at the lower level.

Perceptions of DM of non-managerial employees vs. managers

Even in organizations where a formal DM policy is in place with commitment at the corporate level, the

perceptions of managers and non-managerial employees on achieving DM and organizational practices

may differ considerably (Table 2). For instance, managers of US MNC3 (consulting and marketing)

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reported that there was no issue with DM (or more widely with HRM) in the company because pay

levels were above industrial average; instead, employees were motivated by rewards and recognitions.

In this case, there was an open culture in the firm. DM and equal opportunity policies were in place,

flex-time was practiced, performance appraisal was transparent and based on merit, and the absence of

unions helped promote flexibility in the organization. In contrast, however, employees also revealed that

their work-life balance was affected due to the high intensity of work; work pressure was increasing and

they had little involvement in decision making.

Our findings further show that firms that do not actively practice DM or EO initiatives have

attracted a higher level of criticism from their non-managerial employees than firms that are proactive in

managing equal opportunity/diversity. While managers interviewed were generally more positive about

the DM situation in their organizations, non-managerial staff was less positive. This is notably the case

in firms that adopt an ad hoc approach to DM (see Table 3). A small number of non-managerial staff

identified sources of discrimination, though these were admittedly not wide-spread. For firms that have

not adopted a formal DM policy, non-managerial staff interviewed mostly agreed that although the

workplace was largely free from discrimination and that managers handled diverse staff needs relatively

well, there was a need for some form of formal DM policy to provide clear and consistent guidance.

This is in contrast to managers’ views, as noted above.

At least 16 employees criticized their company for taking a pragmatic approach to DM

commitment. For instance, Indian MNC4 (luxury hotels) made it clear in its HR policy that they

supported providing employment to disabled and physically challenged people. This category of worker,

however, is restricted only to back office jobs that do not require face-to-face interaction with customers.

Similarly, Indian Private4 (confectionary) has a detailed and publicized Fair Employment Practices and

DM policy statement and a Code of Business Conduct that specify the fair treatment of people and

recruiting the best talent from a diverse candidate pool. Non-managerial interviewees, however, felt that

while the DM policy was preached, it was not the driving spirit behind most of the company’s HR

2
policies. The company, they indicated, is more focused toward managing diverse customers than DM of

its employees. The guiding principle for recruitment is seen as recruiting “talent” but not “diverse

talent.” Few actions are taken to meet the needs of a culturally diverse workforce. These findings echo

those revealed in Subeliani and Tsogas’s (2005) study. In other words, firms are either paying only lip

service to DM or implementing it in a way that suits business needs by placing token employees (e.g.,

disabled or ethnic) either on the front line (to attract ethnic minority customers as is in Subeliani and

Tsogas’s case) or in the back office (as in the case of Indian MNC4).

Discussion and conclusion

This paper has explored the societal context of managing diversity at workplaces in India. It assessed

how the notion is understood and operationalized in a number of leading business organizations across

different ownership forms and industrial sectors. The different views of managers and employees have

been highlighted. This study reveals that the majority of the case study organizations have not adopted a

strategic approach to DM to enhance their performance. Instead, the majority of managers from these

organizations take a pragmatic and “problem solving” approach to managing their workforce diversity.

The lack of enthusiasm of line managers towards DM is perhaps not surprising, given the fact that line

managers have often been criticized for their low priority to HR issues and being more concerned with

immediate business needs.

This study has also found that the content of and approach to DM differs across different

ownership forms and industrial sectors. This is in part due to the demographic nature of the workforce,

the historical background of the firm, and leadership preferences. Younger and knowledge-intensive

multinational operations are more likely to take a comparatively more proactive approach to DM to

leverage competitive advantage than long-established, domestic firms in traditional industrial sectors.

The latter firms are more likely to implement DM policy as legal compliance and less likely to adopt

DM initiatives as HR interventions. This is due to their relatively low level of awareness of strategic

2
HRM. In addition, differences appear to exist between oriental organizations and Western MNCs in their

approach to DM and adopting DM initiatives in their Indian subsidiaries. An intuitively reasonable

conclusion is that these differences may be attributed to the national culture and level of sophistication

of corporate HR strategy. Given the relatively higher level at which DM is promoted in the US and UK

than in other countries, US- and UK-owned MNCs operating in India are more likely to have more

sophisticated DM policy and initiatives than other MNCs.

This study contributes to existing knowledge on DM and strategic HRM in the Indian context

through its emphasis on firms in different ownership forms. Some DM practices are becoming

widespread, though perhaps less well-articulated in organizational documents. India is a socially diverse

country of rising economic importance that offers not only attractive foreign investment opportunities,

but also a fertile ground for DM and, more broadly, HRM studies, an area that remains under-researched.

This paper has taken the Western-originated concept of diversity management in the HRM context as a

starting point and used it as a guide to investigate how business organizations in India understand the

concept and manage DM issues. It is a “partial induction approach,” which Tsui (2004) argued was

“particularly useful in analyzing familiar issues in novel contexts that allows connection to the current

body of literature while promising the discovery of new insight” (pp. 506-507).

This paper also contributes knowledge to the study of MNCs through the case study method. As

De Cieri and Dowling (2006, p. 22) pointed out, studies of strategic HRM have been restricted largely to

quantitative methods and suffered from small sample size and low response rates, often with “HR

managers as the sole respondent for each MNE represented in their sample.” This study has addressed

this imbalance using qualitative methods with a relatively large number of interviews with a relatively

large sample companies in India. We also elicited both managers’ and employees’ views.

This case study approach has yielded in-depth information that may not be obtained easily

through quantitative survey studies. Furthermore, limited studies of MNCs have investigated the

differences among them as a result of country-of-origin and ownership forms (Walsh & Zhu, 2007),

2
particularly differences between Western MNCs and oriental MNCs. This study is a modest addition to

this small, but growing body of literature.

Management implications

This paper has revealed useful DM practices and management challenges that organizations operating in

the India context need to address. This study’s findings present a number of important management

questions: “Will strategic DM lead to greater organizational performance?” If yes, then, “What kind of

DM programs will be most suitable for the Indian context?” and “How should foreign MNCs adapt their

corporate DM programs to suit local needs?” Our data suggests that the notion of and approach to DM

developed in another country may not be appropriate to the Indian context. We cannot, therefore,

simplistically adopt a resource-based approach to promoting DM as part of strategic HRM without

taking into account the institutional environment and cultural preference for highly context-specific HR

issues such as diversity. Societal differences have significant implications for Western MNCs that intend

to adopt a global HR strategy and roll out their DM initiatives to their operations in different parts of the

world. Adaptation is needed if these initiatives are to work effectively at the local level, as is noted in

Björkman and Budhwar’s (2007) study of HRM practices of foreign MNCs in India.

Our findings also suggest that managers hold various views towards DM as an HR activity; for

example, they see diversity as already embedded in the society, view diversity as a low management

priority, and are skeptical of DM. Richard, Barnett, Dwyer, & Chadwick (2004) suggested that

entrepreneurial orientation plays an important moderating role for diversity to enhance organizational

performance. If our case study organizations leveraged DM for competitive advantage, therefore, then

there is much work to be done to engage line managers in DM initiatives. A considerable gap also exists

between employees’ and managers’ perceptions of the DM situation within their organization. These

reflect the three social dilemmas, as Schnieder and Northcraft (1999) identified, that organizations must

address if they wish to leverage workforce diversity for their organizational success: “organization

participation,” “managerial participation” and “individual participation” (p. 1,445). More importantly,

2
employees’ perception plays an important role in effective DM. Organizations seeking to deploy DM to

enhance employee commitment need to involve employees fully in implementing DM initiatives.

Limitations and future research

This paper contains a number of limitations. First, the sample MNCs were drawn from a small range of

nationalities with a relatively small sample size within each nationality apart from the Indian MNCs. We

were not able to interview HR professionals at the headquarters to gauge their views on DM as a global

HR strategy and to establish a more solid picture on the level of influence that parent countries have in

shaping regional/local DM policy and programs. Second, we were not able to establish the true effect of

the DM initiatives implemented and the types of DM programs employees preferred that would mutually

benefit the organization and individuals. Third, while a number of factors related to the managers’

backgrounds, firm characteristics and industry appear to be influential in shaping the DM policy and

practices. We cannot, however, generalize this finding without further study.

In view of our findings and the above limitations, we call for more studies in this direction. DM

is a highly contextual issue; therefore, studies must be contextualized to uncover how diversity issues

are culturally and socially constituted within specific socio-political contexts and geographic locations.

Future studies should systematically investigate the country-of-origin effects of MNCs in their efforts to

adopt strategic HRM and DM initiatives in less developed countries. Focus should also be placed on

exploring the key factors that influence MNCs to adopt DM programs; the extent to which organizations

evaluate the outcomes or benefits of investing in DM initiatives; and the most effective DM programs in

aligning the interests of different employee groups with the organization. In addition, management

attitude and competence in DM should be studied in greater depth and on a wider scale with a view of

informing leadership development programs. Finally, researchers should undertaken cross-country

comparative studies to compare and contrast the societal context of and approaches to DM and to

establish the extent to which DM is recognized as an important people management issue in less

2
developed countries. This may help inform regional and international social policy decisions and

corporate global HR strategy.

Acknowledgements

We would like to thank the guest editors and three anonymous reviewers for their helpful comments on

the earlier versions of the paper. This research was supported by a grant from the “Project 211(Phase

III)” of the Southwestern University of Finance and Economics, Chengdu, China.

Author Biographies

Dr. Fang Lee Cooke is deputy head (Research) and professor of HRM and Chinese Studies at the School
of Management, RMIT University, Australia. Previously, she was a chair professor at Manchester
Business School, University of Manchester, UK. Her research interests are in the area of employment
relations, gender studies, strategic HRM, knowledge management and innovation, outsourcing, Chinese
outward FDI, and employment of Chinese migrants. Fang is the author of HRM, Work and Employment
in China (2005) and Competition, Strategy and Management in China (2008). She is currently a visiting
professor of School of International Business, Southwestern University of Finance and Economics,
China.

Dr. Debi S. Saini is a professor of HRM at the Management Development Institute (MDI), Gurgaon,
India. His research interests include strategic HRM, global HRM, new industrial relations, and employee
relations law. He has edited or authored seven books in these areas. He has been published in, among
others, Journal of World Business, Asia-Pacific Business Review, Asia Case Research Journal, ACRC
Hong Kong Cases, Indian Journal of Labour Economics, Vikalpa, and Economic & Political Weekly.
He is editor of Vision—the Journal of Business Perspective—the journal of MDI. Among others, he has
consulted with International Labor Organization, the German Government Agency for Technical
Cooperation, and Society for Human Resource Management, USA.

2
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Table I. Interviews and case study companies coding
No. Case study company Industry Employees Number interviewed
in India
USA MNC 1 Pharmaceutical R&D lab 2,500+ 10 (2 HR managers, 2 line
1. managers, 6 employees)
USA MNC2 Air conditioner manufacturing, 400 3 (1 HR manager, 2 functional
2. distribution, and maintenance managers)
USA MNC3 Consulting and marketing 400+ 8 (1 HR officer, 3 functional
3. managers, 4 employees)
USA MNC4 IT 1,200+ 8 (1 HR manager, 3 line managers,
4. 4 employees)
USA MNC5 Health product 1,100+ 8 (1 HR manager, 2 line managers,
5. 5 employees)
UK MNC1 Telecom 1,000+ 6 (1 HR officer, 2 functional
6. managers, 3 employees)
Australian MNC1 Construction project consultancy 700+ 12 (1 HR manager, 2 managers, 9
7. employees, including 1 expat)
Japanese MNC1 Automotive technology, systems 600+ 9 (1 HR manager, 3 line managers,
8. and components supply 5 employees)
Japanese-Indian Joint Automotive manufacturing 800+ 8 (1 HR manager, 3 line managers,
9. 4 employees)
Venture
Indian MNC1 Pharmaceutical manufacturing 800 8 (1 HR manager, 3 line managers,
10. 4 employees)
Indian MNC2 Telecom 12,300+ 15 (2 HR managers, 6 functional
11. managers, 7 technical employees)
Indian MNC3 Telecom 22,000 8 (1 HR manager, 1 functional
12. manager, 6 technical staff)
Indian MNC 4 Luxury hotels 22,000+ 7 (2 HR managers, 4 functional
13. managers, 1 employee)
Indian MNC5 Luxury hotels 20,000+ 7 (2 vice presidents, including 1 on
14.
HR, 3 functional managers, 2
employees)
Indian MNC6 IT 32,000+ 8 (1 HR manager, 3 line managers,
15. 4 employees)
Indian MNC7 Telecom 7,000+ 5 (1 HR manager, 2 line managers,
16. 2 technical leaders)
Indian Private 1 Commercial 8,000 4 (1 HR manager, 3 functional
17. managers)
Indian Private 2 Tobacco retail 20,000+ 8 (2 HR managers, 3 functional
18. managers, 3 employees)
Indian Private 3 Health care and food products 15,000+ 8 (2 HR managers, 3 functional
19. managers, 3 employees)
Indian Private 4 Confectionary 2,550+ 8 (1 HR manager, 3 line managers,
20. 4 employees)
Indian Private5 Banking 48,500+ 15 (2 managers, 13 on
21.
different types of jobs, e.g.,
sales, rep,
contract staff)
Indian Public1 Tourism 4,000+ 8 (1 HR manager, 3 line managers,
22. 4 employees)
Indian Public2 Energy 7,400+ 12 (all managers)
23.
Indian Public3 Transport 4,500+ 19 (4 line managers, 4 supervisors,
24. 11 officers)

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Table II. Level of Adopting DM policies and practices
No. Case study Industry Existence of DM DM initiatives and informal practices
company policy* Managers’ and non-managerial employees’ view
on DM
1. USA MNC1 Pharmaceutical DM mentioned in  In-built job rotation and geographic rotation
R&D lab Code of Conduct to sensitize employees on different cultures.
 Managers see DM is as embedded in
the organizational culture.
 Female employees feel workplace
discrimination free and treat everybody the
same.
2. USA MNC2 Air conditioner No espoused policy,  Work-life balance considered being introduced
manufacturing, no plan to introduce to some.
distribution, and one as India is seen  Male dominant workforce. HR and line
maintenance as a diverse country managers felt no need for diversity in the
workforce.
 Future diversity issues, if arose, are to be
handled at operational level.
3. USA MNC3 Consulting and Formal DM policy  Equal Employment Opportunity (EEO)
marketing and Affirmative Action Programme.
 Flexi-time for employees.
 Considerable difference between managers’
and non-managerial employees’ perception
about fairness and organizational practices.
4. USA MNC4 IT Formal DM policy  Equal opportunity programs, Celebration of
with high profile Women’s Day, Take Our Kids to Work
DM Day, World Disability Day, etc.
programs
5. USA MNC5 Health product Formal DM policy to  Corporate definition of global diversity as
use diversity “thinking style” that values different ways of
thinking and fosters innovation and creativity.
6. UK MNC1 Telecom Formal DM policy  Employment policy of minimum 3% of
ethnic minorities.
 DM issues dealt with by project manager.
 Non-managerial employees felt that
recruitment procedure was fair.
7. Australian Construction No formal HR policy  Managers use their own contacts, skills,
MNC1 project or DM policy authority, regular communication and interaction
consultancy with employees to address individual diversity
issues.
 Employees suggest company celebrate Indian
festivals, allow flexi-time, provide better canteen
and well-being facilities to improve working life.
 Mixed views from interviewees on the need for a
formal DM policy due to perceived lack of
efficacy.
8. Japanese MNC1 Automotive No espoused HRM  Fair treatment and equal opportunity issues are
technology, or DM policy, but addressed in monthly meetings by senior
systems, and many practices to management team.
components address diversity  Egalitarian approach that bans any differential
supply issues treatment as a result of organizational hierarchy.
 Workplace welfare committees with
representatives from each group to
address workplace welfare issues
regularly.
 Line managers started to be involved in
people management issues through the “HR

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 partner” training program.
9. Japanese-Indian Automotive DM policy as part of  Flex-time.
Joint Venture manufacturing HR policy  Poor implementation of DM policy, age bias

3
 favorable to older employees.
10. Indian MNC1 Pharmaceutical No espoused policy  Flex shift, day-care center, maternity leave,
manufacturing career breaks to accommodate female
workforce
(a large proportion of the workforce is women).
11. Indian MNC2 Telecom Diversity Board at  Presence of women on the board –
corporate level “breakthrough” initiative.
 Fixed female:male ratio, anti-discrimination
against women from recruitment stage.
 Line managers not aware of DM policy,
although they admitted having to adhere to
female:male ratio policy, which they find a
nuisance.
12. Indian MNC3 Telecom No espoused policy  Try to maintain a female:male ratio
(25%:75%) at various positions by
benchmarking competitors’ practices; aim to
increase the ratio to 50%:50% in the next five
years.
 Line managers believe “no issues of
workforce diversity and no formal policy on
DM is required.”
 Non-managerial staff reported “no DM policy
in place but a formal HR policy for DM should
be adopted.”
13. Indian MNC4 Luxury hotels Clear policy of  HR manager reported no DM issues.
providing  Non-managerial staff reported that
employment to employment for disability is restricted only to
disabled and jobs that do not require face-to-face
physically- interactions with customers.
challenged people  Some non-managerial staff felt Parsis are
given undue advantage.
14. Indian MNC5 Luxury hotels Non-discrimination  Fostering meritocracy in organization.
policy that demands  Promoting diversity and a gender friendly
and promotes work environment.
professional
behavior and
respectful treatment
for all employees
15. Indian MNC6 IT Formal DM policy  Global Village Initiative for cross-cultural
management.
 Flexible Basket of Benefits.
 Training programs include DM content.
 Varying views on the existence of DM between
the HR manager and other interviewees.
16. Indian MNC7 Telecom No mention of DM  Flex-time.
in policy  Various communication forums to promote
statements, but flex- friendly working environment and sharing
time and anti-sexual of information and ideas.
harassment policies  Performance-based reward and promotion.
are in place  After-work clubs for employees to
demonstrate and develop their talent and
interests and to achieve work-life balance.
 Employees believe DM is managed effectively
albeit through an unconscious way.
 Disadvantaged social groups are under-
represented in the workforce.

3
17. Indian Private1 Commercial No espoused  A mentoring scheme is adopted in which older
policy, no plan to employees mentor younger and new employees.
introduce one  Pilot work-life balance scheme for executives to

4
 gain a healthier work-life mix.
 Managers felt no need for a DM policy.
18. Indian Private2 Tobacco retail Non-discrimination  Open-door policy is adopted for employees
policy that demand to approach managers with grievance.
and promote  A committee is set up to deal with complaints.
professional
behaviour and
respectful treatment
for all employees
19. Indian Private3 Health care and No espoused  No DM initiative reported.
food products policy, no plan to  Company faced post-acquisition cultural
introduce one integration problem in which employees from
the acquired firm felt dominated by the
acquiring firm (the “Big Brother” syndrome).
20. Indian Private4 Confectionary Formal Fair  Equal Opportunity program.
Employment  Non-managerial interviewees felt DM policy
Practices and DM is preached but not necessarily practiced;
policy statement guiding principle in recruitment is recruiting
Code of Business “talent” and not “diverse talent;” equal
Conduct opportunity focused instead of allowing for
diversity, e.g., lunch break must be taken at the
same time for
everyone.
21. Indian Private5 Banking High profile gender  Women made up 30% of senior
equality statement management and the workforce.
and family friendly  Parental leave.
policy  Career break and career redevelopment
for women with children.
22. Indian Public1 Tourism No formal DM  Interviewees reported that the dominant Punjabi
policy culture in the office has led to some people of
other cultures feeling offended and
discriminated.
 Performance appraisal and promotion
not related to performance.
23. Indian Public2 Energy DM policy as part of  Promoting an inclusive work environment.
HR policy  Work-life balance initiative being developed.
 Creating opportunities for co-workers to teach
each other.
 Advocating performance-based promotion.
 Unitarist approach to HRM – “there is only one
best way” and “we are all the same.”
 DM to be dealt with as problem solving.
 Women made up only 4% of the workforce
and people of colour made up 0%.
24. Indian Public3 Transport Equal Opportunity  Flexible working time and concession given
and Affirmative to employees at discretion of supervisors.
Action (reservation
policy) programme
* The formal DM policy in these case study organizations, where one exists, is normally espoused as part of the
HR policy. Only a small number of organizations, mainly the US/UK MNCs, have a separate statement of the DM
policy.

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Table III. Approaches to and Main Initiatives of DM
Approaches to DM
Strategic DM, valuing DM for
competitiveness
Social justice that goes
beyond legal compliance
obligation but DM not yet
used as part of strategic HRM
Affirmative action beyond
legal requirement typically
from a gender approach
Legal compliance
Ad hoc approach
View publication
Main initiatives of DM Firms adopting the
approach and initiatives
 Cultural awareness for workforce USA MNC1, USA MNC3,
integration/bonding. USA MNC5, Indian
 Work-life balance. MNC6, Indian MNC7,
 Flex-time. Indian Public2
 Encouraging diverse thinking to foster innovation
and creativity.
 Dignity at work that is free from discrimination. USA MNC4, Australian
 Promotion of professional behaviour. MNC1, Indian MNC5,
 Employee welfare and wellbeing programs Japanese MNC1
(e.g., canteen, transport, social club).
 Maternity policy and childcare provision.
 Engagement of employees’ family (e.g., Open
Day, Family Visit Day).
 Removable of hierarchical status or
differentials among different groups of
employees.
 Setting gender or ethnicity ratio in the UK MNC1, Indian MNC1,
workforce and board level. Indian MNC2, Indian
MNC3, Indian Private5,
Indian Public3
 EO policy. Indian MNC4, Indian
Private4
 DM issue to be dealt with as it comes USA MNC2, Japanese-
at operational level. Indian JV, Indian Private1,
Indian Private2, Indian
Private3, Indian Public1