Advances in technology have created an illusion of a smaller world. At the same time, they have eliminated some of the physical boundaries that separate us. As a result, people all around the world are more capable of doing business with one another and the workforce has turned into worldwide melting pot of people. Is this diversity amongst the workforce a good thing? What about at an organizational level? I’ll look at 2 things; a study conducted by Bendick, Egan, and Lanier and a Tesco case study. I’ll summarize their conclusions and compare their results in order to answer the questions I have posed.
Few people would argue that equity in the workplace has made huge steps forward over the past 100 years worldwide. Chubb’s insurance cites three reasons for hiring a diverse workforce; Access to a broader pool of potential employees, Ability to relate to diverse customers, A more productive work force. Legal reasons also present external factors that might be motivating business to have a diverse workforce as well. But outside of independent moral concerns and legal requirements, why should employers provide equal employment opportunity?
These rationales are commonly referred to as the “business case for diversity” because they argue that workforce diversity advances business objectives of productivity and pro? tability (Bendick, 2010). Bendick’s study showed that diversity within the workforce, does not always correlate to a better ability to relate to diverse customers. The large retailer, code named Neighborhood Stores, had managers of ethnicity strategically placed in stores where the customer base was also ethnically diverse.
But segmenting management did not have a direct relationship with the success of segmenting the consumer market. Furthermore, the study showed that African American managerial employees on average received lower performance ratings, earned less, took longer to be promoted, and voluntarily quit the company sooner than their white counterparts (Bendick, 2010). The study would later elude to the fact that these managers were fighting an uphill battle due to the more challenged locations and clientele.
These conclusions were based upon a consumer retail market with tangible goods. How does that differ from other markets, such as advertising, that provide a service? Bendick’s study went on to analyze how diverse the marketing industry’s workforce was. The results of that study exposed glass ceilings for African American employees and an inequality in pay/promotion. More interestingly, it exposed how in business of advertising, the myth of having a diverse employee force can somehow increase the ability to reach a diverse audience.
This was shown by advertising firms that have a majority of African American employees while a vast majority of their clients sell products that target the African American community. There’s even the Association of Black-Owned Advertising (ABAA) agencies whose mission statement is: “To advocate for the interests of African American owned advertising agencies and marketing communications firms, while creating significant business opportunities that allow them to be recognized and rewarded for the substantial contributions they make to the advertising/marketing industry.
” The study finally concluded that the fix to these problems and having diversity just for the sake of diversity was to create an inclusive environment. An inclusive workplace is one in which all employees are treated fairly and with civility, have equal access to resources and opportunities, and are able to contribute fully to their employers’ objectives and thus their own success (Bendick, 2010). When an inclusive workplace is established, only then will all of the benefits of having a diverse workforce be utilized.
Tesco is a UK based retailer that engages with diverse groups constantly. They have a diversity strategy that means every employee at Tesco has a place in something called the ‘framework for talent’. This framework is used to find and develop talent for the future and has three parts: •talent plans for the business •career plans for individuals •succession plans for jobs Tesco also maintains a number of diverse groups within its organization. Some of these groups include: Out at Tesco which is a large LGBT group,
Women in Business, Tesco Asian Network and the ABC Network which includes African, Black British and Caribbean ethnicities. Tesco reaches out to maintain relationships with external groups of diversity to include Stonewall, Employers Forum on Disability (EFD) and Opportunity Now. Tesco claims that its diverse workforce will have a better understanding of customer needs as it reflects the same diversity as the customer base. It also opens up new ideas and opportunities that may arise from different cultures.
They also claim that having a diverse workforce increases employee morale and company flexibility. Furthermore, they claim that diversity leads to better performance and lower costs, since employees are able to offer a variety of expertise that enables jobs to be done effectively, improving productivity and reducing waste. (Tesco study) Are all of these benefits and claims of success due to diversity substantiated? In a retail world, I would agree that having a diverse workforce can have some advantages to relate to customers.
I also think that having all of those diverse workgroups also proves to the outside world the company’s commitment to equal opportunity. It is for these two reasons that I think that Tesco’s diversity strategy is somewhat advantageous. I also think that these advantages directly relate to the findings in the Bendick study. One major finding in the Bendick study was that having a diverse employee force in retail, really didn’t correlate to the customer. “A substantial body of empirical research covering both consumer sales and business-to-business sales con?
rms that, in most circumstances, buyers are not particularly concerned about the racial match between themselves and sales representatives, and sometimes are even offended by it (Hekman et al. , 2010). ” I think that Tesco has such diversity in its workforce that they wouldn’t offend a particular ethnic group, but I do think that they are counting on an aspect of their diversity to help with customer relations which has been proven false. I think that Tesco does create an inclusive work environment for all of its employees. This was highlighted in the Bendick study as they key to
capitalizing on the benefits of a diverse workforce. Not only does Tesco involve a wide variety of groups internally, but they have positive working relationships with external agencies as well. From the Tesco case study, they certainly project the appearance of ‘every employee’s opinion and expertise is valued’. This inclusive environment, in my opinion, is the biggest advantage of Tesco’s diversity over others. In the end, I think that Tesco is successful in creating an inclusive environment for its employees and thus able to benefit from its diversity.
I also think that Tesco thinks that they have increased their ability to relate to their customers because of their diversity, which I think is false. I think that a more in depth look at Tesco and its managerial make-up might shed some more light on whether or not they are as inclusive as they appear. But on the surface, I think that Tesco has a good approach to diversity as a whole.