An organisation is said to be a “social arrangement for achieving controlled performance in pursuit of collective goals” (Buchanan and Huczynski, 2010, Seventh Edition). The social arrangement referred to the group of people who interacted with each other as a result of their membership in the organisation; whilst collective goals meant that the members shared the same goals and objectives. These concepts, especially collective goals, were the major arguments advocated by classical management theorists to explain the nature of economic and social life within the organisation. For example, Weber (1964) stressed the importance of rationality and impersonality, and argued that, “managers and employees behaved and interacted in a stable and rational way.” Henri Fayol (1916) also advocated for the subordination of personal interests and preferences because “ignorance, ambition, selfishness and all other human passions tend to cause the general interest to be lost sight of…”
However, as a result of modern growth and expansion of businesses in a globalized economy, corporations became more complex, providing manager with the problem of controlling and organising economic activities. It also resulted in the re-examination of using classical management theories in explaining the new social arrangement, as classic writers focused on rationality and impersonality as it improved organisational efficiency and tended to neglect what McGregor (1960) described as “the human side of the enterprise.” In other words, there was need to examine the social interaction amongst members of the organisation, as well as recognize that there were differences that existed that prevented a homogeneous workforce. It was these differences that are part of the ‘workforce diversity’ concept.
Workforce diversity, then, is the “concept of accepting that the workforce consists of a diverse population of people. The diversity consists of visible and non-visible differences which will include factors such as gender, age, background, race, personality and work style. It is founded on the premise that harnessing these differences will create a productive environment in which everybody feels valued, and where their talents are being fully utilised” (Fullerton and Kandola, 1994). In other words, workforce diversity concept accepts that there are fundamental differences in the organisation’s social arrangement and theses differences play a significant role in achieving organisational objectives, at is has both benefits and implications which can affect the company.
Ignoring the importance of workforce diversity can cost the organisation time, money and efficiency. It can lead, for example, to an inability of the organisation to attract and retain talented people of all kinds. For example, Ron Ruggles (2004) argued that in the restaurant industry, “it would be difficult to fully staff restaurants, retain management and staff at competitive leadership levels, as well as broaden our understanding of and appeal to our diverse customer base without diversity.” We can see then, ignoring workforce diversity can lead to high employee turnover, which in itself would mean a loss in investment in recruitment and training. It would also lead to a limited customer base, thus reducing the potential profit to be earned by the organisation, and can cause the company that is not diverse to be viewed negatively by the public and customers, resulting in a further loss of goodwill and reputation.
Ignoring workforce diversity can also lead to legal complaints and action, as the company may be perceived as discriminatory. For example, Clive Seligman (2003) highlighted the case of Wilfrid Laurier University in Ontario, Canada, which advertised a female only faculty position in Development Psychology, with Professor Angelo Santi, chair of the department , admitting that they ‘ would not consider a male for the position, even if he were to be better qualified.’ This practice could be seen as unfair and discriminatory and may have resulted in controversy and bad reputation for the University. This could also happen to an organisation if they were to utilize such practices.
Despite this, workforce diversity also has benefits if managed properly, which would be of significant interest to the organisation. One benefit of managing workforce diversity is that it allows for better use of society’s stock of human resources, and thus allows the organisation to access the range of skills, expertise and talents available. As Elaine Keight, manager of car manufacturer Jaguar Land Rover said, “We are focusing on investing in our work environment to ensure that there are no barriers to anyone joining the company. We want to attract the best talent available, not just graduates, but from all section of the community.” (Broughton and Strebler, 2008). This would be important to an organisation, as it should ideally pursue a workforce possessing different skills and backgrounds, and not just from a narrow cross section of society.
Workforce diversity may also be significant to the firm in that it can improve levels of social understanding which may lead to new target markets. As Lynn Sullivan (1998) stated, “Having a diverse workforce will result in having the capacity to develop more creative ideas and solve problems. After all, people of different backgrounds bring a wide range of experience and more ways of looking at an issue.” Chris Pierce et al (2004) concurred, stated that “recruiting and retaining people of diverse backgrounds who can share a common business approach is a priority… Diversity in gender, age and race is correlated with superior business performance in worker productivity, gross revenue, market share and shareholder value.” This means that members of a diverse workforce will be able to give different insights on particular problems and issues, for example, how different products and services may be viewed by different groups, either positively or negatively, which can be a useful tool for the organisation to gauge how successful the product might be.
The challenge of workforce diversity, therefore, lies in the continuous improvement of integration and social acceptance of people from different backgrounds. People possess different human characteristics which influences the way they think, act interact and make choices. It is these differences which “offer challenges to building trust and commitment and affect the ability to effectively function together.” (Kelly, 2001). To address this challenge, management can promote diversity, by various methods, such as mentoring diverse employees; empowering employees to challenge discriminatory behavioural acts and perceptions, as well as provide training for increasing the accuracy of perceptions, and create an appreciation for diverse skills. By doing this management can avoid future problems as well as deal with current issues that may occur in the organisation, thereby improving and strengthening organisational performance.
We have, therefore, evaluated the significance of workforce diversity as it relates to the modern organisation, by analyzing the benefits and challenges of workforce diversity, as well as the consequences and adverse repercussions the organisation may encounter if it were to ignore workforce diversity issues.