Decision Making and Diversity Essay

With reference to the article (Waleed Aly) select an aspect of diversity (gender, religion, culture, etc.) and explore it in detail to explain the ways in which organisations utilise a diverse workforce in order to create a competitive advantage. Today, all businesses must function as part of a global economy. Nearly all businesses will have forms of relationships with many different demographics. The most successful businesses around today are able to market their goods and services to many different of these demographics. They have developed a business model that allows them to function in the global economy; to deal with the uncertain environment better than their competitors. Their products are able to move seamlessly from one demographic to another. As the textbook demonstrates (reference), Google is an example of one of these successful global entities, an example that will be used throughout this essay.

Their workplace aspires to reflect their markets. They have successfully utilised diversity to develop a competitive advantage in their field. This has helped make them the leading search engine provider in the world in a highly competitive industry. National diversity has allowed them to deal with the complexities of their environment for a number of reasons. Primarily, it has been shown that national diversity can increase the function of a team as it increases creativity and prevent some of the negative aspects of team work such as groupthink. Moreover, national diversity that reflects the market has also shown to help with the decision making process of top level management.

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Waleed Aly’s article (reference) discusses how our societal structure prevents this from happening though. He talks of the “polite racism” (reference) that engulfs our society. His evidence suggests that there is a perception that diversity is too difficult to implement. Empirical studies have shown that even small steps to encourage diversity have strong positive implications. However, when it comes to implementing diversity, it is not as simple as setting a quota for the number of different demographics employed. An evidence based approach must be taken to successfully implement it. Ultimately, diversity should be seen as a specific tool to get ahead in the competitive global market; a tool that encourages team performance, creativity and helps op level management understand their demographics.

Differences in nationality can be used to increase creativity and team performance in small teams. It allows these teams to increase productivity and lead to a competitive advantage in an organisation. A study of small teams in the video games industry undertaken by Tobias Scholz led to the conclusion that cultural diversity in small teams has a positive influence on performance. He determined a positive correlation between the levels of diversity and the outputs from the team. Scholz determined that differences in cultural characteristics such as individualism or uncertainty avoidance led to overall better performance by teams. He suggests by selecting teams “most fitting” (reference) to the task will increase performance. Google’s constant ability to come up with new ideas that help make it a more efficient search engine are a result of this attitude. By looking across cultural dimensions, Google is able to look at a standard problem with different cultural assumptions and thus different angles.

Moreover, in having no single dominant culture in a team, the study found that it prevented the development of groupthink. Groupthink is the process of making decisions as a group without individual creativity and influence. Even at a more basic level, practicing anti-discrimination simply allows the talent pool that an organisation draws from to increase. As acknowledged in Beth Brooke’s article; organisation’s must accept “the idea that talented people come from all backgrounds, genders, ages and experiences.” Google specifically addreses this issue by recruiting people who display talent over all else. The sum total of all these factors in an organisation will improve overall performance and without a doubt lead to a competitive advantage.

More specifically, national diversity has been demonstrated to improve the decision making process of top level management. Top management teams need to understand and cater to the market they are wishing to serve. They need to be able to understand use the culture of their market to their advantage. This is easily achieved by having the different demographics of the market present in the major decision making process. A study by Nielson and Nielson(2012) determined that diversity in the upper levels of an organisation was a strong contributor to performance. Just as diversity was crucial in small teams in the video game industry, national diversity in upper levels of management allowed “executive’s strategic mindset”(p.378) to be developed. In her article Brooke describes this process as developing global leadership. She suggests that a leader does not have to be able to understand markets that are foreign to them but needs to be able to consult with people who do. She describes these global leaders as creating “high-performing teams that are greater than the sum of their parts”(p.34) and who “value difference as opposed to merely tolerating it”(p.34).

Using the example of Google again, the textbook shows us that their upper levels of management use diversity to increase their performance. Google has employees of every culture that their service caters to. This is how they deal with the environmental uncertainty of these foreign markets and are able to capitalize on the cultural differences and stay ahead of their competitors. It all comes down to the decisions that the organisation makes. The organisations that overcome the “polite racism” discussed in Waleed Aly’s article are able diversify their staff and make educated decisions. They do not fall trap to mistakes such as Qantas’ unintentionally offensive behaviour discussed in Aly’s article. While not intentionally malicious, Qantas’ behaviour shows a lack of consideration; the type of lack of consideration that evolves from years of “polite racism” at the top level management. National diversity will prevent mistakes such as these at all levels of an organisation. True diversity implies consideration of other cultures. This leads to educated decisions that more accurately reflect the culturally diverse international market and ultimately will lead to a competitive advantage for a company. Importantly, overcoming this “polite racism” and realising its associated benefits has proven to be a seemingly cost-free exercise.

The negative consequence of having different nationalities in a workforce leads people to believe there will be strong cultural clashes. It is dues to this assumption that there is such a prevalence of subtle racism in the work force. Aly’s statistics that people without European last names may have to apply at almost 70% more jobs with the exact same CV suggests that many have a strong view that dealing with other nationalities is a costly exercise. A comprehensive study on the issue by Lauring and Selmer(2012) suggests the contrary. They uncover that national differences can be easily overcome in a workforce by managing the languages. By overcoming language differences, the “strongest indicator of group identity”(p. 156), the negative effects of diversity are easily overcome. Different languages are managed by having a “common language”(p. 156) that all employees are encouraged to speak. By using this common language, inclusiveness is encouraged and bonds are forged between employees. It also prevent the segregation of the workforce by the different languages. This process of language management is a simple and effective tool crucial to international managers. A big, international organisation such as Google has almost 40 different languages spoken by its employees. The specific management of all these different languages helps make Google the success story it is today.

They have mastered one of the most effective tools to build a team orientated and performance driven work force. Each organisation must learn how to harness diversity individually and implement measures to use it to create a competitive advantage specific to the area the organisation is in. While the possible benefits of diversity are clear, cultural diversity must be implemented in a way specific to each company. There is no single ‘correct’ way to implement diversity into a workforce but rather a ‘correct’ way for each organisation. As Prieto, Phipps and Osiri(2012) put it “one size doesn’t fit all when it comes to diversity” (P. 19). Rather, they discuss a so-called conceptual framework when it comes to its implementation. The aim of the conceptual framework is to best link diversity with organisational performance. They acknowledge, when incorrectly used, cultural differences in organisations can lead to negative effects. They conclude, that to improve performance, diversity climates must be assessed before it can be implemented. If there is a discriminatory culture, putting somebody with cultural differences into a management position may enhance rather than reduce the problem.

For this reason, they suggest a “less supportive diversity climate” (P.17) will require training before the benefits can be realised. This fits with the whole concept of uniqueness. Every industry is unique and thus must be treated as such. An international company such as Google that has practised diversity for years will require different processes than an industry dominated by white males. Thus, it is not simply national diversity exclusively that will lead to a competitive advantage in industries but rather its effective implementation. Advantages will only be realised once diversity is truly accepted and true acceptance requires strategic planning.

Ultimately, this comes to the point that diversity in the workplace should be driven by market demand. To truly develop a diverse workforce, it must be from an evolving culture where industries understand the benefits of a diverse workforce. A superficially diverse workforce that is the result of numerous anti-discrimination lawsuits will not have the same result. Christopher Washington(1993) contends in an article that diversity must always be linked with performance. He suggests that it should simply be a tool for meeting strategic objectives in the global economy. Real diversity will be achieved in an organisation when they understand that to sell to a multicultural demographic they will need to employ multicultural staff. By forcing diversity on organisations, it will simply lead to a reinforcement of the negative components. It will not be adopted wholeheartedly. Aly picks up on this notion in his article as well. He expresses his frustration at the “polite racism” that is so prominent in Australia even though we actively practice anti-discrimination.

There is a strong argument that affirmative action will have a carry on effect. The reality is though that the real lasting driver for a diverse workforce will be from its positive impact on business. As Google has shown to the world, to become a multinational force, a multicultural approach to the workforce must be undertaken. Google was not forced to employ people from 40 different language backgrounds, they chose to because they value talent over everything else. They understood the benefits that are apparent in small team environments. They could see the results in their decision making process and its relation to specific markets but ultimately they could see the competitive advantage it gave them over their competitors.

In summary, cultural diversity has been proven to be strongly correlated with a competitive advantage for firms. It has been shown to increase productivity in small teams, enhance the decision making process of top-level management and increase the talent pool that a company can draw from. Most importantly, cultural diversity reflects the international nature of business. A business made up of employees that accurately reflect its market gives it added insight into the dealings of its customers over its competitors. Many critics of diversity, particularily the polite racists in Waleed Aly’s article may subconsciously consider a multi-cultural organisation too difficult to run. In reality, evidence suggests that simple methods such as encouraging a common language to be spoken have a very strong correlation with diversity. Each organisation, of its own volition, must choose to develop a multi-cultural organisation that allows them to best fulfil the needs of their customers. Through these factors and processes, cultural diversity can lead to a strong competitive advantage for any international industry.

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