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Cultural Diversity Management in Organizations

Psychological Variables – Diversity Trainings

©2011 Magisterarbeit 114 Seiten

Zusammenfassung

Inhaltsangabe:Introduction:
Diversity represents the ‘multitude of individual differences and similarities that exist between people’ (Treven & Treven, 2007, p.29). It came into play as an organizational concept three decades ago, in the 1980s in the US as an initiative to create a more positive business perspective and provide equal employment opportunities for various minority groups. The initiative that started as a mere political correctness and legal compliance issue later on evolved into a complex business-orientated strategy in the area of human resource management and development, organizational culture and leadership, named by Gilbert, Stead, and Ivancevich (1999) the new organizational paradigm.
Changing demographics and recent societal changes like extensive immigration and consequent increase in international workforce alongside with current economic metatrends such as internationalisation and globalisation are causing more exposure to Diversity, both in daily and in business life. Managing Diversity is becoming a strategic focus area of management in organizations and a resource, which enables companies gain competitive advantage on the modern market through company’s most important asset - its people (Richard, 2000). Literature reviews (Cox & Blake, 1991) and numerous surveys (e.g. The Second European Diversity Survey, 2004; Survey on Diversity in Corporate Annual Reports of Stoxx 50 Companies, 2009) show that the topic of Diversity and, eminently, the issues of cultural diversity and ethnicity are currently gaining prominence amongst human resource (HR) professionals. Consequently, cultural diversity trainings (CDTs) are becoming salient, e.g. researchers report (Sweeney, 2002 as cited in Jackson, Joshi & Erhardt, 2003) that 67% of employers carry out ethnicity-related diversity trainings (DT). However, scholars (King, Dawson, Kravitz, & Gulick, 2010, p.1) point out that ‘prevalence of DT has not been matched by empirical research on its effectiveness’. The trend toward diversity trainings in organizations poses the question of their efficiency (Pendry, Driscoll, & Field, 2007; Roberson, Kulik, & Pepper, 2001), which can be operationalized as organizational business and individual-level outcomes, i.e. in form of psychological variables, relevant in that regard for both parties - employees and organizations.
On the structural level of organizations Diversity is viewed as an organizational human resource development tool Diversity […]

Leseprobe

Inhaltsverzeichnis


Alena Romanenko
Cultural Diversity Management in Organizations
Psychological Variables ­ Diversity Trainings
ISBN: 978-3-8428-3172-8
Herstellung: Diplomica® Verlag GmbH, Hamburg, 2012
Zugl. Universität Wien, Wien, Österreich, Magisterarbeit, 2011
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http://www.diplomica.de, Hamburg 2012

2
Acknowledgment
I would like to express my deep gratitude to my mentors, Dr. Christa Walenta and Univ.
Prof. Dr. Erich Kirchler for their expertise and insightful guidance of my attempts to develop
the final thesis on the challenging topic of cultural diversity management in organizations.
I am also very grateful my colleagues at vieconsult Corporate Research and Development for
their competent advice and inputs; as well as to my reviewers for their helpful
recommendations on making this thesis more concise, readable and logical.
And last but not least, my deepest appreciation goes to my family for their emotional and
financial support throughout my studies; as well as to my close friends, who have been
showing their continuous interest and support throughout the process of working on the final
thesis.
July, 2011

3
A
BSTRACT
Changing demographic structure of the modern workforce as well as strategies of increasingly
globalized businesses are inevitably posing a multitude of questions about cultural diversity
management (CDM) in organizations. Empirical research findings provide contradictory
outcomes of organizational Diversity and beg the question of its efficient management. The
objective of this thesis was to answer the following research questions: (1) Which consequences
does Diversity have for organizations and what can organizations acquire through practicing
CDM? (2) What are the commonly targeted psychological variables in CDM initiatives? (3) Can
CDM practices influence individual-level psychological variables in order to produce
organizational outcomes relevant for performance? Theoretical and empirical diversity
management literature search and analysis were performed. The overview of the results was
provided using the narrative review approach.
It was established that consequences of Diversity on organizational, workgroup and individual
levels involve positive as well as negative outcomes, whereby Diversity Management is the tool,
which enables their effective handling (Research question 1). Albeit given limited place in early
diversity research, attitudes towards diversity and organizational commitment have been recently
identified as important target variables of CDM initiatives because of correlations with
performance-related company outcomes (Research question 2). Diversity trainings (DT) have
been identified as the method to cause individual-level change across attitudinal, cognitive, and
behavioural dimensions in order to influence organizational performance (Research question 3).
Relevant diversity training inputs and best practices of Diversity management implementation
were reviewed, particularly highlighting the importance of psychological variables and
organizational context in this process. The thesis provides a topical insight into the so far
accumulated research and, based on the status quo of empirical and theoretical research, defines
suggestions for future research.
Keywords: diversity management, diversity training, attitudes towards diversity, organizational
commitment.

4
Abstract (Deutsch)
Die sich verändernde demografische Struktur der modernen Arbeitswelt sowie die zunehmend
globalisierte Wirtschaft werfen viele Fragen rund um Cultural Diversity Management (CDM) in
Organisationen auf. Empirische Forschungsergebnisse liefern widersprüchliche Ergebnisse und es
gilt zu eruieren, wie nun effizient mit Diversity und Diversity Management (DM) umgegangen
werden kann. Das Ziel dieser Diplomarbeit war es auf Basis einer Literaturanalyse folgende
Fragestellungen zu beantworten: (1) Was sind die Konsequenzen von Diversity und CDM in
Organisationen? (2) Was sind momentan die psychologischen Variablen in Cultural Diversity
Initiativen? (3) Wie können die Variablen auf individueller Ebene durch DM-Initiativen
beeinflußt werden, sodass es auch Konsequenzen auf organisationeller Ebene gibt? Eine
Recherche der vorhandenen theoretischen und empirischen Forschungliteratur wurde durchgeführt
und die Ergebnisse in Form eines narrativen Review-Ansatzes überblicksmäßig bereitgestellt.
Die Forschungsliteratur verdeutlicht, dass Diversität auf Ebene von der Organisation, der Gruppe
und des Individuums sowohl positive als auch negative Konsequenzen hat, wobei Diversity
Management die Mittel für einen effektiven Umgang damit bereitstellt (Fragestellung 1). Es zeigt
sich insbesondere bei den individuellen Variablen von Einstellungen gegenüber Diversität
(attitudes towards diversity), sowie der Verbindlichkeit (commitment) des Individuums gegenüber
der Organisation, dass sie in älteren Studien weniger Eingang gefunden haben. In jüngeren
Studien wurden sie gerade in Bezug auf Konsequenzen auf organisationeller Ebene als wichtige
Zielvariablen für DM-Initiativen identifiziert (Fragestellung 2). Mithilfe von Diversity Trainings
können auf individueller Ebene einstellungsmäßige, kognitive und verhaltensmäßige Effekte
erzielt werden, welche die gesamte Leistungsfähigkeit einer Organisation beeinflussen
(Fragestellung 3). Relevante Daten bezüglich praktischer Diversity Trainings bzw. bester
Praktiken bei der Realisierung von Diversity Management wurden skizziert und
zusammengefasst, insbesonders wieder hinsichtlich der psychologischen Variablen und dem
organisationalen Kontext. Die Arbeit bietet einen gezielten Einblick in den soweit bestehenden
Forschungsstand und beinhaltet Anregungen für weiterführende Studien.
Schlüsselwörter: Diversity Management, Diversity Training, Einstellungen gegenüber Diversity,
ommitment in Organisationen

5
TABLE OF CONTENTS
A
BSTRACT
... 3
1.
I
NTRODUCTION
... 8
1.1.
Aim of the Study and Research Questions ... 11
1.2.
Methodology ... 12
2.
M
ANAGEMENT OF
C
ULTURAL
D
IVERSITY IN
O
RGANIZATIONS
... 14
2.1.
Definitions and Theory: Cultural Diversity Management in the Workplace ... 14
2.1.1.
Concept of Organizational Diversity ... 14
2.1.2.
Workplace and Employee Diversity Management ... 15
2.1.3.
Cultural Diversity and its Management... 16
2.1.4.
Measurement of Cultural Diversity ... 17
2.1.5.
Issues of Race, Ethnicity, and Culture ... 18
2.2.
Inevitability of Diversity in the HR World ... 18
2.2.1.
Target Group Companies for Diversity Management ... 19
2.2.2.
Current Cultural Diversity Popularity Trends ... 19
2.2.3.
Role of HR - Allocation of Cultural Diversity Management ... 20
2.3.
Business Case: Diversity as the Right Thing to Do ... 22
2.4.
Diversity Outcomes ­ What Could Companies Expect? ... 25
2.4.1.
Organization-Level Outcomes ... 26
2.4.2.
Group-Level Outcomes ... 28
2.4.3.
Individual-Level Outcomes - Importance of Psychological Variables ... 31
2.5.
C
HAPTER
S
UMMARY
... 33
3.
P
SYCHOLOGICAL
M
ECHANISMS AND
O
UTCOMES OF
D
IVERSITY
I
NITIATIVES
... 36
3.1.
Explanatory Approaches of Diversity Outcomes ... 36
3.1.1.
Social Identity Approach ... 37
3.1.2.
Information-Processing and Problem-Solving Approaches ... 38
3.1.3.
Intergroup Contact Theory ... 39

6
3.1.4.
Ironic Processes Theory ... 41
3.1.5.
Inference: Applying Theoretical Approaches in Diversity Initiatives ... 42
3.2.
Attitudes and Attitudes towards Diversity ... 43
3.2.1.
Theory, Practice, and Operationalization of Attitudinal Research ... 43
3.2.2.
Achieving Attitudinal Change in Organizations ... 48
3.2.3.
Inference: Applying Attitudes Towards Diversity in Diversity Initiatives ... 51
3.3.
Commitment ... 52
3.3.1.
Theory, Practice, and Operationalization of Commitment Research ... 53
3.3.2.
Consequences of Organizational Commitment ... 55
3.3.3.
Strategic Human Resource Management: Commitment Paradigm ... 57
3.3.4.
Inference: Applying Organizational Commitment in Diversity Initiatives ... 59
3.4.
C
HAPTER
S
UMMARY
... 60
4.
C
ULTURAL
D
IVERSITY
I
NITIATIVES AND
T
RAININGS
... 63
4.1.
Successful Diversity Management Implementation ... 63
4.1.1.
Introduction of Cultural Diversity Initiatives ... 63
4.1.2.
Alignment of Diversity Management Strategies and HR Practices ... 67
4.1.3.
Best Practices of Diversity Management Strategies and Practices ... 69
4.2.
Cultural Diversity Trainings in Organizations ... 73
4.3.
Training Goals ... 74
4.3.1.
Eliminating Stereotype, Prejudice, and Discrimination ... 74
4.3.2.
Raising Cultural Competence ... 76
4.4.
Diversity Training Inputs: Context, Design, Trainee Characteristics ... 76
4.4.1.
Training Context... 77
4.4.2.
Training Design ... 77
4.4.3.
Training Methods ... 80
4.4.4.
Trainee/Trainer's Characteristics ... 83
4.5.
Diversity Trainings: Outcomes regarding Psychological Variables ... 85

7
4.5.1.
Cognitive Outcomes ... 85
4.5.2.
Affective/Attitudinal Outcomes ... 85
4.5.3.
Behavioural (Skill-based) Outcomes... 86
4.6.
Effectiveness of Diversity Trainings ... 86
4.7.
Critical Reflections on Cultural Diversity Trainings: Problems and Solutions ... 88
4.8.
C
HAPTER
S
UMMARY
... 89
5.
D
ISCUSSION OF
R
ESULTS AND
C
ONCLUSIONS
... 92
5.1.
Chapter "M
ANAGEMENT OF
C
ULTURAL
D
IVERSITY IN
O
RGANIZATIONS
" ... 92
5.2.
Chapter "P
SYCHOLOGICAL
M
ECHANISMS AND
O
UTCOMES OF
D
IVERSITY
I
NITIATIVES
" .. 93
5.3.
Chapter "C
ULTURAL
D
IVERSITY
I
NITIATIVES AND
T
RAININGS
" ... 96
5.4.
Concluding Remarks ... 99
L
IST OF
R
EFERENCES
... 102
L
IST OF
F
IGURES
... 111
L
IST OF
A
BBREVIATIONS
... 112

8
1.
I
NTRODUCTION
Diversity represents the "multitude of individual differences and similarities that exist between
people" (Treven & Treven, 2007, p.29). It came into play as an organizational concept three
decades ago, in the 1980s in the US as an initiative to create a more positive business perspective
and provide equal employment opportunities for various minority groups. The initiative that
started as a mere political correctness and legal compliance issue later on evolved into a complex
business-orientated strategy in the area of human resource management and development,
organizational culture and leadership, named by Gilbert, Stead, and Ivancevich (1999) the new
organizational paradigm.
Changing demographics and recent societal changes like extensive immigration and consequent
increase in international workforce alongside with current economic metatrends such as
internationalisation and globalisation
1
are causing more exposure to Diversity
2
, both in daily and
in business life. Managing Diversity is becoming a strategic focus area of management in
organizations and a resource, which enables companies gain competitive advantage on the modern
market through company's most important asset ­ its people (Richard, 2000). Literature reviews
(Cox & Blake, 1991) and numerous surveys (e.g. The Second European Diversity Survey, 2004;
Survey on Diversity in Corporate Annual Reports of Stoxx 50 Companies, 2009) show that the
topic of Diversity and, eminently, the issues of cultural diversity and ethnicity are currently
gaining prominence amongst human resource (HR) professionals. Consequently, cultural diversity
trainings (CDTs) are becoming salient, e.g. researchers report (Sweeney, 2002 as cited in Jackson,
Joshi & Erhardt, 2003) that 67% of employers carry out ethnicity­related diversity trainings (DT).
However, scholars (King, Dawson, Kravitz, & Gulick, 2010, p.1) point out that "prevalence of DT
has not been matched by empirical research on its effectiveness". The trend toward diversity
trainings in organizations poses the question of their efficiency (Pendry, Driscoll, & Field, 2007;
Roberson, Kulik, & Pepper, 2001), which can be operationalized as organizational business and
individual-level outcomes, i.e. in form of psychological variables, relevant in that regard for both
parties ­ employees and organizations.
On the structural level of organizations Diversity is viewed as an organizational human resource
development tool Diversity Management (DM
3
). This tool enables acknowledging the differences
between employees and helps to use diversity's positive contributions for strategic purposes of the
company. Diversity management focuses primarily on organizational practices of recruitment,
1
Globalisation ­ "economic interdependence among countries that develops through cross-national flows of goods
and services, capital, know-how, and people" (Gelfand, Erez, & Aycan, 2007, p.481).
2
In organizational contexts the term Diversity is often spelled with a capital D.
3
For reader's convenience the frequently used abbreviations can be found in the L
IST OF
A
BBREVIATIONS
.

9
training and promoting underrepresented groups and is broadly defined by Cox and Blake (1991,
p.45): "Managing diversity refers to a variety of management issues and activities related to hiring
and effective utilization of personnel from different cultural backgrounds". Based on the so-called
business case for diversity human resource management (HRM) models generally assume that
there's a certain alignment between organizational human resource strategies, organizational
performance, and competitiveness. Despite of somewhat contradictory results of empirical studies
of diversity in teams and workgroups (Williams & O'Reilly, 1998), the general stand is that
managed the right way diversity brings benefits and improvements such as attracting the best
minority personnel, enhancing decision-making, increasing team cooperation, and problem
solving (Egan, 2005; Elsass & Graves, 1997), reducing opportunity costs by cutting down
turnover, absenteeism rates, increasing job satisfaction, improved commitment, and organizational
flexibility (Cox & Blake, 1991).
Based on various literature reviews (Jackson et al., 2003; Shore, Chung-Herrera, Dean, Ehrhart,
Jung, Randel, & Singh, 2009), three main structural levels can be differentiated within Diversity
research in organizations: organizational, group and individual (see 2.4. Diversity Outcomes).
Focus of group diversity research clearly lies in the area of group performance (e.g. Chatman &
O'Reilly, 2004; Watson, Kumar, Michaelson, 1993). Quantitatively less attention has been
devoted to individual-level psychological variables, such as employee attitudes (Montei, Adams
& Eggers, 1996; Nakui, Paulus, Van der Zee, 2008) and, in particular, attitudes towards diversity
(Van Oudenhoven-Van der Zee, Paulus, Vos, & Parthasarathy, 2009). Research of organizational
Diversity lies in the area of economic company performance (Hollowell, 2007), whereas again the
impact of company's Diversity management strategy influencing individual-level psychological
variables, such as employee affective organizational commitment (Magoshi & Chang, 2009) has
been far less researched. Therefore, a research gap seems to be particularly apparent within the
area of psychological outcome variables of cultural diversity in organizations, with central
variables being affective commitment
4
and attitudes towards diversity
5
(ATD). This fact is
somewhat paradoxical in the twenty-first century's age of knowledge work, where concepts like
commitment HR strategy are key and where "learning organizations" target at "mobilizing worker
commitment and sustainable competitiveness" (Bratton & Gold, 2007, p.59).
As literature research shows group diversity research has been mostly focused on the performance
aspect of workgroup diversity (Chatman & O'Reilly, 2004). Far less researched, but nonetheless
4
Affective commitment refers to an employee's "emotional attachment to, identification with, and involvement in the
organization" (Meyer & Allen, 1997, p.11)
5
Attitudes towards diversity are "generalized lasting evaluations of diversity in groups" (van Oudenhoven-van der
Zee et al., 2009, p.259)

10
not less important, are employee's affective reactions (e.g. commitment) and attitudes towards
diversity (Van Oudenhoven-Van der Zee et al., 2009). Existing studies (Chang, 2006; Huselid,
1995) examine the effects of HR commitment practices and, using the logic of the commitment
management approach, prove (Magoshi & Chang, 2009) that attitudes towards diversity change
as a consequence of company's exercising of Diversity Management and have far-reaching
consequences on employee's affective commitment (AC). In other words: HR commitment
practices have a positive effect on employees' organizational commitment. With change of
attitudes being a common goal of diversity trainings, another research line has taken up the study
of attitudinal changes as a result of employee participation in DTs. Speaking of the outcomes,
many researchers (van Knippenberg & Haslam, 2003; Van Oudenhoven, Van der Zee, Paulus,
Vos & Parthasarathy, 2009) have suggested that positive attitudes towards diversity in
workgroups affect feelings and general work attitudes of participants in a positive way. Thus,
research has suggested a strong link between the attitudes and organizational commitment.
Multiple associations of commitment with such variables as performance, productivity, retention,
citizenship behaviour have been documented in the literature (Meyer & Allen, 1990, 1991, 1997)
and have left no doubt about the concept's importance. Based on empirical research of
commitment practices (Bae & Lawler, 2000; Huselid, 1995), it has been suggested that Diversity
Management Practices (DMP) can be seen as a reflection of commitment management
philosophy. According to Magoshi and Chang (2009) commitment management approach
foregrounds the reciprocity between the company and the employees (Kossek & Block, 2000),
views the relationship between them as exchanges of commitment (March & Simon, 1958), and
inherently implies devotion of the company practicing DM to the employees and their needs. In
line with the abovementioned theory, company's adherence to Diversity Management Practices
(e.g. in form of carrying out HR development initiatives like cultural diversity trainings) triggers
positive effects on employees' organizational commitment and should, therefore, be treated as an
important outcome, which implicates positive consequences for overall organizational
performance. Research on both: commitment (Magoshi & Chang, 2009) and attitudes towards
diversity (Riordan, 2000; Strauss, 2007) indicates that the abovementioned effects vary for groups
with different ethnic composition as well as for people with majority and minority backgrounds.
This fact offers interesting basis for scientific debate and will be further on discussed in this
thesis.

11
1.1.
Aim of the Study and Research Questions
The objective of the current thesis is to analyze theoretical as well as empirical research literature
in the area of cultural diversity management in organizations with a specific focus on cultural
diversity trainings. Based on the literature research it is planned to provide an overview of the
main theoretical frameworks of diversity management, the most essential empirical findings
within that research field and to highlight the main outcomes of cultural diversity, cultural
diversity trainings in organizations as well as psychological variables relevant in this connection.
Furthermore, goals and methods of diversity trainings will be reviewed and components of
successful diversity programs will be discussed in order to provide orientation for HR
practitioners and to enable successful introduction of diversity management initiatives in
organizations.
The thesis consists of three theoretical chapters, each varying in degree of specification
correspondingly to the prominence of certain variables in the current research as well as their
significance in the relevant scientific literature. Infused by the critical researcher's voices (e.g.
Curtis & Dreachslin, 2008) regarding diversity management that claim limited empirically-
grounded, theory-guided, and methodologically correct guidance for HR practitioners in the area
of cultural diversity management. The current thesis aims to answer three topical questions, which
should, utilizing the state-of-the-art research available in psychological, sociological, and
educational journals and databanks, provide scientifically founded answers that are hard on the
target of the modern organizational world.
Research Question 1
C
HAPTER
"M
ANAGEMENT OF
C
ULTURAL
D
IVERSITY IN
O
RGANIZATIONS
" provides an introduction
into the field of cultural diversity management in organizations. Selective relevant empirical and
theoretical research is overviewed in order to answer the Research Question 1: Which
consequences does Diversity have for organizations? What can organizations acquire as a result
of practicing cultural diversity management?
Research Question 2
C
HAPTER
"P
SYCHOLOGICAL
M
ECHANISMS AND
O
UTCOMES OF
D
IVERSITY
I
NITIATIVES
"
starts out
by providing the theoretical basis to the consequences of Diversity addressed in
CHAPTER
"M
ANAGEMENT OF
C
ULTURAL
D
IVERSITY IN
O
RGANIZATIONS
" in order to underpin them with
psychological mechanisms described by established theories and supported by empirical research.
The chapter offers an overview of publications, relevant for answering the Research Question 2:

12
Which psychological variables are commonly targeted in cultural diversity initiatives? Special
attention is given to attitudes towards diversity as one of the most commonly aimed at outcome
variables within the framework of cultural diversity management; as well as to organizational
commitment - the outcome variable exhibiting a broad range of correlations with performance-
related variables (employee retention, in-role performance, etc.), thus, yielding competitive edge
for organizations in which employee commitment is existent.
Research Question 3
C
HAPTER
"C
ULTURAL
D
IVERSITY
I
NITIATIVES AND
T
RAININGS
"
details the composition and
content of cultural diversity trainings and shows how the added value for organizations in form of
employee commitment, satisfaction, organizational citizenship behaviour, etc. is accomplished
through the change in work attitudes and attitudes towards diversity as a result of cultural
diversity trainings. Thereby pertinent research findings and theoretical constructs are delivered in
order to approach the Research Question 3: Can diversity management practices such as cultural
diversity trainings have consequences for employee's individual-level psychological variables in a
way that they produce outcomes, relevant for organizational performance?
1.2.
Methodology
The literature research was performed among published papers and textbooks using the search
within scientific databases (e.g. Education Resource Information Center (ERIC), PsycINFO,
ProQuest) and e-journals access of the University of Vienna (among management, psychological,
educational, and sociological journals) with keywords including terms relevant regarding the topic
of cultural diversity management in organizations, e.g. `diversity', `cultural diversity',
`management', `training', `organizations', `culture', `race', `ethnicity', `majority', `minority',
`stereotype', `attitude', `prejudice', etc. Certain materials (e.g. executive summaries, corporate
reports, press materials, etc.) have been retrieved from the Internet and are correspondingly linked
to respective websites in the list of references.
The literature search can be conceptually divided into two steps: 1) the preliminary research; 2)
the final research. The preliminary research concentrated on conceptual literature (e.g. review and
theory papers, book chapters) in order to get an overview of the main research questions in the
field of cultural diversity management and cultural trainings in organizations, reveal the
controversies of that research area and get acquainted with the prevailing theoretical explanations
of phenomena typical within that field. On the basis of classifications from specialized and
conceptual literature areas of further research could be defined more precisely and research
questions could be formulated. The final research was performed in a focused manner and

13
concentrated more on empirical research articles. Based on the research questions formulated
during the preliminary search; the final search topically concentrated on providing empirical
evidence relevant for answering the research questions and bridging the earlier identified
practice/theory gaps with the help of latest practical and theoretical scientific research inputs.
By and large, the current thesis follows a narrative review approach (as exemplified in Bezrukova,
Jehn, & Spell, 2010; Posthuma, Morgeson, & Campion, 2002), which implies appropriately
detailed descriptions and critique of the reviewed studies, usually including the used
methodology, research settings and, if necessary, specific predictors.

14
2.
M
ANAGEMENT OF
C
ULTURAL
D
IVERSITY IN
O
RGANIZATIONS
This chapter provides an introduction into the field of Diversity research and cultural diversity
management (CDM) in organizations. Both conceptual and applied literature on this topic is
overviewed, giving a general idea of the main DM trends and dimensions, overviewing the most
relevant findings within that research area and highlighting the business case for diversity in order
to explain, which consequences Diversity has for organizations and what benefits organizations
could possibly acquire as a result of practicing cultural diversity management.
2.1.
Definitions and Theory: Cultural Diversity Management in the
Workplace
Multiple definitions address the core of the phenomenon of Diversity, which is individuality and
variety. On the most general level Diversity represents the "multitude of individual differences
and similarities that exist between people" (Treven & Treven, 2007, p.29). A tool to manage
Diversity is called diversity management (DM). Cox and Blake (1991, p.45) give Diversity
Management a fairly general definition, whereby it refers "to a variety of management issues and
activities related to hiring and effective utilization of personnel from different cultural
backgrounds". DM focuses primarily on organizational practices of recruitment, training and
promoting underrepresented groups and "maximizing the unique skills and abilities of each
employee in an organization" (Hollowell, 2007, p.51).
2.1.1.
Concept of Organizational Diversity
The concept of Diversity in organizational context came into play for the first time three decades
ago, back in the 1980s. It began in the US as an initiative to create a more positive business
perspective and provide equal employment opportunities for various minority groups
6
. The
initiative later on evolved into a complex business-orientated strategy in the area of human
resource (HR) management and development
7
, organizational culture and leadership. Since then
the idea of DM has been gradually gaining recognition and by the mid-90s found application in
Europe, at first mainly in form of so-called "equal opportunity programmes". It was not until the
Amsterdam Treaty signing on the 2
nd
of October 1997 that a common pan-European diversity
policy was created. Amsterdam Treaty alongside with respective EU directives of 2000, 2002 and
6
Minority group - "a group of people who, because of their physical or cultural characteristics, are singled out from
the others in the society in which they live for differential and unequal treatment and who therefore regard themselves
as objects of collective discrimination" (Marshall, 1998, retrieved from http://www.encyclopedia.com/doc/1O88-
minoritygroup.html).
7
Human resource development (HRD) - term used to indicate training and development as an organization's
investment in the learning of its people as part of an HRM approach (Bratton & Gold, 2007).

15
2004 were called upon to act against discrimination on grounds of age, gender, disability,
ethnicity, religion or sexual orientation (Stuber, 2007a, 2007b).
2.1.2.
Workplace and Employee Diversity Management
Two somewhat related terms, which further specify Diversity in organizational context, are
commonly used: workplace and employee diversity management (EDM). Workplace diversity
management is generally defined as a "comprehensive managerial process for developing an
environment that works for all employees" (Kreitz, 2008, p.102). The concept of EDM goes
somewhat deeper into the strategic employee/organization fit and "focuses on changing an
organization's culture and infrastructure for people to provide the highest productivity possible"
(Treven & Treven, 2007, p.32). The same authors (2007, p.29) provide a fairly simple definition
of employee diversity (ED): "ED refers to human characteristics making employees mutually
different". It is widely assumed that employees belonging to the same age, gender, professional
group often have similar patterns of behaviour and this assumption constitutes the starting point of
diversity management. It is easy to imagine that sources of individual variations are different, but
for purposes of clearness can yet be grouped into two categories (Greenberg, Baron, 2000 as cited
in Treven & Treven, 2007, p.29): 1) those that people have little control over, and 2) those over
which people have more control. The first group mainly includes certain stable physical attributes
such as race, sex, age, but also the family and society, in which an individual lives. The second
group involves changeable characteristics that can be willfully adopted or dropped by conscious
choice and effort: political beliefs, education/profession, and marital status. A substantial amount
of diversity could result even from this relatively simple dichotomic classification of diversity
sources. Therefore, the topic of employee diversity in an organization usually involves a vast
scope of issues, starting with types of employee's personality, e.g. extroversion ­ introversion,
adjustment to organizational life, locus of control
8
, employee's values and attitudes (see 3.2.
Attitudes and Attitudes towards Diversity), family issues (work/life balance, parenting), and
concluding with demographic trends: growing number of women in organizations (particularly in
Western and Northern Europe) and ageing of workforce. Naturally, depending on local issues,
diversity trainings also have various priority topics, for example US-only trainings, according to
Bendl, Hanappi-Egger, and Hofmann (2004), concentrate more on the topics of sexual harassment
at work, while European trainings are usually more gender-oriented. However, regardless of local
issues, current worldwide economic metatrends of internationalisation and globalisation,
8
The locus of control is one's belief about the amount of control over one's life. People who believe to be "masters
of their own fate" have internal locus of control; people who assess themselves more "as pawns of fate" and are
convinced that occurrences in their lives are due to chance or luck have external locus of control (Treven & Treven,
2007, pp.30-31).

16
alongside with societal changes like extensive immigration and consequent increase in
international workforce, are inevitably causing increased exposure to diversity, making the issue
of cultural diversity particularly up-to-date for modern organizations by turning the strategic
spotlight on its management and solving of issues connected to diverse cultures and ethnicities of
employees.
2.1.3.
Cultural Diversity and its Management
As the current thesis concentrates on the notion of cultural diversity management and operates
with the terms of culture, race, and ethnicity, it seems suitable to clarify these notions in more
detail. A broad range of definitions have been given to the term of culture: it has been defined as
human-made part of the environment (Herskovits, 1955), collective programming of the human
mind that distinguishes the members of one human group from those of another (Hofstede, 1996)
and as "patterned ways of thinking" (Kluckhohn, 1954 as cited in Gibson, 1994, p.5) or, more
precisely, "characteristic ways of thinking, feeling and behaving shared among member of an
identifiable group" (Gibson & Gibbs, 2006 as cited in Shore et al., 2009, p.124). Most definitions
emphasize the shared and collective nature of culture, which aids assignment to a particular group
and helps find one's identification. Based on this premise, Cox (1993 as cited in Amaram, 2007,
p.1) in general terms defined cultural diversity as "the representation, in one social system, of
people with distinctly different group affiliations of cultural significance". Although obviously
culture can operate in multiple areas of human activity, the current thesis primarily focuses on
cultural diversity and its importance for organizations. Thus, in organizational context, Magoshi
and Chang (2009, p.32) broadly define cultural diversity management as the companies' ability
"to give chances to and utilize resources of people from diverse cultures", whereas culture could
mean nationality or ethnic group. It must be noticed at that point that the topic of Cultural
Diversity is connected with certain definition confusion as different researchers define cultural
background differently. As Shore et al. (2009) rightfully notice it is often not clear, which sources
of cultural effects (e.g. religion, ethnicity or nationality) or which diversity features are most
influential. Diversity features could have an observable character (e.g. accent, religious views) or
be more subtle due to varying degree of acculturation
9
(e.g. an immigrant maintaining cultural
attributes from the country of origin while living in a different country).
9
"Acculturation refers to learning the culture of a group different from the one in which a person was originally
raised. Acculturation may involve learning the dominant language, adopting new values and behaviours, etc. It can
also be forced in some instances: discontinuing bilingual education for migrants in California and forcing students to
learn English in school" (Sullivan, 2011, p.188).

17
2.1.4.
Measurement of Cultural Diversity
As apparent from multiple definitions of cultural diversity (CD) and the abovementioned
problems with the very notion of culture, measuring CD is one of the notorious challenges in this
research area. The biggest methodological challenge of cultural diversity research being the lack
of widely accepted analytical foundation or common well-established theoretical framework,
which would enable complex and integrated explanatory basis the multiple influences of diversity
and cultural diversity on organizational outcome variables. Shore et al. (2009) rightfully notice
that cultural diversity is in need of refined operationalization in order to improve its predictive
validity
10
. They at the same time suggest that a multi-dimensional approach should be applied to
operationalize cultural differences (e.g. Hofstede, 1980, 1996; G. Hofstede, G.J. Hofstede, &
Mayer, 2006), taking not only one dimension, but a whole complex of them to define, measure,
and examine cultural diversity. Kitayama (2001) even more critically claims that the whole area
of "cross-cultural validity of attitudinal surveys" (p.2) cannot be taken for granted, and criticizes
the "entity view of culture" (p.4), which describes culture as a static unit and turns categories like
ethnicity or gender into entities exercising "causal force" (p.12) on behaviours. However,
extensive consideration of the dynamic nature of culture and its integrated analysis is often not
possible out of financial-/time- or other resource-related reasons.
A typical example of short-cuts happening in cultural research is building studies on selective
dimensions from well-known cultural theories: for instance individualism-collectivism from
Hofstede's (1980) cultural dimensions theory. Typically, Anglo-Americans are classified as
belonging to the individualist culture, and Asians, Hispanics, and Black Americans - as the
collectivist culture; continuing this reasoning Cox et al. (1991) theoretically assume and
empirically prove that Asian, Hispanic, and Black Americans (compared to Anglo Americans)
engage in higher levels of cooperative behaviour. Although such research is, without doubt,
helpful for advancing science and specialized research questions, it is nonetheless important to
acknowledge that this type of operationalization has the potential of coming to over-generalized
and over-simplified conclusions.
Another point of criticism/recommendation comes from a cultural diversity measurement
background and is mentioned by Burkard et al. (2002). The authors point out the fact that
workplace diversity is a multidimensional construct and, ideally, multiple methods in the
assessment process should be involved, e.g. interview and observational methods (for targeting
specific variables and gaining a social world perspective of the phenomenon) alongside with using
10
Predictive validity is the extent to which a score on a scale or test predicts scores on some criterion measure
(Cronbach & Meehl, 1955).

18
already established self-report measures/instruments. Kitayama (2001, p.14) with his "system
view of culture" supports this proposal and suggests to draw on an array of instruments from self-
reports over behavioural to performance measures to embrace cognition, emotion, and motivation
responses, which, in his opinion, are important components of culture.
2.1.5.
Issues of Race, Ethnicity, and Culture
Consequently, quite often empirical diversity research simplifies the measurement of culture by
concentrating on a particular dimension and claiming that the dimension they choose accounts for
differences in outcomes and effects. It is therefore common within the scientific community to
choose the definition, which most closely reflects the purposes of the study. Richard (2000), for
example, defines racio-cultural diversity (a.k.a. demographic diversity and cultural diversity) in
the sense of ethnicity (objective ethnic minority/majority). In this regard we have to come back to
the issues of race and ethnicity and their definitions. As Sullivan (2011, p.186) puts it, the concept
of race "refers to a category of people who are believed to share distinct physical characteristics
that are deemed socially significant" and is used to categorize people based on biological
differences. Because ethnicity most commonly refers to a "shared cultural heritage or nationality"
(Sullivan, 2011, p.191), ethnic groups would, consequently, differ in terms of language, family
structure, family customs and national origin. Thus, two people with same racial identity can have
different ethnicities, e.g. Sullivan brings an example of black American and black Jamaican, who
have similar physical characteristics, but have different cultural/ethnic backgrounds. Despite the
fact that some scholars (e.g. Shore et al., 2009) clearly distinguish race and ethnicity diversity
from cultural and national origin diversity, most commonly cultural diversity researchers use the
terms of race, nationality and ethnicity interchangeably: (racio-)cultural diversity, ethnic diversity,
demographic diversity are often used as synonyms, e.g. Roberson et al. (2001) even use the
combining term of racioethnicity. Such terminology choices seem problematic as they disregard
the multidimensionality of the construct of culture and eliminate the opportunity to distinguish
between the causes of meaningful diversity outcomes. Methodologically, this approach leads to
over-simplification of the abovementioned concepts and washes away the traces of various
elements that possibly have impact on diversity outcomes, which get lost in translation during
interpretation.
2.2.
Inevitability of Diversity in the HR World
With globalisation being the "defining political economic paradigm of our time" (Bratton & Gold,
2007, p.120) and with constantly increasing internationalisation (Aronson, 2002) Diversity is
emerging as a strategic success factor for leading companies. Researchers report (e.g. Amaram,

19
2007, p. 1) that cultural integration in business organizations has received "fair and significant
attention in the past two decades." Current prominence of Diversity topics is based on the general
stance that Diversity enables companies to gain competitive advantage through one of its most
important assets - people (Richard, 2000). Empirical research evidence largely proves this point
and makes Diversity a focal point of the strategic human resource management
11
area (see 3.3.3.
SHRM: Commitment paradigm).
2.2.1.
Target Group Companies for Diversity Management
Naturally, Diversity seems to be of particular importance for the specific market fragment of
companies. So, which companies are the Diversity's target group? While discussing the
motivation behind the pursuit of diversity initiatives Vedder (2006, p.12) analyses, which
organizations mainly practice DM. Interviews with leading international Diversity experts make it
clear that Diversity pioneers, despite substantial national differences, can be found in the same
areas transnationally: (a) large scale enterprises operating globally (e.g. BP, IBM, Motorola),
which apply Diversity concepts globally in all of their subsidiaries; (b) big national service
organizations (e.g. banks, posts, telecommunications), who are specifically targeting manifold
customer needs; (c) big national consumer goods manufacturers are particularly interested in
DM-topics; (d) organizations, which do most of their business with minority groups (e.g. with
aboriginal people, people with disabilities); and last but not least (e) group of employers who are
engaged in Diversity activities because of specific personnel recruitment situation (e.g. nursing
services, IT companies, law firms).
2.2.2.
Current Cultural Diversity Popularity Trends
Accepting cultural diversity management has been promoted as a positive tool in organizational
engineering aimed at solving/preventing group dynamics problems in business organizations.
Research societies (e.g. Society for Human Resource Management, 2008) and consulting
companies report Diversity to be widely prominent in corporate annual reports. For example
Diversityinc.com (European Diversity Research & Consulting, 2009) refers to 86% of Top 50
Companies for Diversity naming Diversity as a strategic success factor. European Diversity
Research and Consulting report in their press-release on Survey on Diversity in Corporate Annual
Reports of Stoxx 50 Companies (European Diversity Research & Consulting, 2009) that 76% of
all Stoxx 50 companies mention Diversity in their annual reports for 2007, whereas presence of
11
Human resource management (HRM) is a "strategic approach to managing employment relations which
emphasizes that leveraging people's capabilities is critical to achieving competitive advantage, this being achieved
through a distinctive set of integrated employment policies, programmes and practices" (Bratton & Gold, 2007, p.3).
Strategic human resource management (SHRM) is the "process of linking the human resource function with the
strategic objectives of the organization in order to improve performance" (Bratton & Gold, 2007, p.39).

20
Diversity is most strongly observed in the UK (up to 100% of all reports), but all other European
regions also show a rate at least higher than 50%. These numbers have been ever increasing from
34% in 2003 to 76% in 2007, which means a 42% increase over 4 years (with the UK
unprecedentedly being in the lead with a jump from 58% to 100% in just 2 years).
The Second European Diversity Survey (EDS2) from year 2004 polls 52 leading Diversity
companies and provides proof of the relevance of cultural DM research: the poll shows strategic
interest for diversity, which is attributed by 50% of respondents to globalisation and by 22 % to
European integration and enlargement. The survey also mirrors current demographic changes:
59% of participants see ethnic minorities provide an increasing potential as the most important
driver for Diversity work. 60% of the polled companies also consider the fact that the younger
generation tends to prefer an open and/or multicultural environment to be the most important
cultural trend. Finally, 57% of the surveyed companies name better access to more right
potentials, improved team effectiveness and co-operation as the biggest benefits from Diversity.
Thibeaux, Tillotson, Falls, and Bell (2006) notice that the current trend of Diversity research takes
a particularly close look at issues initiated in ethnicity, culture, and lifestyle as opposed to earlier
Diversity research, which has mainly been concentrated on issues of ethnicity and gender. Taking
into account the research proving positive effects of clever diversity management, future forecasts
for DM development in general as well as prospects for people with diverse backgrounds are quite
optimistic and inspiring. For example, Hollowell (2007) predicts a general increase in
employment opportunities for recent graduates with "diverse backgrounds" (as opposed to the
previously stereotypical Anglo-Saxon middle aged white male).
2.2.3.
Role of HR - Allocation of Cultural Diversity Management
Status and importance of DM for the organization cannot be discussed until its relationship within
the HR structure is defined because, as Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn et al. (2003,
p.7) notice: "when HR practices support the creation of a workforce that has the skills needed to
turn diversity into an advantage, diversity is more likely to lead to positive performance
outcomes". Various authors position the responsible human resource (HR) areas differently, e.g.
Magoshi and Chang (2009) localize DM in the company's HR structure in the area of strategic or
(in case of cultural diversity) international human resource management. The latter is also
sometimes described in connection with the paradigm of cross-cultural management, which is
used for the compilation of research and practice of cross-national comparisons, intercultural
interaction, and multiple culture studies, including research that focuses on culture at the national,
organizational, and sub-organizational levels (Primecz, Romani, & Sackmann, 2009).

21
Figure 1. The international human resource management cycle. Source: Bratton and Gold (2007,
p.85).
Bratton and Gold (2007) describe cultural diversity embedded within the international HR
management cycle (see Figure 1) and directly connected with such HR domains as recruitment
and selection, training and development and, indirectly, with performance appraisal and rewards.
All of the practices in the international HR management cycle are contributing to the strategic
goals and business performance (overviewed by Shoobridge, 2006) of the company as well as of
individual employees because of having effects on such mutually beneficial outcomes as job
satisfaction, commitment, internal communication improvement, etc. International recruitment
focuses on attracting qualified and diverse applicants (Kreitz, 2008) and selection concentrates on
personnel selection issues. Researchers (e.g. Tipper, 2004) provide practical guidance on how to
increase diversity through market research of potential recruitment pool, building business case
for stakeholders and using media-strategy to communicate effectively through traditional and
online-media (e.g. highlight interest in diversity on the company's website) in order to reach
target candidates. Rewards and compensation concentrate on incentives and reimbursements for
expatriates based on costs and benefits at stake. Performance appraisal represents an almost
political activity of gathering information on employee's competencies and performance, work
effort, career paths, motivation as well as termination and employment; thereby closing the HR
management circle and forwarding us back to recruitment and selection.
However, the most relevant for research focus of the current thesis is the area of training and
development of both managers and employees. The range of trainings and development initiatives
is very broad. It starts with general issues of succession planning
12
, and goes on to more specific
12
Succession planning - an "ongoing, strategic process for identifying a diverse talent pool and developing them into
and organization's potential future leaders" (Kreitz, 2008, p.103).

22
areas of cross-cultural training (CCT)
13
and diversity training (DT) (see 4.2. Cultural Diversity
Trainings in Organizations), with goals of increasing cross-cultural adjustment and ability to
understand and appreciate multiple cultural perspectives, global meetings with debriefing and
coaching (intended for learning skills to conduct better cross-cultural meetings) as well as
international assignment rotations (aimed at developing a deep appreciation for the challenges of
working in another culture and increasing in global leadership competence), etc. (Caligiuri,
Lazarova, & Tarique, 2005 as cited in Bratton & Gold, 2007, p.88).
According to Cox and Blake (1991) the management of cultural diversity in organization
encompasses a whole diversity philosophy (see Figure 2) including HR management systems,
mind-sets about diversity, organizational culture, educational programs, and addressing the issues
of cultural differences, heterogeneity in race/ethnicity/nationality, and gender.
Figure 2. Spheres of activity in the management of cultural Diversity. Source: Cox and Blake
(1991, p.46).
2.3.
Business Case: Diversity as the Right Thing to Do
Since its beginnings as an antidiscrimination measure DM has come a long way and evolved into
a business-orientated strategy in the area of HR management and organizational culture, which
13
Cross-cultural training distinguishes from traditional training through its focus on "attitudinal changes rather than
on acquisition of information" (Bhagat & Prien, 1996 as cited in Littrell & Salas, 2005, p.308).

23
often goes under the name of business case for diversity (Robinson & Dechant, 1997; Stuber,
2007a). The business case describes the organizational benefits or impact thought to arise from
investing in, developing, and sustaining a diverse workforce. Some authors (Stuber, 2009b)
conceptualise it in the form of the potential principle that contains four main components:
diversity, respect, inclusion, and added value. There is a heated debate going on between
advocates of the idealistic perspective that companies should be more diverse because it is the
right thing to do or, from a more pragmatic perspective, that managed the right way Diversity
brings benefits and improvements, e.g. enhances shareholder value (Hollowell, 2007), helps
reduce opportunity cost by cutting down turnover, absenteeism rates (cost argument
14
), and
increasing job satisfaction (Cox & Blake, 1991). The latter largely utilitarian attitude explains the
rise of DM to prominence as a result of diversity being a necessity (Schwarz-Wölzl & Maad,
2003; Stuber, 2009a), something that mirrors the Zeitgeist or, as Cox and Blake (1991) call it:
inevitability of diversity, i.e. practical need to hire more women, minorities, and foreign nationals
because of workforce demographic trends.
As Bendl et al. (2004, p.264) mention in their Microsoft-Case-Study, the main long-term goal of
Diversity Management Programs is creating competitive advantage. Singh (2002, p.3) suggests,
supporting the business case for diversity, that developing "individuals to the best of their
abilities" will result in tangible advantage for organizations practicing in form of commitment,
creativity, and, consequently, in competitive advantage and overall higher firm performance for
companies practicing it. This extensive economic goal is achieved through attaining smaller, more
idealistic aims, e.g. providing equality of development opportunities independent of ethnic or
cultural affiliation. Therefore, on a more philosophic note, diversity management is also a mutual
learning process. Cox and Blake (1991) argue that although heterogeneity could cause less
cohesion in the decision-making process, the multitude of perspectives, and diversity in opinions
generally creates less emphasis on conformity, reduces groupthink (creativity argument, e.g.
Aronson, 2002), leads to better problem-solving, and more informed decision-making through
wider range of perspectives, facilitated information processing, as well as learning (problem-
solving argument) (Cox et al., 1991; Ely & Thomas, 2001; Janis, 1982 as cited in Shore et al.,
2009).
Historically first HR area to develop was Diversity in recruitment (equal opportunity programs,
"fairness case" (Singh, 2002, p.3), etc.). Nowadays , as a more complex approach is being formed,
Diversity specialists additionally possess a wealth of knowledge in Diversity Marketing (Cox and
14
All in all, Cox and Blake (1991) single out six arguments in favor of diversity providing competitive advantage: 1.
Cost; 2. Resource-Acquisition; 3. Marketing; 4. Creativity; 5. Problem-solving; 6. System Flexibility.

24
Blake's marketing argument emphasizes the know-how and cultural insight that employees with
diverse cultural background bring to the marketing effort of the companies they are working for);
and customer diversity (resource acquisition argument), e.g. positive reputation development of
companies supporting Diversity, which becomes of particular importance because of labour force
change towards more women and minorities on the market. Consequently, the model for
managing diversity is (with time) expected to become less standardized and determinant and,
therefore, cause greater flexibility towards environmental changes (system flexibility argument),
so that high-quality reactions will be available faster and at less cost. Yet, today diversity
programs seem to generally still be quite costly, so companies require tangible proof in form of
beneficial diversity outcomes and consequences to justify expensive valuing of Diversity. Well,
what are the outcomes of cultural diversity in organizations and what could companies expect
from diversity management? A possible approach to explaining the philosophy behind the
business case can be clarified on the example of the multi-level framework of Diversity dynamics.
Jackson et al. (2003, p. 803) provide an overview of literature published between the years 1997
and 2002 on the effects of workplace Diversity on teams and organizations and conceptualize the
consequences of diversity in three groups: effects on affective reactions, team processes, and
performance.
Figure 3. A multi-level framework for understanding the dynamics of diversity. Source: Jackson,
Joshi, & Erhardt (2003, p.803).
As apparent from the multi-level framework (Figure 3): diversity dynamics are fairly complex.
Few (maybe even none) studies are capable of simultaneously taking into consideration all of the

Details

Seiten
Erscheinungsform
Originalausgabe
Jahr
2011
ISBN (eBook)
9783842831728
DOI
10.3239/9783842831728
Dateigröße
1.4 MB
Sprache
Englisch
Institution / Hochschule
Universität Wien – Psychologie, Institut für Wirtschaftspsychologie, Bildungspsychologie und Evaluation
Erscheinungsdatum
2012 (Mai)
Note
1
Schlagworte
cultural diversity management organizations psychological variables trainings
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Titel: Cultural Diversity Management in Organizations
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