Boston Consulting Group’s Diversity Management

Introduction

The United Nations General Assembly has declared the new millennia and this century to be the century where diversity should be celebrated. As in many other fields of life, even in business diversity has become part of its routine. Globalization along with the triumph of free trade and capitalistic view of the economy has led to a huge mobility among the labor forces from all around the world. Today, the norm we find on the market is that many international companies and corporations do employ staff from very different backgrounds. This situation has come as a result of both internal and external factors. The internal pressure can be exposed in the form of more ‘universal human rights’ appliances and the fight against discrimination and any form of prejudices. For this reason many companies were keen to declare in their ethical norms and mission statements that they not only accept these values but also will actively seek to pursue them for the benefit of the community. Such a case is that of the Boston Consulting Group, a case which we will discuss later on this paper.

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The other factors influencing on this situation are what in the scholarly language are called ‘external factors’. These relate to the globalizing events that began after the Second World War and accelerated after the fall of the Berlin Wall and the end of the ‘Cold War’. During this time, since they have been ‘stretching’ to every corner of the world they use staff members from local communities in their branches but not only.

They also employ people from different background in their headquarters in order to develop the adequate policies and project for the company to succeed in this ever more globalized market.

Here we come to the central thesis of this paper. It is that diversity in the workplace, if properly managed, can turn to a driving force for innovation and company’s successes. We will try to prove this thesis in the pages to come by setting up the theoretical framework and then by describing two concrete examples as support argumentation for this thesis.

Diversity in the workplace as a strength factor

First we have to answer the question of what diversity is. As agreed upon many scholars diversity “refers to the assortment, mixture, variety and range of people and their characteristics. This concept also refers to the wide variety of characteristics that describe people as unique beings” (Jones, 2004, p. 14).

As we can see by the definition provided above, diversity is having a mixture of people in the way they behave externally as well as what they believe to be good or bad, correct or not correct, internally. Until the end of the last century company managers say diversity within their company staff as a inhibiting factor, a factor that would become a barrier to the growth of the business and to the internal work force cohesion needed to achieve that growth. The ‘fear’ was that diversity of staff would demoralize them work closer with each other.

But in the late 1990’s many efforts have been made in the scholarly world to demonstrate that diversity in the workplace, in a company or a business firm, is in fact s source of strength and not of weakness. Many business leaders are now convinced that their companies could use this diversity within them to ‘spark’ the necessary fire for innovation and intrinsic motivation.

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Innovation is an essential tool for business development and success. In today’s business world, most of the major market companies do have their Research & Development sectors, departments, which constantly seek to find new routes, new alternatives for the company to be successful in the market. These companies rely heavily on the creativity of their staff. Many authors sustain that in order to gain a comfortable market share, or to remain on top once you got there, the company should constantly try to create new products in order to attract customers (Ghosh, 2005). It is the intention of this paper to show that market research cannot benefit a company without the various modes of interpretations of its results. Here is where diversity comes to play a very significant role.

Having a unique background staff allows you to have only one point of view, thus only one way of interpreting the analysis of the market research and develop a market strategy. From this we can deduce that the company would manage to have only one approach to the market that could be good for one community or social group. In fact, it will be congruent with those consumers that have similar background with the staff members who analyzed the data and came out with the strategy.

So, having a diverse staff within your company is an important issue, if not the ‘key’ issue, on developing more profitable possibilities for your business. The market strategy formulation process has its steps that should be fulfilled carefully in order for the company to achieve success. Here diversity plays the role of the ‘catalyst’. Today’s societies are composed of different communities and social groups. These communities and social groups come from different backgrounds, many times so different that values and norms do change quasi radically among them.

But at the same time, a business company understands that in order to fulfill its aim the best it can, it should address all of these social groups and communities, or at least most of them. This means that it has to know better its consumer target groups.

Having your staff composed of people with diverse backgrounds helps a company better understand the different forces composing the world today. The first thing why diversity of staff is a positive and a strength factor for a firm is that if can learn from the experiences and backgrounds of all of its staff members.

By showing their own experiences each one of them can learn from the other and thus be more prepared to understand how ‘others’ differ from him and how this ‘different from him other’ does perceive reality. Once this is assessed it can be easier to recognize and apprehend this ‘other’s’ expectations in this world. The other strength factor is that this way you will have multiple forms of interpreting the data of a market research, for example. The same can be said when designing and implementing a market strategy. Being from different backgrounds the staff members can ‘add up’ different pieces of the puzzle and thus by doing so having a broader picture.

It is at this point that a good manager should show his, or her, ability to ‘get the most’ out from the diversity of each one. But this we will discuss in our next part below.

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Diversity ethics of management

We should start by stating that having to manage a group of people is not that easy. And the reason because it is not easy lays in the ‘strength’ of this situation; that you have to deal with different backgrounds. But having different background means also having different mentalities, belief systems or viewpoint.

Thus, each of the staff member is encompasses within itself a different set of capabilities and potentials than the other members.

A good manager has to look at his diverse staff and try to harness their different talents, cultures, outlooks and backgrounds. Effective leaders do accept diversity and use it as a business enhancement toll by recognizing the potential it has (Jones, 2004, p. 22). A successful manager should also be able to coordinate the group in order to achieve the desired results on the target goals a company has. A supervisor managing a group of workers should be aware of the potentials of his workers and their personalities in order to be able to ‘get the most out of them’. It should be part of a manager’s ethics and intelligence to know how to harness the potential of a diverse staff. All of this could be done since its education in our college and universities in order for the manager to have the appropriate understanding of this situation, if it presents itself, prior to the contact in the real world. The ultimate goal is that by managing a diverse set of people working in his company he will be able to benefit, himself, them and the company.

Understanding and comprehending diversity among his staff enables the manager to form a richer working environment. But, at the same time, if the manager fails to address the issues, challenges along with the opportunities that this diverse staff presents, it could result in the formation of a destructive and unhappy working environment. Two possible results would be the increase of conflict between staff members and decrease of performance. This atmosphere will de-motivate people to get their best out during their work and thus ultimately damage the company.

In order to turn this diversity in a positive enhancement factor and positively impact the performance of the staff a manager should be aware of prejudices and of stereotypes. He, or she, should design and implement various policies with the aim to eliminate discrimination among its staff. The manager must demonstrate in a valuable manner that he (or she) really values diversity and that he does not discriminate against any of his staff because of its difference.

At the same time, nor does he allow discrimination to be part of the daily working routine (Gomez-Mejia et al., 2008, p. 35). If it is necessary he should implement various workshops, seminars and programs with the aim to eliminate stereotypes and discrimination among staff members.

As an example of positive diversity management we can mention here the cases of Sanyo Incorporated and that of the Boston Consulting Group, both in the United States. These two companies made their policy, not only to accept, but also to manage them in such a way that to ‘get the most out of them’.

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Sanyo International is a Japanese based business company that deals with digital hardware production, like television sets, pc components, etc. it first arrived in the mid 1970’s when it acquired a local firm in the south of the United States in order to enter its market.

There were a lot of troubles at the beginning for this company as there were a lot of cultural and mentality difference between the new property owners and the local working force. Since Sanyo brought with it many Japanese staff. At first, there was the problem of integration of this staff among the existing American one.

Then it was the problem of stigmatization and stereotyping from both sides. The management team at Sanyo designed and implemented a ‘cultural integration plan’ that had a tremendous positive impact on the company (Gomez-Mejia et al., 2008, p. 43-44). For space purposes we cannot present the entire strategy that Sanyo implemented but we can mention the pillars upon which it was raised. It all began with various seminars and workshops regarding the culture of each other.

For the Japanese workers there were special hours and seminars to present them with American values and stress out the similarity that existed between these values and their own values. To the American local work force the similar values of Japanese culture were presented through various workshops and seminars, too.

Also, a policy of cultural integration during working time was implemented. Japanese workers and American workers were mixed up in their daily work processes in order for them to create a closer bridge of communication. And finally, the company implemented a feedback system asking its labor force about its thoughts regarding what they see as important, going good or bad within the company. This system made everyone feel important within the company regardless the cultural background he came from.

The Boston Consulting Groups similarly was one of the first American companies to implement a cultural diversity program. But this time it was not only directed to its internal staff but also to its target customers. Within its staff it implemented similar techniques like at Sanyo International. This company declared diversity of staff to be the major strength factor of its business and actively engaged in diverse staff recruitment (“The Boston Consulting Group”, para. 1).

This company also implemented policies targeting specific cultural groups within American society. It actively targeted the most stereotyped and marginalized communities. At first there was no positive reaction from the general public but with the passing of years this situation helped the company form positive brand recognition among the general consumer public. And In turn this situation attracted the interest of investors. This situation ultimately benefited the incomes and profits of the company.

Conclusions

In the conclusion part we return again to our thesis that diversity in the workplace, if properly managed, can turn to a driving force for innovation and company’s successes. Today many authors do proclaim that diversity is one of the major strengths of the American work force (Jones, 2004, p. 43). International corporations are well aware of this situation and this is why many of them now are implementing various cultural programs and actively advertising this fact. The successful manager of tomorrow should be a leader able to comprehend and properly manage diversity within its staff. But in order to properly manage it, he (or she) should first fully understand it.

We conclude by reassessing the example of the two companies mentioned above and stating that diversity is in fact a strength factor that companies should be aware of (Ghosh, 2005).

References

Gomez-Mejia, R. David, B. Robert, L. (2008) Management: People, Performance, Change, 3rd edition. New York: McGraw-Hill.

Ghosh, G. (2005) Guatam Ghosh on human resources: points of view regarding organizations, work and people. Web.

Jones, R. G. (2004). Organizational Theory, Design, and Change: Text and Cases, 4th edition. Prentice Hall Publishing House, United States of America.

The Boston Consulting Group. (2009). People management & human resource competencies. Web.

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