Diversity Management: Perspective, Challenges, Benefits

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Introduction

A literature review on diversity management was prepared based on the literature matrix comprised in preparation for the study. Overall, most articles on the topic contain contemporary perspectives on diversity management, including its challenges and benefits in modern organizations. Some information on the historical development of the topic was also found, and it confirms the view that diversity management is a relatively new subject that evolved as a result of sociocultural changes in America and other countries. Some gaps that should be addressed in future research were also located and discussed in a separate section.

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Historical Development of the Topic

Historically, the topic of diversity management was tied to social and cultural shifts. This is particularly true in America, where centuries of slavery, racial segregation, and gender discrimination had a significant impact on vulnerable populations’ employment and education. For example, racial and gender inequality in the United States prevented companies from recruiting women and minority groups until the 20th century (Ayega & Muathe, 2018). Thus, the workforce of companies in the U.S. consisted primarily of white men, with little to no diversity evident. These companies did not need diversity management, as the cultural, ethnic, and gender composition of the workforce was relatively homogenous.

Colonial America

The history of diversity in America began in colonial times when settlers from various European countries arrived to establish colonies in the newly discovered land. As noted by Zinn (2015), there were four countries with the largest colonies in America: England, Spain, France, and the Netherlands. The goals of the new settlers were to explore the land and collect resources for export. The first colonizers believed that they would find a lot of gold on the continent, but this soon turned out to be untrue (Zinn, 2015).

While they found gold in some locations of South America, most colonizers who stayed in Northern America sought to seize more lands and export raw materials to the European market (Zinn, 2015). Given the rivalry for land and resources between the colonies of different countries, there was almost no space for collaboration, and thus people from diverse nations rarely worked together. Similarly, most encounters with the Indigenous people of North America were hostile. In this context, national and racial diversity was seen as a threat.

Nevertheless, some scholars note that there was significant class and religious diversity among individuals, particularly those established by England and France. Zinn (2015) notes that colonizers practiced a variety of religious beliefs and that there were Catholics, Lutherans, Jews, Puritans, Baptists, and Anglicans living in the same colony. People who came to America also varied in terms of their socioeconomic status. Some of them were rich and famous in their homelands, whereas others were people from the working class who simply wanted to earn money for their labor. Thus, while collaboration between people of different nations and races was limited, there was still some diversity in colonies, requiring people to work and communicate with those from different backgrounds.

Slavery and Racial Segregation

The period of slavery is among the most gruesome times in American history. It is relevant to the historical development of the topic because it shows negative attitudes to diversity and its effect on populations. Slavery became widespread in America in the 17th century, and most scholars believe 1619 to be the year when first slaves were brought to the colonized land (Wallis, 2016).

However, there is substantial evidence that slavery was widespread even before that, particularly in some Spanish colonies (Guasco, 2017). Slavery continued to be a widespread practice in America for over two hundred years until the passage of the 13th Amendment in 1865, which ruled slavery unconstitutional and abolished it throughout the United States. Throughout this period, black and American Indian people were used and sold as slaves. The majority of slaves worked in agriculture, producing tobacco, cotton, and other goods for export (Wallis, 2016). Some slaves were also kept as house servants by merchants and wealthy persons.

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One significant aspect of slavery in America, which makes it particularly relevant to the topic of diversity, is that it created a foundation for racial discrimination and white supremacy. Indeed, according to Wallis (2016), slavery in other lands and periods was not based on race. However, at the time of colonization, many European countries, and England, in particular, have already begun to promote ideas of human rights, equality, and freedom. In this context, trading people, torture, and killing for economic profit seemed to go against the beliefs of European society (Wallis, 2016).

To facilitate slavery, those involved in the slave trade used racial and cultural differences between people to demonize African and American Indian people, making them less human in the eyes of the masses. Wallis (2016) states, “the ideology of white supremacy, of course, was economically motivated – slavery was enormously profitable – but it had to be philosophically and religiously tied to false ideas of white superiority and black inferiority” (p. 74). In other words, the ideas that have largely shaped the lives of people of color in the United States have been invented as a justification for greed and cruelty.

The views that originated during the time of slavery had a lasting impact on people of color in the United States after the abolition of slavery. Racial segregation, for instance, was a common practice for decades following the 13th amendment. It involved black people working, studying, and living separately from white people (Wallis, 2016). Segregation was prominent in all aspects of life, and even in the armed forces, black soldiers were separated from others. The social division maintained by segregation policies and attitudes has influenced people’s views on racial and cultural diversity in the United States.

People from different cultural and ethnic backgrounds were seen as “the other,” which led to widespread discrimination. To this day, some people continue to hold racist views, which threatens diverse workplaces. For instance, if a white person has a prejudice against people of color, this will impair trust and collaboration in the workplace, leading to unwanted consequences. This means that the history of slavery had a profound impact on American society as a whole, and it still creates challenges that require diversity management.

Gender Inequality

Another prominent theme in workplace diversity studies is gender, because the history of women in Europe, America, and most other parts of the world has influenced their integration into workplaces. As noted by historians and scholars, women’s position in society of the past was very different from the one they have today. First of all, women had little to no rights, because they were seen as inferior to men (Kimble & Röwekamp, 2016). This was evident in all aspects of life, and thus women of all ages experienced this issue.

For instance, before marriage, young women were rarely allowed to make any choices, as all decisions were made by their fathers or brothers. Women were seldom considered as heirs of fortune or property, and usually, their brothers would receive those after the parents’ death (Kimble & Röwekamp, 2016). After marriage, women were controlled by their husbands, who had authority over most of their decisions.

They were usually pressured into sex and childbearing, and many women would give birth to as many as eight or ten children during their lifetime, which impacted their health. As noted by Kimble & Röwekamp (2016), “wives, like children, did not have the status of full legal persons; their legal status was inextricably tied to their husbands” (p. 81). Divorces were rare at the time, but when they happened, the father would usually gain custody of children (Kimble & Röwekamp, 2016). Women’s rights remained a significant issue in Europe and the United States until the late 20th century, but there are still problems in other areas of the world.

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Secondly, because of the limitations created by patriarchy, women were dependent on men financially, socially, and legally. This also meant that they often stayed at home caring for children and the household instead of working (Kimble & Röwekamp, 2016). On the one hand, husbands could prohibit their wives from working or pressure them into changing jobs.

On the other hand, career opportunities available to women at the time were strictly limited. According to Kimble and Röwekamp (2016), before the 1800s, women worked as girls’ school teachers, servants, cooks, and midwives. Some women also helped their husbands to manage small, family-owned businesses. Serious professions that could provide financial independence, such as doctors and lawyers, were only available to men. This had a significant influence on diversity in the workplace because it limited the majority of the workforce to men.

The industrial revolution of the 19th century created more opportunities for women to work. Middle-class women could now work in factories, and many of them preferred this option to stay at home (Milkman, 2016). Nevertheless, the integration of women into the workforce was not complete because they still could not work in the same jobs as men and earn as much. Milkman (2016) explains that positions available for women in factories were usually sex-labeled, meaning that women never worked in the same positions as men. Workplace segregation prevented women from integrating into the European and American workforce until decades later.

Legal Changes

As evident from the two sections above, racial and gender inequality hindered workplace diversity by causing social division. These issues also impacted the willingness of white men, who constituted the majority of the American labor market, from collaborating and working together with women and people of color. Legal changes that occurred in the 20th century sought to address racial and gender inequality, which is why they had a positive effect on workplace diversity.

The Civil Rights Movement played a significant role in the process of ending racial segregation and was the main stepping stone to racial equality. According to Zinn (2015), the focus of the Civil Rights Movement was on establishing social justice for black people by allowing them to vote in elections, ending segregation in workplaces, education, and communities, and creating laws against discrimination based on race. In 1964, the Civil Rights Act was passed, which made segregation in public places and discrimination in employment illegal. In the following year, the United States Government issued the Voting Rights Act of 1965, which granted voting rights to black people throughout the country (Zinn, 2015).

Segregation in the military and the federal government became illegal almost two decades earlier when President Truman issued an executive order to end discriminatory practices in both structures in 1948 (Zinn, 2015). These events enabled black persons to gain more opportunities in the labor market and allowed them to work alongside white people, thus promoting workforce diversity.

Similarly, the women’s rights movement, along with two World Wars that affected the availability of the male workforce, helped women to achieve stable positions in European and American workplaces. By the beginning of the 20th century, women already had the right to own property in their name and to work in certain occupations for limited hours (Milkman, 2016). In 1920, women also received voting rights throughout the United States as part of the 19th Amendment.

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At this time, many women worked in manufacturing and other industries performing tasks that did not require extensive training or education. However, as Milkman (2016) notes, most employers hired women to save on labor costs, because they could complete the same job at a fraction of the price. The Fair Labor Standards Act of 1938 and the Equal Pay Act of 1963 addressed this issue, whereas the Civil Rights Act of 1964 prohibited employment discrimination based on sex. All of these laws provided for the integration of women into the workforce and allowed them to work in the same positions as men.

Incidentally, the legislative changes that occurred in the United States throughout the 20th century, as well as at the beginning of the 21st century, increased workplace diversity beyond race and sex. For instance, by preventing employment discrimination based on religion and national origin, the United States enabled immigrant workers to take their place in their labor market (Zinn, 2015).

As a result, today’s workplaces are more diverse than ever before. This, in turn, created the need for diversity management, as more employees from various cultures were hired, employers had to establish fair working conditions and ensure a positive environment for every employee (Ayega & Muathe, 2010).

The Emergence of Diversity Management

At first, diversity management focused on preventing or addressing workplace conflict and ensuring equal working conditions for all employees. Little attention was paid to the benefits of diversity management and its theoretical foundations. According to an article by Ayega and Muathe (2018), “diversity began receiving attention in the scientific literature in the 1990s” when the need for effective diversity management became evident (p. 10). At this time, leaders and managers recognized diversity as an inevitable factor that could affect the company positively or negatively, depending on their approach. This enabled researchers to examine the concept of diversity management in greater depth to produce useful strategies and explore the effects of diversity on various companies.

Summary

All in all, diversity management is a new concept that emerged as a result of sociocultural changes in America and Europe. Before legislative changes that took place in the 20th century, attitudes to diversity were mostly negative due to gender inequality and racial segregation. Hence, when managers experienced an influx of people from diverse backgrounds into the workplace, they needed methods to change working conditions and prevent tensions, and thus the first efforts to develop a well-organized approach to workplace diversity began in the 1980s. As the next section will show, the research focused on promoting cooperation and reducing the incidence of conflicts, but also studied the benefits and challenges of diversity both for individuals and for companies.

Contemporary Perspectives

Contemporary perspectives on diversity management were borne out of extensive research on the topic, which was facilitated by the understanding of the necessity of diversity management. As a result, contemporary perspectives acknowledge the forces that drive diversity management and explain the benefits that it can provide to a range of organizations. Nevertheless, some research studies suggest that diversity may result in organizational issues, thus presenting challenges for management.

Drivers of Diversity Management

Globalization

Globalization is among the key forces that affect contemporary workplaces because it has created more opportunities for international collaboration. Globalization is currently evident in all areas of the industry, from international trade to the geographic diversification of companies (Rowntree, Lewis, Price, & Wyckoff, 2017). Indeed, most large companies today have partners or branches in other countries, which creates the need for increased workforce diversity and successful management.

Companies that operate in the globalized environment need to hire workers who are different in terms of cultural norms, religion, race, and other features. These differences become particularly apparent in the context of multi-national workforces, where employees from different backgrounds need to collaborate on various tasks and projects (Martin, 2014). Since managers are required to create a healthy workplace environment and improve productivity regardless of workforce composition, they need a powerful approach to motivate workers of mixed backgrounds. As noted by scholars, diversity management can be helpful here, thus making it easier for companies to operate in the globalized world (Martin, 2014). Therefore, globalization has prompted more research into the topic of diversity management and facilitated the application of theoretical knowledge to management practice.

Technology and virtual workplaces

Similarly, the development of technology has contributed to the need for diversity management. In the 20th century, most companies hired workers who lived nearby, and thus workplaces were relatively homogenous in terms of demographic and cultural variables. However, the invention of the Internet created opportunities for people from various cities and countries to work as part of virtual teams (Gilson, Maynard, Jones Young, Variainen, & Hakonen, 2015). According to the study by Gilson et al. (2015), 66% of multinational organizations include virtual teams, and this number is expected to grow further in the future. Because virtual teams impose no restrictions regarding the geographic location of employees, their race, national origin, and culture, they are usually very diverse.

Organizing the work of such teams and achieving performance goals can be challenging due to cultural barriers and the overall heterogeneity of values, attitudes, and work ethics. Gilson et al. (2015) noted that trust and team identification could be lower in heterogeneous virtual teams than in homogenous ones, which can affect work outcomes. Bataresh, Usher, and Daspit (2017) also examined this notion, confirming that virtual teams can only benefit from diversity in the presence of an appropriate management strategy. These factors contributed to the interest in diversity management in research and practice because it is believed to provide managers with methods to overcome cultural barriers in virtual teams.

Corporate social responsibility

Another important factor that creates the necessity for diversity management is corporate social responsibility (CSR). CSR can be broadly defined as the actions of the company that result in positive developments and are not motivated by financial benefits (Gupta, Briscoe, & Hambrick, 2017). In the contemporary world, there is a significant number of companies that engage in CSR efforts in various ways. For example, some companies can donate to charitable organizations to achieve positive change in the local community. Others participate in disaster relief efforts after earthquakes, hurricanes, and other damaging events. Some companies practice CSR by fostering fair employment conditions and providing career opportunities to underprivileged groups and individuals.

In each of these cases, CSR has an important influence on how a company is perceived by the public. For instance, McWillians (2015) notes that consumers – particularly those in developed nations – prefer to purchase products and services from organizations with a strong CSR profile rather than those who do not show concern for social welfare. This means that CSR can increase the company’s financial performance by attracting more buyers, although it is not the intended goal of CSR efforts.

The relationship between CSR and diversity is complex and can be roughly identified as two separate processes. On the one hand, companies need to achieve a high degree of internal diversity to be perceived as socially responsible. For example, gender and racial diversity among employees influence the company’s CSR profile by showing the public that the company supports anti-discrimination policies and seeks to create an inclusive environment for employees (Gupta et al., 2017). This is because certain groups are perceived to be at a disadvantage in employment and thus by hiring more people from these groups, the company reduces socioeconomic division in society.

Diversity also improves the company’s perceived CSR profile by showing a commitment to its stated goals and policies. According to Mun and Jung (2018), the public can be critical of organizations that support diversity in words only and often require actions and results to prove commitment. Hence, while the vast majority of companies have anti-discriminatory regulations in place, it is employee diversity that makes the company trustworthy and socially responsible in the eyes of its consumers.

On the other hand, internal diversity can help to plan and implement CSR efforts. This is particularly true for the diversity of top management teams, which are often engaged in CSR strategy planning. Studies in this area show that increased board diversity is associated with stronger CSR practices and enhances decision-making about CSR. For instance, Harjoto, Laksmana, and Lee (2015) found that the degree of variability of races, religions, cultures, and genders among board members was a predictor of CSR strategy comprehensiveness and effectiveness. Similarly, the article by Rao and Tilt (2016) shows that diverse top management teams are more capable of improving a company’s CSR profile and maintaining its positive reputation.

Based on both aspects of the relationship between diversity and corporate social responsibility, it is obvious that companies that want to have a great reputation and image need to achieve improved employee diversity. Moreover, organizations need to ensure diversity at all levels of the company’s hierarchy to promote the effectiveness of their CSR efforts. In this context, diversity management is essential for socially responsible companies to respond to changes in workforce composition. Adequate diversity management also means that the needs of employees from all cultural backgrounds will be met, which is also helpful for enhancing organizational image and reputation (McWilliams, 2015). Hence, diversity management is crucial for companies of all sizes and forms, regardless of whether or not they are multinational and use virtual teams because it improves business image and contributes to financial performance.

Benefits

Human resources management

Many recent research studies on diversity management in corporate settings focused on the positive and negative aspects of workplace diversity. For example, diversity was linked to improved outcomes in a variety of human resources management outcomes. Foma (2014) notes that employees working in a diverse environment tend to have a higher level of job satisfaction, motivation, and engagement than those working in homogenous teams. Ayega and Muathe (2018) confirm that diversity is both an intrinsic and an extrinsic motivational factor since it boosts the staff’s attitude and their experiences in the workplace.

Another critical benefit of diversity in the area of HRM is that it reduces turnover by lowering employees’ intentions to leave the company (Bačík & Turáková, 2018). This is particularly evident in sectors where collaboration between employees is essential since diversity management plays a critical role in fostering unity and reducing conflict (Freeman & Huang, 2014). Thus, research shows that the influence of diversity on human resources is mostly positive, as long as an effective diversity management strategy is in place.

Organizational culture

Diversity also plays a critical role in fostering a healthy organizational culture where employees are supportive and appreciative of one another. As explained by Foma (2014), this is mainly because diverse organizations have lower rates of competitive rivalry among workers and can create an inclusive culture that benefits teamwork. Diversity was also linked to enhanced trust and openness in communication, which is considered to be building blocks of organizational culture (Hofhuis, van der Rijt, & Vlug, 2016). In the contemporary context, a company’s organizational culture is of ultimate importance because it affects how a company is perceived by partners and customers. By assisting companies in improving organizational culture, diversity management can become a competitive advantage because it would help to develop and maintain the company’s reputation and image.

Creativity and innovation

Another benefit of workplace diversity is its positive impact on talent development and knowledge exchange in a company. Research suggests that recruiting diverse employees increases the number of talents in an organization, which leads to an improved generation of ideas and helps to enhance problem-solving (Holtzman & Anderberg, 2011). A study by Harjo, Gibson, and Pudelko (2017) also found that multicultural teams were more efficient than homogenous groups in terms of exchanging knowledge, which contributed to their efficiency.

These beneficial influences of diversity play a critical role in organizations that rely on innovations for success. Bačík and Turáková (2018) show that “employees from diverse backgrounds imbue organizations with creative new ideas and perspectives informed by their cultural experiences” (p. 4). As a result, diverse teams can develop new innovative products and solutions that will place the company in an advantageous position in the market. This aspect of diversity is particularly beneficial for marketing companies in the age of globalization, as they can use diverse talents to create marketing campaigns that appeal to a variety of audiences.

Team and individual productivity

A variety of research studies also noted that diversity has a crucial role in promoting team and individual productivity. On the one hand, it enhances communication within groups, thus contributing to problem-solving and agility (Bačík & Turáková, 2018; Hofhuis et al., 2016). On the other hand, diversity management creates a positive organizational climate, which proved to enhance individual motivation and, consequently, productivity (Saxena, 2014). As a result, employees who work in diverse organizations have the opportunity to perform better in both individual and group projects.

Financial performance

The reason why diversity and diversity management are of pivotal importance to many companies is that they are linked to improved financial indicators. McMahon (2010) examines this connection in great detail by considering gender, age, and racial diversity separately. The results of the evidence synthesis show that high racial diversity is linked with improved financial performance in the long term and that this relationship was particularly strong in manufacturing and service industries (McMahon, 2010).

Similarly, gender diversity resulted in improved financial performance and was also connected to improved customer satisfaction (McMahon, 2010). However, other studies note that the positive influence of diversity on business performance can only be achieved if a firm has an effective diversity management strategy (Senichev, 2013). This is mainly due to the effect of diversity management on collaboration, productivity, creativity, and other variables that are vital for achieving success in the modern business environment.

Challenges

Impaired communication

Despite the generally positive effects of diversity on many organizational variables, research shows evidence of some problems associated with diversity. For instance, Begeç (2015) indicates that diversity can lead to tensions in the workplace since individuals tend to prefer working in homogenous groups. These tensions are more likely to arise between individuals who come from cultures with significantly different worldviews. Cletus, Mahmood, Umar, and Ibrahim (2018) argue that workplaces employing persons with radical views are more likely to face conflicts and tensions in the workplace. These difficulties are likely to hurt communication, thus diminishing the benefits of diversity.

Misconduct and corporate culture

Discrimination, bias, or other examples of negative attitudes towards people from minority backgrounds can impair corporate culture, leading to losses in collaboration and productivity. Green et al. (2015) note that failure to recognize and respect cultural differences can lead to misconduct, which hurts the corporate climate and could make it more difficult for managers to achieve good HRM outcomes. According to Henry and Evans (2007), discrimination and misconduct in diverse workplaces cause employees from minority backgrounds to feel isolated, increasing their intentions to leave and absenteeism.

Productivity

Ineffective diversity management can also lead to decreased effectiveness of communication and job dissatisfaction, affecting firm performance and employee productivity. For example, in cases of repeated misconduct, organizations are forced to fire employees causing the problem, which might lead to losses in productivity due to increased turnover or inadequate staffing (Hudson, 2014). Even if there is no apparent misconduct, tensions in the workplace might hurt individual and team productivity, resulting in performance losses (Martin, 2014). As a result, managers need to focus on preventing interpersonal conflicts and addressing poor attitudes to diversity (Bah, 2015). This, in turn, could take up a significant share of their time and effort, causing losses in productivity and performance due to other organizational problems.

Legal compliance

Legal compliance is among the key challenges in diversity management because failure to comply with anti-discrimination policies can result in legal action against the management or the company. Legal compliance with various diversity regulations appears to be a rather simple subject at first glance. However, in reality, achieving compliance can create additional challenges for companies. These challenges vary depending on the race, sex, religion, and other characteristics of diverse employees.

For instance, in the case of gender, recruiting more women and maintaining equal pay and opportunities policies may increase financial expenditures. For example, as noted by Thompson (2016), many countries have regulations that prohibit companies from denying employment to women who are pregnant or planning to start a family soon. This means that companies are required to hire employees who will need to take paid maternity leave soon. As children grow older, working women might also be able to take days off when their child is ill. This contributes to workforce expenses due to the need to hire additional employees, pay for overtime work, and cover medical expenses or sick leaves.

Age diversity has similar repercussions for companies because older adults generally have worse health than younger employees. This leads to additional expenses required to cover medical insurance or sick days. Imposing limitations with regards to medical expenditures or sick leaves can be seen as discriminatory and could lead to lawsuits (Thompson, 2016). This means that companies often need to devote extra funding to ensure that employees of all ages and genders can have their needs met by the company’s policies.

Legal compliance is also challenging for companies that operate in developing economies where anti-discriminatory laws or affirmative action regulations had passed only recently. This is because of a sudden need to hire employees from certain backgrounds and to establish equal pay policies throughout the company (Thompson, 2016). Based on the information above, managers need to understand the importance of legal compliance with diversity-related regulations and find strategies to compensate for the increased labor costs resulting from compliance.

Factors Influencing Diversity Management

Another important field of research on the topic is concerned with creating a positive environment for diversity management. This includes addressing the factors that can improve or undermine the effectiveness of diversity management strategies applied in a particular case. The first variable that proved to be necessary for overcoming the challenges and yielding the benefits of diversity is the presence of corporate policies that aim at promoting inclusivity (Shin & Park, 2013).

These policies could also set diversity and inclusivity as some of the primary values of the organization, which would contribute to a culture of diversity (Shin & Park, 2013). Understanding that the management is committed to promoting inclusivity would help to prevent discrimination, misconduct, and resistance to diversity.

Secondly, studies suggest that there are particular aspects of leadership linked to diversity management. For example, leaders with high cultural empathy, communication skills, and emotional stabilities were found to be better at diversity management than those who lacked these competencies (Visagie, Linde, & Havenga, 2011). Moreover, leaders’ approach to communication in the workplace was also critical, with transparent, friendly, two-way communication having a positive influence on diversity management (Visagie et al., 2011). These results imply that leadership is a significant predictor of success in diversity management and form the foundation for some diversity management theories and frameworks identified further in the paper.

Lastly, studies point to the importance of certain aspects of organizational culture to diversity management. Companies that excel in diversity management and can benefit from having a diverse workforce are usually adaptable and have a strong focus on corporate social responsibility (Syed & Kramar, 2009; Visagie et al., 2011). High flexibility and adaptability allow the workforce to accustom to changes in the cultural make-up of the organization fairly quickly, thus welcoming employees from minority backgrounds. Similarly, the corporate social responsibility of a company determines its values and stance on prominent social issues (Syed & Kramar, 2009). Organizations that have a strong corporate social responsibility profile consist of employees sharing their values, which limits the possibility of workers discriminating against others or engaging in misconduct.

Summary

As shown in this section, the need for diversity management is justified by several important factors, including globalization, technological developments, and corporate social responsibility. Thus, scholars acknowledge that all modern companies need to use diversity management to operate successfully in the current business environment. However, the impact of diversity on an approach can be both positive and negative. In the former case, diversity leads to improved teamwork and collaboration, while also promoting creativity and innovation. In the latter case, diversity could create a threat of discrimination, bias, and misconduct, leading to the deterioration of corporate culture and environment. Whether or not a company benefits from diversity depends on a variety of variables, including corporate culture and leadership styles. Therefore, before implementing the chosen diversity management strategy, leaders should evaluate the corporate climate for barriers.

Historical Development of the Theory

Adler’s Five Diversity Management Strategies

One of the most famous works on diversity management is the theory proposed by Nancy J. Adler in her work International Dimensions of Organizational Behavior. The book was first published in 1986, with future editions offering further insight into the theory. Adler proposed that there are five key strategic options that managers can use to manage cultural diversity in the workplace: cultural dominance, cultural synergy, cultural compromise, cultural avoidance, and cultural accommodation (Adler & Gundersen, 2007). Each of these approaches can be successfully applied in the globalized environment and in local companies that employ diverse workers.

The first option, which is cultural dominance, relies on the premise that the manager’s culture should be the prevalent one, and employees from other cultures need to adjust to it. Adler and Gundersen (2007) note that this approach is often used by large multinational corporations when they expand abroad and use a unified management strategy in all branches, regardless of the location. This option has some clear benefits because it allows a manager to use strategies that they are familiar with and that proved to be effective. However, it might not be applicable in contexts where there are significant differences between the home culture and the target culture. For instance, British managers working in the Middle East would need to make some alterations to their regular strategy to respond to employees’ needs.

Incidentally, cultural accommodation is the best approach to be used in such cases, because it tailors the management strategy to the target culture (Adler & Gundersen, 2007). Here, managers blend into the target culture by learning more about it, understanding the differences, and changing their approaches to communication, motivation, and management. In most cases, this strategy also involves learning the language used in the target culture (Adler & Gundersen, 2007). This approach brings the manager closer to their employees, but can only be used in culturally homogenous workplaces. Cultural compromise, on the other hand, involves studying cultural differences and offering solutions that benefit collaboration (Adler & Gundersen, 2007).

Here, all sides would usually concede something to work together more effectively (Adler & Gundersen, 2007). This approach is particularly beneficial for negotiating certain aspects of work to make employees from diverse cultures more comfortable without losses for the business. For example, if an employee has a religious holiday and asks for a day off, the manager could agree and propose ways of how this employee could make up for their absence.

The final two approaches, cultural avoidance, and cultural synergy are almost the opposite. Cultural avoidance means the refusal to pay attention to cultural differences and acting as if they were inexistent (Adler & Gundersen, 2007). Here, both the manager and their employees reject their cultures while working together to avoid conflicts or disputes. The authors note that this approach is particularly prevalent among Asian managers, who prefer to focus on the work instead of paying attention to cultural differences (Adler & Gundersen, 2007).

While this strategy can be useful in promoting collaboration and productivity due to its influence on workplace conflict, not all people would be comfortable with it, and this could lead to turnover or job dissatisfaction in the long term. Cultural synergy, on the contrary, involves accepting both cultures and finding solutions in the common ground “while expecting each culture’s uniqueness” (The authors note that this approach is particularly prevalent among Asian managers, who prefer to focus on the work instead of paying attention to cultural differences (Adler & Gundersen, 2007, p. 120).

In other words, people from all cultures find a solution that is familiar and comfortable for them and does not impose on their culture at all. For instance, if some employees speak Italian, and the rest speak French, but all employees are fluent in English, English can be a common ground solution for internal team communication. This approach may be challenging to apply in practice, but it is probably the most effective because it unites the workforce and teams without imposing on individual employees’ cultures.

Dynamic Team Diversity Theory

As the topic of diversity in the workplace evolved, new theories emerged to support managers in leading diverse organizations. Diversity management theories are largely focused on creating a positive working environment for diverse teams, where each team member can contribute their ideas and thoughts. For example, the dynamic team diversity theory by Li, Meyer, Shmla, and Wegge (2018) views diverse teams as systems that largely depend on internal changes, such as member addiction or subtraction. The theory states that managers should seek to promote stability in diverse teams and ensure that any changes are smooth and gradual to reduce their negative influence on team members. It is also crucial to identify individual members or groups who hurt working processes and to target them in human resources initiatives, such as training or motivation improvement efforts.

Framework for Diversity Management

Other researchers also attempted to put forward theories and frameworks to assist in diversity management. An example of such a framework is the Pragmatic and Holistic Diversity Management Framework offered by Rijamampianina and Carmichael (2005). According to this framework, diversity and its effect on an organization depend largely on the general management system.

The authors propose managers use a four-process model consisting of motivation, interaction, visioning, and learning (Rijamampianina & Carmichael, 2005). During the first process, leaders should share positive and negative business outcomes with employees, thus promoting transparency and creating an open culture. During the interaction process, managers should seek to create shared mental models in employees, regardless of their background. This goal can be achieved by improving the internal communication of messages and establishing principles for avoiding or mediating conflicts successfully (Rijamampianina & Carmichael, 2005).

The third process is defining and sharing a vision with employees to inspire them to work together towards a shared goal. This step draws on the principles of the transformational leadership theory, which seeks to maximize effectiveness by uniting employees’ efforts. This step is useful for enhancing motivation and providing a sense of accomplishment (Rijamampianina & Carmichael, 2005). It also supports inclusivity by preventing the isolation of employees from the process. Lastly, management should promote organization-wide learning by sharing and expanding knowledge and competence. Rijamampianina and Carmichael (2005) note that employers must provide equal learning opportunities for their employees, as it will foster trust and reduce disparities. The application of this model could be useful to managers working with diverse teams or looking to improve diversity in their workplace.

Summary

To sum up, there is a great variety of diversity management strategies and approaches. Adler’s work offers some preliminary ideas on the manager’s options with regards to diversity management, but there are also other, more specific, and recent strategies. The first strategy considers team dynamics and their influence on diversity, and this approach is particularly useful for middle management and team supervisors. The second strategy seeks to promote and apply diversity successfully in all aspects of organizational functioning by changing the whole management system. Depending on the circumstances, leaders in marketing can review all of these options and choose the one that appears to be more suitable for their organization.

Importance of the Study and Implication for Practice

This literature review demonstrates that the previous research introduced many new concepts and ideas to businesses, designing various diversity management practices, and shifting the perspective from exclusion to inclusion. However, it is evident that some gaps exist in contemporary research studies, and this finding reflects the progress that will be made in the business sphere as well. It is vital to note that companies do not always follow the latest initiatives suggested in academic studies, failing to recognize the benefits of innovative solutions (Benschop, Holgersson, Van den Brink, & Wahl, 2015). At the present state, diversity management is not thoroughly intertwined with the structure of each company that employs people of different races, cultural backgrounds, and genders. Organizations may be reluctant to involve themselves in a new diversity management program because these interventions pose a risk to firms’ established hierarchical principles and core values (Benschop et al., 2015). As an outcome, the field of diversity research remains underrepresented in real business environments.

The first critical gap that will be addressed in this study is that there is little information available on diversity management in marketing companies. Studies that were discussed in this literature review focus on companies in various sectors, but the marketing industry has not received the attention of researchers at the present moment. Diversity management can be considered useful for all industries, including marketing. However, it is crucial to understand the connection between diversity and marketing businesses, specifically since the basis of the latter is its ability to appeal to different groups of consumers. The recognition of different genders, cultures, and races may be a defining factor for marketing firms’ success. Demangeot, Broderick, and Craig (2015) find that, in the age of globalization, multicultural marketplaces cannot be regarded as a small niche but as a standard for many businesses. In marketing, the recognition of multiculturalism is inherent in working with new consumer groups. The same view can be applied to the internal practices of marketing businesses.

The issue of corporate social responsibility (CSR) discussed above blends these concepts together – marketing companies need to acknowledge their internal diversity policies to pursue multicultural audiences successfully. The environment inside a company can have a significant impact on its performance, and diversity management is one of the practices to improve the setting for all current and potential workers (Benschop et al., 2015). Therefore, the present study will demonstrate how diversity can be discussed and implemented in a particular field where cultural differences influence both the process of conducting business and the final product of employees’ efforts. For instance, knowledge-sharing, as one of the mentioned benefits of diversity managing, can produce effects for marketing businesses that differ from those of other companies. Similarly, as advertisement firms value continuous expression of creativity and idea generation, their diversity policies can be detrimental to working with specific consumer groups. To sum up, the unique purpose of marketing organizations, as well as their customer-driven goals, demonstrate a need for additional research that considers these aspects of the industry.

Another gap that was identified during the appraisal of the existing literature is the lack of employees’ opinions in research. While many scholars have analyzed the benefits and drawbacks of diversity and suggested theories of diversity management, not enough research has been done on workers’ attitudes to diversity. As can be seen, the focus of such investigations is organizational performance, with outcomes and financial success being regarded as major benefits of implementing diversity management practices. Sabharwal (2014) argues that the achievement of organizational goals is seen as the main aim of integrating diversification policies into the workforce. However, the author also notes that the previous legislature, such as equal employment opportunities and anti-discrimination laws, help to introduce different people to the workforce but not empower them to explore their full potential (Sabharwal, 2014). Thus, it is vital to approach the issue from another viewpoint by considering the opinions of employees on various aspects of diversity management.

As mentioned above, the current business sphere does not implement diversity policies at the same speed or with similar enthusiasm as they are researched by academics (Benschop et al., 2015). Therefore, it is possible to assume that many companies, including those in marketing, still have views on diversity that potentially stagger their development and innovation. Moreover, such a discrepancy can lead to problems within organizations, including interpersonal conflicts, bullying, and prejudiced behavior. Since discrimination and other forms of negative attitudes towards diverse workers are still prevalent, it is critical to study their effect on diverse employees’ experiences (Mun & Jung, 2018). These opinions may provide one with a different outlook on currently implemented practices and reveal possible ways of addressing such concerns in the future. The present research will seek to address both gaps to enable managers of marketing companies to reap the benefits of diversity and institute policies that have a long-term impact on the company.

Contribution to the Literature

By helping to eliminate the gaps discussed above, the study will contribute to the current literature on diversity management in three ways. First, it will enhance the available scholarly knowledge about differences in diversity management in various types of companies by focusing on the marketing industry. The study will aim to point out diversity-related problems that are specific to marketing firms, deepening one’s understanding of how advertising companies can innovate their approach to human resources. Moreover, this contribution may also encourage future studies to explore other areas of business, basing the need for detailed investigations on the present research. If this investigation discovers diversity considerations that are unique to the marketing sector, scholars will be able to apply this approach to other industries.

Secondly, the study will add more depth to the current knowledge about attitudes toward diversity in the workplace, possibly identifying new areas for future research. Berrey (2014) presents another view of diversity management research and encourages other authors to consider these research topics from a variety of angles. A study focused on employees’ opinions will contribute to this idea and add depth to the academic understanding of diversity. Furthermore, workers’ participation may uncover new concerns that will need further examination. Sabharwal (2014) points out that the lack of empowerment, which some employees feel in organizations where diversity management is not understood well, is a serious issue that has to be acknowledged. The present research question provides an opportunity to fill in the areas of knowledge that remain unaddressed.

Lastly, the study will complement the current information on the topic of diversity management by defining the needs of managers and leaders of diverse organizations. The conclusions of the present research may either support or undermine previous findings. In the first scenario, the validity of the existing scholarship’s findings will be strengthened, providing companies and researchers with a solid base for diversity management initiatives. In contrast, if the study’s results do not align with those of earlier studies, it may show a new course for action that contemporary managers can take to ensure their companies’ success. All in all, the focus of the investigation will use existing information to build its arguments and discussion.

Contribution to Practice

Apart from introducing new data for scholarly research, this study will generate knowledge that can be used in real life. Examining employees’ attitudes and experiences in marketing companies would make a useful contribution to practice by determining essential issues to be addressed by the management. On the one hand, it would explore the experiences of employees in marketing companies, thus suggesting whether the current approach to diversity management used in these companies is productive. Returning to the assessment of historical models employed when viewing diversity, one can see that firms’ ideas about hiring processes and workers’ rights have been changing with time (Benschop et al., 2015). In the study, workers also may present existing strategies as ineffective, suggesting a divide between businesses’ policies and people’s perceptions of their place in the workplace.

On the other hand, the study will describe the attitudes of employees to diverse workers and then compare them to those workers’ experiences. As a result, the research will provide leaders with information on how attitudes to diversity affect the success of diversity management and identify areas for improvement. For example, if the study found that employees generally have poor attitudes toward diversity, and this affects the experiences of employees from vulnerable groups, the company would benefit from training in cultural diversity (Benschop et al., 2015). This finding would signify that organizational culture is highly influential in such companies, revealing a connection between workers’ attitudes and experiences towards each other.

However, if the general attitudes are positive, but diverse workers still have negative experiences or feelings, the problem might be caused by other human resources variables or outside problems dictated not by workers’ lack of training but a structural problem that extends managers’ duties. This conclusion may reveal fundamental problems in businesses connected to systems of employee inclusion and empowerment. Furthermore, such findings can demonstrate that people’s positive view of diversity may be misguided if people base their opinions on factors that do not contribute to companies’ performance or workers’ confidence. Berrey (2014) highlights that some companies may have symbolic boundaries which are not explicitly present in employees’ views but are ingrained in organizational structures, thus contributing to a hierarchy that limits diversification. If the study reveals the existence of such a system, its conclusions may assist companies in understanding how these environments affect workers and their performance. In all cases, the investigation will provide managers with practical advice about beneficial approaches to diversity.

Directions for Future Research

Regardless of the results of the study, it would be beneficial for future research to consider the factors shaping employee attitudes to diversity. This knowledge would help to create theories, frameworks, and models that can be used by the management to improve the organizational climate for diversity. Studies should also seek to test these theories and models in organizations experiencing poor attitudes to diversity, thus adding more practical knowledge to the topic of diversity management (Pitts & Wise, 2010). Additionally, researchers should look beyond diversity management to create opportunities for addressing the issue from a holistic viewpoint. For instance, an article by Subharwal (2014) introduces the concept of organizational inclusion, which can be used in all organizations irrespective of their sociocultural composition. Considering other forces and strategies influencing the experiences of diverse workers could help in developing a comprehensive plan for companies facing diversity-related problems.

Summary

To conclude, the literature review considers the basics of diversity management, from the historical development of this concept to future research direction. The chapter highlights that despite significant progress inequality and civil rights, some workplaces still experience issues of underrepresentation, tensions, and discrimination. Diversity management can help companies to overcome these problems and will result in improved workforce performance, job satisfaction, and collaboration when implemented correctly. The review also highlights two major theories that can assist leaders in improving diversity management. The present research project will have a positive influence on theory and practice by providing more details on the relation of diversity management to other variables, such as employee attitudes to diversity.

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