Best Practice Global Diversity Management

Best Practice Global Diversity Management

by Felicity Menzies

Diversity management has developed largely in the United States—but diversity impacts organisations across the globe. There are seven elements to an effective global diversity program:

1. Cultural Intelligence

Reflecting its civil-rights roots, North American diversity programs are heavily orientated towards racial inequalities and other legally protected categories, including gender and sexual orientation. But when an organisation is operating globally, managing cultural diversity is significant, both in terms of overcoming cultural barriers and for leveraging diverse knowledge and perspectives for innovation and access to new markets.

Global diversity efforts should include the development of Cultural Intelligence—a focus that may be overlooked in programs originating in the United States. Cultural Intelligence is the capability to manage cultural diversity. Individuals with high Cultural Intelligence (CQ) display four critical competencies:

CQ Drive is the willingness to work with others from diverse backgrounds. It includes an ability to overcome explicit or unconscious bias and the capacity to persist in challenging intercultural settings – even when the individual feels confused, frustrated, or burnt out.

CQ Knowledge is the understanding of culture and cultural differences. That involves more than awareness of variations in language, customs, and appearance. Core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked.

CQ Strategy is the ability to flex mentally. With high CQ Strategy, individuals are not confined to a single worldview. They are open to new or integrative ideas.

CQ Action is the ability to flex verbal and non-verbal behaviour. CQ Action decreases the risk of miscommunication and helps an individual respond to diverse others in a manner that conveys respect and builds trust and rapport.

As a tool for managing any form of cultural diversity—whether national, gender, generational, ethnic, health status, sexual orientation, or other subculture—Cultural Intelligence is as relevant at home as it is abroad.

2. ‘Glocalisation’ of diversity management

Diversity issues vary from one country to the next, and they are often more complex outside the United States. Yet global diversity issues are commonly overlooked. Organisations can waste valuable resources aiming at the wrong problems or implementing the wrong solutions. Effective global diversity management needs adaptation to reflect different cultural contexts. At a minimum, adaptation should occur nationally. Regional changes should also be considered. Modification may be required to the content, rationale, language, and methods.

To overcome the limitations of United States-based diversity programs, some companies have delegated diversity efforts to local offices. However, local diversity initiatives may lack the resources and commitment required from senior head-office management to succeed, or they may not have access to individuals with adequate training and experience in diversity management. The best approach is midway between the two; combining head-office expertise, resources, and strategy with local knowledge of and sensitivity to the specific diversity issues facing that office.

3. Flexible human resource management

When foreign companies employ local staff, human resource policies need to be adapted to reflect the cultural profile of local employees. Factors that influence employee motivation, job satisfaction, and organisational commitment vary across cultures. Conflict resolution and giving and receiving feedback also differ across cultures, with implications for performance-appraisal.

4. Inclusive culture

Global diversity management needs an organisational culture that recognises, respects, values, and embraces cultural differences. It must encourage the expression of unique cultural identities and shared cultural learning. Inclusion seeks to motivate and engage all employees and values the contribution of every individual. Inclusion is achieved when every member of the organisation is enabled to fully participate in and contribute to an organisation’s decision-making processes and operations.

Diversity, per se, does not necessarily foster inclusion. Without an inclusive culture, social categorisation processes and associated biases are likely to overshadow the potential benefits of diversity. Diversity may even detract from performance. Prejudice, discrimination, stereotyping, and isolation may prevent culturally diverse employees from fully contributing.

5. Diverse and inclusive senior management team

Global organisations should ensure that senior management support extends to cultural diversity as well as the traditional focuses of race and gender. Support must be visible, active, ongoing, and consistent. It can take different forms:

  • Integrating cultural diversity into the organisation’s values, mission, vision, and strategy;
  • Establishing a cultural diversity council composed of senior line managers;
  • Modelling Cultural Intelligence;
  • Allocating time and financial resources for the development of Cultural Intelligence;
  • Regularly communicating a commitment to cultural diversity;
  • Supporting cross-cultural mentoring initiatives;
  • Recognising cultural diversity efforts internally;
  • Seeking external recognition via participation in benchmarking studies and award schemes;
  • Empowering culturally diverse groups of employees;
  • Holding managers and employees accountable for cultural diversity goals;
  • Responding to employee cultural diversity concerns;
  • Championing culturally diverse community programs or initiatives for improving intercultural relations.

A culturally diverse senior management team is important. Cultural diversity at senior levels normalises intercultural interactions and can send a powerful message to lower-level staff.

6. Diverse partnering

Best practice diversity programs do not limit their cultural diversity internally but also seek cultural diversity in their external stakeholder relationships, including suppliers and community groups.

7. Cultural knowledge management

Cultural knowledge is a significant organisational resource that can be leveraged for competitive advantage. The value of this knowledge grows exponentially when it is shared. Cultural knowledge management links individual-level cultural learning to a broader network of colleagues who can then use and integrate this information innovatively.

Knowledge management is more of a people issue than a technology one. This is particularly true for cultural knowledge. Cultural knowledge is largely tacit. It is not easily codified into explicit knowledge for capture by technology, such as database systems. The effective management of tacit knowledge is reliant on an organisational culture that supports open communication, continuous learning, the sharing of ideas, and collaboration. Online technologies can support this by quickly connecting individuals with others who may have the cultural expertise or knowledge they can use. 

Benefits

When global diversity management is done well, it yields significant benefits, including:

  • Access to new consumer markets;
  • Increased innovation and agility;
  • Improved performance of diverse workgroups;
  • Greater employee engagement and well-being;
  • Attraction and retention of top global talent;
  • Improved access to and better relations with suppliers and other external stakeholders;

These benefits flow through to the bottom line. Research continues to produce results that support the importance of effective diversity management for organisational performance. Studies show workforce diversity drives growth, sales revenue, profitability, market share, share price performance, and return on equity. In particular, cultural diversity offers the insight and flexibility needed for sustainable global success. Organisations with a culturally diverse workforce are 35 percent more likely to outperform their industry peers.

Research
Al Noor, M., Rahman, M., & Uddin, M. I. (2011). Training in diversity management. European Journal of Business and Management, 3(4), 31-38.
Anand, R., & Winters, M.-F. (2008). A retrospective view of corporate diversity training from 1964 to the present. Academy of Management Learning & Education, 7(3), 356-372.
Ang, S., & Van Dyne, L. (2008). Conceptualization of cultural intelligence: Definition, distinctiveness, and nomological network. In S. Ang & L. Van Dyne (Eds.), Handbook of cultural intelligence: Theory, measurement, and applications (pp. 3-15). Armonk, NY: M. E. Sharpe.
Armstrong, C., Flood, P. C., Guthrie, J. P., Liu, W., MacCurtain, S., & Mkamwa, T. (2010). The impact of diversity and equality management on firm performance: Beyond high performance work systems. Human Resource Management, 49(6), 977-998.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120. doi: 10.1177/014920639101700108
Bendick, M., Egan, M. L., & Lofhjelm, S. M. (2001). Workforce diversity training: From anti-discrimination compliance to organizational development. Human Resource Planning, 24(2), 10-25.
Butts, C. C., Trejo, B., Parks, K. M., & McDONALD, D. P. (2012). The Integration of diversity and cross‐cultural work: Competencies and commonalities. Industrial and Organizational Psychology, 5(3), 361-364.
Chavez, C. I., & Weisinger, J. Y. (2008). Beyond diversity training: A social infusion for cultural inclusion. Human Resource Management, 47(2), 331-350.
Cooke, F. L., & Saini, D. S. (2010). Diversity management in India: A study of organizations in different ownership forms and industrial sectors. Human Resource Management, 49(3), 477-500.
Davidson, M. N. (1999). The value of being included: An examination of diversity change initiatives in organizations. Performance Improvement Quarterly, 12(1), 164-180.
Eraut, Michael. (2004). Informal learning in the workplace. Studies in continuing education, 26(2), 247-273.
European Commission. (2005). The business case for diversity: Good practices in the workplace. Luxembourg: Office for Official Publications of the European Communities.
Ferdman, B. (2010). Teaching inclusion by example and experience: Creating an inclusive learning environment. In B. B. McFeeters, K. M. Hannum, & L. Booysen (Eds.), Leading across differences: Cases and perspectives—Facilitator’s guide (pp. 37-50). San Francisco: Pfeiffer.
Ferdman, B. M., Avigdor, A., Braun, D., Konkin, J., & Kuzmycz, D. (2010). Collective experience of inclusion, diversity, and performance in work groups. Revista de Administração Mackenzie, 11(3), 6-26.
Ferdman, B. M., & Sagiv, L. (2012). Diversity in organizations and cross‐cultural work psychology: What if they were more connected? Industrial and Organizational Psychology, 5(3), 323-345.
Fischer, M. (2007). Diversity management and the business case HWWI Research Paper (Vol. 3-11, pp. 1-26). Hamburg: HWWI (Hamburg Institute of International Economics).
Hunt, V., Layton, D., & Prince, S. (2015). Diversity matters. McKinsey&Company.
Jarrar, Y. F. (2002). Knowledge management: Learning for organisational experience. Managerial Auditing Journal, 17(6), 322-328.
Jayne, M. E., & Dipboye, R. L. (2004). Leveraging diversity to improve business performance: Research findings and recommendations for organizations. Human Resource Management, 43(4), 409-424.
Jonsen, K., Maznevski, M. L., & Schneider, S. C. (2011). Diversity and its not so diverse literature: An international perspective. International Journal of Cross Cultural Management, 11(1), 35-62.
King, E. B., Gulick, L. M., & Avery, D. R. (2010). The divide between diversity training and diversity education: Integrating best practices. Journal of Management Education, 34(6), 891-906.
King, W. R. (2009). Knowledge management and organizational learning Vol. 4. Annals of Information Systems (pp. 3-13).
Loermans, J. (2002). Synergizing the learning organization and knowledge management. Journal of Knowledge Management, 6(3), 285-294.
Mason, J. (2005). From e-learning to e-knowledge. In R. Madanmohan (Ed.), Knowledge management tools and techniques (pp. 320-328). London: Elsevier.
Miller, F. A. (1998). Strategic culture change: The door to achieving high performance and inclusion. Public personnel management, 27(2), 151-160.
Mor-Barak, M. E., & Cherin, D. A. (1998). A tool to expand organizational understanding of workforce diversity: Exploring a measure of inclusion-exclusion. Administration in Social Work, 22(1), 47-64.
Nishii, L. H., & Özbilgin, M. F. (2007). Global diversity management: Towards a conceptual framework. The International Journal of Human Resource Management, 18(11), 1883-1894.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource‐based view. Strategic management journal, 14(3), 179-191.
Richard, O. C., & Johnson, N. B. (1999). Making the connection between formal human resource diversity practices and organizational effectiveness: Behind management fashion. Performance Improvement Quarterly, 12(1), 77-96.
Roberson, Q. M. (2006). Disentangling the meanings of diversity and inclusion in organizations. Group & Organization Management, 31(2), 212-236.
Roberson, L., Kulik, C. T., & Pepper, M. B. (2009). Individual and environmental factors influencing the use of transfer strategies after diversity training. Group & Organization Management, 34(1), 67-89.
Rynes, S., & Rosen, B. (1995). A field survey of factors affecting the adoption and perceived success of diversity training. Personnel Psychology, 48(2), 247-270.
Salomon, M. F., & Schork, J. M. (2003). Turn diversity to your advantage. Research Technology Management, 46(4), 37-44.
Shen, J., Chanda, A., D’Netto, B., & Monga, M. (2009). Managing diversity through human resource management: An international perspective and conceptual framework. The International Journal of Human Resource Management, 20(2), 235-251.
SHRM (Society for Human Resource Management). (2010). Workplace Diversity Practices: How has diversity and inclusion changed over time? A Comparative Examination: 2010 and 2005: SHRM.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic management journal, 18(7), 509-533.
Thomas, R. R. (1990). From affirmative action to affirming diversity. Harvard Business Review, 68(2), 107-117.
Thomas, K. M., Tran, N. M., & Dawson, B. L. (2010). An inclusive strategy of teaching diversity. Advances in Developing Human Resources, 12(3), 295-311.
Yang, Y., & Konrad, A. M. (2011). Understanding diversity management practices: Implications of institutional theory and resource-based theory. Group & Organization Management, 36(1), 6-38.
Wentling, R. M., & Palma‐Rivas, N. (1999). Components of effective diversity training programmes. International Journal of Training and Development, 3(3), 215-226.

Felicity Menzies is CEO and Principal Consultant at Include-Empower.Com, a diversity and inclusion consultancy with expertise in inclusive leadership, unconscious bias, cultural intelligence and inclusion, gender equity, empowering diverse talent. Felicity is an accredited facilitator with the Cultural Intelligence Centre and the author of A World of Difference. Felicity has over 15 years of experience working with and managing diverse workforces in blue chip companies and is a Fellow of Chartered Accountants of Australia and New Zealand. Felicity also holds a Bachelor of Commerce and a Bachelor of Arts in Psychology.