Overseas Think Tank for Indonesia

Image source: lgo.org.uk

By Beni Bevly
The Unites States of America is a melting pot country where people from all over the world come, stay, live and make it as their homes. This country becomes so diverse, yet at the same time this diversity does not slow down the Unites States’ steps to roam as a super power. How can it happen? Effectively managing diversity seems the key issue. It would increase a competitive advantage in organizations.

This advantage stems from the process in which the management of diversity affects organizational behavior and effectiveness in the following aspects:

First, lower cost and improve employee attitudes.
Turnover and absenteeism were found to be higher for women and people of color than for whites. By implementing targeting program such as flexible schedule, Johnson in “The Business Case for Work-Family Programs,” Journal of Accountancy, August 1995 found out that NationsBank and Aetna Life & Casualty reduced their turnover significantly. Aetna calculated that reduction in turnover represent more that $1 million in savings.

Past research revealed that people who were different from their work units in racial or ethnic background, were less psychologically committed to their organizations, less satisfied with their career, and perceived lower managerial discretion on their jobs. Gay, lesbian and individual with disability are part of this segment of population. There is 3% to 10% of US population are gays and lesbians and the US Department of Labor’s study in year 2000 that there is one of six American has disability. Two out of three individuals with disabilities can and want to work. I do not think any organization can afford to squelch the motivation and productivity of 3% to 10% its workforce. I think from entrepreneur’s point of view, you will agree with me that individuals with disabilities are underutilized.

Second, improve recruiting efforts.
Organizations that effectively manage diversity are more likely to meet this challenge because women and people of color are attracted to such companies. By having more diverse employees, organizations will provide better customer service.

Third, increase sales and market share
Workforce diversity is the mirror image of consumer diversity. It is thus important for companies to market their products so that they appeal to diverse customers and markets.

Fifth, increase creativity and innovation
Moss-Kanter in The Change Masters, 1983 a management expert was one of the first to investigate the relationship between diverse workforce and creativity and innovation. Her results indicated that innovative companies deliberately used heterogeneous teams to solve problems, and they employed more women and people of color than less innovative companies.

Sixth, increase group problem solving and productivity
Research findings based on short-term group that varied in terms of value, attitudes, educational background, and experience potentially improve problem solving and performance (Mai-Dalton, “Managing Cultural Diversity on the Individual, Group, and Organizational Levels.” Leadership Theory Research: Perspective and Directions, 1993). There are two additional conditions that must be satisfied before diversity can positively contribute to problem solving and performance, (1) group member must share common values and norms that promote pursuit of the organization’s goal and (2) group members need to be aware of cultural and attitudinal differences of other group members.

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*Beni Bevly holds BA in Political Science, MBA in Marketing, and is a DBA (Doctor of Business Administration) candidate. He is the founder of Overseas Think Tank for Indonesia.