“To what extent is the business case a convincing rationale for equality and diversity policies and practices? Answer with reference to theory and research evidence.”
Management of diversity is significantly said to be different from earlier approaches to equity that may be affirmative action in a various number of ways. Developing a quite robust business case for the diversity management is the first step of any business. A general business case consists of organizational benefits evaluation from workforce diversity investment that includes the cost of investment. A business case focuses on specific and narrower benefits of the organization. The benefits of business case are influenced by factors such as internal and external factors. The business case evidence shows the effective management for managing diversity that is the success factor of any organization. There are many well-developed theories consisting of literature for understanding the effect of diversity on the performance of the organization. The dimensions for diversity management are gender, race, ethnicity, tenure, nationality, education, and functional background. The organizational outcomes for the diversity management are team performance, innovation, decision making ability, final performance and corporate reputation. With such factors into consideration, there have been outcomes that are conflicting with diversity. The main crucial management is the effective management of diversity. For this reason this essay assumes the diversity and equality policies that values wider diversity management in bringing out organizations’ diverse workforce.
“Organizations today generally do not include the finance function to determine the diversity of workforce” (Ainsworth, 2013, p. 231)
Inclusion of finance function is much necessary in an organization. Human resource management has been traditionally associated with the diversity management. The finance function role has yet not been studied for managing diversity. The finance function plays certain roles for organizations like strategic role and departmental strategic services. For effective partnership with the organization the realization of the finance function is much important.
Finance function helps in gathering evidence for the impact of diversity management. For developing diversity, indicators and return on investment indices, external and internal impacts of stakeholders, legal and sectoral regulation compliance, as well as global operations in international parity, are hold in relation to any business case (Singal, 2014).
A key strategic asset is diversity and finance function that monitors the effective management role considering diversity for capital management of an organization. A non-financial capital value like human capital is considered to be the strategic resource for the finance function. The extensive utilization of human capital ensures the finance function partnership with diversity management (Sloane, 2010).
“For leveraging diversities, finance function looks over the information that the organization already contains” (Roh and Kim, 2015, p. 67)
This is accomplished by accounting hidden cost and direct cost for diversity leverage. Functional finance has developed diversity priorities and metrics in many organizations. Inclusion and diversity have been developed by the global leaders for monitoring the gender diversity effects across the career management and talent acquisition (Roh and Kim, 2015). This system ensured the relationship between diversity management with business priorities relating to finance. The practical fact is that diversity needs to be built into operational objectives that consider factors beyond finance. The business case can be tailored by priorities and business needs for all the functional areas in the concerned organization. The possible backlash and resistances can be eliminated by specific functional business cases (Schwabenland and Tomlinson, 2015).
“Organizational business case is related to organizational priorities, a multiplicity of accounting interest considering stakeholders.” (Hee-Jung Lim, 2010, p. 101)
If the business case is broadened, then it is found that there is no particular case that relates to diversity. Diversity management business case relates all the arguments and evidence that suggest together diversity leveraging to contribute organizational priorities. The diversity management relates to three categories.
Social demography- gender, sexual orientation, socio-economic background, religion, age, belief, disability, and race are the demographical social factors.
Job-related characteristics- education and tenure, expertise and job function are the job-related factors
Idiosyncratic categories- these factors originate from accent, local settings, political ideology, appearance, and nationality.
The diversity types have been studied beyond all these factors that consist of team level, individual level as well as organizational level. Diversity in consideration to individual level deals with job satisfaction-productivity, commitment, and turnover retention. Considering team level diversity leads to creation, communication, and decision making. Considering organizational level, diversity in workplace drives performance improvements and innovation (Sminkey, 2014). Corporate reputation and stakeholder engagement are also included.
There are also many negative consequences with regards to workforce diversity that consists of staff bonding, communication problem, job-embedded levels and conflict (Rask, Korsgaard and Lauring, 2010). For mapping the diversity benefits, diverse workforce is not sufficient for finding the potential diversity benefits. With effective diversity, management organizations should include a culture of inclusion. This will help in positive outcomes.
According to Esfahani and Hashemi (2014), diversity management practices motivate the organization to embark practices on management. Particularities of the business environment include shareholder value, stakeholder value, regulatory context and global value chain.
According to R. Rao and Bagali (2014), all the organizations today are careful about their resource utilization with the consideration of single bottom line; organizations focus on workforce diversity, profits ad return on investment. Talent acquisition and performance management are the main aspects of every business for understating the shareholder value. For diversity management, organizations today primarily deal with the investment return and profit calculation. Also the budgetary considerations, monetary value, third sector organizations and public are in concern with diversity management.
According to Haikio (2010), with consideration to a higher range of diversity management, employees, shareholders, clients and customers are the wider factors for understating stakeholder value. The triple bottom line consists of all these factors like turnover rates, profit diversification, customer satisfaction and job satisfaction. There is a relationship between corporate social relationship and stakeholder’s value for assessing the diversity benefits. To shape the business case, certain factors with consideration to employees are an ethical employer, positive reputation and employer of choice. All the diverse interest cannot be catered for if different stakeholder’s interest is considered. The next point comes regulatory context that serves the widest interest of stakeholder interest.
Carter, Schmidt and Hirons, (2015), believes self-regulation is the widely used regulatory context, but that can be coercive legal regulation and economic regulation. National agencies, international regulators and diversity networks produce many diversity-related business cases. The shareholder value and stakeholder value is underpinned by market regulations. Voluntarism concept delivers certain creative policies for the organizations. Strategic business priorities help in regulatory measures to ensure business plan. Human resource management along with policies help in the conflation of diversity. The business case for managing diversity depends on number changing as well as promotion related inclusions. The organizations today go beyond the legal compliance and are associated with innovation and creativity that are to be crafted in business areas (Süß, 2010). Both the diversity regulations that consist of coercive aspects and voluntary measures formulate the aspects of arguments related to a business case. Moreover, the diversity quotas will help in promoting meritocracy and high-performance culture at any organization.
“The range from designing of a product to its development as well as service delivery refers to the interconnected activities of the global value chain” (Bush, 2010, p. 321)
Reputation, brand value, and global pool of talent make up the business imperatives and consumer market (Bush, 2010). IR Framework or Integrated Reporting Framework is the way that determines the non-financial and financial dimensions of the diversified strategic value that can be captured. The responsible governance is found to be quite responsible for managing diversity. The transactional opportunities are not managed by the involvement of shareholders and stakeholders, but amplified governance is required as well. International regulation and transnational regulation are important for delivering robust, diversified business case. The global value chain helps in identifying the long-term gain as well as quick fix solutions.
Lumby and Coleman (2010), described the diversity management paradigms that promotes diversity and equality. They delivered some factors that achieve equal opportunities for human resource management.
Equal treatment- equal treatment is a kind of approach that focuses on making the processes to be equal. For every organization, there are a lot of diversities in consideration to human resource. Thus, the treatment for every individual must be confronted to be equal. This will enhance the business case to deal with a comfortable atmosphere where there will be no sense of injustice and partiality.
Positive Discrimination- a direct kind of approach must be ensured that is radical enough for justification. Measuring workforce diversity is quite a hectic job. But positive discrimination will lead to better productivity. If an individual is not able to deliver tasks in time, he needs to be justified with the reason. Motivating him to work will lead to enthusiasm. This is a kind of positive discrimination.
Positive action- an immediate approach that determines additional support is known as positive action. Workforce diversity cannot be justified if support from the management is not ensured. Thus additional support irrespective of diversified discrimination will lead in fir accomplishment of tasks that will be measured by quality by different stakeholders.
Mastracci and Herring (2010), is of the view that from the past, it has been found that there is a shift in management discourse that has resulted from discrimination and fairness to legitimacy and access in terms of learning and effectiveness. The business case has been popularized from the past context that consists of- Rise of neo-liberalism, new public sector managerialism and labor market deregulation.
Kurt April (2012), stated the strengths that the organizations need to follow for managing business case accordance to diversity management. He said organizational generally gets benefited from the positive potentials of diversity. Diversity determination has narrow legalistic approach avoidance that leads organizational culture to be open to all perspectives and views. Business case helps in integrating the organizational equalities and diversities in decision making that is beyond legal discrimination. Further all the other potential aspects of the organization are evaluated. Kurt believes social arguments based on justice are traditional. At present business related arguments are more necessary.
Kurt April (2012), stated certain fatal flaws for the business case that results to certain limitations. He believes business case arguments are short-termist, dangerous, blinkered and contains flawed assumptions. Arguments related to business case are variable, contingent, partial and selective. This results in derailed approach in managing diversities. Diversity concept is hard enough to be defined and operated. In comparison to social justice cases, business case is found to deal with low priorities for tackling discrimination. He believes arguments related to business case are effective in employment cooperation context and areas of consensual context.
Ayub (2013), delivered certain factors for developing an effective business case so that diversities and equalities can be managed by an organization. Requirement of a robust base of evidence for a proper business case requires combination of both the hard and soft evidences that are to be collected for a business case. Data that are related to business case are often found to be partial and so direct prioritizing of data and its identification on related cases are to be provided for business case arguments. The business cases draw representation issues heavily. But though the representations are quite important, the business cases must relate to all possible inclusions, procedures, cultures and organizational standards that relate to diversities. Ayub believes that business cases operate at multiple level but multiple level of business cases must contain data from all sources from team, individual, national, organizational, sectoral and transactional levels. Business cases relates with business priorities and so business case must be arranged according to demands, contextual needs and organizational priorities. Business cases deals with focus on organizational workforce impact so business cases must deal with processes, behaviors and contexts. According to those the diversity and equality management must be confronted.
Michalos (2013), described three most important practices that consider the development process of certain business cases which are sharing responsibility, achieving commitment and maintaining momentum.
Proper delegation of tasks among the human resource in an organization helps in reducing confusion. Organizations today deal with diversified employees. They have different ways of accomplishing tasks. Moreover, they may be experts and educated in their respective parts. Thus, the proper delegation of tasks must be accomplished to share responsibilities among the professionals so that equality is restored.
For achieving commitments and total participation, the diversity leaders need to take considerations from the different stakeholders in decision making. A diversity plan that may cater the core needs of the business has to be determined. This kind of approach will lead in robust business activity and commit a unified diversity policy to secure the organization from wider commitments.
If the policy of diversity is succeeded, it will attract for future commitments and motivation for accomplishing tasks. For maintaining momentum, the business case must deal with all sorts of short-term, mid-term and long-term activities (Michalos, 2013). Resistance forms and strategies creation will prepare the programs for the future that will drive the business in achieving diversified activities.
Roh and Kim (2015), stated ten action points that organizations need to develop in their business case for managing diversity. The action points are defining the diversity means for an organization, identification of priorities of the strategies that are taken earlier, different data sources from multi-levels are to be aligned for organizational priorities and diversity policies, both the current data and new data needs to be fed in forming arguments for business plan, proper integration of thoughts, demonstrations, trust and allocation of data has to be ensured in a business case, business cases have to be developed by linking diversity data with results from the associated business, stakeholders commitment has to be achieved for forming business case, diversity strategies that are generated from a business case has to be crafted, mutual responsibility sharing for management of diversity and equality across the organization has to be ensured and effectiveness of the business case for managing diversity in workplace has to be monitored from time to time. These actions serve as recommendations for formation of effective business case for any organization.
The business case for managing diversity and equality varies from each context that is likely to be stronger for high growth, diversify consumer markets and higher innovation sectors. The business case for diversity and equality is mostly selective than applied universally. For enhancing business performance, effective and appropriate management of context has to deal with diversities. Effectiveness and learning approach for business cases will help in achieving greater benefits to access the legitimate approach of an organization. Diversity management is most likely to be effective if it is based on positive business case arguments, strong legal frameworks, and employee voice through consultation and negotiation.
In conclusion, the diversity management of a business case is a convincing rational for a great extent that includes economical reasons. The reasons encompass increase in profit and revenue of the organization. Corporate goodwill and talent acquisition though has certain limitations but still can be used in contextual manner. There are many other cases such as legal reasons, social justice that supports the workforce diversity. As it is said that “Society is unity in diversity” organizations need to undertake workforce considerations to enhance business case and increase their productivity and service.
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