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Running head: GLOBALIZATION’S EFFECT ON DIVERSITY MANAGEMENT: LEADERSHIP
COMPETENCIES REQUIRED FOR HUMAN RESOURCE MANAGEMENT TO CREATE A BUSINESS
ADVANATGE THROUGH ORGANIZATIONAL DIVERSITY
Globalization’s Effect on Diversity Management:
Leadership Competencies Required for Human Resource Management to Create a Business
Advantage through Organizational Diversity
Dr. Mark A. Livingston
Organizational Environments in a Global Context
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Due to globalization, there has been an increase in diversity of the workplace, which caused the
role of human resources management (HRM) to evolve. A diverse workforce now includes more
representation from employees of different races, national origins, religions, ages, sex, disabilities, and
sexual orientation. Increased diversity requires innovative HRM leadership competencies to effectively
lead a global workforce. HRM leadership should create a competitive business advantage while reducing
the possibility of workplace conflict due to cultural misunderstandings by understanding cultural
intelligence and group conflict theories. The aim of this paper is to identify the HRM leadership
competencies necessary for corporations to create a business advantage by effectively utilizing diversity.
HRM leadership has to move beyond traditional HR roles as only service providers and migrate to
business enhancers by becoming value-added business contributors and transforming HRM diversity
functions. HRM is vital to an organization in order to effectively manage diversity to develop effective
practices and policies to meet organizational strategy and goals. This paper critically reviewed the
literature and asked the question: What HRM core leadership competencies are required to effectively
manage diversity to create a competitive advantage? Through a review of literature, this study develops a
framework for managing diversity in a global workplace and recommendations for leaders will be
presented. As a result of the literature reviewed in this paper, the findings revealed that effective diversity
practice and management leads to competitive advantages and can create a business opportunities in the
core business functional areas.
Keywords: competitive advantage, cultural intelligence, diversity management, globalization,
group conflict, human resource management, leadership
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Globalization’s effect on diversity management:
Leadership competencies required for human resource management to create a business
advantage through organizational diversity
Globalization has changed the way the world conducts business today. One of those
changes has been the expansion of diversity in the workplace. Increased diversity has forced
human resource management (HRM) to adapt to ensure the human resource staff of the global
leader is optimized for world-wide competition and success. The workforce is much more
diverse with different racial, gender, ethnic, religious and non-religious, generational, sexual
preferences, and transgender than at any other time in history. Increased diversity has forced
management to ensure the HRM is more than just payroll, or processing benefits for employees.
Instead, new HRM competencies are required to efficiently and effectively lead a globally
diverse workforce. Diversity changes have created an opportunity for global businesses to utilize
diversity in a business setting to create a competitive advantage.
Diversity adaptability, now more than ever, includes much greater diversity than just race
or ethnicity in the workforce, as the make-up of the workforce is changing on many different
diversity fronts. Sippola & Smale, (2007) define diversity as having differing dimensions but not
limited to demographic factors such as age, gender, race, and ethnicity, and as 21st Century
HRM broadens that aperture it now includes characteristics such as capabilities, personality,
education, religion, culture, and language. There is no one single definition of globalization, but
there is a consensus that globalization has linked economies between many different countries on
many different levels (Choo, Halim, & Keng-Howe, 2010). As diversity has transformed the
status quo of current HRM policies and practices, leaders have also had to adjust to face the
challenges of a new and evolving diverse global workforce (Mura, 2012). The benefits of a
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diverse workforce are a wider range of employees with a number of different skills and
perspectives. But with that acceptance of a diverse workforce, there is also the potential for
conflict due to differences ranging from religious affiliation, sexual orientation, ethnic or cultural
backgrounds, past life experiences, unintended prejudices or hidden pre judgments. Conflict
manifest itself in many ways in a work place environment. Those who lack understanding of
others who are different may not understand how to effectively work in harmony with employees
who are different and conflict may arise. Lack of awareness or appreciation can result in loss of
organization focus on the intended goals of the firm. Changes in diversity require effective
leadership and cohesive strategies for managing a unique and diverse workforce today and in the
future to ensure organizational success.
Diversity management requires a reexamination of past HRM policies to meet the
ongoing developing policy and practice requirements for new employee diversity management
(Mathis and Jackson, 2008). Furthermore, Delery and Shaw (2001), argue there is a general
agreement on three enduring HRM principles which argue that diversity can create an advantage,
HRM practices directly influence the entire organization, and HRM has a direct impact the
bottom line profits or losses. HRM leadership must have the competencies required to meet
potential diversity challenges. Leaders must be proficient in leadership, cultural intelligence and
diversity management to lead a globally diverse workforce. This is the premise to answer the
research question posed here and to fill the literature gap on existing diversity advantage beyond
recruitment for a global organization.
There are economic factors associated with globalization that affect the bottom line and
diversity is a large part of that equation (Mura, 2012). The changing diversity landscape reflects
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ongoing changes in the social, cultural norms that impact global business for multinational
corporations. (MNCs)
Globally Diverse Workforce
Globalization provides greater opportunity for global workforce, which in turn requires a
greater HRM management strategy. Because of the success of globalization, MNCs need
employees who may be culturally adaptable and work in a number of different environments
while fully understanding that each is different but that the corporation remains the same in each.
There are evolving diversity requirements for HRM practices and policies that require flexibility.
Both practice and policy must keep pace with application of HRM decisions or risk unintended
diversity workplace conflict. Global leaders and employees must both be adaptable, to economic
strife and success, cultural intelligence and differences, political unrest and social discourse
impacting global operations and business operations globally. In addition to the global
operations, the expansion of technology has expanded the availability of a much more diverse
workforce by allowing work to grow across time zones, country borders and cultural differences.
The influence of social media, as technology continuously advances, changes the environment
and how the diverse workforce approaches the work environment (Mura, 2012). Advances in
diversity have also increased employee organizational accessibility horizontally and vertically by
connecting employees and customers across all boundaries (Ulrich, Brockbank, Johnson, &
Younger, 2007). Senior leadership connection to the diverse workforce allows greater
accessibility to increase diversity communication.
Contributing factors for globalization are also factors for diversity advances. Technology
is one of those factors as it has allowed global business and diversity to both expand. Technology
enhancements, greater cooperation and dependency on inter-related economies, fewer trade
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barriers, lower labor costs and the abundant availability of cost effective workforce in developing
countries are all contributing factors for increased diversity and expanding globalization
(Friedman, 2007). Therefore, the research question posed here to identify the HRM core
leadership competencies that are required to effectively manage diversity to create a competitive
advantage are directly related to issues of identified by the evidence, and the two issues of
diversity an globalization.
Theoretical Background and Development
Group conflict theory (GC) as discussed by Jackson (1993) and cultural intelligence (CQ)
theory by Ang (2007), specifically related to HRM leadership of diversity management were
examined here. Both theories share similar concerns about group conflict, cultural awareness and
impacts of globalization. Other related theories included social psychology, discrimination,
stereotypes, group dynamics, prejudice and cross cultural communications (Pratto, Sidanius, &
Levin, 2006). By examining a number of different theories, both sides of the argument were
equally evaluated and understood for clarity and were value added for insights to the theoretical
lens of the research conducted to answer the research question to identify the HRM core
leadership competencies required to create a business advantage through organizational
diversity. The argument presented here was intended to compliment the theoretical foundations
of GC and CQ, of which the majority of the findings were discovered in the research of HRM
diversity management.
A theoretical lens of group conflict theory, cultural intelligence and culture of inclusion,
was balanced with a classic view of seminal authors Mintzberg (2004), and Schein (2010)
Schien. The modern theoretical view of diversity was provided by Maugans (2015) discussing
21st Century HRM and Mura (2012) HRM from an internationally operating company
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perspective. There are no identifiable seminal authors identified in the current literature on
diversity management. That gap illustrates the importance of conducting research like this to
advance the goal of effective diversity management beyond recruitment. The theoretical lens for
this paper and the conceptual model in figure 1 is represents the importance of the two theories
and the building of the research propositions.
Proposition 1: HRM competency is required to achieve diversity advantage.
Proposition 2: Effective diversity management is a core business issue that requires
effective leadership.
Proposition 3: Effective diversity competency and practice leads to a competitive
advantage in global business.
According to Blake and Cox (1991) there is a direct correlation to an organization’s
success in diversity management that can lead to competitive advantages in cost, services,
customer satisfaction business building, and through the highest quality human resources
management (53). These propositions represent the research framework to guide the evidence
review to the discovery of the evidence to answer the research question as to what are the HRM
core leadership competencies required to effectively manage diversity and create a competitive
advantage.
GC, as discussed in the literature (Brief, Umphress, Dietz, Burrows, Butz, & Scholten,
2005, p. 831-832) indicated that as demographic heterogeneity increases in organizations,
majority group members (e.g., whites) react more negatively to their jobs (Riordan, 2000).
Riordan and Shore (1997) observed that majority group members reported lower-quality
interpersonal relationships in their work groups as diversity increased, and Chattopadhyay (1999)
found that in increasingly minority-dominated groups, white employees reported lower trust in
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and attraction to their peers (Tsui, Egan. & O'Reilly, 1992). GC explains how resentments can
grow as groups compete for the same scarce resources and offers an explanation for personal
feelings of prejudice and discrimination towards other groups in the organization that are
perceived as different (Brief et al., 2005). Therefore, both theories are important to the research
question posed here because as the HRM core leadership competencies are identified to
effectively manage diversity to create a competitive advantage, a full understanding of group
conflict resolution and cultural intelligence help to guide that global success. Also, while not
explicitly considered as a primary theory, Pless & Maak (2004) expansion on the theory of
culture of inclusion, produced a four-phase model that serves as a underlying principle here.
Diversity and organizational impacts was also considered important to the research question and
Cox and Beale (1997) provided a basis for that understanding by arguing the issues of diversity
and learning. That work was a direct result of the initial work by Kotter's (1996) model of
leading change. The noted research issues were considered so as to provide a full understanding
to answer the research question posed here.
As it relates to diversity, and globalization CQ is important because the lack of
understanding what is different is the basis of the resentment and potential for workplace
conflict. HRM leadership needs to understand both principles to negate potential problems to
allow diversity to work in a global setting. In this regard, “the social group is seen to function as
a provider of positive social identity for its members through comparing itself, and distinguishing
itself, from other comparison groups along salient dimensions which have a clear value
differential” (Commins & Lockwood, 1979, p. 282). Because of GC and CQ, it can thereby be
understood that in the global workplace, generally, the need to cooperate and work in harmony is
largely based on the personal perceptions derived from past experiences that shape the
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experiences brought into the workplace and influence the interactions of all employees (Whitley,
& Kite, 2010).
Cultural intelligence (CQ) theory provides the second part of the theoretical review as it
offers a balance to group conflict theory by highlighting top management team importance in
diversity management as top management must make diversity a priority and commit
organizational resources to ensure it succeeds (Earley & Ang, 2003, p. 870). CQ intelligence
theory is “a person's ability to adapt effectively to new cultural contexts” (Earley et al., 2003, p.
871). It was introduced as a required competency to adapt to different cultures and to function
globally and is based on understanding new cultural context and adapting to it while working
globally and in foreign cultures (Earley et al., 2003, pp.149-151). At the time of this research,
there is an ongoing debate as to the validity of CQ as a theory or a strategy. For the purposes of
the research conducted here, and as a result of the evidence provided as a result of the academic
study, the CQ theory is accepted as presented by the scholarly practitioners of the University of
Maryland University College.
Healthy competition helps to make organizations and workplace performance better.
However, when it becomes disruptive because of diversity issues or cultural misunderstandings
HRM must be prepared to effectively deal with those issues (Brief et al., 2005). Dreachlin
(2007) argued new global diversity management issues test HRM core leadership skills.
According to Barrett and Beeson (2012), found that developing leadership competencies for
competitive advantage, leadership competencies showed that diversity changes the global
competitive environment. GC theory offers an explanation for negative attitudes toward racial
integration and efforts to promote diversity (Jackson,1993). GC theory can help to explain
discrimination against different ethnic and racial groups within a global setting (Esses, Jackson,
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& Armstrong, 1998). Together both examples illustrate the propensity for conflict as diversity is
expanded in a workplace environment.
Diverse organizations, by their very nature, oftentimes have a number of different goals,
leadership styles, internal decision-making procedures, and established systems that create
diversity communication and coordination difficulties (Jiang, Santoro, and Tao 2010, 1138).
Dreachlin (2007) argued changes in diversity management would test existing leadership skills
on a number of different levels including a personal level. Barrett and Beeson (2002), identified
the leadership competencies for competitive advantage, and argued that core leadership
competencies change, as does the globally competitive workplace. Barrett and Beeson’s
argument is consistent with past seminal scholar views Mintzberg (2004), on organizational
culture and diversity management within that organizational culture (Brief et al., 2005).
Understanding the culture in which you work helps to understand the diversity issues much
easier. By combining diversity, CQ and managerial leadership, MNCs may create the much
needed diversity advantage. The research conducted here will fill a gap in the literature that
exists today. There is limited scholarly literature research on the topic of current diversity issues
for several reasons. One of which the current diversity changes have been happening a prolific
rate and the literature has not been able to keep pace and the other is the changes have been so
unique that the research time lines requires a thorough and exhaustive effort to be scholarly.
There is an abundance of research on diversity and the associated issues of recruitment,
necessity, cultural reasoning, affirmative action and other topics, but there is little to none on
what to do after diversity has been achieved in an organization and no current literature on the
current diversity issues.
Method
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The methodology for the research is a rapid review, as the time was limited to less than
six months to complete this review (Harker, 2012, p. 398). The research question posited here
asks to identify the HRM core leadership competencies that are required to effectively manage
diversity to create a competitive advantage and the methodology chosen to answer that question
was to conduct a systematic review of the literature. The systematic review follows the
systematic review model consisting of seven distinct and sequential steps as presented by Gough,
Oliver, and Thomas (2012, p. 39). A rigorous and systematic search strategy was used to conduct
an exhaustive search for issues related to globalization, diversity, leadership and human resource
management.
Search Strategy
The search strategy utilized the University of Maryland Library’s OneSearch a discovery
tool, that search 47 different database using two distinct search strings (Wong, Greenhalgh,
Westhorp, Buckingham, & Pawson, 2013, p. 7). Keywords included human resource
management competencies, diversity management, business advantage, cultural intelligence,
work place conflict, HRM practices and policies, HRM implementation leadership, diversity
advantage, diversity management, HRM professional standards and diversity changes.
Inclusion and exclusion criteria
Inclusion and exclusion criteria was directly aligned to specific scholarly articles aligned
to the topic, the subset of managing diversity and the ability for HRM leaders to create a business
advantage in a global setting. The search results discovered over 400 returned records. After
narrowing the results down by full text, subject, language, date and topic, there were 14 articles
available to consider for the research basis of the argument (Pawson, et al. 2005, p. 3). The
exclusion criteria were limited to three central themes each with one subset. The three were a)
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articles had to be in English, b) no academic reviews of articles, only actual articles included in
the synthesis of the evidence and, c) the article had to directly relate to the topic, no implied
understanding or intended data conclusions. Subsets included no translations as the services are
not always consistent, reviewed articles are opinionated and not scholarly, and topic relation had
to be overt not implied. By utilizing the weight of evidence procedures, and carefully considering
the inclusion and exclusion criteria, the articles considered were narrowed to include the most
informative to answer the research question as to what HRM core leadership competencies are
required to effectively manage diversity to create a competitive advantage. After further review
and analysis, that number was further reduced again to pinpoint the topic of the argument to
correlate to the available articles and five articles were finally selected. The quality and
relevance appraisal is provided in Appendix B.
The Weight of Evidence (WoE) framework from Pawson (2005, p. 3) is identified and
further explained in the appendix. The weight of evidence was conducted in a systematic manner
to evaluate the criteria for either inclusion or exclusion for those paper to answer the research
question to identify the core HRM leadership competencies that are required to effectively
manage diversity to create a competitive advantage (Gough, Oliver, & Thomas, 2012). A ranking
of high, medium or low was assigned based on the establish criteria.
Results of Systematic Review of Literature and Conceptual Framework
Human Resource Management
HRM has been described as a “critical component of global corporation strategy” by
Schuler & Rogovsky, (1998, p. 18 ) furthermore, Teagarden & Von Glinow, (1999) went as far
to actually call it the “glue that holds global organizations together.” (p. 132) Because
globalization requires MNCs to conduct business globally, there is an appreciation required of
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different cultures, languages and legal environments. Differences can pose significant challenges
in the organizational dynamics of conducting global business and must be addressed rather than
ignored (Friedman, 2007). Forward thinking leadership requires an equal partner in the HRM
leadership to ensure the HRM practices and policies are ready to face the challenge as change
agents (Friedman, 2007). HRM practitioners are faced with the challenge of providing solutions
to the challenges that are a result of such a diverse and changing workforce.
As the importance of HRM grows in the hierarchy of the MNCs structure, HRM
professionals must continue to “develop and deliver business knowledge, HR content expertise,
influence skills, and personal credibility” because HRM skills are only as valuable as their last
success. HRM professionals must also lead effectively in areas of diversity management, conflict
resolution and cultural intelligence. HRM leader’s diversity skill sets must be constantly
refreshed to remain as current as the current diverse workforce in global organizations
(Friedman, 2007, p. 169). In a global context, competent and effective HRM leadership is even
more important where diversity and CQ are strategic imperatives for success. There is a legal
consideration that must be factored in as well. Different countries have different employment
laws, and HRM practitioners need to have a basic understanding of host nation laws. Managerial
competencies are a requirement for effective MNC global HRM diversity management and for
the full realization of the diversity advantage.
HRM Competency
Competency is defined as “an individual's demonstrated knowledge, skills, or abilities”
(Ulrich, Brockbank, Yeung, & Lake, 1995, p. 473). MNCs understand HRM is required for
successful employee services or traditional human resource management. For HRM service
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providers to be competent they need to be proficient HRM practitioners. HR leaders must be
innovative and fungible to adapt to changing business conditions.
Mukhopadhyay and Sil (2011), proposed four key areas HRM competency: (1)
organizational strategy; (2) basic industry knowledge; (3) policies and procedures; and (4)
diversity. The four competencies identified here have many subsets of related HRM
responsibilities but the overarching HRM philosophy is to support the organizational goals and
strategy.
Traditional HRM were service related. In the past, a HR department's main goal was to
assist managers with recruitment and selection; ensure pay was administered correctly, record
and institute compensation and benefits packages as required and when directed, also help
managers develop employee individual development plans for training. HRM leaders now need
diversity leadership that understand the strategic intent of the organization while working every
day in a tactical mode to ensure that all operational business objectives are being met (Sue,
2008).
Diversity Management
Diversity management is focused on the leadership ability to influence the diverse
workforce to concentrate on achieving organizational objectives (Visagie, Linde, & Havenga,
2012, p. 224). The seminal organization argument made by Mintzberg (2004) is echoed here as
the changing organizational culture does influence leadership and that is why diversity
management is vital. Competency in diversity management, as explained by Chang and
Thorenou (2004), includes respecting differing values, treating people as individuals rather than
groups, and accepting different perspectives verses only past examples. Diversity management
and competency are important cultural intelligence characteristics of MNCs that operate in at
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least two different countries, and are significantly influenced by diversity and globalization
(Alharthey & Rasli, 2011, p. 10449). Diversity supervision in a global work environment is “a
complex issue which evokes different perceptions in different organizations and cultures without
any unitary meaning” (Sippola & Smale, 2007, p. 1896).
Historically, diversity has been gauged in simple terms of demographic factors that were
limited to age, gender, race, and ethnicity. Now as diversity has expanded, it includes a much
broader inclusion perspective such as mental capabilities, personality issues, educational bias,
religious affiliation and non-affiliation, culture, and language barriers (Sippola & Smale, 2007).
New modern day issues like transgender, gender neutral, gender transition and floating gender
have all become issues that are impacting the workplace today and HRM policies need to keep
pace.
Sippola and Smale, (2007) argue that diversity is vital to a global business’s success. It is
important because organizations must meet future challenges and effective HRM diversity
leadership creates an advantage by being more inclusive of a diverse workforce. A fully realized
diversity business advantage can be enhanced through workforce diversity as result of including
more employees with a wide variability of skills, past work and life experiences, multi-cultural
understandings, and different perspectives. HR management must keep pace with increased
diversity or risk losing the potential advantage which is created by having an inclusive
environment. There is however, a need to address the issue of conflict. Again, GC is important,
specifically, “the dysfunctional consequences of diversity can be explained by realistic group
conflict theory where competition between groups for valuable but limited material or symbolic
resources breeds hostility” (Brief et al., 2005, p. 831). .
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Diversity management as a business advantage is an effort to build a trust and
understanding between different groups, by allowing that difference between employees to be
the source of creativity, growth, better business success (Martín-Alcázar, Romero-Fernández, &
Sánchez-Gardey, 2012, p. 512). Diversity management is a multifaceted issue and must be
addressed as a core issue and not mass-produced as a one size fits all. There must be context and
understanding for diversity management to be effective (Sippola & Smale, 2007). Specifically,
HR managers need to work across organization boundaries and hurdles to gain a quantifiable
diversity advantage by “moving beyond mere compliance with equality legislation to accepting
and valuing differences, by learning from diversity, and working towards the full and equal
utilization of capabilities through empowerment and inclusion” (Sippola & Smale, 2007, p.
1987).
Diversity Competency
Chrobot-Mason & Leslie (2012) have defined diversity competency as “the ability to
respond to the challenges and opportunities posed by the presence of social-cultural diversity” (p.
219). Cultural intelligence, (CQ) as defined by Offerman and Phan (2002) is “the ability to
function effectively in a diverse context where the assumptions, values, and traditions of one’s
upbringing are not uniformly shared with those with whom one needs to work” (p. 188).
Combined, both leadership characteristics are the cornerstones for future global leaders as they
manage a diverse workforce to achieve global business success.
People are the critical piece of any organization and that is why for HRM leaders,
“diversity is the life blood of the human capital to the organization” (Scott, Heathcote, &
Gruman, 2011). To remain competitive in a global economy, it is vitally important that HRM
practice and policies are strategically aligned with the corporation performance goals. The need
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to align both business concepts is essential if a competitive edge is to be gained and maintained
(Lytras & Pablos, 2008). The combining of the HRM focus with the organizational goals and
concepts also play a crucial and active role in managing diversity as the two are inherently
linked.
Effective diversity management, based on sound tenants of practical HRM provides a
solid foundation to build a successful global corporate business model. Diversity management
will allow employee performance to support corporate success as a global business (Alharthey &
Rasli, 2011, p. 10449). Global organizational employee diversity is a bridge to future corporate
success and continued growth of the capabilities of the organization as new diversity increases
new opportunity (Sippola & Smale, 2007). Key customers and stakeholders appreciate the
ability of global corporations to connect locally while operating globally (Mura 2012). New and
innovative solutions are often a result of an engaged diverse workforce as engaged employees
are more likely to gravitate to cultural related positions within the organization (Alharthey &
Rasli, 2011, p. 10449).
Diversity presents a competitive advantage to an organization but requires a HR plan that
incorporates the tenants of all aspects of diversity management (Glastra, 2000). As a sports
metaphor can illustrate, recruiting the best player at a certain position in a certain sport will not
be any benefit if that player is not allowed to play or is part of a winning team. That is why
diversity recruitment alone does not ensure diversity success. By recruiting against a diversity
target or quota, the unintended message to the organization is that “meeting the bare minimum
legal requirements for demographic diversity, sends a strong message that diversity is something
that must be tolerated rather than something holding out the promise of improved organizational
performance” (Gilbert, 1999, p. 32). An additional consideration that must be factored in that
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the individuals recruited and hired as part of an organizational effort to be more diverse could
suffer the negative side effects of being label a quota rather than a highly skilled employee who
earned the right to be hired on merit alone. A perception like this does not serve the organization
mission, and also puts those recruited at a disadvantage.
Leadership Competencies for Managing Diversity
Global organizations need an HR department that matches the workforce requirements in
order to retain top talent. Beyond hiring the right diverse workforce, the top organizations need
the HRM leaders who can build trust and commitment to the organization through professional
HR services (Manna & Morris 2008). Effective HRM leadership is required to ensure the entire
organization’s human asset potential is realized (Hernez-Broomeand & Hughes 2006).
Chang and Thorenou (2004) identified five key leadership competencies for managers
who manage multicultural workforces, specifically cultural empathy, job knowledge, effective
communication, managerial skills, and leadership style. Additionally, the five identified
leadership competencies had inherent skills that were identified, and included the flowing HRM
leadership competencies:
• Within cultural empathy: cultural intelligence and awareness, individual respect,
accepting of other cultures.
• Job knowledge: job context, intellectual curiosity, adaptability, ambiguity and keen
observation abilities.
• Effective communication: Listening, accessibility to others, transparency, consistency,
non-verbal ques, foreign language appreciation.
• Managerial skills: inspiring, collaborative, engaging, conflict resolution, planning,
finance and resource allocation management.
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• Leadership style: adaptable style as required, i.e. situation or person or culture,
emotional intelligence and empathy.
Gudykunst (1988) had previously argued leadership competencies for effective
interpersonal and inter-group communication. While not specifically HRM, it is directly related to
the same target skill set for tolerance of others, ambiguity in the workplace, and the ability to
empathize with others in the workplace. Also, Lockwood (2005) further identified and adapted
similar HRM leadership competencies for diversity management which included ten different
skills that remain relevant today. Those skills are:
• active, non-judgmentmental or prejudgment listening;
• willingness to be persuaded by the facts on issues of diversity;
• collaboration and innovation diversity skills;
• conflict resolution and change management;
• understanding of group labeling;
• diversity issue recognition and group conflict;
• cultural team building;
• willingness to learn and grow;
• ability to share to new knowledge; and
• emotional intelligence as it relate to diversity issues and sensitivity.
Human (2005,) similarly referred to Mintzberg’s (2004) organizational competency
model which also described comparable competencies. Requisite leadership competencies
inherent to leadership styles are addressed, in view of the overall aim, to establish the kinds of
leadership styles required by organizations. McClelland (1975), wrote that the most effective
leadership style depends on the people, the task and the situation that needs to be managed. In
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global organizations, the effective HRM leadership of diversity management is important to the
overall organizational success and if a business advantage is to be gained, it must be gained
through leadership of diversity.
Organizational Culture and Diversity
Organizational culture is one of the major determinate factors for success or failure of
diversity management. Seminal organizational scholar Schein (2010) defined organizational
culture “as a set of shared behaviors, norms, values, or beliefs”. The culture of an organization is
the identity that drives the interactions and norms between employees, which in turn drives the
HRM policies and practices (Scott et al., 2011). This is exponentially true in organizational
diversity management. Not all HR policies are effective for an organization just because the HR
department issued them to the organization because the organizational culture may not be
accepting of the policy (Scott et al., 2011). Organizational culture is not a single entity or block
of employees, rather, it is a number of issues, topics and concerns.
To understand organizational culture, specific diversity elements need to be examined.
There are also other factors such as specifics related to the individual culture, and include
“physical characteristics and social identities inherited from parents and ancestors” and include
“age, ethnicity, gender, and race” (Chao & Moon, 2005, p. 1131). Geography places a role as
well in a number of different ways. The geographical location, continent, hemisphere, all shape
employee identities and behaviors (Chao & Moon, 2005). Association of employees is also a
factor as they drive our belief systems and set our values. The link between geography and
location influences employee religion, politics, and worldview (Chao & Moon, 2005). The three
alone are anchors for many employees and must be understood to manage diversity.
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Scott et al. (2011) builds his case for organizational culture and diversity on the model
provide by using Schein’s (2004) three levels of organizational culture artifacts, exposed values
and basic underlying expectations. A senior leader within the HR department assigned to guide
the organizational diversity management effort and report to the CEO on progress or setbacks
(Scott et al., 2011). The physical aspect is important here and there needs to be an ongoing HR
effort to remind and guide the organization in all aspects of effective diversity management. For
the second level of the model, values and judgments by organizational leaders are active in the
actual cultural development as “leaders will express values that are embodied by organizational
members” (Scott et al., 2011, p. 739). Public support demonstrates to the entire organization the
importance of diversity and shows the commitment of senior leadership to diversity
management. A real proposition to the workforce rather than just a concept is when the senior
leadership of an organization plays a participating role in the practice and policy issues of
ensuring diversity management (Scott et al., 2011). Historically, employees are hard to win over
on any new concept and maybe even more so on diversity. Individual employee actions and
values still may not match the prescribed organization expectation as only a real situation will
tell if the diversity management plan and training worked (Scott et al., 2011, p. 738). Some
employees may say they embrace diversity issues only to avoid being singled out.
In the last level, employee internalization of individual values leads to assumptions and
behaviors based on that interpretation (Scott et al., 2011, p. 739). Diversity management is built
into the organization as it grows, nit as an afterthought or at the end of the year when all the
organizational training has to be completed. It is an ongoing issue that needs to be nurtured daily.
Successful organizations embed diversity in their HRM practices, and policies as an ongoing
22
effort. Organizations that do this in an unconscious and inclusive manner to guide diversity
policy formation are more inclusive (Scott et al., 2011, p. 739).
In an inclusive organization, employees are valued as equal participants to the success of
the organization. The public image of an organization being inclusive is important to understand
because a healthy culture does not segregate groups, they integrate all employees (Scott et al.,
2011). Working in an environment allows all employees to contribute (Scott et al., 2011). With
every employee contributing, rather than being isolated and not performing, organizational
success is more likely. The synergy is also a result of the social identify theory, as there is an
accepted understanding that there is a tendency for like individuals to congregate together as a
mechanism for social identity and comfort. Inclusive environments ensure diversity
accountability will be evaluated as a HRM core competency in leader’s performance appraisal
(Scott et al., 2011, p. 739). In successful organizations, what gets rewarded gets continued.
Building an Inclusive Culture Model
Corporate success tends to create models for others to follow. Becker & Huselid (1998)
introduced one such model. In the model provided by Becker & Huselid, the corporation’s
strategic business strategy is designed to reflect the HRM policy and practices in a cohesive and
complimentary manner. Pless & Maak (2004) produced a four-phase model as a follow on from
an initial case made by Cox and Beale (1997) with their topic of diversity and learning. Both are
a result of the initial work by Kotter's (1996) model of leading change. Combined, all three
works led to the four phase model for constructing a culture of inclusion. The model is provided
below in Figure 1.
Pless & Maak, (2004) created a four phase model to aid in creating a culture of inclusion.
The four phases are depicted in figure 1 and are the basis for the updated model in figure 2. The
23
steps are successive and begin with awareness which leads to a strategy or vision. A review is
required phase three to reconsider past mismanagement decisions and action to consider which if
any should be changed or continued. The fourth and final step is the culmination of the three
preceding stages as the competencies of inclusion are identified as necessary for change. Pless &
Maak, (2004) state in clear terms “in order to be able to change and create a culture of inclusion
people need to have certain qualities and traits, called competencies of inclusion that enable them
to effectively respond to challenges and opportunities in a diverse and inclusionary work
environment” (p. 139).
(Source: Pless & Maak, 2004, p. 137)
Figure 1. Transformation Stages for Building a Culture of Inclusion
This model represent the four phase model of inclusion.
24
Figure 2. (Source: Adopted from Transformation Stages for Building a Culture of Inclusion Pless &
Maak, 2004, p. 137).
This figure is adapted to reflect an updated version with the two theories in this paper.
The model represents a graphic illustration of the need for cultural awareness which is
imbedded in the Cultural Intelligence Theory, Group Conflict Theory and is a basis for the
research. The need to build an environment that is inclusive rather than exclusive is the
acknowledgement that a lack of cultural awareness can prevent a diverse workforce from
reaching its full potential and creating a business advantage The theory and model represent the
potential conflict that between different groups of diverse employees. In addition, employee
diversity perception or reality are separated by little more than the actual realization of the
potential threat posed by either group, “stemming from either actual or perceived competition for
25
material or symbolic resources, are at least sufficient to produce such dysfunctional
consequences as ethnocentrism” (Brief et al., 2005, p. 831).
Phase one, is a beginning point to start an ongoing discursive learning process, which is
aimed at raising employee awareness to understand how others perceive reality differently which
helps to begin the understanding for a culture of inclusion (Pless & Maak, 2004, p. 137). Phase
two, is a clearly defined vision or azimuth which sets a direction for the organization (Pless &
Maak, 2004). Much like a trip, a map is required to understand where a trip will take you and
where you intend to go as an organization. For organizations there is seemingly always a series
of leadership changes, growing organizational values, evolving belief systems and trending
employee mental perceptions that set the course, and the vision is a changing guide point (Pless
& Maak, 2004, p. 137). Organizations want to know where they are going and employees want
to know how to get there.
Phase three is a time to reflect. The ability to consider past management concepts of the
organization and consider the founding principles as they relate to current organizational
situations help to ground guide the organization today (Pless & Maak, 2004).
The conceptual model proposed here are three progressive steps represented by three
arrows. The first two arrows encompass the first three steps of the previous model and simplify
the steps into awareness and creating a shared vision. The third and fourth steps of the previous
model are replaced with the modern HRM leadership with competencies that reflect the changed
global workplace diversity. The six HRM focus areas are exact areas of focus where global
leaders and HRM professionals must focus to reach the full potential of a diversity advantage.
The six focus areas are not sequential nor are they listed in order of priority. The arrows in the
26
wheel chart are purposely placed to demonstrate the inherent cyclic nature of the continuous six
areas as they are always running in the background of the global organization.
As with most important organizational issue, the conceptual ideation is easier than the
actual execution. It is no accident when inclusive work environments are created. To create a
workplace culture of acceptance requires a set of unique skill sets that current and future HRM
professionals need to master. The mental HRM competencies of diversity inclusion are the first
steps in a mental acceptance of facing diversity challenges (Pless & Maak, 2004, p. 139).
Concept meets action here, and it all comes together to build the basis for diversity advantage is
born. The concept model illustrated in figure 3 (above) illustrates the two major themes in the
for effective diversity management in global diversity, which are diversity and cultural
awareness and conflict resolution and leadership. The first major theme, is evenly split between
the two theories of group conflict theory and cultural intelligence, which impacts the three major
functional areas of moving beyond jut section and hiring, diversity competency an management.
27
The second major theme is the solution for potential conflict which might arise as a result of
increased diversity and the leadership required for all aspects of management to work but
especially diversity management. The arrows represent the multifunctioning roles each major
themes plays at different times in a global organizations as the HRM function is never static and
is perpetually moving in a constant motion of improvement. Each of the three functional areas
is required to interact with both major themes and sometime concurrently as the satiation
warrants. The loop back cyclic nature of the chart represents a purposely identified effort to
display the nature of HRM and the need for the functions to work as a redundant and
complementary process, with overlapping responsibilities and leadership who provides internal
checks and balances to ensure a culture of acceptance for diversity to grow. The argument
presented here, proposes that the three specific functions, sets as subsets of the two overarching
themes, serve as the basis for creating a business advantage for global business, as illustrated in
the concept map.
HRM Scholarly Diversity Implications
Organizations that embrace diversity will gain a competitive advantage in work place
creativity, problem solving, and facing new unforeseen challenges. The conceptual diversity
literature identified and discussed in here demonstrated the value that diversity serves as a
foundation for competitive advantages. By increasing the quality of diverse thoughts and
ultimately the organization, increases the wider the response to existing and future problems
(Shen, Chanda, D'Netto, & Monga, 2009, p. 235). It is not enough to simply recruit a diverse
workforce; it must be fully assimilated, led by competent HRM policy and guided to create a
business advantage to the organization. There has to be a culture of inclusion and a commitment
28
to valuing diversity from top to bottom in the organization so that the entire organization
understands the importance (Shen et al., 2009).
To compete successfully in a global economy, it is a strategic imperative that HR
managers guide their organizations to fully realizing the diversity advantage. Resolving conflict
before it becomes uncontrollable is a major factor that must be addressed as well. The bottom
line for global HR managers is that the vital evidence presented here identifies the need to
manage diversity and create a business advantage through effective HRM competencies.
Understanding CQ as a core competency for HR managers will go a long way to accomplish the
goal.
As a result of the literature reviewed, and evaluated, the following are key takeaways
were identified for HR managers to manage a globally diverse workforce:
• Organizational culture must embrace diversity not simply accept it.
Cultural intelligence and conflict management are critical for success.
• Effective diversity management requires competent HR managers with up to date
skills and understanding of past, current and future diversity issues.
• Recruitment alone is not diversity management.
• Diversity based HRM practices are important to create productive performance.
• Diversity management should build a competitive advantage.
Limitations
Two limiting factors were time and lack of research saturation. There is an abundant
amount of research available on the topic of diversity but very little scholarly literature on
current issues of diversity management or issues beyond what to do once diversity is achieved.
Specific and directed research would have provided much need empirical data to substantiate the
29
findings and conclusions. Evidence based management was a critical underlying principle in the
research effort and may have used more time and evidence to make a stronger case for the points
made here. The specific competencies identified for HR managers to lead a global, diverse
workforce informed the research, and may serve as a basis for other scholarly practitioners to
build on. There is a lack of identifiable strategic human resource management definitions,
competencies, and diversity definitions as well. There is a lacking uniformity in the HR
community that needs a base line if other scholarly research is to build on identified gap in the
literature.
Conclusion and Implications for Future Research
Diversity management can and should create a competitive advantage. To build on that
premise, human resource management needs to focus on six functional areas to build human
capital to gain that advantage by better understanding diversity management and cultural
intelligence. The business areas are: (1) financial management, (2) resource acquisition, (3)
marketing and branding, (4) creativity and ingenuity, (5) problem-solving, (6) organizational
resiliency. As the evidence has indicated, diversity impacts all aspects of the organization and the
bottom line and as such it should hold a higher place of importance in the global organizational
hierarchy. In order to compete successfully in the future, global organizations need to ensure that
the diversity and globalization are addressed in the HR management practices and policies.
The purpose of the research is to answer the research question, is to logically discuss the
competitive advantage to be gained by a fully realized diverse workforce. Considering
globalization, culture and diversity, the argument presented here critically examines the literature
to fill the gap and ask identify the competencies necessary for a global HRM manager to manage
diversity to create a competitive advantage. The examination of the evidence identified related
30
diversity management and cultural challenges for both HRM practitioners and future researchers,
while adding value to current management decision-making efforts related to diversity and
global cultural issues.
Future researchers should consider the design and structure of the HR department. If it
has not evolved in some time, the definitions and expectations may not have kept pace with the
changes in the workforce nor has the leadership expectations. New leaders need to be a reflection
of the current state of the workforce today. Diversity management and understanding the changes
necessary is more than just training might accomplish. CQ, HR managerial competencies,
building an inclusive environment and diversity management are now linked for global success.
Future global businesses need to build around issues rather than hire to them later. Most of the
research in the UMUC library was clearly from a Western viewpoint, it would have been highly
informative to see a global perspective as it relates to the topics present here.
31
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Figure 1. Results of systematic searches (PRISMA, 2013, para 10).
Total Research identified (n =403
Other research identified (n =21)
Excluded (n = 22)
Assessed (n = 32)
Excluded (n =82)
Research included (n =10)
Research after first screening (n =187)
Screened (n = 114)
Iden
tifi
cati
on
S
cree
nin
g
Eli
gib
ilit
y
Incl
uded
43
Appendix A
Figures 1, 2 & 3
Conceptual Framework Map JQP
Figure 2 Culture of Inclusion
44
Figure 3 Updated Conceptual Culture of Inclusion Model
45
Appendix B
Table 1: Source Articles Included in JQP Draft 2
Appendix B
Quality Appraisal Results
Bibliography Purpose Publication Credibility
Author(s) Credibility WoE
Brief, A. P., Umphress, E., Dietz, J., Butz, R. M., Burrows, J., & Scholten, L. (2005). Community matters: Realistic group conflict theory and the impact of diversity. Academy of Management Journal, 48(5), 830-844. doi:10.5465/AMJ.2005.18803925
Provided a useful descriptive framework to analyze workplace conflict and diversity challenges.
Ulrichsweb search found the journal to be scholarly, refereed, and reviewed.
Ph D academic Professors who have published widely on the topic and are affiliated with a University.
High
Chao, G. T., & Moon, H. (2005). The cultural mosaic: A metatheory for understanding the complexity of culture. Jornal of Applied Psychology, 90(6), 1128-1140. doi:10.1037/0021-9010.90.6.1128
This article presents a bounded, temporally bracketed overview of the literatures exploring culture and the impacts of combining it with diversity.
Ulrichsweb search found the journal to be scholarly and refereed.
Scholars and Terminal degrees. Peer reviewed and published.
Medium
Friedman, B. (2007). Globalization implications for human resource management roles. Employee Responsibilities & Rights Journal, 19(3), 157-171. doi:10.1007/s10672-007-9043-1
This article examined HRM as it related to globalization and role conflict for leaders. The study was based on quantitative and qualitative methodology.
Ulrichsweb search found the journal to be scholarly, refereed, and reviewed.
Scholar, widely recognized as an expert.
High
Kiessling, T., & Harvey, M. (2005). Strategic global human resource management research in the twenty-first century: An endorsement of the mixed-method research methodology. International Journal of Human Resource Management, 16(1), 22-45. doi:10.1080/0958519042000295939
This article identified a systematic plan whereby Strategic global human resource management was a key strategic consideration. This structured, sequential method to global HRM.
Ulrichsweb search found the journal to be scholarly, refereed, and reviewed.
Scholars and Terminal degrees. Peer reviewed and published.
High
Martín-Alcázar, F., Romero-Fernández, P., & Sánchez-Gardey, G. (2012). Transforming human resource management systems to cope with diversity. Journal of
This study sought to explain HRM and diversity challenges.
Journal of Public Relations Research
Ph D academic Professors who have published widely on the topic and are affiliated with a University.
Medium
46
Bibliography Purpose Publication Credibility
Author(s) Credibility WoE
Business Ethics, 107(4), 511-531. doi:10.1007/s10551-011-1061-0doi:10.1207/S1532754XJPRR1202_2
Mukhopadhyay, K., Sil, J., & Banerjea, N. (2011). A competency based management system for sustainable development by innovative organizations: A proposal of method and tool. Vision 15(2), 153-162. doi:10.1177/097226291101500206
An examination of HRM competency in innovative organizations.
Vision European Scholars with a global perspective.
Medium
Pless, N. M., & Maak, T. (2004). Building an inclusive diversity culture: Principles, processes and practice. Journal of Business Ethics, 54(2), 129-147. doi.org/10.1007/s10551-004-9465-8
This study and presented the textual approach to qualitative research following the research intent of building a diversity culture. This article spoke to the issues of culture and diversity.
Ulrichsweb search found the journal to be scholarly and refereed. (Academy of Management Journal)
Scholars and Terminal degrees. Peer reviewed and published
High
Sippola, A., & Smale, A. (2007). The global integration of diversity management: A longitudinal case study. International Journal of Human Resource Management, 18(11), 1895-1916. doi:10.1080/09585190701638101
This article reports results of a qualitative study that examined diversity management.
Ulrichsweb search found the journal to be scholarly and refereed.
Scholars and Terminal degrees. Peer reviewed and published.
High
Ulrich, D., Brockbank, W., Johnson, D., & Younger, J. (2007). Human resource competencies: Responding to increased expectations. Employment Relations Today 34(3), 1-12. doi:10.1002/ert.20159
This study examined the necessary HRM competency required for global leaders and examined diversity as well.
Ulrichsweb search found the journal to be scholarly and refereed.
Ph D academic Professors who have published widely on the topic and are affiliated with a University.
High
47
Appendix C
Definitions
1. HRM Competency
Competency is defined as “an individual's demonstrated knowledge, skills, or abilities” (Ulrich,
Brockbank, Yeung, & Lake, 1995, p. 473).
2. Diversity Competency
Chrobot-Mason & Leslie (2012) have defined diversity competency as “the ability to respond to the
challenges and opportunities posed by the presence of social-cultural diversity” (p. 219).
3. Cultural Intelligence
Cultural intelligence, (CQ) as defined by Offerman and Phan (2002) is “the ability to function effectively
in a diverse context where the assumptions, values, and traditions of one’s upbringing are not uniformly
shared with those with whom one needs to work” (p. 188).
4. Organizational Culture
Seminal organizational scholar Schein (2010) defined organizational culture “as a set of shared behaviors,
norms, values, or beliefs”. The culture of an organization is the identity that drives the interactions and
norms between employees, which in turn drives the HRM policies and practices (Scott et al., 2011).
5. Diversity Management
Diversity management can be defined as “a voluntary and planned program designed to make differences
between employees a source of creativity, complementarity and greater effectiveness” (Martín-Alcázar,
Romero-Fernández, & Sánchez-Gardey, 2012, p. 512).
6. Cultural Competency
Cultural competency is defined as a “set of values, behaviors, attitudes, and practices...that
allows people to work effectively across cultures” (Seidenberg, 2006, p.3).
48
Appendix D
Appendix D. Databases searched
Databases searched
Databases searched
Behavioral Science
Business source complete which is an EBSCO host
database
EBSCO host database
Pro Quest Database
PsycARTICLES, Psychology and behavioral sciences
Psychology
Psychology and Collection
PsycINFO
SocINDEX
Sociology
Ulrich
Web of Science for cited reference search
