Diversity contributes to firm performance in three primary ways: recruiting access, market access, and input diversity (McMahon, 2010). Recruiting access provides employers with a broadened pool of individuals with a more expansive list of backgrounds to fill roles. Market access is obtained through diversity by employing individuals from cultures which can relay information about their in-group for marketing potential.
Finally, input diversity is obtained through diversity simply by the increased number of unique viewpoints within the organization. While input diversity is likely to influence any organization as inclusion will inevitably lead to those individuals contributing ideas which will be derived from their experience which is unique from the dominant culture, the influence of recruiting access is largely dependent on the employment needs of the organization and market access dependent on the need for market pursuit (e.g. if the organization has a product which has no relevant possibility to market to an out-group, there is no need for employees of that out-group with regards to their ability to provide market access).
For this reason, it should be considered that input diversity is the most consistent influencer of organizational performance as it is not contingent on potential marketing opportunities or labor markets as is the case with market access and recruiting access, respectively.
While not as ubiquitous as input diversity, market access and recruiting access, so long as their relevant contingencies are in effect, can contribute significantly to a firm's profitability. In the case of market access, the needs of multinational organizations have been found to benefit greatly from increased diversity resulting from their unique and relevant cultural insights (Hajro, et al., 2017).
When considering this form of diversity it is important to note that unlike the other two benefits, pursuing the advantage is not simply a matter of seeking those of diverse backgrounds generally for their out-group status but rather pursuing specific and relevant out group statuses such that a multinational pursuing markets in sub-Saharan Africa would not consider a Chinese applicant in order to yield such an advantage. The benefit of recruiting access differs from input diversity and market access as it is not pursuant of diversity for its own sake but rather the result of openness to diverse hiring.
Benefits from diversity in this regard are difficult to observe unless a ban has been lifted such as with the acceptance of open homosexuals in the military (Jones &Koshes, 1995). The benefit of their inclusion in this context is that their inclusion in the pool of applicants will increase in size and generally increase the quality of employees selected should any of those additional applicants prove to be amongst the most qualified in the full population of applicants.
While the difficulties in implementing inclusion policies are vast, they are often driven by the individual groups being included. Rather than attempt to formulate a complete list of such difficulties two general trends will be explored.
The first of these trends will be the difficulty of inclusion without compromising the benefits of diversity with assimilation and the second being the limits on establishment of group norms that diversity provides.
While assimilation into the dominant culture may be the ideal within certain contexts, for the goals of input diversity and diversity driven market access it is largely disruptive.
This detriment occurs mostly in organizations with an authoritative view of the knowledge base (McMahon, 2010) and stands to erode gains in input diversity by placing a greater value on agreeableness and homogeny than independent thought as well as eroding gains in diversity driven market access since, while diversity employees may retain their relevant statues, the expressed cultural viewpoint which is expected to provide this access will be suppressed.
This erosion of benefits of diversity necessitates an organization seeking either of these benefits to either constantly seek to increase diversity within their workforce or to actively suppress the assimilation of employees that possess a unique background in order to preserve their unique traits.
Pursuant to organizational cohesion and survival are the establishment of group norms which serve to provide a framework of behavior for all participants as a generally acceptable minimum (Feldman, 1984).
These norms, being the result of an unspoken system of bargaining within a group over time, tend to reflect the dominant culture of that group and as such largely discount voices of descent, especially in the case of those which join the group after the norms have since been well established.
While this late entry into an established set of rules may not provide difficulty to members of the dominant group due to similarities in culture, those of more unique backgrounds may have difficulty in adapting to the norms, especially when maintaining the unique traits which, in the cases of input diversity and diversity driven market access, provide value to the organization as a whole.
Resources
Feldman, D. (1984). The development and enforcement of group norms. Academy of Management Review, 9(1), 47-53.
Hajro, A., Gibson, C. B. &Pudelko M. (2017). Knowledge exchange process in multicultural teams: linking organizational diversity climates to teams' effectiveness. Academy of Management Journal, 60(1), 345-372.
Jones, F. D. &Koshes, R. J. (1995). Homosexuality and the military. The American Journal of Psychiatry, 152(1), 16-21.
McMahon, A. M. (2010). Does workplace diversity matter? A survey of empirical studies on diversity and firm performance, 2000-09. Journal of Diversity Management, 5(2), 37-48.