Managing Diversity at Workplace

This essay investigates diversity management, gender diversity issues, different management approaches to diversity management, and discusses the case of Fortescue Metals Group management policy of managing gender diversity and equality at the workplace.

Managing diversity at workplace
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The social transformation that took place over the last two decades resulted in
increasing workforce diversity and cross-cultural interaction (Alcázar, Fernández and
Gardey 2013). The growing demographic diversity created a need to understand
heterogeneity at the workplace. Diversity management approach has emerged to deal
with demographic diversity. It supposes that differences can be managed constructively
in business activities. Therefore, diversity management has replaced the equal
opportunity movement and gained the support of many organizations (Lauring 2013).
The workforce in Australia is culturally diverse; it composes of more than 250 ancestries
from more than 200 countries and they speak about 400 languages. Despite this
Australian Institute of Company Directors (2018), argue that Australian diversity is not
reflected in the senior and strategic leadership at organizations. Employers seriously
consider gender equality and diversity management; more than 70% of the
organizations adopt a gender equality strategy. Currently, large organizations promote
new gender equality initiatives that aim at addressing challenging improvements,
including large payments during parental leave, reducing the gender pay gaps and
finding ways to fix them.
This essay investigates diversity management, gender diversity issues, different
management approaches to diversity management that enable to compare and contrast
their rationales and finally it discusses the case of Fortescue Metals Group
management policy of managing gender diversity and equality at workplace.
The increasing rate of globalization and liberalization caused major changes in our
workplace. Currently, females work in almost equal ratio with males. Also, language
differences are brought to the workplace due to differences in the geographical regions
to which they belong. It can cause many problems not only because people speak
different languages, but also because it brings different mindsets to the same place, in
which they are supposed to act together to achieve the common goals of the same
organization. That is why contradictions among staff members are very challenging to
the organization and it might result in discrimination among the employees (Saxena
2014).

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Diversity refers to the way in which people differ, it is commonly used to differentiate the
marginalized groups according to their social identity, like gender, religion, race,
disability, ethnicity and social class. Cox (2001), as cited in Byrd (2014), argue that
diversity represents the variation in social and cultural identities among individuals at a
certain place that could be the work or the market. Hence, intersectionality refers to the
intersection between people's social identities and indicates the different ways through
which social identities converge to create a dynamic system. Due to the increasing
cultural diversity, organizations found out that issuing diversity initiatives are likely to
reduce the negative impact of diversity at the workplace. These initiatives mainly aim to
reduce discriminatory employment practices and enhance the work climate that ensures
that differences among the employees are eliminated.
Reicher, Spears, and Haslam (2010), as cited in Byrd (2014), argue that the social
identity relates people to the social world, where people have similarities and
differences, there shared identity results in common social actions and their shared
identity is created from their practices. The term 'race' refers to the social categories
sustained by politicians to differentiate people according to their social construct.
According to E. L. Bell and Nkomo (200), as cited in Byrd (2014), the term 'gender'
refers to the biological differences among people, which are based on the assumptions
and beliefs that affects the treatment, behaviors, feelings, thoughts and resources of
women and men and take place on the individual and the societal levels.
Theoretical assumptions reveal that organizations' value is maximized by adding
women to leadership positions. The negative outcomes could exist only if the women
leaders lack the managerial experience required to fill the position or if women are
scarce to occupy the position (Noland, Moran and Kotschwar 2016).
Appointing women to participate in the board of directors represents a big effort towards
managing the board homogeneity. The percentage of women participation in the boards
reflect the number of women who occupy seats in the companies. According to
Stephenson (2004), as cited in Abdullah (2014), boards with women directors enhances
the process of audit and risk control and women can help in attracting more women to
the employment staff and promote the positive attitude among young women who wish
to become senior executives. Moreover, women directors pay attention to non-financial

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performance measures, like social responsibility and innovation the matter that
improves the organization image. Accordingly, women participation in the board
represents a deviation from the traditional male-dominated boards. On the other side,
opponents to women's right to join the board argue that women lack the operational
experience required to take a leading position. Also, they assume that women, in
general, do not have the ambition to advance to the top (Lenard et al. 2014).
The agency, resource dependency and stakeholder theories could be used to defend
the necessity of having gender diversity on boards. The gender diversity and board
independence are highly related; the more independent the board, the less likely to be
male-dominated. This theoretical argument of the agency theory reveals the importance
of gender diversity to align the board decisions with the management and shareholders’
interests. In addition, the resource dependency theory argues that the board ability to
link the organization with its resources increases due to diversity. Finally, the
stakeholder theory assumes that organizations have contracts with many social
constituents, where fulfilling an objective of the shareholders who are considered
among the stakeholders is viewed to be sufficient to maintain the organizational survival
(Ali, Ng and Kulik 2014).
The universalistic approach represents the HRM incorporated strategies into practice by
revealing the best practices. HRM practices should reveal the capabilities of improving
the organizational performance that could also be generalized. These HRM practices
are very important to be applied under the conditions of diversity and cross-cultural
management. They devote special importance to work-life balance, intercultural training,
assessment of participative performance and flexible compensation (Alcázar,
Fernández and Gardey 2013; Kulik 2014).
The human capital is essential to organizational success that is why human resource
management concerns with the human aspect of the organization. Employing human
resources with different age, attitude, gender, religion, perception and caste is difficult
for both employees and managers, because they require to adjust the work
environment. Managing a diverse workforce is very challenging to management due to
differences that exist among employees in terms of their way of thinking, generation and

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perception that complicates the process of managing them. Different types of people will
result in instability of interpersonal relationship (Saxena 2014).
The traditional main goals of diversity management are to prevent discrimination among
employees. Recently, many organizations have moved away from this problem-focused
approach and started to consider diversity as a strategic resource that can be utilized to
serve the organizational goals and enhance their performance. The rationale of such
multicultural approach is that diverse people can possess different skills, relationships,
various networks and perspectives that can be utilized to serve the larger benefits of the
organization (Lauring 2013). Despite this, while this multicultural approach should
enhance the work environment that prepares the employees to feel included, these
initiatives are usually met with resistance by the majority. This resistance could be
explained by the fear of losing the status and dominance, in-group bias, fear of
instability and social identity safety. The term 'social identity safety' refers to the
protection of the individual identity within a particular team context. It could be physical,
for example being recognized for belonging to a certain group, or it could be effective,
for example, the group that the individual belongs to is highly noticed in the organization
(Jansen, Otten and Van der Zee 2015).
The main purpose of the all-inclusive multicultural (AIM) approach is to reduce the
employees' resistance to the multicultural approach when the organization includes the
cultural group in a conception of diversity. For example when included in the mission
statement of the organization. This approach considers all groups members across the
organization, including the majority members (Jansen, Otten and Van der Zee 2015).
The top management team (TMT) diversity approach was developed by Hambrick and
Mason (1984), as cited in Homberg and Bui (2013), they argue that the individual
characteristics of the top management significantly impact their strategic actions
towards diversity management that are also related with the organizational
performance. Accordingly, organizational performance is explained by the TMT
members' individual characteristics. Another approach is the similarity-attraction
perspective, it investigates the impact of diversity on decision making, where the quality
of decisions are determined with the level of information exchange among the team
members and the way of processing these information. This approach indicates the

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importance of team homogeneity, concerning the negative impact of diversity on the
team outcomes (Cho, Kim and Barak 2017).
Fortescue Metals Group management policy ensures that as many women as possible
have the chance to strongly contribute to Australian mining. The company has many
social activities, including practical policy implementation of flexibility, child care and
fostering the work climate towards embracing diversity. Also, it offers flexible parental
leave to allow primary carers to leave during the first year after birth or adoption.
Moreover, the primary carers are offered to work up to 10 days ‘keeping in touch days’
with a transition back to work. The company CEO Elizabeth Gaines manages to keep a
family-friendly workplace that support the parents and encourages diversity. It fosters the
culture that builds a pool of talent of future leaders to deliver better outcomes for the
shareholders (Fortescue Metals Group Limited 2019).
In 2017, Fortescue won the Australian Women in Resources Alliance (AWRA) award for
its development of innovative strategies that aim to improve women's participation in the
Australian mining industry. Also, the company has a heroic history of supporting the
Aboriginal which resulted in their contribution of 15.8% of the workforce. The company
statistics of 2017, reveals that female represents 17.5% of the workforce and 23.6% of
the managerial positions are occupied by women compared to 20% in 2016. About 94%
of the primary carer females returned from parental leave. In 2016, Fortescue was the
first ASX 20 Company with 5 women on its board of directors, this number has
increased in 2017 to 50% of the board members (Fortescue Metals Group Limited
2017).
In 2018, the company continued to focus on implementing practical measures that
support parents at the workplace, including 24 hours of Fortescue Family Room and a
flexible work schedule. The company was considered in Bloomberg Gender-Equality
Index (GEI) for its efforts to support a gender diverse environment. CEO Elizabeth
Gaines believes that encouraging diversity is not just the right thing to do, but it is the
smart thing that should be done. In addition, diversity brings more trust of the
shareholders to the company business. The CEO has established the Workplace

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Gender Equality Act that reports Fortescue’s achievements in creating equality and
diversity (Fortescue Metals Group Limited 2018).
In conclusion, diversity management approach has emerged to deal with demographic
diversity. It supposes that differences can be managed constructively in business
activities. Australian diversity is not reflected in the senior and strategic leadership at
organizations. Employers seriously consider gender equality and diversity management.
Contradictions among staff members are very challenging to the organization and it
might result in discrimination among the employees. Despite this, theoretical
assumptions reveal that organizations' value is maximized by adding women to
leadership positions.
Boards with women directors enhances the process of audit and risk control and women
can help in attracting more women to the employment staff and promote the positive
attitude among young women who wish to become senior executives. The gender
diversity and board independence are highly related according to the agency, resource
dependency and stakeholder theories.
HRM practices should reveal the capabilities of improving the organizational
performance that could also be generalized. These HRM practices are very important to
be applied under the conditions of diversity and cross-cultural management. Many
organizations have moved away from this problem-focused approach and started to
consider diversity as a strategic resource that can be utilized to serve the organizational
goals and enhance their performance.

7
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