Workforce Diversity: Theories, Benefits, and Management Strategies

This essay delves into the multifaceted concept of workforce diversity, emphasizing its significance in contemporary organizational settings. It defines workforce diversity as encompassing the various differences among employees, including age, race, culture, religion, and other factors. The paper underscores the importance of managing diversity effectively to leverage the unique strengths and skills of each individual, thereby enhancing organizational productivity and performance. It explores various theories of diversity management, such as Institutional Theory and Resource Based Theory, and discusses the benefits of a diverse workforce, including increased innovation, improved communication, and a better understanding of global markets. Additionally, the essay addresses the legal and ethical imperatives for managing diversity, highlighting its role in social responsibility and compliance with anti-discrimination laws. The essay also examines the potential challenges associated with diversity, such as conflict and miscommunication, and suggests strategies for mitigating these issues, ultimately advocating for a proactive and inclusive approach to workforce diversity management.

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Running head: Workforce Diversity
Managing Diversity and Equal Opportunities
Student
Institution

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Workforce Diversity
Introduction
Workforce diversity refers to the differences and similarities at the workplace which
include age, race, social cultural, religion, physical abilities or disabilities, sexual orientation
among others, amongst the employees of a particular organisation (Bedi, Lakra, & Gupta, 2014).
A diverse workforce means that its workers, suppliers, customers and even the managers
comprise of different backgrounds in terms of culture, language, religion, values and others
(Mujtaba, 2007). An organization that takes advantage of the diverse talents from different
backgrounds benefits from strengthened productivity. Workforce diversity is the policies and
those practices that an organization has in place that foster inclusiveness of people who are
different from the majority in that prevailing constituency (Bedi et al., 2014). When an
organisation manages workplace diversity properly, it can benefit from the strengths and
complement the weaknesses of each individual and leverage on the knowledge and skills from
each person to make a huge impact on performance. Therefore workforce diversity needs to be
managed for any organization to realize its full benefits. This paper will discuss managing
workforce diversity, why it is important, theories of diversity management, its benefits and
negative effects and why it is important to manage diversity at the workplace.
Managing Workforce Diversity
Managing diversity in an organisation is an important yet difficult task. An organisation
may need to make changes in order to accommodate the changes of each and everyone and
maximize their potential and thus be well positioned to meet the business demands in a global
environment. There is therefore need for policies and practices and also new ways of thinking
and doing things in order to accommodate the different groups of people.

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Organisations have to be ready to transform the workplace culture so that it is in line with
the values of the different people. They have to start by understanding their own identity, the
culture and the biases that exist, the prejudices and the stereotypes. Only when this is
acknowledged can they move forward towards changing those practices that are biased towards
certain groups of people. They must recognize that diversity runs through all the aspects of
management in the organisation (Bedi, et al., 2014).
Recognition that managing diversity means recognizing people are different and that
those differences can be used to add value to the organisation is important for firms. Good
management practices can be used to maximize on the benefits that accrue from diversity so that
all employees feel valued and have freedom to contribute to organization’s goal achievement.
The strategies for managing diversity that work in one situation may not work in another
situation. There is no rule to how organisations should manage diversity and each organisation
has to devise the strategies that work for their circumstances.
An organisation response to diversity can range from doing nothing to having a full
strategy to deal with workforce diversity that places various interventions in to the organization
framework. Organisations’ possible reactions to diversity may include exclusion, denial,
assimilation, suppression, isolation, tolerance, relationship building to mutual adaptation. They
may choose to ignore or address the diverse backgrounds of their employees, view it as a
challenge or an opportunity or choose to be proactive or reactive to diversity (Podsiadlowski, et
al., 2013). With globalisation and internationalization of organisations, diversity is likely to
continue to grow in workplaces in the long run (Okoro & Washington, 2012).

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Diversity in our current global world is a fact of life and is a necessity for one to function
appropriately in the universe especially important at the work place. It makes a workplace more
interesting and attractive but if not managed properly can cause people to be annoyed by
comments or behaviors from others in a diverse team. This makes the workplace more
challenging and unpredictable as diversity can be both a good thing but yet create conflict if not
well managed. Some of the beliefs challenge people’s values embedded in their minds since they
were young thus making them uncomfortable (Mujtaba, 2007).
The differences in the world today continue to be reflected in organizations. Each then
has the responsibility to be aware of these differences and become respectful towards individuals
who are different and unique. Understanding, tolerance, respect of those differences is important
for one to take advantage of each person’s unique skills and maximize on productivity of
employees for competitive advantage. All employees and managers must be culturally competent
for them to be successful. This means they must continue to learn how to function well in a
culturally diverse environment (Mujtaba, 2007). The organization must therefore invest in
training employees for them to become culturally competent.
Theories of Managing Diversity
There are two broad approaches to workplace diversity management. These are
Institutional Theory and secondly Resource Based Theory (Yang, & Konrad, 2011).
Institutional Theory
This approach emphasizes that organisation structures cannot be separated from their
social environments (Yang, & Konrad, 2011). The structuring of organisations provides meaning
to the social behavior in those organisations. They include the regulative institutions which are

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the regulations, laws and rules. The normative institutions refer to the professional and social
norms. The cognitive institutions refer to the ethics and the culture. All these institutions put
pressure on the organisations and they are expected to conform. Organisations thus adopt
structures that conform to societal expectations in order to gain legitimacy and thus approval
from both internal and external stakeholders. The institutional theory thus influences the
diversity management practices and how they are implemented (Yang, & Konrad, 2011).
Resource Based Theory
This theory recognizes that organisations consist of various resources which include
physical, financial, human and corporate capital. These resources determine an organisation
ability to implement business strategies and thus determine a firm’s performance. Valuable
resources are those that allow a firm to perform effectively and efficiently. The resources that are
valuable and not easily accessible or held by just a few firms help a firm achieve competitive
advantage. The resources that are of value, are not commonly available and cannot be imitated
help a firm gain sustained and competitive advantage. This ability is determined by an
organisation’s structure and its procedures and the practices. According to this theory these
resources determine the selection of diversity management practices, their implementation and
outcomes (Barney & Clark, 2007).
Why Manage Workforce Diversity
Organisations manage diversity for social responsibility. This is because most of the
practices of diversity are for the disadvantaged groups and making them more accepted and
valued at work. By diversifying the work place, such groups are given a fair chance to earn a
salary and take care of their needs. It also supports groups of people who were previously getting

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supported and give them a chance to earn and pay tax thus economically empowering them. This
then can be considered as a good action towards social responsibility (Bedi et al., 2014).
Diversity is also managed as a source of talent. Workplace talent is represented by people
from diverse places and backgrounds and experiences. Discriminatory practices can stop a
company from attracting and retaining top talent. Competitive companies will therefore put in
place policies and practices that cater for diverse talent in order to attract the best talent and
retain them for competitive advantage.
Another reason for managing diversity is in compliance with legal requirements.
Companies have a legal mandate to have practices that are not discriminative. Companies that do
not comply face heavy fines or even loss of contracts from government agencies and thus incur
losses. It is therefore good business practice to comply with the legal requirements of the area
companies operate in (Bedi et al., 2014). Other stakeholders may not want to do business with a
company that is seen to flout labor requirements or that practice discriminatory practices against
a group of people.
Managing diversity is also done as a marketing strategy. The customer base in the global
world is represented by people from different cultures and beliefs. To attract and retain the
customer base from different places, organisations must then hire people from the same diverse
pool. This will ensure diverse ideas and knowledge which is useful for the company to deliver to
their customers’ satisfaction. The diversity in the customer base has to be reflected in the
employee base for success.
Diversity is also managed as a business communication strategy. There is growth in the
diversity of companies’ stakeholders including the suppliers, the vendors, the customers and all

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others partners. With a homogenous workforce, a company is likely to become very ineffective
in its communication. Diversity helps to overcome the barriers in this communication as
employees from different backgrounds will be helpful in understanding communication to their
unique groups (Bedi et al., 2014).
Finally, managing diversity is for capacity building. Companies that succeed in the
changed business times are those that are quick to adapt to the new situations, resolve problems
quickly, identify new opportunities and exploit them. This is achievable with a diverse pool of
talent, knowledge and experiences of the employees. Valuable employees are those with unique
qualities and perspectives (Bedi et al., 2014). Companies that recruit employees from diverse
backgrounds know that they will work differently and therefore change the old ways of doing
business for success.
Benefits of Workplace Diversity
The challenges and opportunities created by diversity affect all organizations in the world
to an extent. Some of the critical diversity issues affecting the world include racial supremacy,
cultural identification, unfair compensation based on gender or other minority status all having
an effect at the workplaces. Currently, some countries like the USA are having conflicts based on
racial supremacy while other organizations have conflicts based on unfair pay based on race and
gender differences (Mujtaba, 2007).
Workforce diversity is now one of the important issues in all organizations and in every
sector. While previously workforce diversity was viewed as a compliance with the laws issue
only, organisations are now changing and consider diversity as a strategy issue and considering
how diversity can be used to achieve organisation goals. Employee diversity benefits

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organisations by encouraging different perspectives and solutions to workplace problems but it
can also lead to conflict, miscommunication and mistrust (Pitts & Recascino, 2010).
Sustaining and encouraging diversity is important in the world for the development needs
of democratic societies. Studies have shown that diversity in higher learning institutions
enhances the learning experience and makes environment better for supporting lifelong
relationships. Diverse learning environments also prepare students for the increased global and
complex world and cultivate mutual respect and team work in them (Okoro & Washington,
2012).
Managing of the human resource activities is important for the growth, sustainability and
success of organisations around the world and thus in Australia. Cultural diversity is central to
national identity in Australia with about 25% of Australians born overseas. Discrimination in any
part of public life is therefore against the law and this implies even in employment according to
the Racial discrimination Act of 1975 (Australian Human Rights Commission). Diverse
organisations like Australian Broadcasting Corporation (ABC) have policies and strategies that
support diversity in gender, languages differences and disability and have been striving for
workplace inclusivity and flexibility (ABC, 2014). In 2016, Envato was awarded as being top
diversity company in Australia by JobAdviser (Longman, 2016).
A company with a diverse workforce also has a better understanding of the global market
place. Diverse organisations have better productivity and thus higher profits than those that are
not diverse due to the diverse cultures that encourage employees to perform at the best. When
employees feel valued regardless of their backgrounds, they become hardworking and loyal
which improves on the overall productivity and profits of the company. Their customers from

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different cultures and who may speak different languages also benefit from service offered in
their own languages (Bedi et al., 2014).
Diversity also encourages exchange of good ideas and also team work. A diverse team
benefits from different ideas and perspectives especially towards a complex task and explore best
solutions within a short time. Different people bring in their diverse experiences when tackling
team tasks thus strengthening productivity. Marketing and advertising activities may benefit with
a better understanding of different cultures which is easy to gain from a diverse team (Bedi et al.,
2014).
Diversity gives an opportunity to employees for learning and growth. Employees are
exposed to different cultures, ideas and ways of doing things. This enables them to have a clear
outlook to the organisation and their place in the global perspective and thus learn more and
grow intellectually from the different ideas gathered. With frequent exchange of ideas and
knowledge, the employees become more global in their search for problems within the
organisation thus better to serve global customers (Bedi et al., 2014).
It enhances effective communication. It enhances an organisation’s relationships with
certain groups of customers and other stakeholders thus making communication more effective.
When an employee is serving customers whom they share a language or culture, it enhances the
relationship with the customer as they feel at home and can be able to communicate effectively
thus become loyal to the company. The benefits of workforce diversity will be enjoyed by
careful planning and commitment by organisations for them to hire and retain a diverse mix of
employees and also promote and reward them without any form of discrimination (Henry &
Evans, 2007).

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Negative Effects of Diversity
Workforce diversity does not automatically mean positive benefits. If not well managed,
it could potentially lead to some challenges. Intercultural communication is a daunting challenge
in organisations. It is important that the business communicator is adapts quickly to changed
responsibilities and working relationships. Managing diversity is much more than simply
acknowledging differences in people. With increased globalization, increased immigration,
increased number of women at the workplace among other factors continues to fuel the trends in
diversity. The diverse workforce brings along communication challenges and affects how
communication happens at the workplace (Bovee, & Thill, 2012).
Supervisors and managers are faced with the challenge of motivating and creating
harmonious relationships among colleagues. Managers may also face losses brought about by
work productivity, negative attitudes and behaviors that act as barriers to diversity. An
organisation that ignores diversity is likely to be faced by law suits and low staff morale (Okoro
& Washington, 2012).
Some companies have suffered from unethical and unfair practices to some employees
from minority groups. This always leaves a negative impact on the organisation performance and
the society in general. In some cases, some organizations have suffered from law suits when
employees have suffered from discrimination based on their differences. It is in the interest of
organisations to promote fair treatment of all groups of people regardless of their backgrounds.
This will not only result to enhance performance by employees but also retention of talent and
avoidance of losses resulting from lawsuits and bad reputation. It also encourages all employees
to work synergistically with the interest of productivity and competitiveness. According to Brian

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and Amrik (1999), the challenges of workforce diversity are not adequately addressed by
organisations in Australia. Therefore more needs to be done to achieve the highest benefits
of diversity.
Conclusion
In conclusion, it is clear that companies who hire diverse employees achieve competitive
advantage over those that do not. Companies that enjoy the benefits of diversity are those that
hire diverse employees because of their differences and acknowledge the value they will bring in
to the business and thus leverage on them. The organisation must select from the different
diversity management practices what works best for their circumstances. When diversity is
managed appropriately, it grants a firm sustained competitive advantage. The companies that
hope to survive in this global world must embrace strategies that promote workforce diversity.
This paper has discussed workforce diversity management, the theories of diversity management
and why it is important for firms to manage diversity. It has also discussed the benefits of
workforce diversity and highlighted some negative effects of diversity.
References

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ABC. ( 2014). Equity and Diversity Annual Report. Retrieved August 29, 2017 from:
http://about.abc.net.au/wp-content/uploads/2015/02/EquityAndDiversityAnnualRPT2015
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Australian Human Rights Commission. Retrieved August 29, 2017 from:
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Barney, J., & Clark, D. (2007). Resource-based Theory: Creating and Sustaining Competitive
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Bedi, P., Lakra, P., & Gupta, E. (2014). Workforce Diversity Management: Biggest Challenge or
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Brian D’Netto, Amrik S. (1999). Human Resource Practices and Workforce Diversity: an
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Bovee, C., & Thill, J. (2012). Excellence in Business Communication. Pearson Higher Ed.
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