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CHAPTER 3. ENVIRONMENTAL CONTEXT: DIVERSITY AND ETHICS I. PURPOSE AND TEACHING OBJECTIVES To discuss diversity and ethics as two major dimensions in today’s environmental context facing contemporary organizations; to identify some of the specific characteristics of diversity such as age, gender, ethnicity and education and the individual and organizational approaches to managing diversity; to describe some individual, cultural, organizational, and external factors impacting ethical behavior; and, to examine some major ethical concerns such as sexual harassment, pay and promotion discrimination and employee privacy challenging today’s organizations. II. TEACHING NOTES AND REVIEW OUTLINE A. Diversity is an important component in the contemporary environment for organizations. Changing demographics, legislation and lawsuits, competitive pressures and a growing international business environment are conditions that have contributed to the emerging challenges of managing diversity. Some objective characteristics of diversity include: 1. Age - The work force is getting older because of the baby-boom generation, health and medical care improvements, and the removal of mandatory retirement rules. 2. Gender - More women than ever are joining the work force. The glass ceiling effect still prevents many women from being promoted to top management positions, and women are still paid less than men. 3. Ethnicity - Minorities, especially African Americans, Hispanics, and Asians will continue to proportionately grow in the work force. 4. Education - The educational level of employees is rising; however, those with little or no education or basic knowledge are also increasing. 5. Other - Spanish is becoming a primary language in some parts of the country, and people challenged with disabilities must be ensured equal employment opportunities. NOTES: B. Emerging diversity can be systematically managed to ensure a truly multicultural organization. Jackson, La Fasto, Schultz and Kelly in Human Resource Management 20 note that most organizations are still far from being truly multicultural as characterized by: 1. 2. 3. 4. Supporting a diversity of ideas, interests, and people within the organization. Eradicating all forms of social oppression within the organization. Including a diversity of participants in decision making. Contributing to external efforts to eliminate all forms of social oppression. Jackson et al. also identify the stages of organizations leading up to the multicultural organization as: 1. Exclusionary organization - Devoted to maintaining the dominance of one group over all others on factors such as age, education, gender, or race and characterized by exclusionary hiring practices and other forms of discrimination. 2. Club organization - Characterized by the maintenance of privileges by those who traditionally have held power. 3. Compliance organization - Committed to removing some of the discriminatory practices, but turns out to meet the letter rather than the spirit of the laws. 4. Affirmative action organization - Committed to proactively eliminate discriminatory policies and practices, but dominant group's norms and practices continue. 5. Redefining organization - Goes beyond being proactively antiracist and antisexist, questions the core cultural values of the organization, recognizes the value of a diverse work force, and engages in visionary planning and problem solving to tap the strength of the diversity. 6. Multicultural organization Is characterized by core cultural values and an ongoing commitment to eliminate social oppression throughout the organization. NOTES: C. An individual can play an important role in effectively supporting diversity by learning appropriate communication and interaction behaviors and by empathizing with those facing discrimination. NOTES: 21 D. Organizational policies and practices effectively supporting diversity establish a climate of openness, responsiveness and flexibility. Some of the specific techniques to manage diversity include: 1. Testing - Develop and use job-specific tests that are well-suited for selecting and evaluating individuals within diverse groups. 2. Training - Provide training for members of diverse groups and also to management that fosters insight and understanding of other groups. 3. Mentoring - Assign mentors to help support members of diverse groups in their jobs, socialize them in the cultural values of the organization, and assist their development and advancement. 4. Work/Family Programs - Allow all employees, but especially parents of small children, greater autonomy and flexibility in their work arrangements. The most common arrangements are flextime, the compressed work week, job sharing, and telecommuting. NOTES: E. Ethical issues are important in the study of organizational behavior because they impact employees, their work, and organizational outcomes. There is also increasing evidence that ethical behavior positively impacts “bottom-line” financial performance. This chapter focuses on the following ethical problems: 1. Sexual Harassment - Defined as unwanted sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature. While most firms now have sexual harassment policies in place, some continue to have repeated problems and appear to suffer from “deaf-ear syndrome” regarding sexual harassment issues. Characteristics of organizations with this “deaf-ear” toward sexual harassment include: a. inadequate policies and procedures which are poorly written and vague; b. cumbersome reporting procedures; and c. negative managerial reactions and rationalizations. Prescriptions offered to increase organizational responsiveness to sexual harassment issues and eliminate the “deaf ear syndrome” include: a. examining the characteristics of “deaf ear” organizations; 22 b. c. d. e. f. fostering management support and education; remaining vigilant in monitoring the workplace; taking immediate action upon any report or claim; creating state of the art policies and procedures; and establishing clear and “user friendly” reporting procedures. 2. Employee Privacy Issues - Developments such as computer technology, mandatory drug testing, and employee life style control have all directly influenced an employee's right to privacy. Being open and honest with employees may be the best way to manage the privacy issue. NOTES: III. HINTS FOR INTERNET EXERCISE: Ethical Issues in the Workplace 1. Do you believe employers should be allowed to electronically monitor workers? Would you like to be monitored in this fashion? While employers may feel entitled to monitor workers electronically and consider this no different than traditional methods of observing employees’ performance, many employees may consider electronic monitoring a violation of their privacy and personal rights. 2. Summarize the different perspectives that you found on the Internet. Be specific as to where you found this information. The ACLU is adamant in their call for more laws to protect the privacy rights of workers, stating that “unless new protections are in place, companies will continue to take advantage of new/cheaper technologies to spy on employees. The privacy rights of employees do not end when the work day starts.” 3. Discuss other ethical issues that surfaced when looking at the ACLU website or others that you found. Other ethical issues that are highlighted on the ACLU website include the use of genetic testing and other medical tests sometimes required by employers. 23 IV. STUDENT INVOLVEMENT EXERCISES Doing haphazard exercises on diversity can prove to be hurtful, if not potentially damaging, so care must be taken. Here are a few suggestions: 1. Break the class up into four heterogeneous groups. Using the data presented in the chapter as a point of departure, have the groups provide a written and/or oral report on the status of either age, gender, ethnicity or education for the workforce in the current year. Have these reports stick to the facts, but then discuss the implications and make recommendations for organizations. 2. Show one of the many emerging video tapes on managing diversity or on ethical issues and discuss relevant questions. 3. Break up the class into groups. Using the discussion in the chapter as a point of departure, assign a written and/or oral report on the topics of sexual harassment, discrimination in pay and promotion, or employee privacy. Have these reports stick to the facts as found in published literature, but then discuss the implications and make recommendations for organizations. V. HINTS FOR CASE DISCUSSION Real Case: A World of Sweatshops 1. 2. What ethical responsibility do you think firms from the United States and other developed countries have in making sure their suppliers from developing countries are not badly exploiting workers? Managers must consider the long-run implications of any strategies employed by their firms, including their choice of suppliers. The public views firms as being responsible for their actions, even if those actions are indirect. Cultural, political, legal, economic and other external forces shape ethical behavior, and what one person may consider to be ethical may be viewed quite differently by another individual. As illustrated in the case, ethics can affect the well being of employees and their performance, and there is increasing evidence of the positive impact that ethical behavior has on bottom-line performance. How do you react to the statement at the end of the case by the Indonesian manager that “If we aren’t cheap enough, customers will go to Vietnam or elsewhere”? This comment reflects the pressures of global competition and the potential “peer pressure” placed on managers to be less ethical. 3. Besides the ethical, human rights issues, are there any implications in this case for the study and application of organizational behavior? This case illustrates the complexity of operating within a global economy. Aspects of organizational structure, communication, leadership, and motivational techniques need to be 24 consistent with the underlying cultural values of the workforce. Real Case: Not Treating Everyone the Same 1. How is the new management philosophy described in this case different from that of the old, traditional philosophy? Identify and describe these differences. One of the ways in which the new philosophy is different from the old is that instead of treating everyone the same, some companies now use an approach that takes into account the specific needs of each employee. A second is the willingness of some organizations to be more flexible in the way they accommodate their people. A third is the focus on measuring people based on value added rather than just the number of hours worked. 2. In what way are alternative work schedules proving helpful to managing diversity? Alternative work schedules are proving to be helpful in that they allow employees to balance their personal and work lives better than they could before. This is improving organizational morale and helping to drive up productivity and profit and drive down costs. 3. Do you think these new programs are likely to continue or will they taper off? Why? These new programs are definitely going to continue because they are helping firms increase their profit and productivity and become more competitive in the market place. Businesses and non-profit organizations such as hospitals have discovered that by more carefully addressing the needs of their people, they are able to increase the work performance of these individuals, decrease absenteeism and turnover, and thus make the company more successful. For these reasons, the programs discussed in this case are likely to continue for the indefinite future. Organizational Behavior Case: Changing with the Times 1. Do Jerry and Robert understand what “management of diversity” means? How would you advise them? Robert and Jerry clearly have the wrong understanding on what management of diversity really means. They are narrowing their focus to abiding by the law, and may be missing some opportunities. They would now be characterized as a “compliance organization.” To move towards a true multicultural organization, they would need to broaden their commitment to hiring and using a more diverse workforce to move the organization ahead and meet the challenges of the 21st century. 2. Considering the marketing plans, how could they benefit from a more diverse management team? Be specific. 25 The current homogeneous sales force may lack the experience or the knowledge required to follow through on the aggressive marketing plans. This organization would benefit tremendously from a multi-cultural sales force that has specific knowledge of how the toys will sell in the targeted countries. This is an example of how a diverse workforce can add considerable value. This and other teams in today’s organizations can benefit from ideas and opinions of people that are not like themselves. 26