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Chapter 12 Diversity Management
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DIVERSITY MANAGEMENT
CHAPTER OBJECTIVES
After studying this chapter, you should be able to:
Define diversity management.
Discuss the strategic importance of diversity management today.
Discuss the various steps in managing diversity.
List current industry practices in this field.
Discuss the special challenges facing global firms in the context of diversity management.
POWERPOINT® SLIDES
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(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
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Part 6 Maintaining High Performance
®
LECTURE OUTLINE (with PowerPoint slides)
DIVERSITY MANAGEMENT
Diversity Management
Slide 1
Management of Diversity
Slide 2
Organizational Barriers
Slide 3
Workplace Diversity
Slide 4
Dimensions of Diversity
Slide 5
A diverse workforce requires managers with new leadership styles who
understand employees’ varying needs and creatively respond by
offering flexible management policies and practices
• A combination of factors including government policies,
demographic and labour forces changes, increasing global
operations, technological revolution have fundamentally changed the
way Canadian organizations work and who they employ

A variety of organizational barriers exist:
-- Old boy’s network is the set of informal relationships that
develop among male mangers and executives that provide
increased opportunities for men
-- Glass ceiling is the invisible but real obstructions to career
advancement of women and visible minorities, resulting in
frustration, career dissatisfaction, and increased turnover
-- Stereotyping is the process of using a few observable
characteristics to assign someone to a pre-conceived social
category
MEANING OF DIVERSITY MANAGEMENT
Workplace diversity includes important characteristics that influence
values, perceptions of self and others, behaviours, and interpretations
of events
Dimensions of Diversity Include:
• Core dimensions of diversity
-- Exert considerable impact on our early socialization and have a
sustained life-long impact
-- Includes age, ethnicity and culture, gender, race, religion, sexual
orientation, and capabilities
-- Example: An individual’s age impacts how (s)he is perceived by
others, the individual’s ability to learn, perform tasks; also
impacts the individual’s perceptions and behaviours

Secondary dimensions of diversity
-- Are less visible and more variable in their impact on individual
behaviour
-- Includes education, status, language, income levels, etc.
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Chapter 12 Diversity Management
Strategic Importance
Slide 6
Traditional versus New
Paradigms
Slide 7
STRATEGIC IMPORTANCE OF DIVERSITY MANAGEMENT
Several factors make diversity management strategically important

Changing Workforce
-- Canadian labour market is undergoing a transformation
-- Today’s workforce is considerably more diverse than in the past

Importance of Human Capital
-- Knowledge workers may be the key to success or failure
-- Most valuable parts of the organization’s operation may be
reflected by the human tasks performed e.g. sensing, decisionmaking

Diversity as a Competitive Advantage
-- Proactive organizations recognize that competitive strength often
depends on focusing on employees and their clients
-- A firm’s customers are no longer a homogeneous group due to
globalization and changing domestic markets
-- Effective managers recognize the value of tapping people’s
differences and pooling their insights and experience

Paradigm Shift
-- Paradigm is a shared mindset that reflects a fundamental way of
thinking and understanding the world around us
-- Paradigm shifts require organizations to make fundamental
changes in thinking, operating and managing people
-- See next slide “Traditional versus New Paradigms”

Increasing Role of Work Teams
-- Teams play a dominant role in modern organizations
-- Effective handling of diversity can lead to added creativity,
problem-solving, and intra-organizational communication
Traditional versus New Paradigms

Traditional
-- Organizational success is linked to standardization
-- Diversity is a cost
-- Rules and policies are to be shaped by senior executives
-- Emphasis on “masculine” values of competitiveness,
aggressiveness, and individuality
-- Change employee behaviours and attitudes to suit the
organization’s culture

New
-- Success is linked to individual’s contribution
-- Diversity is a competitive advantage
-- Rules and policies are to best shaped to satisfy the customer and
the employee
-- Recognition that “feminine” values of openness, flexibility, and
relationship orientation are important to organizational success
-- Modify organizational culture to suit the needs of employees
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Part 6 Maintaining High Performance
Steps in Managing Diversity
Slide 8
STEPS IN DIVERSITY MANAGEMENT
Diversity management efforts require four key steps:
1. Identify Ideal Future State
• Begins with identification of current workforce composition i.e.
age, gender, ethnicity, education, and disability (may also include
language, race, parental status, marital status, etc.)

Surveys, focus groups, and employee interviews are then conducted
to identify present and ideal future states at work e.g. may reveal
employees are experiencing difficulties in balancing work and
family responsibilities
2. Analyze Present Systems and Procedures
• Examine current policies, systems, practices, rules and procedures
to determine their validity and fairness for a diverse workforce e.g.
work assignments, recruitment and hiring, orientation, etc.
3. Change Systems, Procedures, and Practices

Senior Management Commitment
-- One of the most important elements of ensuring the success of
diversity efforts
-- Must be viewed as integral part of the firm’s business philosophy
-- Link diversity initiatives to business goals and performance
criteria to create manager accountability

Establishment of a Diversity Committee
-- To oversee diversity efforts, implement process, and serve as a
communication link
-- Should represent all employee groups i.e. occupational groups,
geographic locations, age etc.

Education and Retraining
-- Training in the importance of diversity needs to be provided to all
employees at all levels in the organization
-- Variety of training and employee development techniques may
need to be used to sensitize workers to varying cultural values
and norms

Wide Communication of Changes
-- Information, changes in internal systems and procedures must be
communicated to all employees
4. Evaluate Results and Follow-up

Monitor progress on a systematic basis and communicate
quantitative (e.g. number of hires, promotions, absenteeism,
turnover, grievances, etc.) and qualitative (e.g. work climate
feedback) indices
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Chapter 12 Diversity Management
Current Industry Practices
Slide 9
CURRENT INDUSTRY PRACTICES
The choice of specific mechanisms should be made after consideration
of the organization’s unique challenges and constraints




Current Industry Practices
(cont’d)
Slide 10


Key Focus Areas – Global
Firms
Slide 11
Diversity Training Programs
-- Managers and supervisors need new skills to manage and
motivate a diverse workforce
-- Awareness training focuses on creating an understanding of the
need for managing and valuing diversity and to increase selfawareness of diversity related issues e.g. stereotyping, crosscultural sensitivity
-- Skill building training educates employees on specific cultural
differences and how to respond to these differences in the
workplace
-- Content training relates to providing specific information about
a culture
-- Process training involves understanding how to utilize
behaviours for effectiveness in diverse workplaces e.g.
management style, interpersonal communications, etc.
Mentoring Programs
-- Programs encouraging members of disadvantaged groups (e.g.
women) to work with a senior manger who acts like a friend and
guide in achieving career success
-- May be formal or informal
Alternate Work Arrangements
-- Non-traditional work arrangements e.g. flex-time, telecommuting
-- Provides more flexibility to employees while meeting
organizational goals e.g. balancing work and family issues
Apprenticeships
-- A form of on-the-job training in which young people learn a trade
from an experienced person
Support Groups
-- Provide emotional support to a new employee who shares a
common attribute with the group
Communication Standards
-- Formal protocols for internal messages and communication to
avoid offending members of ethnic, age, or other groups e.g.
chairperson vs. chairman
DIVERSITY CHALLENGE FOR GLOBAL FIRMS
International human resource management requires the addition,
deletion, and modification of traditional human resource functions.
Key focus areas include recruitment and selection; orientation,
training, and development; performance appraisal; compensation
decisions, and employee sensitization to differences
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Part 6 Maintaining High Performance
Key Focus Areas – Global
Firms (Recruitment & Selection)
Slide 12

Key Focus Areas – Global
Firms (Orientation, Training,
and Development)
Slide 13

Key Focus Areas – Global
Firms (Performance Appraisal)
Slide 14

Key Focus Areas – Global
Firms (Compensation
Decisions)
Slide 15

Key Focus Areas – Global
Firms (Sensitizing to Cultural
Differences)
Slide 16

Recruitment and Selection of Personnel
-- Expatriates are home country nationals sent to foreign locations
on temporary or extended stay
-- Host country nationals are local citizens employed by a foreignowned firm (in the host country)
-- Third country nationals are natives of a country other than the
home or host country of the firm that has hired them
-- More than just technical or managerial ability must be
considered—ability to manage a diverse workforce and to adapt
to the company and country culture are also critical
-- Other core competencies of an expatriate manager include
multidimensional perspective, decision-making ability, teambuilding, leadership, resourcefulness, negotiation and change
agent skills
Orientation, Training, and Development
-- Cross-cultural Orientation Themes include language i.e. being
familiar with other languages; cultural norms i.e. the values and
norms that determine behaviours of individuals and groups in
different cultures; and managing personal and family life to
avoid culture shock i.e. cultural disorientation
-- Cross-cultural Training Methods include the use of sensitivity
training; culture assimilators i.e. episodes dealing with
interpersonal issues in a cross-cultural setting; critical incidents
i.e. of effective and ineffective behaviour; case studies; role
plays; and simulations
Performance Appraisal
-- Home country evaluations are carried out by an expatriate’s
home office--may be difficult because the evaluator may be a
great distance away and not fully understand the challenges faced
by the employee
-- Host country evaluations are carried out by an expatriate’s local
(or host) office—the evaluator may have a better understanding
of any constraints faced, however, local cultural values may bias
perceptions of effectiveness and the evaluator may only be
familiar with local vs. organizational priorities
Compensation Decisions
-- International compensation goes beyond pay and benefits—may
include incentives e.g. return trips home, education for children,
etc.
-- Relocation assistance may be provided i.e. financial or other
assistance to help expatriates move to the new work location
Sensitizing Employees to Cultural Differences
-- Challenges to workforce diversity are amplified in international
HR management i.e. diversity increases
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Chapter 12 Diversity Management
ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS
6. What are the key training approaches to prepare
expatriates for foreign assignments?
1. Why is management of diversity important for an
organization today?
Training for overseas assignments should focus on
policies, place, procedures, and people that expatriates
will encounter in the near future. Training should cover
details of culture, language, local customs, social
attitudes toward time and punctuality, power, teamwork,
use of titles, social taboos, and degree of formality in
interaction with the local population. The specific
training approaches include sensitivity training, cultural
assimilators, critical incidents, cases, role play and
simulation exercises (see pp. 536-537).
Changing demographics, labour force changes,
changing values, technological revolution, globalization
of business, immigration policies, all have
fundamentally changed the way Canadian organizations
work and whom they employ (see discussion on pp.
510-511).
2. What are the steps in implementing a diversity
management program?
Figure 12-3, p. 519, describes the four steps in
managing diversity (see also discussion on pp. 518524).
3. What are some unique challenges in international
human resource management?
See discussion on pp. 528-539.
4. Some persons believe the best way to manage
employees is to treat them equally irrespective of
their sex, race, age, or other characteristics. Do you
agree? Why?
Disagree. Treating everybody equally may result in
embarrassments, frustrations, and disappointments.
Asking an Asian employee to explain why he deserves a
promotion is an embarrassment for him, because he will
not be used to the North American approach of "selfsell," i.e, listing one's accomplishments which, in his
culture, is perceived as boasting. Expecting a member
of a culture used to consensus decision making to make
individual decisions may result in frustrations, because
it is unlikely to be forthcoming. See also Figure 12-5, p.
523, for a comparison of different values. Employees
should be treated fairly, but not equally.
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Part 6
Maintaining High Performance
ANSWERS TO CRITICAL THINKING QUESTIONS
4. If 40 percent of your employees are women, but if
women account for only 2 percent of the executive
cadre and 6 percent of the managerial cadre, what
steps will you take to improve the status of women in
your organization?
1. If you are a manager in a software manufacturing
firm who is about to be transferred to China to work
with a joint venture partner firm there for the next
18 months, what factors will you be concerned
about? What actions will you take?
It would require a diversity management approach as
discussed on pp. 518-524. In addition, the employment
equity opportunity discussion in Chapter 4.
It will be essential to learn more about the Chinese
culture, values, customs, and rules of social interaction.
Also important will be some knowledge of how a
Chinese company is managed. If a spouse and/or
children are to accompany the manager, this should be
taken into account in the preparation. The manager, and
perhaps his/her spouse should receive cross-cultural
orientation. See also discussion on pp. 534-537.
5. You manage a work team of fourteen persons,
about eight of whom are above the age of 40 years.
Three of theses persons have elderly relatives to look
after and are frequently absent from work to take
care of their relatives' family or medical needs.
What possible actions can you take to ensure that
the needs of the employees are met, while at the
same time maintaining high productivity at the
workplace?
2. You are a senior executive in a consulting firm
with its head office in Toronto. As a part of your
global expansion strategy, your firm recently started
two new offices abroad: one in Jakarta and another
in Mexico City. You have been placed in charge of
the new project. You decide to hire consultants in
Canada and send them to these offices on one- or
two-year assignments initially. You feel that this
strategy will help you to start operations
immediately and give global experience to your
newly hired consultants. What will be your
considerations when you hire the consultants? What
actions will you take to ensure their success abroad?
The discussion on p. 527, on alternate work
arrangements, applies. See also the discussion on work
options in Chapter 3.
Hiring people for jobs abroad should follow the
guidelines discussed in "Recruitment and Selection of
Personnel", pp. 531-534. Figure 12-9, p. 533, lists the
core competencies of an expatriate manager. The major
action taken would be providing cross-cultural
orientation, discussed on pp. 534-537.
3. Choose an organization that you are familiar
with. Are any of its rules, practices, or policies likely
to be found undesirable by its female, minority, or
older employees? Why?
Answers will vary. Students will reflect on their
personal experiences.
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Chapter 12 Diversity Management
ETHICS QUESTION
Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.
WEB RESEARCH
Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
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Part 6
Maintaining High Performance
INCIDENT 12.1: PRECISION SOFTWARE LTD.
1. Are Keith, Mark, and Karen justified in feeling the way they do?
No; however, it should be emphasized that their feelings are entirely understandable given the current values in society
and the organization. In other words, while the promotion of an employee should not be based on his/her appearance, it is
understandable that people feel uncomfortable with those who do not follow common dress codes. The situation is made
more difficult due to the comparability of the two candidates on several criteria.
Critical points to emphasize here are:
 some of Doug's actions which have caused others discomfort are understandable given Doug's background and
his increased interest in his roots.
 except Doug's pony tail, the other differences are probably ones that other employees may exhibit. For example,
several employees may live outside the city and commute for an hour or more; other employees may also have
outside interests or commitments that take up most of their free time; fasting is not uncommon for certain
religious groups; several employees may have strong spiritual needs and values (which may be expressed in
ways that Keith, Mark, and Karen are familiar with). In other words, several of the differences in Doug's
behaviour/lifestyle have become more important to the group and are, perhaps, seen as "problems" mainly
because of their discomfort with his appearance.
 the points in Bill's favour — "steady, stable character"... "family man" etc., show a built-in bias against people
who are different.
 they are assuming that clients and/or financial institutions may be uncomfortable in dealing with Doug. This may
or may not be the case. Even if it is, would a company be justified in not hiring/promoting someone based on
outsiders' prejudices? What if clients do not like to deal with a woman? Or an overweight person?
 points in Doug's favour (his ability to get along with and motivate his subordinates) seem to be undervalued by
the three members.
 the company would be setting a dangerous precedent if it denies Doug the promotion for the "discomfort" with
his appearance.
2. Should Dave speak with Doug about his appearance?
No. Doug's personal appearance -- except for his pony tail -- seems to be within societal norms. In other words, he does
not appear at work looking unclean or in other ways unacceptable. However, Dave may want to speak to Doug and find
out why Doug does not attend any social get-togethers. Perhaps he feels uncomfortable being the only Native Canadian in
the company. Or, perhaps, it is just a timing conflict. If it is the former, Dave may need to find out how/what would make
Doug feel more comfortable.
3. If you were in Dave's position, who would you promote? Why?
Of course, the "politically correct" and easy answer would be to say he should promote Doug. However, it is important to
note the following:
 the company has to comply with the Employment Equity Act of 1986. It has a very low percentage of women
and other protected class workers in supervisory positions now.
 when you have two equally good candidates, promoting the minority group person makes sense given the legal
issues and the need to be seen as an equal employment opportunity employer. It would also send a strong signal
to other employees and outsiders that there is top management commitment to diversity in the company.
 if there are other ways of evaluating the two candidates, these should be examined.
 if Doug is promoted, Dave has to recognize that the "discomfort" the others feel may result in serious problems
later on. In other words, regardless of who gets the promotion, the company needs to examine its diversity
management initiatives (or lack thereof) and develop a program to manage diversity (refer to Figure 12-3). The
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Chapter 12 Diversity Management
low percentage of protected class members at the supervisory level is a cause for concern. The company needs
to examine its current state in terms of diversity in the workforce and develop ideal states. It has to re-evaluate
its systems and practices to ensure that its workforce represents society at large and is a place where all
employees — regardless of their origins — can grow and become effective team members. This is all the more
important in industries at the cutting edge of technology, where good employees are difficult to find and human
capital becomes critical.
At a minimum, Dave has to (1) offer diversity training programs, (2) put together support groups for minority group
members, (3) provide orientation sessions, and (4) develop better counselling practices.
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Part 6
Maintaining High Performance
CASE STUDY: MAPLE LEAF SHOES LTD.,
MANAGING A DIVERSE TEAM
Answers to Discussion Questions
1. What cultural differences or other differences
possibly account for the present situation?

Chinese and Koreans prefer indirect ways of
communicating disagreement (Wang's "mumbling" and
suggestion that they have to "look at all alternatives"
were his ways of saying no). The fact that Wang or
Alfred did not express their displeasure at Jeff's jokes
does not mean they liked or even tolerated them. Public
disagreements or loss of temper are considered
inappropriate by both communities. Chinese and
Koreans are different ethnic groups, though they belong
to the same race. They do not like being lumped
together. Jeff's open disagreement with Wang —
especially in front of another employee — would have
been seen as a loss of face, which would be offensive to
someone like Wang. Often, a first "no" does not mean
the person does not want to interact with you. Quite
often, first offers are rejected politely and you are
expected to repeat the offer a couple of times before it
would be accepted. Not looking someone in the eye
does not indicate anything negative in a lot of Asian
cultures. In fact, looking at a superior or older person in
the eye is considered disrespectful. The fact that Jeff
cracks jokes about other races/groups does not make his
behaviour acceptable. Some may not mind his
behaviour, but others may take offence.

been encouraged to express their opinions freely or
to use an intermediary to communicate their
disagreements, perhaps through support groups).
Providing settings for employees to interact with
each other socially within the company (e.g.,
workplace get-togethers).
Monitoring the progress of mixed/diverse groups
more carefully.
3. What should Jane do now? Why?
Jane should meet with Wang and Alfred individually or
together and reiterate that the company needs them and
would appreciate their continuing in the team. She
should emphasize the importance of their contributions
and the need to provide continuity in their dealings with
their Indonesian partner. Wang should be given a way
to "save face" by offering to listen to his ideas about
which shoe line to produce abroad and to take them to
Jeff and Rod. If it is too late to make a change, they
should be asked for other suggestions. The need to
understand differences in cross cultural communications
must be emphasized and their help in making the team
work is needed. They should be told politely that in the
future, if they disagree with Jeff and Rod, it might be a
good idea to let their feelings be known (either directly
or through her). It should be made clear that the issue of
racial jokes has been raised with Jeff and it will be
communicated to him and others that it is not acceptable
behaviour. Jane should meet with Jeff and Rod and
convey Wang & Alfred's ideas about the Indonesian
project, and ask them to think about the ideas carefully
and let her know their comments the next day. The need
to understand cultural differences in communication
must be emphasized and they should be asked for their
help in making the team work. A joint meeting with
everybody in which ground rules for future
communications are covered should be arranged. Areas
of agreement should be emphasized as well as areas in
which common solutions have to be found and work
toward it. Jane should attend a couple of meetings and
keep track of the progress.
2. Could such a situation have been avoided?
Explain.
Implementing a diversity management program, as in
Figure 12-3 may have prevented the situation. Some
minimum steps would have been:
 Training in cross cultural communications to all
employees (diversity training programs).
 Setting ground rules for what is acceptable and
unacceptable behaviour in a work setting
(communication standards e.g., racial jokes should
not be encouraged).
 Making sure team members understand what is
required of them and how it should be
communicated. (e.g., Wang and Alfred should have
The student should be encouraged to relate text material
in analyzing this case. Some of the key points from the
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Chapter 12 Diversity Management
chapter that should be included in the student's analysis
are:
1. The strategic importance of diversity can be seen:
 Wang and Alfred reflect the changing workforce.
 the importance of human capital is reflected in
the difficulty faced in replacing Wang and
Alfred.
 the competitive advantage of diversity is seen in
the importance it places on foreign markets and
having people with familiarity in international
business. They can "leverage diversity" through
these employees.
 impact of diversity on work team effectiveness
(or lack of it due to improper diversity
management initiatives!) can be seen in the
tension and conflict faced by the team members.
 individual and organizational effectiveness has
been affected by poor diversity (absent?)
management practices.
2. In the long term, the company has to implement a
diversity management program as discussed in the
text (see Figure 12-3). Specifically, it has to:
 examine the present composition of its workforce
and identify ideal future states.
 understand the current attitudes and values of its
workforce through surveys, etc.
 analyze present systems and procedures. Figure
12-4 provides a basis for analyzing the present
systems and practices.
 develop appropriate systems, practices and
policies. It is important to note that top
management commitment has to be there. Again,
as a minimum, the company needs to at least hold
some diversity training programs and support
groups for minority group members.
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Part 6
Maintaining High Performance
CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK: PLANNING FOR
DIVERSITY AT HBI
Answers to Discussion Questions
ratings and higher percentages with university education
than their male counterparts. This suggests that the
female middle managers are able to do the jobs at least
as well, if not better than the male managers, even in the
operations division where females have fewer years of
experience.
1. Based on the data provided, what conclusions can
you form about the status of male and female
employees (managerial and other) at HBI?
Table 1 shows that the higher the position level, the
smaller the percentages of female workers. There is no
female at the top management level at HBI. For both
females and males, the percentages with university
education increases with level. Within each level, the
female workers have a higher percentage with 5 or more
years of experience than their male counterparts.
2. What suggestions do you have for Dickoff to
diversify the workforce (managerial and other) at
HBI?
HBI should adopt the 4 step process in diversity
management (p. 519), especially in increasing the
percentages of females in middle and top managerial
positions. Resistance to the diversity program should be
managed through diversity training that would
emphasize the benefits to HBI of having more female
managers.
Table 2 shows that females have more experience than
males in the administration and marketing division;
however, females have significantly less experience
than their male counterparts in the operations division.
Across all 3 divisions, females have higher leadership
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