Thursday, February 23, 2006

Cultural Diversity ?!

Cultural Diversity in organizations

Cultural diversity in organizations and in decision making processes has become another cause championed by civil society organizations. The basis of seeking such diversity is that the organization is seen to be fair to all points of view and hence is willing to employ “diverse” people. By ensuring that all cultures contribute to decision making, the decisions made will also be sensitive to all cultures. Backing such diversity initiatives are law courts, especially those in developed countries. The strongest indicator of cultural diversity, as found acceptable to its proponents, is the employment of different races and communities within the organization.

Organizations on the other hand work very hard towards building conformity of thought and action. Such conformity building measures will include “doing things the GE way”, “standardized world class processes”, “proven best practices”. They will include “corporate communication and presentation skills” etc that encourage everyone to act, behave, think and decide in a similar way. Those who do not fit into the system better be star performers or else they will find themselves on the way out of the organization. A lot of the reward systems, especially appraisal of the “soft issues” revolves around conforming. The end result in most large institutions is that everyone is happy to lower the bar on several measures of diverse thinking in order to conform.

Organizations spend enormous amount of time in standardizing data presentation and analysis. Such standardization is not related to key figures, but is detailed in lengthy forms. Such forms will even be computerized. The cost of incorporating a new way of assessment and analysis becomes an inherent barrier to change - “the computer systems will have to be changed company wide” etc. Head office seeks to find newer and newer ways in which to control the way distant offices function using phrases like “standardization”, “quality” and “transparency” while limiting scope for individual innovation or team creativity. In fact, hardly any organization attempts to measure in any way real indicators of diversity – for example, how much has the budgeting system changed over the past five years even while the market has become more competitive?

The net effect is that while organizations employ people with different ethnicity, colour, gender and sexual orientation, they work very hard to ensure that everyone fits into any colour – as long as it is black!

Just switch to any mainline television news channel, be it CNN or BBC or NDTV. All the newsreaders and most of the reporters use similar language, mannerisms and inflections of speech regardless of their diverse opinion. How many news items covering a hostage situation will use phrases like “ the security forces cannot be exempt from blame” or the all time favourite “time will tell”?

The real diversity that exists within organizations is exemplified by the way the organizations do things and the things they do! To explain, organizations that are nimble footed in identifying new sources of supply, relocating manufacturing to efficient locations, recruiting the best people from a global pool for reasons relating to competence and efficiency are expressing diversity. GE, trashed earlier in this note for other reasons, employs several thousand Indians, because it makes more sense to do so. Management has not let is personal cultural biases affect a sound business decision.  

Corporations, media and politicians should not be talking about shifts to “cheap” locations but more “efficient” ones. Hence, low cost imports from China, Taiwan, Japan (though maybe not any longer), Korea and India (software, garments, leather) constitute efficient imports and not “cheap” ones. The latter implies a quality – cost trade off that the evidence does not bear out.

Diversity is Unilever managing to successfully market its products in over 110,000 villages in India (or over 20%) despite handicaps of infrastructure and sheer purchasing power. Its possible now for daily wage earners to procure some useful products of daily use because they have been made accessible in terms of price and distribution. The small shops that retail these products are run by a spectrum of people from different communities, castes and by both sexes.

The cultural diversity argument has managed a pretty big change with the United Nations, for example. While the UN has gone about becoming culturally diverse, its general importance on various fronts through its different arms has declined. It has proved ineffective in its primary roles as an arbiter of peace and facilitating development of poorer nations. Culturally diverse thinking, if it has been achieved, hasn’t contributed to any better results.  If culturally diverse thinking has not been achieved, then mere representation of all hasn’t helped achieve cultural diversity.  

If people really believed in cultural diversity here are some of things that they would do or not do:

  • They wouldn’t be tracking fashions

  • They would actively want their news channels to say things they don’t normally hear

  • They would actually seek out information about other people and cultures (lets compare US readership of National Geographic vs viewership of its national network news)

  • They wouldn’t protest jobs and investments lost to more efficient locations

  • They wouldn’t petition their local authorities, governments to bring about immigration restrictions

There is absolutely no evidence to show that organizations with wider representation of different communities perform better than others. By insisting that organizations employ everyone without any comparable yardstick to assess quality and performance we are just imposing another constraint on economic activity. Shareholders and fund managers will not recommend “hold” decisions because of a company’s culturally diverse employment record neither will consumers continue to buy a sloppy or more expensive product for that reason.

Critics of this viewpoint may well pose the question as to how do minorities who have been economically and socially disadvantaged ensure a fair shot at good jobs and career progress? On the margins, this will happen through legal support to discrimination cases. It is one thing to expect that an organization gives everyone a fair appraisal and quite another to look at the employee list and conclude that the organization is biased. The main shift will occur when mainstream social institutions, especially those that influence young minds, work towards bridging the chasm. Children who grow up believing they are superior or inferior will generally continue to think that way as adults. Children belonging to more affluent communities, and thus more likely to culturally dominate, can afford to pay for the cost of such “diversity exposure” to their young minds.

It is foolhardy to believe that centuries of bias and prejudice can be overcome by demanding that a few large institutions and some global corporations go out of the way to demonstrate that the world is a better place. Proponents of cultural diversity through employment seem to think that this is possible not realizing that this is socially too large an issue to be amenable to a quick fix.

Cultural diversity, in the truer sense of the meaning, is about freeing the way individuals can think and act while being part of larger institutions – whether they be governments, religious orders, greedy corporations or a community action group. This will require a new set of process indicators linked to outputs/results. This will require some hard work and different thinking. I wonder if the pro-cultural diversity groups feel up to the challenge?