The business case for diversity and the perverse practice of matching employees to customers

Abstract

The typical "business case" for workforce diversity management in the USA implies that matching the demographic characteristics of sellers to buyers increases firms' productivity and profitability. This paper explores the consequences for both employers and employees of following that guidance. Design/Methodology/Approach-The paper statistically analyzes employment data on African Americans from one large US retailer and from the US advertising industry. Findings-In both cases analyzed, a badly conceived business case for diversity perversely translated into discriminatory employment practices, starting with stereotypebased segregation in work assignments and spreading to consequent inequality in other employment outcomes such as earnings and promotions. Such patterns illegally limit employment opportunities for women and race/ethnic minorities. Simultaneously, they fail to promote customer relationships and sales. Practical Implications-To avoid negative effects on both business and societal objectives, employers need to be guided by a business case promoting workplace inclusion, not "diversity without inclusion," which buyer-seller matching represents. Originality/Value-The business case for diversity is often considered unimportant "boilerplate." This paper alerts employers to the importance of articulating, and then following, a correct business case.

Antecedents and Outcomes of Diversity and Equality Management Systems: An Integrated Institutional Agency and Strategic Human Resource Management Approach

“…The business case for diversity argues that diverse firms will perform better due to (1) access to high‐quality employees, (2) ability to sell to a diverse set of customers, and (3) creativity and problem solving due to an increased variety of knowledge and perspectives (Cox & Blake, ). While the business case has received important scholarly criticism (e.g., Bendick, Egan, & Lanier, ; van Dijk, van Engen, & Paauwe, ), it is commonly cited in practice business, so much so that it has been deemed a “management fashion” (Heres & Benschop, ).…”

Professionalizing Diversity and Inclusion Practice: Should Voluntary Standards Be the Chicken or the Egg?

“…This would require even more aggressively shifting the emphasis, described earlier in this article, from work force diversity toward work place inclusion. In turn, this change would require major changes in attitudes throughout the D & I community, including abandonment or modification of some well‐established D & I practices such as the content of the business case for diversity (e.g., Bendick, Egan, & Lanier, ; Kochan et al, ; Litvin, ; Thomas & Ely, ). D & I standards can play a powerful role in defining and disseminating this shift.…”

Transforming Human Resource Management Systems to Cope with Diversity

“…The replacement of the social justice rationale by the business rationale has potentially 'fatal flaws which can undermine equality outcomes and might ultimately prove to be dangerous for social justice' (Noon 2007, p. 773). As a consequence of this, to what extent diversity management programs can help the organization to create a sustainable competitive advantage still remains in question (Kamp and Hagendorn-Rasmussen 2004;Bendick et al 2010). …”

“…Affective effects In addition to cognitive effects, scholars have argued that diversity is also likely to have affective consequences on group cohesion, Bendick et al 2010). Affective effects of diversity have been supported mainly by the social identity and social categorization theories (Taylor et al 1978;Turner 1987;Williams and O'Reilly 1997).…”