The Future of Business is Diverse.

Organizations need to draw on the talents and resources of all their employees. But employees don’t work in a vacuum. They influence (and are influenced by) each other.

Sometimes these influences can be productive. But often they can be destructive (consider groupthink, when individuals conform to the opinions of others regardless of their private information).

How can firms retain the positive influences and minimize the negative? Recent work by Scott Page at University of Michigan demonstrates that diversity is one such tool. Diverse groups, groups whose members are of different demographic backgrounds, personality styles, varying generational cultures, “ways of knowing,” and/or undergraduate majors, make better decisions than groups that are homogenous.

This improvement is primarily due to the synergies that emerge between diverse individuals. When individuals are the same they tend to look at the same data in order to inform their decisions, and to come to similar conclusions. When individuals are different, they look at different data, and reach different conclusions. The discussions which emerge, and the reconciliation of multiple conclusions which inevitably occurs, results in significantly improved outcomes.

Firms who are successful in recruiting, developing and retaining a diverse workforce will reap the benefits from improved decision-making, broader and deeper analysis, and more insightful strategies. At UT Arlington, faculty and students are part of one of the most diverse college campuses in the United States.

U.S. News and World Report recently ranked UT Arlington the fifth most diverse national university in its 2013 rankings, released in September. The university’s “diversity index” is one of the highest in the country, demonstrating an ethnically diverse campus population, and an educational environment wherein students learn not only from their professors but from the cultural experiences of their peers.

A recent paper in the Journal of Business Research, co-authored by Associate Professor of Marketing Elten Briggs, explores how shared ethnicity influences the interaction between employees and customers. The research compared Hispanics, Asians and Caucasians, and identified conditions under which having a shared ethnicity can enhance customer service, satisfaction and loyalty.

The benefits of diversity are high, but the managerial challenges are also significant. Here in the College of Business, Professor of Management Myrtle Bell’s teaching and research focuses on the management of diversity in organizations.

In her textbook, “Diversity in Organizations,” now in its second edition, Dr. Bell notes that, “[A]s employees get to know one another and exchange job-relevant information, the negative effects of surface-level differences can be reduced…it is imperative that organizations attend to diversity issues proactively.” Dr. Bell’s course, Diversity in Organizations, provides College of Business students with the tools they need to successfully manage diverse organizations.

Along with ethnic diversity, age diversity is becoming a growing challenge in business, as we all live longer and work longer. College of Business Associate Professor George Benson has worked with the Center for Effective Organizations and Center for Creative Leadership at the University of Southern California to identify generational differences in the workplace. This global research project finds more similarities in how different generations react to forces that influence employees’ experiences at work, from team dynamics and communication to career development and work-life balance.

In addition to our faculty’s research, next week, the College of Business Executive MBA students embark on their annual two-week immersion trip to China, where they will connect with professionals from diverse business groups, tour significant companies, and gain new insights about emerging international markets. You can follow their adventures on the EMBA blog.

What other aspects of diversity affect business now, and will influence business in the future? How is collaboration among members of this diverse workforce improving business strategies and outcomes in your industry?  I welcome your comments and feedback!

FURTHER INSIGHT

“Diversity in Organizations” by Myrtle Bell
http://www.amazon.com/Diversity-Organizations-Myrtle-P-Bell/dp/1111221308

“Shared Ethnicity Effects on Service Encounters” by Detra Y. Montoya and Elton Briggs
http://www.sciencedirect.com/science/article/pii/S0148296311002888

“The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies” by Scott E. Page
http://www.amazon.com/The-Difference-Diversity-Creates-Societies/dp/0691138540

“Winning the Generation Game”
http://www.economist.com/news/business/21586831-businesses-are-worrying-about-how-manage-different-age-groups-widely-different

“New Study: Diversity Drives Serial Innovation” by Lauren Leader-Chivée
http://www.inc.com/lauren-leader-chiv%C3%A9e/diversity-helps-maximize-your-innovation-potential-.html

“Going Global? Better Rethink Your Diversity Training.” by Jennifer Gilhool
http://www.forbes.com/sites/85broads/2013/06/03/going-global-better-rethink-your-diversity-training/

1 Responses to “The Future of Business is Diverse.”


  • In my opinion, diversity is a dual saw. Although a company may benefit from different ideas that evaluate various aspects of a concept, diversity should not be the main approach in functional areas.

    My practical experience shows that cultural diversity may have destructive effect, especially while in implementation. In other words, diversity may be helpful in the planning phase, but during the implementation phase, where people should exactly do what they are assigned to, diversity may not be useful. I mean, in tasks that the implementation is the main objective, I believe we should build working groups that in overall have the same spirit of the goal: those whose general ideas are aligned with the outcomes of the task and believe in the way the object will be reached.

    This is a main issue in my country; Iranians are used to comment in almost every issues and most of the time they insist on their views. Therefore, most plans are not executed as they are planned, because during the implementation phase there are always some people who change the exact plan the way they believe is better. These changes rarely result in better outcome and most of the time they result into a failure, plus reworks.
    In contrast, while working with Chinese and Korean people, I saw that the execution body of the organization respect the decision without reservation and accordingly, they finish projects with reasonable cost and in timely manner.

    I think this is why most strategic planning models emphasis on using a broad range of managers as steering committee, but placing an owner for each step of the implementation who is completely in line with the objective of that stage.

    As more international companies are coming to Middle East and are using local labor, managing the contrast between the cultures of management team and the labor will be a challenge in this great market: though using diverse ideas in planning and marketing phase may be useful for these companies, they may face difficulties while using a diverse body of workers for implementing their ideas.

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