You are here

Managing differences in organizations

11 May, 2016 - 11:43

By Hanoi N Soto Garcia and Nora Martin

In today’s business environment, an increasing trend towards teamwork, a larger presence of women and ethnic minorities in the workplace, and a greater exposure to international businesses and cultures are constantly challenging employees from a variety of industries in all parts of the world. This posts a greater opportunity for people to learn from cultural and personal differences and create a more productive work environment. Thomas L Friedman, in The World is Flat, makes the following comment after one of his trips to Bangalore, India: “It is now possible for more people than ever to collaborate and compete in real time with more people on more different kinds of work from more different corners of the planet and on a more equal footing than at any previous time in the history of the world” (2006). Due to the importance of managing differences effectively in organizations, there is a need to identify the types of differences encompassed in organizations, the effects of differences in work teams, and the importance of understanding and diagnosing differences to maximize organizational performance.

Organizations usually take one of two paths in managing diversity: (1) they encourage people of diverse backgrounds to blend in for the benefit of fairness and equality; or (2) they set them apart in jobs that relate specifically to their backgrounds, assigning them, for example, to areas that require them to interface with clients or customers of the same identity group. African American MBAs often find themselves marketing products to inner city communities; Latino Americans are frequently positioned to market to Latinos or work for Latin American subsidiaries. In those kinds of cases, companies are operating on the assumption that the main virtue identity groups have to offer is knowledge of their own people. This assumption is limited and detrimental to diversity efforts. Diversity goes beyond increasing the number of different identity-group affiliations on the payroll. Such an effort is merely the first step in managing a diverse workforce for the organization’s utmost benefit. Diversity should be understood as the “varied perspectives approaches to work that members of different identity groups bring” (Thomas & Ely, 1996).

Leaders realize that increasing demographic variation does not in itself increase organizational effectiveness. They realize that it is how a company defines diversity and what it does with the experiences of being a diverse organization that delivers on the promise.

Group diversity refers to the amount of heterogeneity within a group determined by several characteristics derived from informational, visible, and value differences (Hobman, Bordia, & Gallois, 2003). Informational differences refer to different professional backgrounds and experiences; visible differences refer to things that become more physically apparent, such as age, gender, ethnicity, etc.; and value differences are shaped by each individual’s set of beliefs, goals, and values. These three categories of differences have a major impact on team performance because they can become the cause for multiple types of conflicts within a team. When approaching tasks, different members of the team will have different behaviors based on their own set of informational, visible, and values characteristics. Employees with different views of the same situation may have totally different ways of responding to it.

After the appearance of conflict, team members can create a true learning environment where they can perform far beyond expectations by leveraging their differences. Hobman, Bordia, and Galois highlight the ways in which group diversity can foster a higher organizational performance, “It has been noted that diversity can lead to higher performance when members understand each other, combine and build on each others’ ideas. This suggests that interaction processes within a diverse team are crucial to the integration of diverse viewpoints. For example, Abramson found that organizations that had teams with high diversity and integration had the best performance” (Consequences of Feeling Dissimlar from Others in a Work Team, 2003). Along these lines, diverse groups have a higher ability to overcome initial difficulties by identifying the multiple angles of a problem and generating creative solutions.

The more openly they are recognized and discussed, the better chance there is for differences to become part of organizational success. Tomas and Ely believe in the notion that “a more diverse workplace will increase organizational effectiveness. It will lift morale, bring greater access to new segments of the market place, and enhance productivity” (Making Differences Matter; A New Paradigm for Managing Diversity, 1996). By truly embracing diversity, leveraging the talent within multicultural teams, and approaching diversity as means to higher knowledge and productivity, organizations will effectively manage differences, to achieve competitive advantage successfully.



Key success factors

Table 5.1 Paradigms of diversity


  • Equal opportunity, fair treatment, recruitment, and compliance with US federal Equal Employment Opportunity requirements
  • Leaders work towards restructuring the makeup of the organization to reflect more closely that of society
  • Effectiveness in its recruitment and retention goals rather than by the degree to which companies allow employees to draw on their personal assets and perspectives to do their work more efficiently

Access-and legitimacy

  • Need of a more diverse workforce to help companies gain access to the differentiated segments
  • Matches the demographics of the organization to those of critical consumer or constituent groups
  • Degree to which leaders in organizations understand niche capabilities and incorporate them into differentiated categories aligned to their business strategy


  • Incorporates employee’s perspectives into the main work of the organization
  • Enhances work by rethinking primary tasks and redefining markets, products, strategies, missions, business practices, and even cultures
  • The promotion of equal opportunity and acknowledgment of cultural differences
  • Organizational learning and growth fostered by internalizing differences among employees

End goal: Leaders should thrive to shift to the Learning-and-effectiveness paradigm to approach diversity as a means to higher knowledge and productivity.