Importance of Diversity Management in Organizations: Analytical Essay

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Diversity management has a pivotal role in growth in today’s fiercely competitive global market and workplace issue due to the rapidly change in globalization. To encourage managing diversity, bringing talented workers, including foreign nationals and women is considered as the key role in global enterprises, as diverse workforce is interpreted essential for sustaining and strengthening the creativity and competitiveness of economies. However, Japanese enterprises are known as culturally homogeneous and non-diversified and the chronic problem of gender inequality at work has been visible in this country for centuries. Both unequally entrenched perception towards women in the nation’s society and Japanese management practices (lifetime employment) has threatened their labour market for diversity management.

The term of diversity refers to difference in attributes such as race, gender, age, religion, disability etc. Whereas people management or diversity management may be defined as controlling and developing a group of individuals in their work, which recognized as a heterogeneous team: demographic, social, and ethnic background defences, in such a way to optimise efficiency and correctly use their talent, at the same time staying equal and fair to ensure that each member of your group receives a tailored approach. In the recent years, it has become a key area of focus for HR teams to ensure diversity in the work place due to need for different perspectives in the growing consumer market. This can be demonstrated in the Japanese working culture where homogeneity is widely practiced as the workplace is mostly male-dominated (Cooke and Kim, 2017). It is also common in the Japanese labour market that HR teams often look to hire Japanese nationals, again constraining the range of type of workers.

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Therefore, this essay will analyse how those two issue – gender inequity and homogeneous conception in enterprises employment system – are a challenge for diversity management in Japan and aim to the advantage of diversity management in organizations. The first section will evaluate the first issue about gender equality embedded in a male-dominant society, which cause to main challenge of managing diversity. Then, it will analyse the diversity workforce issue rooted in ethnically homogeneous culture which is another major challenge in the nation. The next, it will explore about diversity management in HRM field in-depth and the reason of the importance in diversity management.

One of the problems that are on the rise in various organisations around the world is diversity and ensuring that everyone from the workforce is treated equally, with dignity and has their fair share or resources, as this is simply the right thing to do. This problem is also reflected in the Japanese Labour market and can be seen represented in the mixture of backgrounds ratio of any company’s employees. Although there are many legislations, such as Equal Employment Opportunity law put in place to ensure the reinforcement of equality through the elimination of gender-based discrimination in recruitment, treatment of workers and promotion since 1985 have prompted a gradual increase in the employment rate among women. (Harzing and Pinnnington, 2011), there is still an unbalance seen in the nation’s gender equality in the labour market of the advanced economies. According to the Economist (2018), the “glass ceiling index”, which is the invisible barrier keeping women and minorities from advancing above a certain threshold in the corporate world, indicates that Japan holds one of the lowest ranking amongst 29 of the more developed countries, coming in at number 28. This shows that women and minorities are not encouraged or offered to do as well as the majority of Japanese men are. Furthermore, The World bank (The World Bank, 2018) surveyed the labour force in Japan and found that less than 50% of Japanese women were actively contributing to the country’s workforce.

Full-time female workers were surveyed to be at 30% which is a similar percentage to the amount surveyed in 1985, ultimately concluding that female workers still find it difficult to hold and maintain full-time jobs (Magoshi and Chang, 2009). In addition to this, it was found that only 9% of women held managerial or board positions (The Japan Times, 2016). Wilson assert that “the notion that equal opportunity exists now for women is a myth.” Indeed, there seems to be considerable disappointment and disillusionment about the current state of women’s position at work, given 30 years of equal opportunity legislation in Japan. In short, this can be interpreted to mean that not only do women find it harder to get full time jobs, their career path also proves to be full of more obstacles if they wish to take it further.

Many associate these obstacles with gender and race, as opposed to factors such as lack of ability and management skill at a higher level. Despite all of the achievements made by women in Japan, it is still a common stereotype in the country that women as leaders are perceived negatively. As a male-dominant society, it is common perception that women are followers or supporters of these men and this may hinder some women’s view of themselves as leaders when aiming for such high positions. This perception is intensified by not only the lack of strong women role models for young Japanese females, but also by the unspoken partiality present in promotion decisions which often result in less effective use of the best talent in organisations (Robinson and Dechant, 1997). This implies that many work places often prefer to use a male employee to do the job over a more qualified female employee as a result of this culture. It is suggested that organising the strategy of positioning fairly between genders directly correlates with the company’s productivity, and therefore, profit levels.

Cox and Smolinski (1994, p. i) demonstrate “Organization which excel at leveraging diversity, including the hiring and advancement of women and which provide overall climate of equal opportunity to contribute, should experience better financial performance”. For instance, Recent research conducted by Forbes show that women influence over 70% of retail choices, which implies that input from women employees in the marketing industry is crucial (Brennan, 2015). Due to the low levels of female workers in many businesses, corporations are likely to not make as much profit in a male-dominant group versus a mixed gender group as the latter group’s range of ideas would be broader, casting a “wider net” on consumers. Gender diversity supports the quality of group decision-making, encourages productivity growth and improves innovation (Hewlett et al., 2013). It can be considered that challenging the policies and practices of the current Japanese HRM system can prove to be beneficial for all parties by helping organisations hire highly talented women and therefore improve the attitude and culture associated with the gender inequality prevalent in Japan.

In order to achieve this equality, a business needs to view it as essential as achieving organisational goals. It is considered to be a good practice for an HRM of a company to strategically manage a firm in such a way so that opportunity is equally divided amongst male and female co-workers in every aspect of the business policy, as opposed to using percentage of female workers as a statistic to flaunt (Davidson and Burke, 2000). The tradition of mainly hiring Japanese employees in organizations is likely to start to diversify for global workforces as they must learn to adapt to not only the declining population and society of the nation, but also the rapid growth in global market interest. In order to accommodate client’s needs around the globe and promote diversity management strategies, tactically managing all the variation of the corporations’ staff is a vital option. Managing this kind of diversity is seen as a proactive approach (Babalola & Marques, 2013), which encourages a heterogeneous workforce (Casio, 1998). The ultimate aim of this method is to maximise the benefits of diversity and employee talent, while at the same time minimising any potential disadvantages that may occur (Cos, 2993). However, Homogeneous societies, male-dominated cultures, centralized, unique and ethnocentric management styles present a difficult starting point for Japanese to meet the demands of global talent and severe challenges for attaining and integrating foreign labour.

This trait of the Japanese society and internal labour market has been a pivotal idea as it is based on appealing to new graduates and intending to keep them with the company for long length such as until retirement. In this keystone system of the Japanese corporate world (Brinton, 1993; Ono, 2010), employers spend time and resources in hiring, training and retaining employees in hopes that they will stay with the company on the long run helping them chisel the staff according to exactly what the company require. In return, employees receive a role-specific skillset that can’t be transferred to other firms but are highly valued in their current organisation (Dore, 1973; Lincoln and Kalleberg, 1985; Aoki, 1988). This system, which is based on shared commitment, has been one of the explanations of Japan’s competence and productivity until the Japanese economic crisis (Brinton, 1993). Although, after the economic crisis of the 90s, Japan has attempted to adapt more international trends of practice, this system of “lifetime employment” has been set deeply into the work life of the country and has remained stable throughout recent years, i.e. still recruiting Japanese nationals who are predominantly men in their early 20s (recent graduate age) (Krook, 2017). As a result, the country is still known to be one of the least diverse countries of the industrialised nations with 99% of the country’s population being ethnically homogenous (Cooke and Kim, 2017). Although the number of working foreigners in Japan has more than doubled in the past decade to 1.3 million, this figure still remains below 2 percent of the labour force, compared with 13 percent in Britain and 39 percent in Singapore in 2017 (Hayakawa, 2018). Nevertheless, the country is aiming towards a more culturally rich society by various new policies and legislations. One example is the approval of a new law that will let in as many as half a million foreign workers into Japan by 2025 by Prime minister Shinzo Abe. Many have voiced this new legislation as the “end of Japan’s traditional opposition to large-scale immigration” ( ).

The opportunities brought forward by this new bill will aid Japan with the talent shortage they are currently facing and is anticipated to find ways to meet their global talent demand. Developing a supportive culture for all employees can lead to healthy and happy workers who are willing to contribute to the best of their ability and this can partly be achieved by the sincere determination of the top management. Including diversity as one of the company’s goal and business strategies will help to recognise and match the rapid change of the market and to strengthen organizations competitiveness in the face of economic globalization. Instead of aiming for inclusivity for the purpose of cultural and political correctness, diversity is more about caring for individuals and their wide array of differences and inputs. (Sai Vashanti, 2012). A few decades ago, Human resources teams focussed on contracting and holding employees how it has been become increasingly important for corporations to keep in mind a variation of backgrounds and differences within their workforce (Shen et al., 2009). For the purpose of obtaining a wide range of diverse customers, a similar diverse workforce needs to be readied in an equal and fair manner. Meaning that companies must first manage their internal distribution of diversity in order to meet the needs of their clients rationally and efficiently. Further, treating their own staff fairly can lead to the business’s creativity, innovation and profit.

Diversity management relies mainly on people-centred policies alongside the correct strategy. Although diversity management revolves around the wellbeing of employees, the HRM purpose is to be the custodian of people management processes. Both these ideas have some overlap; for example both HRM and diversity management are concerned with the contribution of human resource function to the business strategy (Noe, 2012). Secondly, both are fully involved in individual differences, the improvement and welfare of each individual (Truss, Gratton, Hope-Hailey, McGovern and Stiles 1997). Therefore, diversity management has become an essential part of the HR strategy aiming to improve development (Shen et al., 2009). Furthermore, studies show that using HRM to address inequality in the workplace, e.g. in recruitment, progression, appraisal and incentive, can lead to equal employment opportunity, further improving inclusiveness and creativity in the company’s work. (Konrad and Linnehan 1995; Burbridge, Diaz, Odendahl and Shaq 2002; Goodman, Fields and Blum 2003). An example of this is the Ford Foundation’s study of non-profit boards goes to show how hiring practices can affect the returns of a business. By increasing the number of female board members, Ford’s research demonstrates that it will influence HR teams to hire more females in the future. Moreover, research by Goodman et al. (2003) concluded that there is a positive correlation between highlighting employee development and promotion and the ratio of women in the workplace. Further studies have revealed that there is defined association between the greater representation of women and minorities in higher roles versus the identity-conscious decision making by the HRM teams in the company (Kalleberg, Knoke, Marsden and Spaeth 1994; Konrad and Linnehan 1995) meaning that if considered equally by the HR teams, minorities can comfortably make their way up the corporate ladder. In addition, HRM strategies are vital in overcoming process problems and at the same time improving the social, environmental and financial aspects of the company.

Efficient strategies put emphasis on improving the learning, flexibility and knowledge creation of a firm while at the same time developing the quality of work produced. Diversity management is an fundamental part of HRM and should be kept at the heart of practices and policies executed by Human Resource Teams. Overall, it is recognised by many researchers that diversity management can be seen as an effective method of improving HRM strategies. (Litvin 1997). As making the management of diversity stronger in global enterprises has become an increasingly important issue even inclusively in Japan, it is clear that in order to progress even further, these companies must pay more attention to diversity management as a potential competitive resource. CIPD (2018, p.2) indicates that “the pace of progress towards realising equality of opportunity needs to accelerate, especially for moral and business case” (CIPD, 2018, p. 2). This has been the case for some Japanese firms so far as it’s an idea also supported by the Chief Cabinet Secretary Yoshihide Suga who says “Creating a new residence status to accept foreign workers and encouraging women to participate in the workforce is of utmost importance as the nation’s population declines and businesses suffer from lack of personnel,”. This reiterates the fact that diversity inclusion is significant factor to consider when hiring new talent via HRM. My impression is that HR teams can increasingly benefit from widening their outlook when they distinguish between talent pools in terms of overcoming the traditional homogeneous and ethnocentric culture. Not only will this increase globalisation within Japan, but will also aid in the integration of Japan on a global level.

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