This report aims to provide business solutions to a multicultural issue that affects Uber Technologies Inc. Uber represents a visible multinational company that has received considerable negative attention in the media. However, few people know of the extent of its aggressive management approach that led to various problems such as sexual harassment scandals, discrimination, ethical issues, and so on.
Much of the publicity about Uber is both a direct consequence of and a direct consequence for stakeholder relationships. This case was created using secondary data sources from publicly available sources. In order to choose this company, the author made research and after looking into the available data, decided upon Uber or H&M. The author went to the designated team and presented arguments in favor of choosing Uber. After every member confirmed, the author informed Professor Khan.
The team agreed for each member to do their research and then confront the information and link it. The case study structure attached at the end of the appendices represents a summary with some sources to the secondary data websites of the information that the author presented to the professor in order to get feedback. After the presentation, the team split the issues, each member focusing on one intercultural issue. The issue on which the author focuses is related to discrimination. After analyzing the context, the author made some recommendations in order to eliminate that threat using cultural theories from course slides and recommended books.
Nowadays, discrimination is a very serious issue in both, personal and professional life. Many multinationals deal with its repercussions and have lost important sums of money by being forced to pay millions of dollars for discrimination settlements. Furthermore, the effects of discrimination go way beyond cash liabilities impacting the internal workforce productivity, the ability to retain and recruit staff, and even the brand image. This report focuses on the analysis of Uber’s discrimination issues and providing relevant solutions. The author chose this multicultural problem because it is linked indirectly to the majority of the other problems. Also, it is a very important issue nowadays.
A flawed organizational culture causes and empowers discrimination in the workplace. This statement is supported by Kartolo and Kwantes’ (2019) research in which they discovered that individuals’ perceptions of discrimination in the workplace are influenced by both perceived discrimination in society and perceptions of behavioral norms related to organizational culture. Findings indicated individuals’ attitudes and beliefs manifested in the societal context were carried into, and reflected in, the workplace. Additionally, beliefs related to organizational discrimination were found to be amplified or minimized depending on organizational culture; specifically, organizations dominated by culture norms reflecting behaviors related to individual security needs predicted higher levels, and culture norms reflecting behaviors related to meeting employee satisfaction needs to predict lower levels of perceived organizational discrimination.
This is the case of Uber, which had serious internal and external discriminatory issues in recent years. Most of their problems are linked to their bad organizational culture that doesn’t embrace diversity – “Our workplace culture and forward-leaning approach created significant operational and cultural challenges that have in the past harmed, and may in the future continue to harm, our business results and financial condition” (Uber IPO, 2019). Uber investors, Mitch and Freada Kapor (2017) wrote an open letter to the company’s board in which they were condemning Uber’s culture – plagued by disrespect, exclusionary cliques, lack of diversity, and tolerance for bullying and harassment of every form. Although their mission is ‘to bring transportation – for everyone, everywhere (Uber, 2019), unsurprisingly, they never respected that statement. Originally, drivers have been able to see just the origin, not the destination of a requested trip before deciding whether to accept it or not. Many times, if the trip was not long enough for them, they would cancel as can be seen in IMG 1. At the end of 2019, Uber changed their app algorithm (Uber Blog, 2019) and instead of trying to solve the problem, it made it worse. Now, drivers can see whether the journey will end in a wealthy neighborhood or a low-income one, and discrimination regarding social status may occur. A 2016 report from the National Bureau of Economic Research in the US found that female passengers were taken on longer, more expensive rides. This was down to “a combination of profiteering and flirting to a captive audience”, the report claimed. Black passengers, meanwhile, were made to wait 35pc longer for rides. Another report by the Kelley School of Business at Indiana University, published in 2018, found that riders displaying LGBT symbols in their profiles were almost twice as likely to be refused rides.
Also, the company’s cultural norms are not in balance with its actions. As an example, they affirm that they ensure people of diverse backgrounds are welcomed, encouraged, and heard. This is clearly not the case as the New York Times reported in 2018 that Liane Hornsey, the human resources chief, was departing. The staff change came after an accusation that she didn’t take allegations of racial discrimination seriously. Also, Business Insider (2018) reported that Barney Harford, the chief operating officer, had apologized to employees after complaints he had made insensitive racial remarks during a conference call.
Uber formed some empowerment groups – one for women, one for Asians, one for African-Americans, and so on for every minority category. Their aim was to show people that they value all genders and races but by grouping them and encouraging them ‘to form their own groups, they don’t support diversity, they split them. This might cause more harm if the groupthink phenomenon occurs. If some of the persons in that group feel discriminated by others, and they have any kind of power over the group or they become emergent leaders, they could also induce this idea to the others causing serious ethical breaches. For example, in 2018, two Latin-American women engineers accused the ride-services company of gender and race discrimination. The lawsuit ended with the company agreeing to pay $10m in gender and race discrimination settlement to 285 women and 135 men of color for financial and emotional harm. According to GLOBE Study, the Latin America cluster has an average score for Humane Orientation and Gender Egalitarianism. This means that people from that culture are not necessarily urged to be sensitive to forms of racial discrimination. Furthermore, they do not expect power to be distributed evenly among citizens, instead of accepting authority, power differentials, status privileges, and social inequality. Humane orientation means that a society “encourages and rewards individuals for being fair, altruistic, friendly, generous, caring, and kind to others” (House & Javidan, 2004, p. 13). There is relatively little and seemingly contradictory evidence on this concept. Kabasakal and Bodur (2004) explored the relation of humane orientation with other cultural dimensions of the GLOBE study and found humane orientation to be strongly positively related to institutional and in-group collectivism, and negatively related to assertiveness. Humane orientation was also negatively related to the willingness to justify unethical behavior (Parboteeah, Bronson, & Cullen, 2005). However, other results on humane orientation have raised doubts concerning an unambiguously positive interpretation suggested by its definition. Kabasakal and Bodur (2004) noted a positive correlation of humane orientation with right-wing orientation. Gupta et al. (2004) found a relationship between humane orientation and items on racism and xenophobia from the World Value Survey. Humane orientation was not related to either societal tolerance or well-being; instead, societies with a high degree of humane orientation tended to be poorer, less educated, and less urbanized than low humane-oriented societies (Kabasakal & Bodur, 2004). Bond et al. (2004) identified a positive relation of humane orientation with “dynamic externality” (a measure of a naive belief in a just world with authoritarian streaks) and a combination of high religiosity and superstitious beliefs. Its scores are relatively low on several other dimensions including Future Orientation, Institutional Collectivism, and Uncertainty Avoidance. In a conclusion, it can be stated that the groupthink phenomenon influenced the two Latin women to take this unusual decision.
Another fact that shows signs of race discrimination, as can be seen in IMG 2, is the distribution of Uber employees by ethnicity in different departments. It is obvious that around 50% of Uber’s employees are part of the white race.
In February 2017, according to Business Insider, Susan Fowler, an Uber engineer published a widely-read blog post in which she said HR ignored her complaints about a manager who propositioned her for sex. Fowler said she was told the manager was considered a high-performer who shouldn’t be punished for an innocent mistake. Considering the fact that the US had a relatively low Power Distance, Susan did not accept these power differences, and status privileges based on a dramatic lack of Gender Egalitarianism. Hofstede (2006) considers one of the aspects of predominantly masculine countries such as the United States – 62 (IMG 3) to be the prudishness about sexuality and gender.
Another important issue is gender discrimination. According to Uber D&I report (IMG 6), Uber female workers are still fewer than males. Figures from the firm show that 38% of Uber’s workers were women as of March 2018, up from 36% a year earlier, but women in leadership roles fell to 21% from 22% a year earlier.
The data (Uber report, 2018) indicates a continued need to focus on women (-1.8 percentage points), Black/African American (from 0% to 0.8%), and Hispanic/Latins (also from 0% to 0.8%) employees in tech leadership roles. Furthermore, in the tech department, the discrepancy between genders is very high, with only 21.9% being women (IMG 4).
The difference between the United Stated together with Canada and Latin America regarding gender employment is very obvious (IMG 5). While the first group had significantly more male employees, their southern neighbors almost reached equality in number. This could be owed to the average Gender Egalitarianism score which does not under qualifies women as it does in other countries.
In addition, a study from Stanford University (2019) has found that there is a gender pay gap at Uber with male drivers outearning women by roughly seven percent. During a typical week, a male driver would earn an average of $397.68 compared to a female driver taking home $268.18 on average. The study says that the entire gap can be explained through a number of factors. First of all, male drivers tend to operate in more lucrative locations. For example, they have a higher willingness to drive in areas with higher rates of crime and more drinking establishments. Another reason is that men drive more often every week and they accumulate more experience and capital. They are also less likely to stop driving with Uber and they have a lower tendency to cancel trips.
It is clear to say that Uber faces many multicultural problems such as sexual harassment scandals, ethical scandals, and discrimination. The root of all of these is the vague organizational culture which was not strong enough or even defined to deal with the intercultural differences that occurred on the international market in this globalization time. In consequence, the author gathered and analyzed secondary data from publicly available sources and came up with some recommendations. Firstly, the group thinking phenomenon could be used in order to decrease judgemental behavior and discrimination inside the company. Secondly, the organizational culture should be redefined and employees should be hired according to the company’s values. Next, the leadership and management team should know how to identify and fulfill their staffs’ needs in concordance with their culture.
If Uber manages to escape from this discrimination culture, the other multicultural problems will also disappear. In order to do so, the first step would be for the company to redefine and impose its organizational culture, including its values. Next, it has to change its employment criteria and start hiring cultural fits. It’s really important for them to understand that cultural fit shouldn’t be used to discriminate against diversity and that great company culture will reflect a diverse workforce. The reason behind this statement is that a multicultural team is described as being task-oriented (Marquardt and Horvath, 2001) and concentrated on accomplishing their shared objectives by taking advantage of their unique abilities, communication skills, and shared talents (Lane et al., 2009). As claimed by Rice (2010), in this context, the focus should be on embracing differences and planning a safe environment in which people can feel appreciated and respected.
All of these should be implemented by the manager. Its role is to motivate the people, decrease the level of uncertainty and reward good performance. According to Trompenaars and Hampden-Turner questionnaire (1998), a good manager is a person who guides subordinates continuously and helps them solve various problems as they arise. He/she acts like a parent, not a taskmaster. Mullins (2005) in examining motivation in workers suggests that a major determinant of behavior is the particular situation in which individual workers find themselves; motivation varies over time and according to circumstances.”
In consequence, in order to motivate people, the manager should use Maslow’s Hierarchy of Needs. Based on the gathered data, the needs of Uber employees are mainly gravitating towards Esteem and Safety level with an intense need for respect, security, achievement acknowledge. However, before applying this theory, the board should have some discussions with their staff in order to corectly identify their needs.
Hofstede suggests that this theory is based on ‘self-interested need/want satisfaction’, so people will need self-advancement and self-satisfaction which is gained through increased material rewards, increased status, and personal self-actualization. As a recommendation, in the United States’ case, awards such as ‘Employee of the month’ or annual rewards or bonuses should be given in order to stimulate because of its individualistic, masculine/achievement orientated culture with low uncertainty avoidance – these should awake their internal motivation. Management style should be a move towards theory X and the leadership needs to be strong. Rotter (1954,1982), describes the way individuals attribute responsibility for different events. In the case of the United States, they have an internal locus because of their focus on themselves and self-improvement, strong self drives to control the external environment.
Regarding the gender difference, to help address this gap, Uber should provide mentoring and coaching programs globally that could help people achieve their standards and with social integration and acceptance.
Turning to the next recommendation, group thinking might be a phenomenon that encourages discrimination in this company, as was discussed previously. However, it could also be a phenomenon that could contribute to decreasing its level. If Uber will start to offer training and coaching to their teams and lead by example (the board and the managers should inspire love and embracement for diversity), other people might change their minds and also embrace it. People don’t need to stay and spend their time only with people of their own race or gender, they should be mixed up in projects and departments.
Next, it is essential to build a campaign that would rehabilitate the brand’s image. Because of all that bad PR, people started to associate Uber with discrimination of all kinds. It is essential to project a new image and support it through all possible channels, including word-of-mouth. Employees are the most important aspect of this strategy – if they trust and respect the company, they could recommend it. If they don’t feel good working there, they will continue to spread the word and this will lead to another possible issue: lack of labor. People won’t want to work for a company that lacks ethic and respect towards their employees and customers.
In order to solve gender inequality, Uber should go for example to Universities and offer internships to students of all races and genders and build their knowledge through training and mentoring as they want and need to. This way, they will have loyal employees that will have the expected and required knowledge.