Managing Diversity at Spencer Owens & Co.
Case Study – Human Resources Management Fall Semester 2010/2011

19-10-2010
UNIVERSIDADE NOVA DE LISBOA

Cátia Santos #
Rita Matos Dias #681
Rita Lourenço Leite #689
Tânia Rodrigues #698

Should organizations aspire to be racially, ethnically and gender diverse? Why?
Diversity is aspired by organizations as a strategic initiative that can bring advantage for the company. The aspiration of diversity is not only concerned with moral issues but it is also about competitiveness, maximizing benefits or human effectiveness.
Simply recognizing diversity in a corporation helps link the variety of talents within the organization and also allows those talented employees to feel needed and have a sense of belonging, which increases their commitment to the company and allows each of them to contribute in a unique way. Thus, organizations should have a racially, ethnically and gender diverse environment mainly because of the unique advantages that diversity can bring such as: fresh outlooks, higher morale, increased flexibility, multiple perspectives, increased problem-solving skills, increased creativity, reduction in intergroup tensions, and improved market opportunities (ability to compete in global markets).
Using diversity, organizations are able to ensure that they have staff with relevant knowledge of the locations in which they are working and mechanisms to use that knowledge in strategic and operational decision-making. They also are able to ensure that the diversity of their clients is represented when they are designing, marketing and delivering services and products. Managing diversity promises also advantages concerning marketing and distribution as a diverse workforce which put organizations in a better position to respond to desires and needs of culturally diverse costumers in a market – on condition that they are members of these culture groups.
When employees come from diverse backgrounds, they bring individual talents and experiences with them and this invariably contributes to an organization’s overall growth and leads to a wide variety of viewpoints and business ideas. This helps an organization formulate the best business strategy, with its large pool of different ideas and solutions. Some studies also have discovered that heterogeneous groups produce better quality solutions to assigned problems than homogeneous groups, so diversity can enhance creativity and innovation.
Although all these advantages, diversity has also some disadvantages, but if the value and richness brought by diversity maximizes some potential disadvantages that should exists in the organization.

Under what circumstances does a team’s cultural diversity detract or enhance its effectiveness?
A diverse workforce can supply a greater variety of solutions to problems. Employees from diverse backgrounds bring individual talents and experiences in suggesting ideas that are flexible in adapting to fluctuating markets and customer demands. A diverse collection of skills and experiences is the bridge between the work place and the market place as it allows a company to provide service to customers on a global basis. Creativity also increases when people with different ways of solving difficult problems work together towards a common solution. Language skills are needed in today’s increasingly global economy, and diverse workers often have this proficiency. A diverse workforce that feels comfortable communicating varying points of view provides a larger pool of ideas and experiences. All these benefits can lead to increase the productivity and effectiveness of a company if the communication and cooperation between the workforces are successfully achieved. Otherwise, if there are communication issues, resistance to change or even an ill defined strategy, diverse teams can lead to worst performances and lower levels of effectiveness.
Low Morale, ambiguity, conflict, tension, confusion and slowly decision making are some of the many problems that diversity can brings to an organization. In fact, workforce diversity isn’t a competitive organizational strength unless it’s effectively managed. Having many different individuals in the same workforce make it difficult to have one shared purpose, and consequentially to have an efficient process. Diversity can reduce the cohesiveness of the group and result in increased employee absenteeism and turnover (Tsui, Egan & O’Reilly, 1992). Generally, greater diversity is associated with lower quality because it places lower performing people in positions for which they are not suited. (Rothman, Lipset & Nevitte, 2003).
The benefits and the costs of diversity are not the same for every company or neither a stated fact. Top managers need to think carefully about all these effects before implementing a diversity strategy. It is not enough to “play fair” and “act political right”, it takes much more than that.

What is the root cause of the problems that Spencer Owen is encountering?
Until Agnes Richard assumes her directorial duties, the company was considered a model of successful diversity efforts. With that event, it appeared two concerns: employees of color were quick to bring charges of racism against whites in the organization and also, increases the frequency of the complaints brought by the two networking groups (women employees and employees of color).
According the first concern, when an African American manager in Human Resources, Sahara Johnson, was fired by Richards, that problem grew and divided the firm into 2 groups, those who considered her dismissal unjust and those who felt appropriate. With respect to the second concern, some whites complained that these groups had taken on a policing and advocacy function and sometimes the groups have more leverage and more power than they ought to have in decision making. This way, any event involving people of color, like a dismissal or a constructive criticism, was considered racism, so, it was very difficult to promote fair and constructive supervision to people of color.
Observing the exhibit 1, we can conclude that minority, special the program staff has considering high: * The racism against them in the organization; * The discrimination against black employees to get away with things that white employees can not get away with; * The lightness with which the black employees in management are taken against their counterparts; * The need to suppress much of who they are to be accepted and to do their work;
On the other hand we observed that White employees show a high level of agreement when asked about the hesitation to criticize minority coworkers because they do not want to be called a racist.
So, we concluded that the root cause could be this environment of fear and hesitation by white employees and, the constantly “feeling of persecution“ by people of color into the organization.

What needs to change at Spencer Owens to address racial issues?
We believe that, the firm committed to fairness and equality and encouraged people to ignore gender or ethnic differences. But, by trying to be a “happy family” and trying to treat everyone the same way, resulted in people being repressed or afraid of exposing their feedback and critics to other colleagues. People were trained to be sensitive to racial issues and prejudices and so this lead to the fear of being called a racist if you confront a colleague. For this reason, valuable and constructive feedback opportunities were missed out.
We agree that, this approach of equality that was taken by Spencer Owens lead to the employees of colour quickly charging whites against racism in the organization. By creating two networking groups protecting the rights of women and employees of color, this lead to a distinctive treatment of employees and the minorities felt encouraged to complain about the whites. There was a fear of saying something that would appear to be a racist comment and so this obligation of being political correct lead to misunderstandings and a lack of communication. People were “walking on egg shells” trying to be sensitive to others.
We believe that instead of trying to treat people in a equal way, Spencer Owens should try to acknowledge that there are differences and take benefit of those differences. People of colour believe that the minorities are tolerated but not fully accepted, to respond to this claim, the company should try to create programs where instead of ignoring the differences, this differences are used to increase the profits of the company. This is, they should use this different backgrounds, perspectives and skills, to better respond to the market and to create better practices. A diverse workforce results in more creativity, more flexibility and better solutions and decisions. The consumers are also different and for this reason, a diverse workforce can understand better which are there demands and needs.
There shouldn’t be a friction between races or a fear of exposing feedback and critical comments, by acknowledging that there are differences and improving the communication between groups, this fear disappears and people can be truthful and not be repressed, and so be able to confront others.