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Unformatted text preview: AULIKKI SIPPOLA Essays on Human Resource Management Perspectives on Diversity Management A C TA W A S A E N S I A No. 180 Business Administration 75 Management and Organization U N I V E R S I TA S W A S A E N S I S 2 0 0 7 Reviewers Professor, Ph.D. (Econ.), M.Sc. (Psych.) Iiris Aaltio School of Business and Economics P.O. Box 35 FI–40014 Jyväskylä University Finland Professor, D.Soc.Sc. Pauli Juuti Lappeenranta University of Technology School of Business P.O. Box 20 FI–53851 Lappeenranta Finland ACTA WASAENSIA 3 ACKNOWLEDGEMENTS This dissertation and my research project have been supported by many people and organizations, to whom I would like to express my deep gratitude. Firstly, I wish to thank the official examiners of this dissertation, Professors Iiris Aaltio and Pauli Juuti for providing valuable comments on the manuscript. Secondly, I would like to thank my supervisor, Professor Vesa Suutari for his unwavering support, constructive feedback and encouragement throughout the research process. I would like to thank the co‐authors of this dissertation, Jussi Leponiemi in article one, and Adam Smale in article four. In addition, I wish to thank the members of the research group at the University of Vaasa, Department of Management for their support. I would also like to thank Kimmo Happonen and Adam Smale for proofreading my manuscript and articles. My warmest thanks also go to all interviewed persons and organizations participating in my research project and to Anneli Sintonen, for offering me access to those organizations belonging to the EU/EQUAL‐project ETMO. I hope that this study will be of practical use to organizations for dealing with diversity management issues. I am also very grateful to Professor Pirkko Pitkänen, who encouraged me to start this study within an area just emerging in Finland, and contributing to its inclusion into the Lifelong Learning‐programme of the Academy of Finland. I am also grateful for the generous funding of the following institutions and foundations: The Academy of Finland, The Finnish Work Environment Fund, The Finnish Foundation for Economic and Technology Sciences‐ KAUTE, the Foundation for Economic Education and the Oskar Öflund Foundation. Finally, I owe special thanks, and my deepest appreciation, to my family: my husband Rainer, and children Mats and Inga‐Stina, for their love, patience, flexibility and comfort from the beginning. To my parents, for teaching me Finnish perseverance and optimism, which have carried me forward in life. My warmest thanks go also to the families of my sister, brother and Susu in Canada for their long‐distance support as well as to Sari Hammar‐Suutari for our invaluable discussions. Espoo, June 18th, 2007 Aulikki Sippola ACTA WASAENSIA 5 CONTENTS ACKNOWLEDGEMENTS 3 ARTICLES 7 ABSTRACT 8 1. INTRODUCTION 9 1.1 Objective of the study 14 1.2 Structure of the dissertation 16 2. THEORETICAL BACKGROUND 17 2.1 Diversity management 17 2.1.1 Concept of diversity 17 2.1.2 Different approaches to managing diversity 19 2.1.3 Managing ‘sameness’ versus ‘difference’ 22 2.1.4 Diversity management paradigms 26 2.2 Human resource management of a diverse workforce 32 2.2.1 Human resource management activities 32 2.2.2 Reactive and proactive human resource management 36 2.2.3 Implications of workforce diversity for human resource management 39 2.2.4 Training and development in diversity management 46 2.3 Global diversity management 52 2.4 Finnish context for diversity 55 3. METHODOLOGY 61 3.1 Research strategy 61 3.2 Research methods 61 3.3 Case selection 64 3.4 Data collection 66 3.5 Data analysis 68 3.6 Validity and reliability 69 4. SUMMARY OF THE ARTICLES 72 4.1 Implications of an emerging diverse workforce in HRM. 72 A multiple case‐study among Finnish organizations 4.2 Diversity management paradigms and HRM: Implications of 74 cultural diversity for strategic and operational HRM 4.3 Developing culturally diverse organizations: A participative and empowerment‐based method 76 6 ACTA WASAENSIA 4.4 The global integration of diversity management: A longitudinal case study 80 5. CONCLUSIONS 82 REFERENCES 90 ACTA WASAENSIA 7 ARTICLES [1] Sippola, A. & J. Leponiemi (2007). (submitted). Implications of an emerging diverse workforce in HRM. A multiple case‐study among Finnish organizations. European Management Journal. An earlier version has been published in: Työelämän taitekohtia, 157–174. Eds P. Jokivuori, R. Latva‐Karjanmaa & A. Ropo. Ministry of Labour, Labour Policy Studies no. 309. Helsinki: Hakapaino [2] Sippola, A. (2007). Diversity management paradigms and HRM: Implications of cultural diversity for strategic and operational HRM. The Finnish Journal of Business Economics 2/2007 (forthcoming). [3] Sippola, A. (2007). Developing culturally diverse organizations: A participative and empowerment‐based training and development method. Women in Management Review (forthcoming). [4] Sippola, A. & A. Smale (2007). The global integration of diversity management: A longitudinal case study. International Journal of Human Resource Management 18:11. The Special Issue of “Global Diversity Management” (forthcoming). 111 136 172 199 8 ACTA WASAENSIA ABSTRACT Sippola, Aulikki E‐I. (2007). Essays on Human Resource Management Perspectives on Diversity Management. Acta Wasaensia No. 180, 234 p. This doctoral dissertation examines diversity management from Human Resource Management (HRM) perspectives. The purpose of the study is to find out what kinds of impacts increasing workforce diversity has on HRM within organizations. This aim will be achieved through four articles, in which the effects of diversity management on HRM are studied from different perspectives and mainly in longitudinal settings. The objective of the first article, as a pilot study is to find out what the reasons, benefits and challenges of emerging cultural diversity are and what implications it has for HRM in order to gain a pre‐understanding of the issue in the local context. The study reveals that diversity was considered important for competitiveness, but was not typically stated in HRM strategy. Recruitment, training and development were the main areas modified. The aim of the second article is to investigate how different diversity management paradigms identified in organizations impact HRM. It contributes by presenting an empirically tested typology explaining the extent to which the activities of the strategic and operational level HRM are reactive or proactive in light of four different diversity management paradigms. The third article aims to examine how workplace multiculturalism is developed and promoted through a ‘working culture bridge group’‐method. The study investigates how development goals are set, what training and development methods are applied and what the outcomes and their explanatory factors are when a bottom‐up training and development approach is applied. The main objective of article four is to identify what aspects in the design of diversity management are globally integrated in multinationals (MNCs) and what integrating (delivery) mechanisms are used in facilitating it. The other aim is to ascertain the institutional‐based challenges associated with the Finnish national diversity context, which was encountered throughout the integration process. The findings reveal that through extensive use of various integration mechanisms, the case organization was able to achieve more global consistency at the level of diversity philosophy, but was forced to rely on a more multi‐domestic approach to implementing diversity policies and practices. The challenges encountered highlighted the peculiarities of the Finnish cognitive and normative institutional context for diversity. Aulikki E.I. Sippola, Taavilantie 4H, 02180 Espoo, FI‐02180 Espoo, Finland, e‐mail: aulikki.sippola @uwasa.fi or [email protected] Keywords: diversity management, HRM, diversity training and development, global integration ACTA WASAENSIA 1. 9 INTRODUCTION Management of diversity has become popular in recent years (lately in Europe), having it roots in North America. There are also traditionally homogenous or non‐diverse countries, such as Finland, which have not until now faced the challenges accompanying an emerging cultural and ethnic‐based diversity within the workforce. Despite the different contexts workforce diversity is increasingly gaining more attention and characterized by its growing importance due to globalized and international business, mobility of global and national workforces, demographic developments, or to increasing competitiveness (Johnson & Packer 1987; Tayeb 1996; DeNisi & Griffin 2001; Konrad 2003; Kirton & Greene 2005). Consequently, diversity management issues have been approached through legislative, economic, and ethical forces. The changing composition of the working population as to language, race, age, religion or ethnic and cultural background is said to challenge especially human resource management (HRM) to utilize diversity: the knowledge, capabilities and skills potential of the entire workforce to cope with the future changes (Cox 1993; Tayeb 1996; Thomas & Ely 1996; Kandola & Fullerton 1998; Thornhill, Lewis, Millmore & Saunders 2000; Gilbert & Ivancevich 2000; Gagnon & Cornelius 2002; Kirton & Greene 2005). The European way of diversity management is recognized to be emerging yet found to stress the linkage to business (Stuber 2002) and lacking knowledge in diversity management issues (European Commission 2003). Increasing immigration focuses diversity to be often handled as cultural minority challenges, which suggest the main‐streaming of anti‐discrimination activities (Wrench 1999). These reasons have, in turn, formed the basis of the extensive research into diversity which has produced various theories, frameworks, paradigms and guidelines from multidisciplinary perspectives, for instance, from industrial/organizational psychology and behavior (OB), sociology, ethnology, migration, economics, postcolonialism etc. in the form of global, societal, organizational, group and individual level diversity studies. This dissertation concentrates on diversity issues from business economics and more precisely, from HRM perspectives as organizational level phenomena. Organizational demography focusing on the construction of diversity and social psychology, particularly social identity theory with different ‘identities’ of people or intergroup relations are mainly used as conceptual frameworks (Mor Barak 2005). In the working context, the research aim is mainly to identify inequalities or investigate the effects of diversity on work‐related outcomes 10 ACTA WASAENSIA (Janssens & Steyaert 2004; Kossek, Lobel & Brown 2006). The research interest at the individual level focuses on behaviours, attitudes, cognition, intercultural skills or competencies of persons (see e.g. Cox 1993; Triandis 1995; Nkomo & Cox 1996) and at the group level on group dynamics, inter‐group relations, performance and teamwork or construction (see e.g. Jackson & Ruderman 1996; Milliken & Martins 1996; Williams & O’Reilly 1998; Thomas 1999). Organiza‐ tional level studies cover such issues as justifications behind the composition of the workforce as well as workplace equality and diversity issues and how they can be managed effectively (e.g. Thomas 1990; Cox 1993; Herriot & Pemberton 1995; Kossek & Lobel 1996; Tayeb 1996; Thomas & Ely 1996; Wilson 1996; Liff 1997; Kandola & Fullerton 1998; Lorbiecki 2001; Dass & Parker 1999; Denisi & Griffin 2001; Gagnon & Cornelius 2002; Kirton & Greene 2005). Studies can further concern either domestic diversity, excluding national differences, or international diversity, referring to different national cultures (Jackson & Joshi 2001). Diversity is said to be a context dependent, selective, relative, complex, and plural term or concept with different perceptions in different organizations and cultures without any unitary meaning (Moore 1999; Cassell 2001; Omanovic 2002; Caproni 2005). As a consequence, along with various internal and external factors, diversity can be managed, people trained and organizations developed in different ways. This dissertation approaches diversity in an organizational context as a construction of ‘differences’ to be managed. Various management approaches have advanced in sequential phases bringing along different diversity management paradigms. The two traditional approaches and main streams with different theoretical grounds to manage and deal with workforce diversity issues are equality/equal opportunity (EO) legislation and diversity management (DM). These approaches basically relate to whether diversity is managed through enhancing sameness through legislative forces or as valuing the differences of people on voluntary grounds, which indicate the reactivity and proactivity of an organization towards diversity management (Thomas & Ely 1996; Kandola & Fullerton 1998; Dass & Parker 1999; Cassell 2001; Kirton & Greene 2005). Among many alternative classifications and approaches to manage diversity (cf. e.g. Cox 1993; Gagnon & Cornelius 2002; Kirton & Greene 2005), this study applies the diversity management paradigm perspectives of Thomas and Ely (1996) and Dass and Parker (1999), which are resistance, discrimination‐and‐fairness, access‐and‐ legitimacy and learning‐and‐effectiveness paradigms. The focus in these four paradigms changes from first resisting diversity through treating it equally and ACTA WASAENSIA 11 then considering diversity valuable for business towards seeing learning opportunities in it. Accordingly, the integration of diversity management varies. However, the impact of the paradigms on HRM activities has been poorly addressed in previous research. HRM activities at the operational level include recruitment, training and development, performance appraisal and rewarding, which are seen as the means and the logic, through which human resources can be managed guiding the choice of specific HRM policies and practices (Schuler, Jackson & Storey 2001). At the strategic level HRM activities are linked to influencing the business strategy and adding value to the organization (Schuler et al. 2001; Bratton & Gold 2003). HRM is, indeed, considered central having the capacity to promote the management of diversity and its integration with its strategies and activities (Cox 1993; Kossek & Lobel 1996; Kandola & Fullerton 1998; Kirton & Greene 2005). On the other hand, the ability of ʹtraditionalʹ HRM to manage diversity and support workplace equality and diversity instead of effectiveness by maintaining homogeneity and similarity, is questioned (Kossek & Lobel 1996; Tayeb 1996; Cassell 2001; Lundgren & Mlekov 2002; Kirton & Greene 2005). HRM is also perceived as insufficiently designed to respond to external changes (Kossek & Lobel 1996). These kinds of notions and contrary views raise the question whether managing diversity is primarily a HRM issue or not (Agócs & Burr 1996; Cassell 2001; Benschop 2001) since little evidence regarding the integration of diversity practices and policies into HRM or its relevance in HRM literature exists (Benschop 2001; Cassel 2001; Hoobler & Johnson 2004). If it is a HRM intervention, then the correspondence between diversity objectives, diversity management strategies and HRM responses in order to gain the desired benefits, is suggested to be more deeply addressed (Agócs & Burr 1996). The arguments of the importance of HRM in managing diversity also suggest a more proactive policy from HRM (Kirton 2003), implying to its capability to reduce inequalities in order to attract, develop, retain and motivate diverse workforces. The operational HRM activities in managing diversity are addressed in the first article of the present dissertation as a pilot study, which encouraged further investigations on the nature of HRM activities. The reactivity or proactivity of HRM is argued to relate to the need of a conceptual shift from traditional HRM (Ulrich 1997; Wintermantel & Mattimore 1997; Brockbank 1999; Thornhill et al. 2000;) towards the strategic participation of HRM and changing from an isolated reactive administrative function implementing strategy one‐way, to proactively influencing business strategy formulation and effectiveness two‐way (Golden & Ramanujam 1985; Butler 12 ACTA WASAENSIA Ferris & Napier 1991; Noe, Hollenbeck, Gerhart & Wright 1997). Brockbank (1999) has analyzed the development and trends of HRM activities, showing how they have first been operationally reactive, then operationally proactive moving towards being strategically reactive, and then strategically proactive. These stages of HRM evolution also indicate the increase in competitive advantage and strategic value by means of the HR function. The model of reactive and proactive strategic and operational HRM activities (Brockbank 1999) was found suitable in the second article of this dissertation in order to examine HRM’s involvement in diversity management and more precisely, how the significance of HRM can be demonstrated in organizations dominated by a certain diversity management paradigm (Thomas & Ely 1996; Dass & Parker 1999). Even though the reactivity or proactivity of HRM can have relevance across all HRM activities (either strategic or operational) in managing diversity, in particular, training and development is argued to be one of the main means employed (Wentling & Palma‐Rivas 1998; Jayne & Dipboye 2004). However, the way in which organizations promote diversity issues can be said to depend on the objectives of managing and utilizing diversity, directing whether they aim to influence and change individuals or organization or both (Cassell 2001; Wrench 2001; Bendick, Egan & Lofhjelm 2001). Different training and development strategies have been found to have advanced in sequential phases and can be divided into: information provision, impacting attitudes, behaviours or organization (Wrench 2001). They aim to increase knowledge of diversity issues, change attitudes and behaviours or develop organizational measures. The application of training and development in light of the different management paradigms, however, is lacking in existing literature and is investigated in article three of this dissertation. Moreover, it is argued that diversity training and development can often fail and be inefficient, if conducted as isolated events, top‐down planned and delivered (Bendick et al. 2001; Richards 2001). For these reasons, it is suggested, in order to increase the effectiveness of training and development, to approach the management of diversity, its integration or implementation as a comprehensive development and change process towards inclusiveness, which concern both the individual and the whole organization; its practices, structures, power relations and culture (see e.g. Tayeb 1996; Ford & Fisher 1996; Kossek & Lobel 1996; Kandola & Fullerton 1998; Dass & Parker 1999; Moore 1999; Lorbiecki 2001; Bendick et al. 2001; Wrench 2001; Easley 2001; Jackson & Joshi 2001; Litvin 2001; Litvin 2002; Jackson, Joshi & Erhardt 2003; Kirton & ACTA WASAENSIA 13 Greene 2005). In creating an inclusive culture, an enabling working environment or in promoting diversity issues partnership with employees and involvement of different stakeholder groups is suggested (Nemetz & Christensen 1996; Easley 2001; Cornelius, Gooch & Todd 2001; Gagnon & Cornelius 2002; Cornelius & Bassett‐Jones 2002; Simmons 2004), and particularly for the purpose of bringing about cultural change (Ulrich 1997). However, participative and empowering development methods are only scarcely reported in existing research. On these grounds, this study focuses in its third article on the process of training and development by means of the so called ‘working culture bridge group’‐ method along with its explanatory factors in promoting workplace multiculturalism. When the pers...
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