The Symbolic Value of Diversity

DOES DIVERSITY MANAGEMENT IMPROVE BUSINESS PERFORMANCE? RESULTS ARE NOT UNAMBIGUOUS, BUT UNDER THE RIGHT LEADERSHIP AND IN THE RIGHT ORGANIZATIONAL ENVIRONMENT THE CULTURE OF A COMPANY CAN CHANGE A LOT FOR THE BETTER

by Simona Cuomo, SDA Bocconi School of Management
Translated by Alex Foti

Do companies that implement diversity management policies and practices perform better than those who don’t? Is it worth investing mental energy and economic resources to change the established culture and trigger a process of change in the mindset of the organization, as well as its stakeholders?

Managers and administrators normally seek an irrefutable proof that would justify the organizational effort needed to change a company’s culture, and adopt a socio-demographic profile more in line with that of the population at large. Perhaps we should take a step back, and try to answer the above questions.

Companies don’t have to know everything to act

First of all, one wonders why for other management policies adopted in recent times (from SAP to engagement support), companies have acted without having certainties about their positive effects.

Secondly, it’s important to analyze the findings of scientific research concerning the utility for performance of diversity management. The fifty empirical studies surveyed by the Diversity Management Lab of the SDA Bocconi School of Management (covering data since 2000) highlight the fact that it’s impossible to identify an unambiguous correlation between the dimensions of diversity sampled (age, gender, ethnicity) and various measures of business performance. Also, the effect takes a different value according to the context of reference: it varies in relation to industry and type of employment, business strategy and stage in the lifecycle of the organization, stability of competitive environment and whether the company is developing or downsizing.

It also depends on whether or not diversity management is part of a wider company strategy and imbues the organization’s culture. In this regard, results change depending on whether diversity programs are a spot measure or part of a more global approach the diversity management. Diversity management works if employees have a high degree of identification with the company; if the commitment to diversity is shared by top management; if the objectives of diversity programs are well stated and measured; if public statements of the company proclaim diversity as an opportunity for employees.

Summing up: does diversity management improve business performance? It all depends.