This is a diversity management strategy report for Aramex as a multinational corporation (MNC). It is expected that the strategy will enhance Aramex’s competitiveness in the global economy. The report clearly explains the principles of diversity management for the Aramex, identifies the challenges faced by the company in introducing a successful diversity management scheme and makes recommendations for ensuring that the introduction of the scheme improves Aramex’s competitiveness in the global economy.
According to Taylor Cox, diversity management is “planning and implementing organisational systems and practices to manage people so that the potential advantages of diversity are maximised while its potential disadvantages are minimised” (Cox 1993).
Principles of diversity management in MNCs
The principles of diversity management are strategic business objectives for MNCs such as IBM, Apple, Inc., General Electric and Google among others that wish to compete globally, enhance organisational capacity and competitiveness at workplace and strive to create an environment in which all employees’ contributions are recognised and appreciated. In addition, the employee populations should reflect and comprehend markets in which the company serves. It must unite diverse cultures, sexual orientations, gender, languages, geographies and employees into a single integrated global community.
Diversity management is flexible
While the concept of diversity management is well established in organisations such as IBM, Apple, Inc., GE and Google and management discourses, Aramex will recognise that it is understood completely in different ways in various countries globally. In addition, it lacks a single, direct and unambiguous definition.
Various factors have shaped the concept of diversity management in different countries. These include legislative requirements, specifically affirmative action, changes in demographic and workforce characteristics in the labour markets, the prevailing economic situations and the main management principles at the time.
Aramex will recognise individual personal characteristics. This will include race, age, sexual orientation, gender, race, nationality, religion and family among others. From a broader perspective, diversity management will reflect both similarities and differences among the workforce in Aramex. Further, diversity management shall accommodate disabilities among employees. Therefore, the nature of principles adopted for diversity management will rely on dimensions that Aramex would identify across various countries. For instance, IBM diversity management accounts for women leadership, gay, lesbians, bisexual and transgender (GLBT), job flexibility, cultural difference and people with disabilities.
A wider scope of interpretations
Aramex shall appreciate that diversity management has a wider scope of interpretations. The initial concept of diversity management outcomes focused on developing competitive advantages for companies and thus enhancing their overall performances. However, today, diversity management has a broader interpretation. It is a part of corporate social responsibility initiatives in Danish firms.
Aramex shall note these various dimensions and interpretations of diversity management.
Diversity management is an evolving phenomenon and incorporates several models
Earlier periods were characterised by reactive strategies while later stages have seen more proactive approaches.
The earlier approaches to diversity management focused on strategic management framework (Kramar 2012). In this case, the framework provided processes through which organisations could handle both internal and external environments. Organisations aimed to achieve their goals and create competitive advantage in their respective industries.
In this context, MNCs such as Google, IBM and GE have relied on their diverse workforce to achieve competitive advantages by changing their structures and processes. This strategy of diversity management takes into account the resource-based view in managing human resources. The resource-based view encourages the development of employees and cultures in an organisation for creating competitive advantage (Boxall & Purcell 2003). Hence, Aramex will use diverse workforce to create competitive advantage.
Later approaches to diversity management incorporated change management processes into diversity management strategies (Kramar 2012). In these models, organisations adopted learning approaches to ensure that they incorporated and leveraged several perspectives into “decision-making processes and creation of organisational cultures” (Kramar 2012, p. 245).
These models emphasised that the creation of policies and practices were required to manage diversity and ensure changes to a culture of diversity. These models argued for the use of various perspectives such as the development of interpersonal relation skills and facilitation of change among employees (Kramar 2012). As a result, organisational leadership, education and change of organisational human resource practices were necessary to facilitate adoption of diversity management. Organisational change is required in diversity management.
Google promotes fairness at workplaces, inclusion, benefits for all employees and connecting various communities. Aramex will review its current vision, human resource practices, strategic goals and then formulate new strategies, train and educate employees, review job descriptions, career development, reward systems and performance management. This process aims to inculcate change in Aramex. Organisational change, therefore, will facilitate culture change and build a new culture that promotes diversity in an organisation.
A more recent approach to diversity management is rather comprehensive (Thomsen & Lauring 2008). This strategy shows an eco-systems model in which an organisation is regarded as a part of “an environment, it influences and influenced by the environment in which it operates” (Kramar 2012, p. 245) with regard to impacts on various internal and external stakeholders. Based on this model, diversity management integrates responsibility to communities and engages in various community activities through supporting educational programmes, skill developed among marginalised groups, understanding the global aspects of the business and impacts of an organisation on various groups.
In addition, the model recognises that “diversity management also influences social processes as well as economic impacts” (Kramar 2012, p. 245). A focus on social outcomes, however, does not preclude an organisation from pursuing profitability and enhancing effectiveness in diversity management. In other words, an organisation can use social responsibility strategies as a form of diversity management, but account for various internal and external stakeholders in these processes (Thomsen & Lauring 2008). Google diversity approaches focuses on the broader community to ensure net accessibility to everyone and promotes networking, mentorship and community service opportunities, specifically in the Asian region.
This most recent view on diversity management recognises various factors that influence the concept at different levels. It acknowledges that concepts and applications of diversity management are not uniform. This implies that there are “social, economic, cultural and historical factors” (Kramar 2012, p. 251) that influence diversity management strategies. Organisational actions and outcomes reflect various structures such as “institutions, cultures, belief systems, laws and education levels attained” (Kramar 2012, p. 251). In addition, personal preferences, social orientations and other individual factors could also influence diversity management practices. Therefore, any diversity management model that recognises these factors requires more dynamic, flexible and multifaceted practices.
Diversity management practices
The diversity management practices spread from the US to other countries. Different countries have adopted a variety of practices to meet diversity management. In the US, companies have considered diversity management as a strategic business issue, but some countries do not consider diversity in that manner (Kramar 2012). In Europe, diversity management has been associated with anti-discrimination, equality at workplaces and equal employment opportunities. In Danish firms, diversity management was adopted as corporate social responsibility strategy or as a way of promoting equality at workplaces (Kamp & Hagedorn-Rasmussen 2004). However, the latest practices in Danish firms have added financial performance and career development of employees as components of diversity management.
In the Asian region, different religious practices such as Islam, Buddhism, Christianity, Judaism and Hinduism have influenced diversity management (Kramar 2012). In most cases, religious practices influence the nature of organisational management and thus organisational values tend to reflect similar values held in societies (Harzing & Sorge 2003). Therefore, Aramex must development specific diversity management programmes for different European countries and Asian regions.
Based on these observations, diversity management practices are thus influenced by various cultural and religious ideologies. This also influences the role of men and women in organisations, human resource policy formulation and implementation and organisational workforce composition.
There is a widespread occupational isolation and poor representation of women in many emerging economies. Consequently, both local firms and MNCs have failed to utilise capabilities of women in economic activities. Many Muslim countries also differ with regard to interpretation of Shariah laws. For instance, countries with narrow interpretations of religion and promote patriarchal traditions have restricted participation of women in the labour market and society in general. Still, African cultural norms and belief systems have also stifled women’s participation in both education and employment opportunities. Therefore, diversity management in such countries has nothing at all or little to do with equal work opportunities for men and women.
This short overview of practices of diversity management in various countries shows that diversity management has always meant different concepts and interpreted in different ways across various countries and in different periods (Kramar 2012, p. 253). It is imperative to note that the relevance and importance of diversity management differ across countries based on religious perspectives, legal requirements and social practices, which are highly influential in some countries than others. Likewise, “cultural, economic, historical and other relevant factors” (Kramar 2012, p. 255) also influence organisational management practices. However, there are ongoing economic and demographic shifts, which have forced organisations to review their approaches to diversity management.
The challenges faced by the company in introducing a successful diversity management scheme
MNCs such as Google, IBM and GE consider diversity management as a critical issue in human resource management. However, Nishii and Ozbilgin have pointed out that MNCs have always approached diversity management from “the ethnocentric assumption that domestic definitions and targets are appropriate abroad” (Nishii & Ozbilgin 2007, p. 1883). That is, MNCs tend to transfer diversity management practices from the parent head offices to regional subsidiaries. These subsidiaries do not participate in formulation of diversity management practices (Nishii & Ozbilgin 2007; Sub & Kleiner 2008).
This implies that Aramex may fail to be sensitive to various forms of issues that could influence diversity management at subsidiaries. The approach to diversity management tends to show organisational structure. If the management structure does not allow Aramex to account for local situations and opportunities, then the approach of exporting diversity management practices to subsidiaries is most likely to fail. When Aramex does not incorporate local practices into its diversity management approaches for subsidiaries, it will even face significant challenges relative to those experienced in the parent country.
Implementation of diversity management practices requires training. In most cases, however, training might be ineffective and insufficient, which could hamper the implementation process. Employees may poorly comprehend the concept of diversity management, and change may only influence a single group and reinforce stereotype in an organisation.
There is also another challenge associated with the use of parent company’s model in other countries with different cultures. For instance, Aramex may apply its diversity management strategies at local subsidiaries without considering cultural aspects. This could lead to suspicion and employees may resist any diversity model based on the parent company model (Sippola & Smale 2007). Hence, Aramex must understand how local cultures and conditions would affect diversity management implementation.
Local conditions, for instance, may create multifaceted situations if Aramex attempts to develop a diversity management program that reflects its overall goal. It would be difficult for Aramex to conform to local practices. Conversely, local subsidiaries may also find it difficult to fit within the narrow application of diversity management practices. At the same time, local regulations and laws, institutional influences and other relevant bodies could hamper diversity management of Aramex at the local levels.
Recommendations for ensuring that the introduction of the scheme improves the company’s competitiveness in the global economy
Aramex should understand diversity management from national perspectives for every country in which it conducts business. This approach will consider laws, regulations, labour policies, demographic trends and workforce characteristics. In addition, prevailing economic situations, management practices, human resource management practices and cultural values with regard to race, gender and social factors should be considered in diversity management at the national level.
For instance, some countries such as the US, Australia, Canada and others have adopted laws that prohibit discrimination of individuals based on gender, race, age, nationality, sexual identity and other individual factors. Such laws encourage companies to offer equal opportunities to all workers and rewards at workplaces. In Australia, for example, diversity management practices have covered other elements such as flexible work schedules, compassionate leave and unpaid personal or career development leave (Kramar 2012). This could facilitate autonomy of practices rather than centralisation (Fenton-O’Creevy, Gooderham & Nordhaug 2008).
Aramex must recognise its role in promoting trade, investment and creating employment opportunities in the global market. At the same time, it must recognise strategic functions with regard to global competitiveness. In other words, Aramex should develop human resource policies that reflect local practices instead of adopting a broader international framework. Practices from its head office may fail local subsidiaries. Practices at the head offices tend to be sophisticated for local operations. Therefore, customisation of human resources practices to meet a local context is mandatory for Aramex.
Aramex should recognise that new ways of managing people evolve continuously. Hence, there is a need for strategic human resource management (SHRM) to ensure that organisations link their human resource practices with strategic business objectives. Therefore, Aramex must focus on adopting a more proactive method of managing diverse workforce globally.
At individual employee levels, Aramex should promote individual interactions because employees have their social identities, which could influence interactions, roles, job performances and socio-cultural issues in an organisation. It must also recognise that individual identity is dynamic, develops and could be contradictory.
Organisations that tend to be highly effective have always focused on diversity management from a gender perspective. Gender issues have influenced business strategies and objective formulation processes. Therefore, Aramex should implement diversity management as a business case in a consistent manner so that it forms a culture of the organisation.
Aramex must balance diversity issues with business case, equity and legal compliance globally. While MNCs tend to promote diversity management as a business case, there are legal requirements, which require firms to consider gender balance in their workforce composition in certain countries.
Aramex should adopt various diversity management models in different countries. Nevertheless, these models must seek to promote inclusive workforce, fairness and productivity by recognising individual differences and creating competitive advantage for the company (Kramar 2012). The company should ensure that all subsidiaries have formulated and implemented workplace diversity programmes that enhance equity, free from discrimination and show various cultural aspects. These programmes should drive business values and organisational cultural change processes. Effective diversity management should help Aramex to tackle skill shortages in any subsidiaries because it can draw skilled employees from any subsidiaries and post them in other regions.
As noted earlier, MNCs consider diversity management as a critical issue for several reasons. Aramex should ensure that its diversity management strategy is a part of organisational cultural change and must be demonstrated in the way it handles various issues such as policy formulation and relationships with internal and external stakeholders. As a result, diversity management will lead to innovation, enhance provision of services to stakeholders, competitive practices and promotion of best practices in the global human resource practices.
These aspects are core business cases for Aramex to promote diversity in its wider context. In addition, Aramex will build and promote capabilities of its global workforce through diversity management. It must consider diversity management as a greater part of human capital management. In this regard, it should develop effective human resource policies for global workforce planning, employee training and development, leadership development, employee attraction, recruitment and retention strategies, as well as talent acquisition and management strengthened by career development.
Aramex should keep data on its diversity management practices from all subsidiaries. Specifically, it must focus on both business and social outcomes because of diversity management. It must account for all outcomes and consider them as fundamental factors that influence competitive advantage.
Diversity management practices reflect organisational commitment to social responsibilities to communities, particularly with employment opportunities and fair labour practices. While organisations focus on employee management and community issues, it is not clear whether diversity management has been emphasised among these issues. Hence, Aramex must draw clear approaches to employee management, community issues and diversity management practices. The organisation may incorporate diversity management into corporate social responsibility to achieve business goals, but it must account for all internal and external stakeholders in such practices.
There is no single approach to diversity management, and it differs from one organisation to another and from one country to another. Diversity management is an evolving practice that aims to promote effective employee management by maximising potential benefits found in diverse workforce. The current principles and practices in diversity management have taken a broad view to rise beyond affirmative action and legislative requirements. Business case has been a major driving factor for diversity management among MNCs.
Implementing diversity management schemes could face challenges because of differences in practices between the parent country and local subsidiaries. Hence, Aramex must account for local contexts rather than export its diversity management practices and impose them on subsidiaries.
It is therefore recommended that Aramex should review national aspects and individual characteristics before developing diversity management schemes for local subsidiaries.
Boxall P & Purcell, J 2003, Strategy and human resource management, Palgrave Macmillan, Basingstoke, UK.
Cox, T 1993, Cultural diversity in organisations: theory, research and practice, Berrett-Koehler, San Francisco, CA.
Fenton-O’Creevy, M, Gooderham, P & Nordhaug, O 2008, ‘Human resource management in US subsidiaries in Europe and Australia: Centralisation or autonomy’, Journal of International Business Studies, vol. 39, no. 1, pp. 151–166.
Harzing, W & Sorge, M 2003, ‘The relative impact of country-of-origin and universal contingencies on internationalization strategies and corporate control in multinational enterprises: World-wide and European perspectives’, Organisation Studies, vol. 24, no. 2, pp. 187–214.
Kamp, A & Hagedorn-Rasmussen, P 2004, ‘Diversity management in a Danish context: Towards a multicultural or segregated working life?’, Economic and Industrial Democracy, vol. 25, no. 4, pp. 525–554.
Kramar, R 2012, ‘Diversity management in Australia: a mosaic of concepts, practice and rhetoric’, Asia Pacific Journal of Human Resources, vol. 50, no. 2, pp. 245–261. Web.
Nishii, H & Ozbilgin, M 2007, ‘Global diversity management: Towards a conceptual framework’, International Journal of Human Resource Management, vol. 18, no. 1, pp. 1883–1894.
Sippola, A & Smale, A 2007, ‘The global integration of diversity management: A longitudinal case study’, International Journal of Human Resource Management, vol. 18, no. 1, pp. 1895–1916.
Sub, S & Kleiner, M 2008, ‘Dissemination of diversity management in Germany: A new institutiional approach’, European Management Journal, vol. 26, no. 1, pp. 35–47.
Thomsen, C & Lauring, J 2008, ‘Practicing the business of corporate social responsibility: A processual perspective’, International Journal of Business Governance and Ethics, vol. 4, no. 2, pp. 117–131.