Patterns 5.20 7.00*** Cooperation 5.45 6.95*** ---------------------------------------------------------------- * Significant at
the .01 level ** Significatn at the .10 level *** Not Significant
(a) Questionnaire and continuous (see below) used in this research are modifications taken from Structure and Process
of Organizations: A Systems Approach, Arlyn J. Meloner. Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1976,
Appendix A,. pp. 435-445. 1--------to-----------9 Low High
(1) Adams, Tom, "Wierton Steel Bets on Quality", Quality, 23, No. 4, April 1984, 23-25.
(2) Bretz, R.D. and Dreher, F.F., "Individual Group of Organizationally Oriented Personal Systems: Implications for
Staffing the High-Technology Firm", Proceedings, Managing the High-Tech Firm, 1988, pp.2-8.
(3) Burke, R.D. and Wilcox, D.S., "Characteristics of Effective Performance Review", Personnel Psychology, 22
(1969), 291- 305.
(4) Cascio, W.F., "Strategic Human Resource Management in High Technology Industry, " Proceedings, Managing the
High- Technology Firm, 1988, pp. 9-18.
(5) Cash, Bill, "Quality Circles: Should We or Shouldn't We?" Quality, 23, No. 12 (December), 48-49.
(6) Chesser, R.J., "The Development of Change Models of MBO Reflecting Moderator Effects of Personality
Characteristics", Proceedings 33rd Academy of Management, 1973, pp. 389-394.
(7) Dailey, John J., Jr., Kagerer, Rudolph L., "A Primer on Quality Circles", Supervisory Management, 27, No. 6 (June
(8) Dale, B.G., and Hayward, S.G., "Some of the Reasons for Quality Circle Failure: Part 1", Leadership and
Organization Development Journal (UK), 5, No. 1 (1984), pp. 11-16.
(9) DuLuca, Mike, "Employee Involvement in Management", Management quarterly, 15, No. 4 (Winter 1983), pp. 5-8.
(10) Drucker, P.F., "What Results Should You Expect? A User's Guide to MBO", Public Administration Review, No. 1
(January/February 1976), 12-13.
(11) Francis, G. James, "MBO and the Small Organization", American Journal of Small Business, 1 (July 1976), pp. 1-
(12) Gibson, W. David, "Employee Involvement Teams Ring Olin's Bell", Chemical Week, 136, No. 26 (June 26,
(13) Golembiewski, R. T. and Carrigan, S.B., The Persistence of Laboratory-Induced Changes in Organizational
Styles", Administrative Science Quarterly, 15 (1970), pp. 330-340.
(14) Hand, H.M., Richards, M.D., and Slocum, J.W., Fr., "Organizational Climate and the Effectiveness of a Human
Relations Training Program" Academy of Management Journal, 16 (1973), 185-195.
(15) Hanley, Joseph, "Our Experience With Quality Progress", 13 (February 1980), pp. 22-24.
(16) Haskew, Michael, "Management and Quality Circles: Communicating and Cooperating", Quality Circles Journal,
8, No. 2 (June 1985), pp. 16-19.
(17) Ishikawa, Kaoru, "The Cause and Effect Diagram", Quality Circles: Application, Tools, and Theory (Milwaukee:
American Society for Quality Control, 1976).
(18) Klein, Janice A., "Why Supervisors Resist Employee Involvement" Harvard Business Review, 62, No. 5
(September/October 1984), pp. 87-95.
(19) Likert, R., New Patterns of Management (New York: McGraw- Hill, 1961).
(20) Likert, R., The Human Organization (New York: McGraw-Hill, 1967).
(21) Litwin, G.H. and Stringer, R.H., Motivation and Organizational Climate (Boston: Graduate School of Business
Administration, Harvard University, 1968).
(22) Marchington, Mick, "Opinion: Industrial Relations- Involvement and Intervention", Management Decision (UK),
21 No. 1 (1983), pp. 22-30.
(23) Melcher, A.J., Structure and Process of Organizations: A Systems Approach (Englewood Cliffs, New Jersey:
Prentice- Hall, 1976).
(24) Meyer, H.H., Kay, E., and French, J., "Split Roles in Performance Appraised", Harvard Business Review, 43, No.
1 (1965), pp. 123-129.
(25) Nave, James L., "Z: From Theory to Practice", Management World, 12, No. 4 (May 1983) pp, 10-12.
(26) O'Dell, Carla, "Changes in Pay and Benefits Spur Productivity", Canadian Business Review, No. 1 (Spring 1984),
(27) Quible, Zane K., "Quality Circles: A Well-Rounded Approach to Employee Involvement", Management World,
10. No. 9 (September 1981), pp. 10-11.
(28) Schneider, B., and Bartlett, C. J., "Individual Differences and Organizational Climate", Personnel Psychology, 21
(1968), pp. 323-333.
(29) Werther, William B., Jr., "Out of the Productivity Box", Business Horizons, 25, No. 5 (September/October 1982),
(30) Werther, William B., Jr., "Productivity Improvement Through People" Arizona Business, 28, No. 2 (February
1981), pp. 14- 19.
(31) Werther, William B., Jr., "Quality Circles: Key Executive Issues", Journal of Contemporary Business, 11, No. 2
(1982), pp. 17-26.
MANAGING DIVERSITY IN THE SMALL BUSINESS WORKPLACE
Thomas D. Clark, Xavier University
"Managing Diversity in the Small Business Workplace" discusses how America's demographic revolution will effect
the management of small businesses in the near future. It describes the changing composition of the American
workplace, highlights the implications of these changes, and describes a rationale and a set of implementation
guidelines for a small business diversity program.
Twenty years ago Neil Armstrong took "one small step for man, one giant step for mankind." Few could foretell the
incredible impact that space research would have on current technology. From microwave ovens to cordless car phones,
lives have dramatically changed as a consequence of the effort to put an American on the moon.
Even more revolutionary has been the impact of social trends which became visible in the 1960's:
* Betty Friedan's Feminine Mystique was a manifesto for the equality of women in education and the workforce;
* Martin Luther King's "I Have a Dream" speech was a clarion call for equality for Blacks.
* Caesar Chavez's leadership of a successful boycott of grapes brought national attention to the plight of Chicano
* The "Special Olympics" highlighted the capabilities of the handicapped.
* Asian boat people began migrating to the United States looking for freedom from war and the opportunity to learn
and to succeed.
As the Hudson Institute's Workforce 2000 and other future oriented publications have demonstrated, these trends are
now having -- and will continue having -- significant impacts on how American small businesses recruit, train, retain,
and promote their workers. (1)
This paper 1) highlights key facts regarding the demographic revolution; 2) assesses the implications for small business
management; 3) demonstrates why small businesses should develop diversity programs; and 4) outlines steps for
implementing a diversity program.
The Demographic Revolution
1. The 1990's will confront American small business with significant labor shortages especially for young workers.
The workforce will be growing at its slowest rate since the 1930's. John Naisbett, author of Megatrends, points out that
there will be 4 million fewer entry level applicants in the 1990's than there were in the 1980's -- simply because there
will be more people leaving the workforce than will be entering it.
Young people will be especially scarce, with two million fewer people aged 1624, or an 8% drop, in this segment
during the 1990's.
In fact, the Tower-Perrin survey indicates small businesses are already having difficulty filling current positions. (2)
2. Small service businesses will create virtually all of the new jobs, most of which will require higher levels of skill and
eduction than ever before.
Continuing the trend of the 1970's and 1980's, virtually all new jobs will be created by small business, primarily in the
service sector. Over half the new jobs will be in service occupations, administrative support, and marketing and sales.
Most of these jobs require above average scores in reading, math, and language. In fact, of all new jobs that will be
created over the 1984-2000 period, more than half will require some education beyond high school and almost a third
will be filled by college graduates.
Whereas today, only 22 percent of all occupations require a college degree, 30% of new jobs will require a college
degree. This figure underestimates the trend, given that many jobs currently held by high school graduates, such as
technical salespeople and managerial accountants, will be filled in the future by college graduates.
In fact, "jobs that are currently in the middle of the skill distribution will be the least-skilled occupations of the future,
and there will be very few net new jobs for the unskilled." (3)
This is disturbing given the results of a study the US Dept. of Education conducted which showed that among 21-25
years old, large numbers of workers lack basic skills:
* 40% of Whites, 60% of Hispanics, and 75% of Blacks could not locate information in a newspaper or almanac.
* only 25% of White, 7% of Hispanics, and 3% of Blacks could decipher a bus schedule.
* only 44% of Whites, 20% of Hispanics, and 8% of Blacks could correctly determine the change they were due for the
purchase of a 2-item restaurant meal. (4)
The fastest growth categories: lawyers, natural scientists, and health professionals require the highest level of ability in
reading, math, and language.
3. Not only will the labor market be tighter, it will also be more diverse.
It will be more female, more nonwhite, and more mature.
a. White males will make up only 15% of all new labor entrants in the next 10 years.
b. The biggest impact will be "the feminization of the workforce." Sixty two percent of new entrants will be women,
including 42% white native American women, 13% black native American women, and 9% women who have
immigrated to the US.
Over half of the women joining the workforce will have children at home. In fact, the majority of children under six
will have mothers in the workforce.
Most working mothers want part-time employment, flexible hours, or stay-at-home jobs. As the Hudson Report
concludes, "If employers fail to provide sufficient jobs with flexible working arrangements, more mothers may choose
to leave the labor force during their child rearing years, further reducing the numbers of new workers entering the
c. Native nonwhite Americans will make up 20% of all new workers.
d. Immigrants will constitute 22% of all new workers. In fact, two thirds of the world's global migration will be to the
United States. By 2000, people of Hispanic origin will make up 20% of the total US population. And cities such as San
Francisco will have Asians as a majority of their citizens early in the next century. (6)
e. In addition, the American workforce will be "middle aging" in the years ahead, with the average age climbing from
36 to 39 by 2000. (7)
4. Ethnic minorities are exercising increasing market power.
Blacks and Hispanics make up a $425 billion annual consumer market, one that will grow to $650 billion by 2000, a
market larger by far than our combined total exports to Japan and Canada, our two largest international consumers. (8)
Implications For Small Business
These demographic trends have important implications for small business today. Managers will need to change the way
they recruit talent. And they have to create multicultural work environments that will allow their business to value and
profit from the
diversity of the new labor force mix of the coming decades. In short, small business organizations that are to be
successful in the twenty-first century are going to have to begin implementing changes now.
1. organizations will have a much more difficult time than in the past in recruiting talent.
Not only will there be fewer applicants from which to choose, but because of labor shortages, they will have to work
harder to retain the employees they do successfully recruit.
Compounding the problem will be the behavior of large businesses, which will be dipping more deeply into the labor
pool. This means small businesses will need to raise incentives to attract and retain workers, increase the productivity
of existing staff, equipment, and methods, or recruit more from a pool of nontraditional applicants.
They will be recruiting not only women and a variety of ethnic minorities, but also others who differ from the
mainstream in age, appearance, physical ability, experience, and lifestyle. (9)
2. To attract excellent talent, small businesses will have to implement successful diversity programs.
As Burnell Robers, CEO Mead Corporation, has pointed out, one of the biggest challenges facing organizations in the
1990's will be fostering "the fundamental values of the corporation without stifling the creative and productive talents"
of diverse employees. (10)
Rationale for a Diversity Program
Small business leaders should view promoting diversity as more than a business necessity -- they should view it as a
solid business decision -- with a positive rationale behind it. As Rosabeth Kantor shows in The Change Masters,
companies with progressive human resource policies have higher longterm profitability and financial growth than their
non-aggressive counterparts. (11)
Done well, a diversity program can result in improved profitability because of four factors: 1) better decision-making;
2) improved ability to deal with customers; 3) better management of all workers; and 4) better ability to recruit the best
of all talent available.
1. A diversity program leads to more creative and effective decision-making.
For example, Nancy Woodhull, President of Gannett News Media concludes that USA Today has been successful
because readers find its format and news stories interesting because they reflect the insights and active involvement of a
diverse group of employees,
including women and minorities, both young and old. (12)
2. A diversity Program improves an organization's ability to meet the needs of customers.
Business success in large part is a reflection of a superior understanding of consumers and their needs. To sustain this
superior understanding of consumers, small businesses must develop a workforce that reflects the demographics of its
customers. And who better knows the needs of women, Blacks, Hispanics, Asians, the handicapped, the dual career
family, and the single parent family than women, Blacks, Hispanics, Asians, the handicapped, dual career couples, and
Promoting diversity can also help on the international front, an area of major opportunity for American small business.
Markets both at home and abroad are becoming more competitive and demanding. Therefore, it is critical that
organizations develop workforces that are effective in dealing with a diversity of cultures, not only within their own
organizations, but also in terms of the workforce s of their national and international suppliers, distributors, and
Speaking to this point, Felice Schwartz observed in a recent issue of the Harvard Business Review that black women
often enjoy significant success in the international arena, an arena which is becoming more and more important to
American small businesses. (13)
3. A diversity program will help develop better management of all company talent.
Participants from all levels of organizations have commented that diversity training has broadened their horizons and
expanded their enjoyment of different people. Not only do they find that they appreciate others more, they also find
their coworkers appreciate them more now that they better understand each other.
Diversity training also prepares managers for the reality that in the future they will increasingly be teachers and
nurturers of highly specialized professionals, knowledgeable workers who often will have more detailed knowledge of
job-relevant subjects than they do.
Thus, it is important to have a program to develop and reward managers who can effectively manage people in what
Peter Drucker calls "turbulent times." As he points out, increasingly supervisors must act as assistants, resources, and
teachers. And the new elements in the labor force -whether they are physically handicapped, working part-time, single
parents, or minorities with various ethnic backgrounds -- require different leadership than supervisors have traditionally
been trained to give. (14)
4. A diversity program also improves the ability to recruit, develop and retain the best of all available talent.
Workers will be attracted to companies in which they know they can succeed on merit and in which their ideas will be
listened to and respected, regardless of race, gender, handicap, or ethnic origin.
Implementing a Diversity Program
So far, this essay has discussed why, given that the workforce of the future will be highly diverse, small businesses
begin now to develop work environments which encourage diversity.
Now it turns to the question of implementation -- the steps small business organizations can take to implement
successful diversity programs.
1. The first step is to gain commitment from leadership to make the development of a multicultural environment a top
The Tower-Perrin survey shows that top management support is crucial for success. "Among organizations where
concern about labor shortages is reflected in strategic plans, 42% recruit nontraditional workers, such as the
handicapped or elderly and 51% apply a marketing approach to hiring.
By contrast, among those that have not yet translated concerns into specific plans, just 16% recruit from nontraditional
sources and only 35% market to prospective candidates." (15)
Unfortunately, the survey also revealed large businesses were far more likely to fall into the former group and small
businesses in the latter group.
An initial step for top management in developing a diversity program is to inform its employees of its strong
commitment to diversity. For example, top management at Procter & Gamble issued the following Multicultural Vision
statement: Procter & Gamble is a multicultural organization whose members are committed to the business value of a
diverse workforce. We achieve a full contribution from all segments of our workforce advantaging or disadvantaging
no one as a result of cultural background. We fully develop and challenge each individual's talents. Our diversity has
increased our ability to market products that give us a competitive advantage. We are a model for the entire business
community and proud of it.
2. The second step is to align the organization with these goals. The key to success here is demonstrating that diversity
is not simply an equal opportunity commitment, but rather a business decision which effectively prepares the
organization for the future. Diversity training -- with visible top management support -- often is effective in gaining
support for diversity programs among middle management as well as administrative and technical workers.
3. The third step is to build a diverse organization through effective recruiting, an area where many small businesses
need to improve.
Small business, in general, is far behind their larger counterparts in this area. Companies that recruit less than 75 entry
level workers annually are only half as likely as companies that hire 300 or more entry level workers annually to have
articulated diversity programs. (16)
Small business managers should investigate making more intensive use of placement office interviews, internships,
presentations on college and high school campuses, and community involvement. Successful recruiting also requires a
commitment to meeting numerical targets. To be successful, small business organizations must set goals. Experience
indicates that if an organization does not have a female minority goal, it will find it does not have female minorities on
Recruiting, however, is only an initial step.
4. The fourth step is to provide growth and development oppor- tunities for all.
The key to the success of a diversity program lies not simply in meeting statistical targets, but also in creating an
environment in which people focus on sharing ideas freely on how to take advantage of business opportunities without
interference from nonrelevant factors, such as race, gender, religion, or physical handicap.
Thus, first class training and development opportunities must be made available to each individual. Yet a great majority
of small businesses are lacking in this area. The Tower-Perrin survey indicated that over two-thirds of companies, and
more in the small business sector, spend less than $2000 per year on any kind of training. Yet in light of the facts about
the growing skills gap between what abilities new jobs will require and the inadequate preparation in language and
mathematical skills of many young adults, investing in training has become a necessity, not an option. (17)
Small business organizations must also recognize and reward "diversity champions," managers who advocate diversity
and mentor employees on how to benefit from diversity. In addition, it means that organizations must create a corporate
environment that promises involvement, commitment, recognition, and system changes which guarantee the continual
improvement of the work environment.
It also means tracking results and holding managers accountable for their behavior. Small business managers must
document -- as part of their annual performance review -what they have done to help create a successful multicultural
environment in their areas of responsibility. (18)
And small business organizations should not expect their new employees to do all the adjusting. They should work to
achieve mutual adjustments, where employees work together to benefit from their differences, rather than argue about
These adjustments include taking into account the family circumstances of employees. Small business should consider
a variety of techniques to adjust to changing lifestyles, including cooperation with a high quality day care center,
flextime, job sharing, "mommie tracks," sick leave care for children, pregnancy leaves, cafeteria style benefits, and part
Part of the adjustment includes making sure promotions and salary increases are based on contribution, with no one
disqualified because of gender, race, ethnic origin, religious creed, or physical handicap.
Ultimately, in the twenty-first century, leadership positions in small business should mirror the race, gender, and
lifestyle make-up of the entire workforce.
This is not to say that implementing an effective diversity program is easy. It is not. Budget limitations, inflexible
management styles, racial and gender biases all must be identified and over- come.
In addition, managers must be trained to appreciate the attitudinal and lifestyle differences of their employees. This is
significant because it means that a uniform set of responses to employee behavior, recommended in such books as The
One Minute Manager, which has proved to be highly popular among small business managers, may backfire. (19)
For example, some Native American and Pacific Rim employees have been penalized for appearing to lack leadership
because they believe it is immodest to champion their own causes.
Some Asian and female employees do not want to be touched, which they perceive as being overly personal and
familiar, not the honest camaraderie the manager intended.
Some women and men are uninterested in talking sports, while others feel uncomfortable in highly formal settings,
such as country clubs, particularly those clubs that in the past have had histories of discrimination.
In short, because of these cultural differences, small business managers will have to adjust their management styles to
understand and respect the feelings of each individual in their workforce.
Last, small businesses will have to invest additional effort into some employees, especially those who have excellent
potential, but need extra development because of social, cultural, and educational deficiencies. In particular, small
business leaders must take the
initiative to form partnerships to improve America's much-maligned public education system.
While there are few hard and fast rules for successfully taking ad- vantage of the opportunities a diverse business
environment provides, the following key principles are good guides to management behavior:
* Develop an environment in which no group has an advantage or disadvantage because of gender, race, ethnic origin,
religion, handicap, or lifestyle.
* Gather data on progress toward diversity -- this includes having multilevel cultural task forces, meetings with
minority employees, and comprehensive surveys of company attitudes.
* Conduct training in diversity for all employees.
* Follow up training with accountability.
* Make sure all employees share the burden of adjustment, not only minorities, the handicapped, and women.
* Promote qualified people from all groups to highly visible positions. This will help reinforce the idea that promotion
is based on contribution, and not on being a member of a preferred group.
* Work to continually improve the working environment for all employees. (20)
James E. Preston, president of Avon, has observed that the United States is not a melting pot, it is a mosaic, "composed
of many cultures, many races, many colors, many religions." He believes we all have to recognize that "America's
greatness is a result of the fact that we are this beautiful mosaic, the only one in the world." (21)
Small business managers should now move forward in creating effective multicultural environments that benefit from
the everchanging American mosaic.
Documents you may be interested
Documents you may be interested