Diversity Management Risks in Global Organizations

Barack Obama in his autobiography “Dreams of My Father” reflects  “where do I belong?”. Being a child of parents of different races and religions, he spent a childhood searching his identity. Bill Clinton in his autobiography “My Life” discusses a white child’s perspective on segregation of schools in America in 1950s. Both men grew up without their real fathers presence; Obama’s lived in Kenya and Clinton’s lost his real father before birth in a car accident. Their step-fathers didn’t play an important role in building their characters, both attribute their mothers for raising and guiding them.  The personalities reflected in the books are different. Obama comes across as an intellectual and philosophical man, Clinton appears to be a people person and detail oriented. However, Americans and worldwide public had remarkably different viewpoints just because of the color of the skin.

Moreover, their religious faith did swing some votes in their favor. Barack Obama’s credibility is still questioned by opponents by stating that his grandfather was a Muslim, hence Obama cannot be following Christianity. Even in the world super power politics, race and religion play an important role. The more recent case is of Nicky Haley stating she has converted from Sikhism to Christianity. She is an Indian born in US, with the name Nimrata Rhandawa married to Michael Haley. That she felt the need to convert, and was questioned by a Time magazine reporter as to whether she will give a bigger tip to Sikh cab drivers, depicts the hypocrisy of choosing candidates based on performance, ideologies and meritocracy.

Closer home in India, religion still plays a major role in politics. Dynastic politics prevails and even the first family of Indian politics projects belief in Hinduism. It is ironical that the family is secular in religious belief, however, has to present themselves as Hindus for public consumption. As per historical records Indira Gandhi a Kashmiri Brahmin (Hindu) married Feroze Ghandi, a Zoroastrian. To prevail politically, the surname spelling was changed to Gandhi, making it sound similar to Mahatma Gandhi, though there was no family connection. Rumors prevail that Feroze Ghandi by birth was a Muslim. Their first son Rajiv Gandhi, married Antonia Edvige Albina Maino (Sonia Gandhi), an Italian Christian and the second son Sanjay Gandhi married Maneka Anand,a Sikh.  However, the next generation of Gandhi’s – Rahul, Priyanka and Varun – publicly follow Hinduism.

Can’t blame them, because in India religion and region bias are huge. South Indians will view North Indians suspiciously and vis-a-versa. Among South Indians, the Telugu and Tamils will fight, whereas in North India the Punjabis and Jats will battle for superiority. Worse, grouping also  occurs on bases of caste and sub-castes. In such a scenario, with globalization, can organizations really ensure unbiased behavior and decisions on race and religion? Is it possible to wade out prejudices, suspicions and intolerance for a few hours at work, and come home to indulge in the same?

The challenges for organizations are mind-boggling due to technological advancement. As in this wordpress blog where readers from 50 countries visit daily to read posts, in global organizations faith, philosophies, ideologies, race and religion of employees are quite different. Homogeneous behavior cannot be brought about by a code of conduct or compliance team. Meritocracy can win only when it is built into the culture of the organization, else the spirit of the organization will be in tatters due to the dichotomies in employees faiths and beliefs. Hence, let us take a look at diversity management risks in multinational organizations.

1. Regulations of various countries.

Labor laws relating to age, race, religion and gender differ among countries depending on the legal, political and cultural environments. Additionally, in large countries, for instance US or India, they differ state wise and some vary according to industry. Therefore, multinational organizations have to devise policies and procedures on diversity management according to the laws of the country in which head quarters is located, and international operations.  Compliance to various laws and regulations can be a challenging task and head office may not have the full picture.

2. Variance in local cultures

Local cultures impact diversity management initiatives of multinationals. For instance, in Saudi Arabia, women sit separately in a room and do not mix with the men in office. In India, the number of local languages tend to group people of a state together. Hence, the status of embedding diversity management initiatives in head office and regional offices may differ significantly. Cultural integration may become difficult due to behavioral attitudes. For instance, Americans are more outspoken and aggressive in nature, whereas Indians are diffident and respectful. Due to these aspects, global communication and integration plans have to be adopted to local environment.

3. Anti-discrimination protection

The effectiveness of anti-discrimination protection is dependent on enforcing laws and the judicial environment in the country. For example, in US a number of discrimination cases are filed by employees and huge penalties are levied on the organizations. However, in India, though similar laws exist, there is hardly an instance where a case is filed by an employee on the basis of discrimination, as there is minimal possibility of employee winning the case against a large organization. To ensure same level of adherence is maintained at head office and regional offices, diversity management officers need to play a critical role.

 4. Increase in workplace violence

Globally and in India, workplace violence is increasing. Employees report increasing number of cases of bullying, harassment, sexual harassment and physical threats in various surveys. Here again, a group or individual  belonging to a specific race or religion may get mobbed by the majority, depending on the political climate in the country. Hence, the challenge for multinationals again is that similar laws may not exist in other countries. For example, India still doesn’t have an act passed on sexual harassment in workplace, though the bill has been pending in the parliament for sometime. Therefore, awareness levels of these issues differs in various countries. Multinationals, to bring uniformity need to have extensive training in regional offices and subsidiaries.

5. Mergers and Acquisitions

With the ongoing trend of multinationals acquiring companies in different countries, addressing diversity issues becomes critical. Mergers fail, due to failure in culture alignment and not because of failure in merging financial numbers. Post merger, for cultural integration one of the first things to do is devise a strategy for diversity management and implement the same.

Closing Thoughts

An extremely complex subject that impacts organizations especially those with international operations, at three levels – customers, productivity and staffing. However, it is often ignored by the management and definitely by risk managers and auditors. Very few risk managers do a human resource risk assessment, hence these problems continue to brew within the organization, till the culture becomes toxic or legal cases are filed. Hence, it is a good move to develop global and local diversity management strategies and implement the same. Indian organizations can take a leaf out of US organizations, and start appointing diversity management officers.


Workforce diversity initiatives by US Multinationals in Europe – Mary Lou Egan.. Marc Bendick, Jr.

One comment on “Diversity Management Risks in Global Organizations

  1. Pingback: Risks of Restrictive Mindsets of Indian Gen X Leaders « Sonia Jaspal's RiskBoard

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