Question

How can diversity create a competitive advantage for a firm? Use an organization which you know or researched as an example in your answer.

Answer 1

Workforce diversity refers to the workforce that includes people of different gender, age, ethnicity and sexual orientation.

The two major form of workforce diversity are:-

• Surface-level diversity
• Deep-level diversity

Surface level diversity refers to the human differences that can be seen easily in terms of ethnicity, race, age, sex, gender, etc. Examples are workforce consisting of older workers and younger workers, workforce consisting of male and female employees and workforce consisting of employees of different religions.

Deep-level diversity refers to the differences in values, personalities and work preferences that are not seen easily but can be determined when people get to know each other. Examples are workforce consisting of people prefer to do night shifts and day shifts, workforce consisting of people who prefer to work in a group and people who work independently and workforce consisting of people adaptable to change and people resistant to change.

Diversity can create a competitive advantage for a firm because: -

• Diverse workforce includes people with different skill sets which help the organization to drive innovation.
• Diverse workforce attract best talents who perform well and contribute towards meeting the organization goal. This in turn improve customer service.
• Having a diverse workforce, make the organization competitive and thus companies focus on hiring talents which will be beneficial for the organization in the long run.
• Diverse workforce makes both the employees and customers get accustomed to different cultures and values.

Example - Walmart is an organization which respect and values diversity. The employees provide unique ideas and opinions. The organization is inclusive of all people. They believe that diverse workforce promotes growth of business because if everyone is included then everyone wins. About 43% managers in Walmart are women.