The Effects of National and Organizational Context Factors on Diversity Management

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The Effects of National and

Organizational Context Factors onDiversity Management

with a Specific Focus on the Netherlands, New Zealand

and Austria

Astrid Podsiadlowski

Groningen, 28th of January 2009



Overview

Research Project on Workplace Diversity

National Contexts

Diversity Management in Organizations

Results on National and Organizational Level Influences

Conclusions



A Cross-national Comparison of

Workplace DiversityInclusive Identities in the Context of

Increasing Culturally Diverse Workplaces

Research Project



Research Model

Demographics

History of MigrationImmigration Policies

Social Inequalities

Economic Situation

National Context

Organizational Context

Attitudes

Acculturation

ImmigrationMulticulturalism

Perception of Threat

Workforce Composition

Diversity Perspectives

Diversity Management

Group Processes

Communication

Intergroup Relations

Patterns of EmployeeIdentification

Intercultural Compe-

tencies

Macro

Meso

Micro

Level of Analysis

Ib

Ia

II

IIIa

Organizational Outcomes

Organizational Performance

Innovation

Stability

Individual Outcomes

Personal Well-being

Individual Performance

Creativity

Employee Commitment

II



NATIONAL CONTEXTS

CONTEXT VARIABLES New Zealand Austria Netherlands

Demographics

- Size of the population 4.1 million 8.0 million 16.4 million

- Proportion of foreign-born

population 22.9% 16.3% 19.6%

History of Migration

- Society of settlement settler former empire former colonial

- Sudden increase in migration yes no no

- Recent negative public events no no yes

Immigration Policies- Diversity policy index high low medium

- Multiculturalism pluralist assimilationist civic

Economic situation

- GDP growth 1.4% 3.2% 2.9%

- Skills shortages yes yes yes

Labour Market Position- Employment rate Lower for foreigners Lower for foreigners Lower for foreigners

- Unemployment rate Higher for foreigners Higher for foreigners Higher for foreigners

Regional Clusters

- Schwartz (2003) English-speaking Western Europe Western Europe

- GLOBE (2004) Anglo Germanic Germanic

National Context Variables



On the effects of national and organizational contexts

on the implementation

of diversity sensitive management measures

Cross-national findings Astrid Podsiadlowski and Astrid Reichel



Or: Which national level and organizational level factorslead to implementing

action programs for ethnic minorities?

Research Question

?

?

??Which type of organisation

- under which conditions -

implements diversity management tools?

? ?



Importance of Diversity Management

Organizations should actively manage diversityKreitz 2008; Jackson 1992; Podsiadlowski & Ward 2009

Different approaches to dealing with diversityBhawuk et al. 2002; Ely & Thomas 2001; Podsiadlowski, Otten & van der Zee, 2009

Only some approaches include active management of diversityCox & Blake 1991

Evidence that diversity has positive impact on group outcomes

if managed accordinglyEarley & Mosakowski, 2000; Ely & Thomas, 2001; van der Zee et al., 2004



Concept of Diversity Perspectives An organization’s approach on how to deal with (cultural) diversity,

characterised by distinct ideologies and reasons to diversify and

varying degrees of appreciation.

Reinforcing homogeneity: Organizations not only neglect potential culturaldifferences, but reject cultural diversity via aiming for a homogeneous workforce.

Kanter, 1977; Schneider, 1987

Colour-blind: Everybody is supposed to be treated equally no matter where he or

she is coming from, not specifically referring to the necessity of diversitymanagement. Ely & Thomas, 2001

Fairness: Fairness shall be achieved via specific support for minority groups

considering possible bias because of cultural differences.

Bhawuk et al., 2002

Access: Diversity more as a business case by gaining access to diverse customers

and international markets. Ely & Thomas, 2001

Integration: The whole organization can benefit from a diverse workforce and

diversity creates an overall learning environment for the organization.

Ely & Thomas, 2001



Diversity Management Strategies

Basic Diversity Strategy

Equal Employment Opportunities and Affirmative Action Programs

Individual Awareness Diversity StrategyTraining programs on intercultural awareness and communication

Integrated Diversity Strategy Integration of various interventions into an organization-wide

framework

Bhawuk et al., 2002



Specific focus on (cultural) diversitye.g., public statements, diversity committees, multicultural work

groups, specific support for minority groups, advocacy groups,language classes, intercultural training, diversity workshops,

information about different ethnic groups

Embedded into existing training and personnel development toolse.g., formalized procedures of recruitment, selection and performance

evaluation, mentoring and coaching systems

Measures and Initiatives



Specific Action Programs [CRANET Data]

Austria New Zealand Netherlands

Minority

ethnics2.5% 19.6% 42.7%

Older workers

(50+)15,5% 10.7% 37.1%

People with

disabilities24.7% 17.1% 32.2%

Women 100% 14.9% 29.9%

N = 397 286 270



Influence of Culture on Organisations:

Theories and Approaches

In what ways and to what extent does culture influenceindividual and group phenomena in organisations?

Political-economic theoryHall & Soskice, 2001

Societal effect approachMaurice & Sorge, 2000

Cross-cultural school of thoughtAycan, 2000; Hofstede, 1980, 2001

Contingency theories:Cultural convergence as a consequence of industrialization and technological changes

Meyer, Boli, Thomas & Ramirez, 1997



Organizational Characteristics

External environment

- political context - legal context - educational context - institutional context

- socio-cultural context

Internal environment- size

- type of work, industry and production- type of workforce- technology

- stage of development



Hypotheses on National Context Factors

Diversity Policies H1: Organizations in countries with a medium and high policy index should have

implemented more action programs for ethnic minorities than countries with alow diversity policy index.

Policy Perceptions

H2.1 Perception of international openness: A perceived high relevance of aninternational openness for economic development should be reflected in a high

amount of action programs implemented in organizations in the respective

country.

H2.2 Perception of skills shortages: Negative perceptions of a government’s

efficiency with regard to skills shortages should be reflected in a low amount of

action programs implemented in organizations in the respective country.



Diversity Policy Index

New Zealand Austria Netherlands

- Government

policy promoting

multiculturalism

Yes No Yes

Treaty of Waitangi, NZ

immigration Settlement Strategy

2004, MSD Social Report 2007

Government program 2007-2010:

Integration on all levels,

naturalisation more difficult

Integration strategy 2007-2011

(deltaplan integration),

naturalisation ceremony

- Multicultural

ministry or

secretariat

Yes No Yes

National level: Te puni kokiri –

Ministry of Maori Development;

Office of Ethnic Affairs

Regional level: Municipal Dep. for

Integration and Diversity &

Immigration and Citizenship

Supra-regional level, programme

director for housing, communities

and integration

- Adoption of

multiculturalism inthe school

curriculum

Yes Yes, but low Yes

Kaupapa Maori education, te reocurriculum, ka hikitia; Pasifika

education plan; International

Education Agenda 2007-2012

“1+1 advancement model” (preschools) and special German

language course for pupils with

non-German as first language

Early-school language programs ,possibility for Islam schools

- Ethnic

representation in

the media

Yes Yes, low Yes, low

Maori TV, Triangle TV; Access

radio, Nui FM, Punjabi radio...;Aotearoa Ethnic Network

Journal, Pacific Journalism

Review, Homevoice…

OKTO TV, ORF’s focus on

autochthon ethnic minorities, smallradiostations, Print-Media (Biber

and international newspapers)

Dutch Muslim Broadcasting on

TV and Radio

- Allowing dual

citizenship a.o.

Yes No No, but in practice: yes

only for Austrians applying for

foreign citizenship

not allowed, but many exceptions

OVERALL

RATING

High Small Medium



Perceptions of Business and Government

Efficiency [World Competitiveness Index 2007]

Categories NEW ZEALAND AUSTRIA NETHERLANDS

Attitudes towards Globalization

Business Efficiency:

Attitudes and Values

0 … negative in your society, 10 … positive in your society

19th (6.60) 27th (6.00) 8th (7.05)

National Culture

Business Efficiency:Attitudes and Values

0 … closed to foreign ideas, 10 … open to foreign ideas

10th (7.85) 31st (6.81) 7th (8.18)

Discrimination

Government Efficiency:

Societal Framework

0 … does hinder economic development, 10 … does not hinder

economic development

16th (7.30) 2nd (8.14) 28th (6.71)

Image Abroad


Attitudes and Values

0 … encourages business development, 10 … discouragesbusiness development

13th (7.85) 5th (8.43) 10th (8.09)

Note: Rankings are from 2007 (Sample: 55 countries). Numbers in brackets are either mean scores or ranging scales (0…lowest

score, 10…highest score). Results are based on Executive Opinion Surveys (n = 3,700 responses).



Perceptions of Business and Government

Efficiency [World Competitiveness Index 2007]

Categories NEW ZEALAND AUSTRIA NETHERLANDS

Skilled Labour


Labour Market

0 … is not readily available, 10 … is readily available

50th (3.95) 1st (7.38) 22nd (5.72)

Brain Drain


Labour Market

0 … hinders competitiveness in your economy, 10 … does not

hinder competitiveness

44th (3.60) 3rd (7.76) 14th (6.15)

Immigration Laws

Government Efficiency: Business

Legislation

0 … prevent your company from employing foreign labour, 10 … do

not prevent foreign labour

11th (6.70) 44th (4.98) 34th (5.63)

Foreign High-Skilled PeopleBusiness Efficiency:

Labour Market

0 … are not attracted to your country’s business environment, 10 … are

attracted to your country’s business environment

21st (5.6) 10th (7.14) 15th (6.37)

Note: Rankings are from 2007 (Sample: 55 countries). Numbers in brackets are either mean scores or ranging scales (0…lowest

score, 10…highest score). Results are based on Executive Opinion Surveys (n = 3,700 responses).



Hypotheses on National Context Factors (ctd.)

Cultural Values H3.1 Cultural values with regard to future orientation: The higher the future

orientation as prevalent cultural value system in a country the more action

programs should be implemented in organizations.

H3.2 Cultural values with regard to humane orientation: The higher the humane

orientation as prevalent cultural value system in a country the more action

programs should be implemented in organizations.

H3.3 Cultural values with regard to uncertainty avoidance: The less uncertainty

avoidance as prevalent cultural value system in a country the more action

programs should be implemented in organizations in the respective country.



Cultural Practices [GLOBE 2007]

Note: Numbers are from 1 (attribute greatly inhibits a person from being an outstanding leader) to 7 (attribute contribute

greatly to a person being an outstanding leader). Numbers in brackets are rankings (N= 61 countries) or Band rankings

(scores also assigned to so-called Bands): Band A>Band B>Band C>Band D. Questionnaire distributed to middle managers:

New Zealand: n=184, Austria: n=169, Netherlands: n=287.

GLOBE Study:

Societal cultureNew Zealand Austria Netherlands

As Is Should Be As Is Should Be As Is Should Be

Future

Orientation3.47 (48th) 5.54 (31st) 4.46 (6th) 5.11 (50th) 4.61 (Band A) 5.07 (Band B)

As Is ∆ Should Be + 2.07 / (- 17 ranks) + 0.65 /( -44- ranks) + 0.46

Gender

Egalitarianism3.22 (38th) 4.23 (47th) 3.09 (45th) 4.83 (19th) 3.50 (Band B) 4.99 (Band A)

As Is ∆ Should Be + 1.01 / (- 9 ranks) + 1.74 /(+ 26 ranks) + 1.49

Uncertainty

Avoidance4.75 (12th) 4.10 (48th) 5.16 (6th) 3.66 (57th) 4.70 (Band B) 3.24 (Band D)

As Is ∆ Should Be - 0.65 / (- 36 ranks) - 1.50 /(- 51 ranks) - 1.46



Hypotheses on Organizational Context Factors

Sector H4: Due to the stronger focus on legal and social requirements in public sector

organizations more action programs should be implemented in the public than inthe private sector.

Industry H5: Due to different skills shortages and customer orientation in different

industries the implementation of action programs in organizations should depend on the industry of the organization.

International Market Orientation H6: The more international the market orientation of an organization the more

action programs should be implemented.



CRANET Database

International research network analysing developments in

Human Resource Management:

- Cross-national and longitudinal survey design

- Public and private sector organizations with more than

200 employees

- 41 countries as part of the network

- Representative sample of respective company population

- Answers provided by HRM specialist (top HR person)



Descriptives: Country Level

N=1865

% foreign

born po-

pulation1

% ethnic

minority

programs

Diversity

policy index2

International

openness3

Skills

shortages3

CountryAustralia 66 24.10 27.7 High (3) 1.39 -0.35

Austria 152 14.1 2.7 Low (1) 0.56 1.12

Finland 164 3.60 8.2 Low (1) -0.22 0.13

France 93 8.30 3.2 Low (1) -2.38 0.88

Germany 221 12.9 2.0 Low (1) -0.22 0.69

The Netherlands 188 10.6 39.3 Medium (2) 0.90 -0.05

New Zealand 124 21.20 12.4 High (3) 0.84 -0.91

Sweden 191 5.32 29.8 Medium (2) 0.51 0.32

UK 570 10.10 20.4 Medium (2) -0.15 0.63

USA 96 13.00 63.4 Medium (2) 0.06 1.04

1 OECD, 20092 Berry et al, 20063

WCI, 2008



Descriptives: Company Level –Descriptive statistics action programs per industry

% of companies with minority action programs

Industry

Agriculture 12.2

Infrastructure 21.0

Manufacturing 17.3

Non-manufacturing 16.3

Services 16.5

Social services 35.5

Other 20.0



Correlations: Company Level

SizeHigh-low

profitability

Public-

private

sector

International-

national

market

Action program for

ethnic minorities.179** .127* .272** -.112**

Size .074* .150** -.033+

High-low profitability -.200** .082*Public-private sector -.339**



Logistic Multilevel Regression

B SE B eB

Variables – macro-level

Percentage foreign-born population -0.074 0.091 0.927

Diversity policy index medium 2.379*** 0.422 10.794

Diversity policy index high -0.4880 1.694 0.614

International openness 1.949** 0.756 7.022

Skill shortage -0.275 0.599 0.760

Future orientation -1.990 1.436 0.137

Humane orientation 0.970 0.761 2.638

Uncertainty avoidance-1.456*** 0.417 0.233

n = 1865. * p<0.05. ** p<0.01. ***p<0.001



Logistic Multilevel Regression

B SE B eB

Variables – meso-level

Company size 0.000 0.000 1.000

High profitability 0.482* 0.215 1.619

Public sector 0.75* 0.263 2.117

Infrastructure industry 2.081* 0.873 8.013

Manufacturing industry 1.967* 0.852 7.149

Non-manufacturing industry 1.28 0.902 3.597

Service industry 1.879** 0.876 6.547

Social services industry 2.918*** 0.877 18.504

Other industry 1.833* 0.852 6.253

International market orientation -0.101 0.211 0.904

Action program for older workers 0.725** 0.264 2.065

Action program for disabled 2.566*** 0.224 13.014

Action program for women 2.282*** 0.232 9.796

n = 1865. * p<0.05. ** p<0.01. ***p<0.001



Hypotheses confirmed

Sector H4: Public sector organizations have more action programs implemented.

Industry H5: Service sector organizations have most of the action programs implemented.

Cultural Values H3.3 Uncertainty avoidance as prevalent cultural value system in a country shows

a negative relationship with the implementation of action programs.

Diversity Policies H1: Organizations in countries with a medium policy index have implemented more

action programs for ethnic minorities than in countries with a low diversity policy

index.

Policy Perceptions H2.1 A perceived high relevance of an international openness for economic

development is reflected in a high amount of action programs in organizations.



Hypotheses not confirmed

International Market Orientation H6: The international market orientation of an organization does not influence the

amount of action programs implemented.

Cultural Values H3.1 Future orientation as prevalent cultural value system in a country does not

show any relationship with the implementation of action programs.

H3.2 Humane orientation as prevalent cultural value system in a country does not

show any relationship with the implementation of action programs.

Diversity Policies H1: Organizations in countries with high policy index have not implemented more

action programs for ethnic minorities.

Policy Perceptions H2.2 Negative perceptions of a government’s efficiency with regard to skills

shortages is not reflected in a low amount of action programs.



Conclusions

Future Research

Effects of high diversity policies Integrative, organization-wide diversity strategies

Sector specific

Legislative and social requirementsSocial responsibility versus business case

Action programs as only one aspect of diversity management Reflection of fairness and awareness with focussing on specific groups

Importance of diversity policies and their perceptionsOpenness versus perception of threat



Research Steps

1. Cross-national analysis of secondary material

2. Organizational analysis of secondary material

3. Qualitative interviews with employers and HR managers

4. Surveys with employees of different cultural background in Austria, New Zealand and the Netherlands

5. Surveys on assessment of diversity management measures

6. Experts interviews and tests of diagnostic instrument

7. Communication of results

2009

2010

2011



National Context (Step 1)

Comparative context analysis of secondary material:e.g., national policies, history of migration, population demographics,

social integration, economic situation and labour market statistics

Identifying relevant categories of comparisons:e.g., society of settlement, diversity policy index, world competitiveness

index, integration measurment index

Researching relevant international databases:e.g., Eurostat, OECD, IMD, World Value Survey, GLOBE



Organizational Context Analysis (Step 2)

Organization context analysis of secondary material:e.g., public statements, internal documents and business figures

Interviews in selected organizations representing the local business

structures Linking organizational context with national context within one

dataset (CRANET)

Employers‘ and Employees‘ Interviews (Step 3)Qualitative interviews with employers (owners, general managers, human

resource managers):

on prevalent diversity perspectives, workforce composition and

implemented diversity management measures

Employees’ interviews:

on concept of diversity and experiences with working in culturally

diverse environments

The Effects of National and Organizational Context Factors on Diversity Management

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