02 Nov 2017
Since the building of the pyramids in Egypt to more recent times with the building of some of the tallest buildings ever to be built on the planet, the act of building requires the management of people to achieve the task that have been set. Maybe in Egypt the method in which people where managed might have been a little bit more brutal compared to today’s standards but in each case strategic diversity management was necessary in order for the job to be achieved. The Strategic Management of Diversity is a process that has become very important because of the how it affects anything that requires the management of people. This process relates to effectively utilizing and creating a work environment that is not only fair but also an environment that is equitable; furthermore, it looks at the management of employees and decisions that allow for long term objectives being meet.
Analysis suggests that the world’s workplaces appear to be more receptive to workforce diversity as they enter the twenty-first century. The merits of diversity are being debated everywhere from corporations to government, from city councils to the presidential cabinet, from elementary schools to institutions of higher education, and from domestic to global organizations. Employers are simultaneously being urged to "celebrate" diversity and advised against neglecting it. Management scholars warn that while corporations may run the risk of losing their competitive advantage, government faces an even greater risk, the risk of diminished legitimacy in the eyes of the people it is trying to serve by failing to effectively utilize and manage diversity.
The research in this analysis will look at the strategic management of diversity using one of the largest and most diverse companies in the world Caterpillar Inc. as a case study. Analysis will look at different studies on the management of diversity and look at the suggested theories on how to successfully mange diversity. The research will also include a focus on Caterpillar looking at the history, Competitors, Macro Environment, as well some of the company strengths and weaknesses and how the company deals with diversity with a workforce well over 70,000. In conclusion recommendations will be made based off of analytical research factors about the strategic management of diversity within Caterpillar.
The Strategic Management of diversity is a very important obstacle that companies and mangers within these companies will and are currently facing. In today’s work place the different employees within an organization can be made up of different genders, multicultural backgrounds, hundreds of different religions, and many different types of races and ethnicities. Due to high levels of complexity in diversity there are multiply ways of doing things. In any company or environment people are unique but they all want to be treated equal. The problem is this doesn’t necessary mean being treated in the same, but this creates issues when we have to address public and private services, but also in procurement activities’ and products. These issues modify the nature and demands placed on Managers and Organizations and bring into prominence the concept of diversity (Digitalife Limited, 2003, para. 3). There is a great degree of importance in Management being ready and able to invest in the Strategic Management of diversity as this concept not only plays a significant role within the job related issues but also is significant to the needs of consumers, business ethical issues, staying compliant legally, and profitability.
Studies show whether you work in health care, education or manufacturing (etc.), the importance of developing some degree of cultural competence in your work is essential. Demographics illustrate just how rapid change is occurring in our society. Census data reports that, by 2050, nearly half of all those in the United States will be from a non-white, non-anglo culture (Rose, para. 1). This number is important because it not only reflects the United States but this is a reflection of how more culturally diverse the world will and is becoming. As the world becomes more diverse the measurements and the need, as well as the manner in which we manage need to change. Organizations as well have to adapt because the tools once used and manage what once might have been a one domination dominated workforce will most likely not be successful in a workforce with multiply cultural; backgrounds. One of Tyson’s food Plants located in Goodlettsville, TN has over a thousand employees and over 97% hourly works in the plant the process the actual meats for Tyson where of some other race other than Black/African America or White decent. During a visited at the plant I saw the diversity in the plant first hand and I even saw one of the supervisors at the plant speaking with one of the employee’s daughter for translation purposes because the employee under the supervisor didn’t speak English well. As I sat and watched and waited it became very clear to me in that instant just how much the United States and the World is changing.
In the diversity management literature, the most commonly cited motivation is for firms
to increase the emphasis on diversity while also improving business performance. Research has suggested that diverse working groups can be more innovative, flexible, and productive; can offer valuable perspectives on important issues; and can better appeal to a consumer base likely to include a growing number of minorities. Groups made up of diverse personnel do a better job of analyzing and attacking problems (Marquis et al., 2008 pp. 14).
In order for Diversity management to work on any level those people such as managers, and supervisors must have a model and understanding of the expectations and goals the have been set before them. Research shows that managers should have a mental model or perception of the strategic concepts and their interrelationships that his/her firm uses in an attempt to manage its environment. For example, each manager will have a mental model of the role that various elements (such as innovation, costs, service, diversity and location) play in the firm's overall strategy (Knight et al., 1999. PP. 445-465). When businesses and different organizations look at how to strategically manage diversity not only do models and concepts need to be created but one important step in creating a workplace that values diversity is training for both supervisors and managers, and for all employees. Training helps with the understanding of diversity and helps with the process of managing it. Those companies and organizations that have the knowledge and ability to work within an increasingly diverse society will be in the best position to gain employment. Cultural knowledge and awareness, multi-lingual ability and a true skill in working with people from other cultures will be sought after (Rose, para. 3).
It doesn’t matter if your Caterpillar or Bank of America when looking at strategic management of diversity it’s important that every employee within an organization be involved. According to the diversity studies, corporate diversity begins (but does not end) with initiatives to recruit, promote, and retain a diverse group of employees. To be effective, research suggests that diversity practices need to be implemented at all levels and in all aspects of the organization. Without properly designed and articulated initiatives, diversity objectives and leadership involvement will be wasted (Marquis et al., 2008 pp. 18).
It is also very important to remember that just as in many different business processes there are several ways of managing diversity. Every company has to look at what works for them especially a company such as Caterpillar Inc. With well of over 70,000 employees caterpillar strategic diversity management plan will look a lot different from that of a corner market store. When you look at a company such as Caterpillar that is highly visible and well accepted they do have a number of programs in place for managing diversity. The facts can be different from what is true as most analytical information looks at demographic profile which provides evidence of what’s on the surface, and lacks substantive information. More substantive criteria are missing, such as an evaluation of whether a numerically diverse workforce affects performance, whether the diversity initiatives in place are working well, and whether they lead to positive business outcomes (Marquis et al., 2008 pp. 23).
Organizations have come to realize the strategic management of diversity must be done effectively and efficiently in order for a company to see success in the long run. This concept when used correctly is a ploy that allows a company to stay competitive in a world where social charactertics and the talent of employees are increasing.
Despite this, a close look at organizations globally reveals that diversity programs are taking a long-time to have an impact. There are still very few women in the managerial ranks and there tends to be a bias towards youth cultures within leading organizations. Few companies have integrated disabled people into the workforce and management teams and boards do not reflect ethnic diversity. There are, however, companies that are managing some aspects of diversity well, and are starting to make inroads in this area (Munn et al., 2008. para.1).
Diversity is a reality in America today. Whether you let diversity be a drain on your organization or a dynamic contributor to your mission, vision and strategy is both a choice and a challenge. There are some fundamental concepts associated with SDM that you need before you can even begin to practice SDM (Thomas. 2006. Pg 111);
To build on the promise of diversity demands that you practice strategic diversity management (SDM), which is, at its core, the craft of making quality decisions in the midst of the differences, similarities and tensions that make up diversity (Thomas. 2006. Pg 111). By making quality descions and understating the concept just listed companies can than move forward in the effort of trying to strategically manage diversity. Implementing a diversity management program successfully is not an overnight task. Often, the process of fostering a more accepting work environment takes time and dedication. But with patience, time, and structured efforts to educate employees, a diversity management policy and program will eventually make a huge difference in the communication among employees and the general productivity of the department (Thomas. 2006. Pg 114).
Most research would show that there are factors that will help companies such as Caterpillar manage diversity affectively if not already doing so. There was an assessment done on diversity and how too strategically mange it and seven key success factors where found for managing diversity effectively;
A clear articulation of the business case for diversity- A distinguishing feature of companies that have been effective in implementing diversity programs, is that they are able to articulate the clear benefits associated with having a diverse and inclusive culture.
A clear understanding about the current situation- Companies who are strong in managing diversity are prepared to hold a mirror to themselves and to understand fully the current situation, not just in terms of data and statistics but also in terms of mindsets and behaviors.
Diversity is championed from the top- successful diversity programs depend upon visible support from the Chief Executive and Senior Leadership Team.
Diversity leadership is a stand-alone function at a senior level- Companies who are committed to managing diversity effectively support this by putting in place a senior level executive responsible for the function. This person will often report through to the senior HR professional and will be responsible for managing a sizeable team and budget.
Programs are focused on cultural change rather than just redressing imbalances- Companies that are effective in managing diversity work to ensure that minorities can be successful in the organization.
Management processes, measurable goals and incentive systems underpin the change- A number of companies have tied diversity objectives to performance pay. For example, the Hyatt Hotel Group ties approximately 15% of the bonus potential to diversity goals. Companies that have been successful in managing diversity have translated it into a core competency used to assess the performance of management.
Wide employee engagement and involvement is achieved- Diversity programs that only address the most senior levels within an organization result in short lived and superficial improvements. In order to create a sustainable change, diversity programs needs to cascade down through the organization.
The seven success factors for managing diversity are not complex concepts, nevertheless, they are difficult to implement and require a concerted and focused effort. It would appear that leading organizations globally are beginning to take on this challenge but there is a long way to go (Munn et al., 2008. paras.2-8).
In an ideal world, every person is treated equally when it comes to getting a job, advancing in their career, and being treated fairly in the workplace. In reality, we know this is not the case. Racial discrimination does still exist in hiring, firing, and promotions. For African, Hispanic (Latino), and Asian Americans to overcome these challenges, they must be able to recognize the problems, understand the remedies, and be willing to take action. Are the examples recommended in this literature prevalent to companies? To test these theories one of Americas largest companies a global entity across the world, Caterpillar Inc diversity practices is compared against the practices of the recommend diversity literature.
Caterpillar is one of the most diverse Companies in the world. As Caterpillar continues to expand into new global markets, diversity is more important than ever. Diversity in Caterpillar is describe as a concept that focuses on a broader set of qualities than race and gender. The way they do business and the processes they used in the past will be very different as the move into the present and future. Caterpillar understands the world is changing, the talent pool is different, and customers expect more and they must change along with the marketplace to remain successful (National Post, 2008.pg.1).
As a global company, Caterpillar understands that there are many differing economic and political philosophies and forms of government throughout the world. Research shows they seem to acknowledge the wide diversity that exists among the social customs and cultural traditions in the many countries in which they operate. They maintain the flexibility to adapt their business practices to the different areas in which they operate in. As a highly diverse organization Caterpillar tries to leverage their global experience to achieve the best results for the enterprise. Business for a company with such a large size and large workforce is fore ever evolving. Companies such as Caterpillar who stand out for being different the challenges remain largely the same, that is how to effectively manage and maintain business. For more than 80 years, Caterpillar has been building the world’s infrastructure and, in partnership with their network of Caterpillar dealers worldwide, have helped drive positive and sustainable change on every continent. They are a global company, with hundreds of locations worldwide to serve and support their customer base, and respond quickly to their needs.
Since its inception Caterpillar has grown to be the world's largest maker of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. In partnership with their worldwide dealer network, they drive positive and sustainable change on every continent. Caterpillar delivers products, services and technologies in three principal lines of business: Machinery, Engines and Financial Products. As a global, diverse technology leader, Cat commits to excellence in all that they do (Caterpillar. 2007,para 1 ).
Public(NYSE:Â CAT)
1925
Peoria, Illinois, USA
James W. Owens, CEO &Chairman
Heavy equipment
Construction&AgricultureHYPERLINK "http://en.wikipedia.org/wiki/Machinery"Machinery
â–²$32.396 billion USD(2009)[1]
â–²$894 million USD(2009)[1]
As of the first quarter of 2009, 44% of Caterpillar's sales are to overseas customers. Caterpillar products are sold in nearly 200 countries. The company has a worldwide network of 220 dealers: 63 dealers in the United States and 157 in other countries. Caterpillar products and components are manufactured in 51 plants in the United States and 58 plants in Australia, Belgium, Brazil, Canada, England, France, Germany, Hungary, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Northern Ireland, the PeopleHYPERLINK "http://en.wikipedia.org/wiki/People's_Republic_of_China"'HYPERLINK "http://en.wikipedia.org/wiki/People's_Republic_of_China"s Republic of China, Poland, Russia, South Africa and Sweden (Caterpillar. 2007,para 1 ).
Caterpillar has a list of some 400 products for purchase through its dealer network. Caterpillar's line of vehicles range from tracked tractors to hydraulic excavators, backhoe loaders, motor graders, off-highway trucks, wheel loaders, and agricultural tractors. They are used in construction, road-building, mining, forestry, energy, transportation and material-handling industries (Caterpillar. 2007,para 2 ). The structure and business of the company must be understood in order to understand how diversity works in the company and how it is consistent and in consistent with what most research would say about strategic management of diversity. Caterpillar's worldwide employment was 93,813 at the end of 2009, down 19,074 from a year ago. Due to restructuring of business operations, in the decades since the 1990s have seen the elimination of 20,000 high-wage union jobs in the Peoria, Illinois area, while employment has increased due to the use of more foreign and nonunion labor (Caterpillar. 2007,para 2 ).
Caterpillar has come a long way from posing questions about the relevance of diversity. Studies and statistics about emerging demographics, minority spending power, and the globalization of the marketplace have moved the discussions well past whether or not Caterpillar could’ve or should’ve embrace diversity to how it can make inclusion part of its corporate fabric.
Analysis suggests that there must be a clear articulation of benefit in having a diverse background. Caterpillar is able to articulate the clear benefits associated with having a diverse and inclusive culture within the organization. Since diversity has become one of the biggest corporate trends in recent times, Caterpillar as has been offering intentions of support and committing to policies, resources, and strategies for effective implementation of different diversity initiatives. Diversity initiatives, within Caterpillar are developed and financed with programs for training and outreach mechanisms to grow contacts and networks. Caterpillar does understand these concepts but at times does struggle at putting them all into action. Caterpillar believes that diversity needs to be viewed as a competitive advantage and a business opportunity. Research shows that the company also understands that Diversity is about recognizing, respecting and valuing differences based on ethnicity, gender, color, age, race, religion, disability, national origin and sexual orientation (Diversity Edge Magazine, 2008. para.1).
Companies who are strong in managing diversity are prepared to hold a mirror up and look at themselves to try to fully understand their current situation. Highly diverse companies have programs that are focused on cultural change rather than just redressing imbalances. In today’s global economy, it is evident that the skills needed for success can only be developed through exposure to diverse cultures and ideas. More than 90 percent of Fortune 500 companies have employee affinity groups, and Caterpillar is no exception. These eight groups are:
Caterpillar African American Network (CAAN). Caterpillar’s oldest affinity group was established in 2002 to improve its ability to attract, develop and retain African American professionals.
Caterpillar Armed Forces Support Network (CAFSN). Established in 2007 to promote and support personal and career development for Caterpillar military veterans and to serve employees and their families during times of re-activation and deployment.
Caterpillar Asian Indian Community (C-AIC). Established in 2008 to attract, retain and engage Asian-Indian employees, while serving as a corporate resource on issues related to Asian-Indian culture.
Caterpillar Chinese Affinity Group (CCAG). Established in 2008 to drive positive employee engagement and assist Caterpillar to succeed in China and around the world, while assisting employees in reaching their full potential, and anticipating and responding to Caterpillar's needs in Chinese-related opportunities.
Caterpillar Experienced Professional Direct Hire Affinity Group (EPDH). Established in 2008 to provide career enhancement for experienced professionals hired into Caterpillar and to attract and retain key talent while leveraging the diversity of skills and perspectives each person brings to the organization.
Caterpillar Lambda Network (CLN). Established in 2006 to create an inclusive environment for Caterpillar's gay, lesbian, bisexual and transgendered employees, along with their allies (GLBTA) in support of Caterpillar's non-discrimination policy, and to educate employees on the perspective of the GLBT community.
Caterpillar Latino Connection (CLC). Established in 2005 to build Caterpillar's global excellence by leveraging Latino culture as a competitive advantage.
Women’s Initiatives Network (WIN). Established in 2006 to play a significant role in helping Caterpillar achieve its strategic goals and to support Caterpillar's PEOPLE initiatives and global diversity goals.
At Caterpillar, diversity is a driving force that helps the company evolve and grow. When the affinity groups were formed, Caterpillar "wanted to provide an opportunity for employees to have a place where they could get together with people like themselves," explained Kelli Stokes, director of global diversity and talent acquisition (Wahl, 2010.para.5). Caterpillar actions are similar to what most research recommends out of companies. They are trying to understand their current need, they look for leadership from top level management, and most importantly as a whole the company really tries to articulate and understand why the need for diversity is so important. Caterpillar recognized groups of employees share common concerns and the affinity groups do is help to focus on those who have been historically under-represented in the workplace. While Caterpillar’s affinity groups have different areas of focus, they all work in similar ways. Each group is made up of committees, holds membership meetings, and hosts lectures they feel are important to their members. When the Affinity groups work well, they can help companies attract and retain employee talent (Wahl, 2010.para.1). This is the whole point of diversity to retain employees and bring in different people with different background that will untimely help the company be successful. A lot of Caterpillar measures seem to be consistent in what literature and research shows in that many different factors need to be implemented in order for the strategic management of diversity to work and work well.
Another key factor in strategic management successfulness is that Companies must committed to managing diversity effectively support this by putting in place a senior level executive responsible for the function. This person will often report through to the senior HR professional or upper management and will be responsible for managing a sizeable team and budget. Caterpillar point of contact for management of diversity is Kelli Stokes Director of Global Diversity and Talent Acquisition. She is responsible for managing all process involved in finding, attracting, and eventually hiring highly talented individuals who will integrate smoothly and productively into your company.
Mrs/Ms. Stokes works with the different brands and divisional Headquarters in Caterpillar to help develop an individualized talent acquisition and place employees strategically within the company. Caterpillar has put in solutions and diversity programs that do the following;
Help with the Assessment of Talent Situation and hiring talent
Creation of Plan for Improvement, Focused on Cost Effectiveness and Process Improvement for current and future business
Analysis Areas Include Visibility into Performance, Ongoing Metrics for Measurement, Opportunities to Streamline and Reduce Costs in the Acquisition Processes of the workforce.
Talent acquisition helps Caterpillar continue to streamline the entire recruiting process and dramatically reduce overall recruiting costs also. Managers and recruiters are responsible for create and posting requisitions, searching the talent acquisition pools, screening applicants, performing background checks, and select the best candidates for the job at hand that creates a diverse and atmosphere within Caterpillar (Caterpillar. 2007,para 2 ).
Much has been written defining what diversity is, however there has been little discussion directed at quantifying the amount of diversity needed for a group to be viewed as diverse. In judging the diversity of a group it is not difficult to identify situations lacking diversity. We know very little, however, about what proportion minorities should hold for a group to achieve minimum or maximum diversity (Harrison & Klein, 2007). Knowing this would contribute to our understanding of diversity beyond simply identifying between-person differences. As discussed previously, even the mere perception that a company is diverse can go a long way in attracting and recruiting minority applicants and appealing to minority consumers (Avery, 2003; Gilbert & Stead, 1999; Hays-Thomas, 2004; Ng & Burke, 2005).
The concept that even perception can drive diversity creates Inconsistency in the nature of how diverse Caterpillar is as a company but this can also be true for any company. As this case has mention there are many ways in which to measure and there are different ideas and concept on how strategically mange diversity. Most studies agree with the 7 key factors needed to successfully manage diversity do a good job and provide great road map for companies, but some If there can be no one clear measure that everyone agrees upon how can there be consistency across the board. Apart from this empirical studies, there has been little research testing people’s perceptions of the appropriate amount of group diversity or whether an organization such as Caterpillar has made enough effort toward achieving a diverse workforce (Guidroz. 2008. Pg 19)
Caterpillar is driven by diversity but has some inconsistency in their message about what the company is doing, has done and wants to do in its efforts o strategically manage diversity. despite forecasts of continually changing demographics and a variety of success stories, Caterpillar still struggles with actually making diversity work. It doesn't, however, prevent the Company from waving a diversity banner. Since diversity has become one of the biggest corporate trends in recent times, Caterpillar as well as other companies have been offering intentions of support but not quite committing to policies, resources, and strategies for effective implementation. Diversity, when it works, is developed and financed with programs for training and outreach mechanisms to grow contacts and networks and Caterpillar understands these concepts but struggles at putting them all into action. They track it, measure it, but leave some doubt within the commitment to being the best in class as the company didn’t even make to top 50 in most diverse companies to work for.
A distinguishing feature of companies that have been effective in implementing diversity programs, is that they are able to articulate the clear benefits associated with having a diverse and inclusive culture. Due to the size and overall structure of the company caterpillar at times struggles at making sure all the different entities and segments been effective in implementing diversity programs within the company. There is also some distain between Caterpillar Inc. and Caterpillar Financial. Diversity is championed from the top and successful diversity programs depend upon visible support from the Chief Executive and Senior Leadership Team. This is unclear at times as Cat Financial at times operates spate from Cat Inc.. This creates inconsistency in times such as now when Cat Inc. brings down policies and changes and Cat Financial employees are unclear of who is championed at the top.
The role that diversity plays in the workplace has increased over time as more companies adopt diversity management strategies in an effort to increase performance or attract new employees (Hays-Thomas, 2004. Pg 3). Little research has been directed, however, toward
understanding how diversity perceptions are impacted by the amount of diversity present in the
group. It is easy to identify occurrences when diversity is absent, but we know little about how
much diversity is needed for a group to be perceived as diverse (Guidroz. 2008. Pg 4).
Recommendations
Conclusion
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