The business case for diversity and the perverse practice of matching employees to customers
| DOI | https://doi.org/10.1108/00483481011045425 |
| Pages | 468-486 |
| Date | 08 June 2010 |
| Published date | 08 June 2010 |
| Author | Marc Bendick,Mary Lou Egan,Louis Lanier |
| Subject Matter | HR & organizational behaviour |
The business case for diversity
and the perverse practice of
matching employees to customers
Marc Bendick, Jr and Mary Lou Egan
Bendick and Egan Economic Consultants, Washington,
District of Columbia, USA, and
Louis Lanier
Econ One Research, Washington, District of Columbia, USA
Abstract
Purpose – The typical “business case” for workforce diversity management in the USA implies that
matching the demographic characteristics of sellers to buyers increases firms’ productivity and
profitability. This paper aims to explore the consequences for both employers and employees of
following that guidance.
Design/methodology/approach – The paper statistically analyzes employment data on African
Americans from one large US retailer and from the US advertising industry.
Findings – In both cases analyzed, a badly conceived business case for diversity perversely
translated into discriminatory employment practices, starting with stereotype-based segregation in
work assignments and spreading to consequent inequality in other employment outcomes such as
earnings and promotions. Such patterns illegally limit employment opportunities for women and
race/ethnic minorities. Simultaneously, they fail to promote customer relationships and sales.
Practical implications – To avoid negative effects on both business and societal objectives,
employers need to be guided by a business case promoting workplace inclusion, not “diversity without
inclusion”, which buyer-seller matching represents.
Originality/value – The businesscase for diversity isoften considered unimportant “boilerplate”. This
paper alerts employers to the importance of articulating, and then following,a correct business case.
Keywords Equal opportunities,Discrimination in employment,Advertising, Retailing,
African Americans
Paper type Research paper
The evidence above documents two important points. First, academics have only mixed
evidence that customers prefer to be served by similar others. Second, employers often act as
if customers have this preference (Leonard et al., 2004, p. 733).
I. Introduction
In the USA, the 1960s Civil Rights Movement symbolized by the leadership of Dr
Martin Luther King, Jr established a moral imperative for ending workplace
discrimination. The keystone legal consequence of these efforts was Title VII of the
federal Civil Rights Act of 1964, which granted broad, enforceable rights to equal
employment opportunity regardless of race, color, religion, sex or national origin.
Over the ensuing 50 years, these moral and legal developments have secured major
reductions in workplace inequities for racial/ethnic minorities, women, and other “out
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0048-3486.htm
An earlier version of this paper was presented at the 10th International Human Resource
Management Conference, Santa Fe, NM, June 2009.
PR
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Vol. 39 No. 4, 2010
pp. 468-486
qEmerald Group Publishing Limited
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DOI 10.1108/00483481011045425
groups”. However, they have not eliminated all employment discrimination or
prevented employer backsliding (Smith and Welch, 1989; Reskin and Bielby, 2005;
Bendick, 2007). Remaining inequities in part reflect the choice of some employers to
meet legal requirements only when they are directly challenged by public enforcement
or private litigation, typically slow or unlikely events. This tendency to “wait it out”
has been reinforced by sometimes wavering commitments to equal employment
opportunity by some US courts and weak legal enforcement by some presidential
administrations (Kelly and Dobbin, 1998).
One response to these circumstances by diversity/anti-discrimination practitioners
within the human resource management community has been to articulate reasons
independent of moral concerns and legal requirements why employers should provide
equal employment opportunity. These rationales are commonly referred to as the
“business case for diversity” because they argue that workforce diversity advances
business objectives of productivity and profitability (Moran, 2006; Herring, 2009;
Dobbin, 2009, chapter 6).
Most observers agree that employer support for equal employment opportunity is
strengthened when these practices are viewed as promoting business’ own objectives
rather than solely responding to external legal or moral pressures (SHRM, 2005;
Bendick et al., 2008). However, the content of the business case for diversity has
received little critical attention. This paper focuses such attention on one principal
component of the typical business case: the claim that employee diversity equips
businesses to deal with diverse customers.
Section II of this paper describes the typical business case’s articulation of this
argument and its potential mis-translation into discriminatory employment practices.
Sections III and IV illustrate such outcomes in the USA with empirical analyses of
African American managers and professional employees in one large retail firm and in
the advertising industry. Section V discusses how employers can avoid these perverse
results by avoiding a fundamental mistake common in diversity management today –
focusing on workforce diversity rather than workplace inclusion. Finally, Section VI
discusses the relevance of this analysis to workplaces outside the USA.
II. Linking employee diversity to customer diversity
When the “business case for diversity” is presented to a company, the arguments are
most persuasive when they are customized to that firm, its industry, competitive
strategy, history, and terminology. The public statement by one large employer, Chubb
Insurance, is presented in Figure 1 as a representative example of such
company-specific statements.
As is typical in such statements, Chubb Insurance essentially argues that a diverse
workforce offers three advantages to employers:
(1) Access to a broader pool of potential employees. The native-born white male
workers who have traditionally dominated much of US employment –
particularly in well-paid, prestigious, influential positions – are a decreasing
proportion of the available work force. Now and in the future, an increasing
proportion of trained and talented employees will be race/ethnic minorities,
women, and members of other “out groups” (Johnston and Packer, 1987; Bell,
2007, pp. 7-9).
The business
case for diversity
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