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IBM, one of the key players in the IT industry with global-scale visibility, attempted an overhaul of its diversification strategy in the middle nineties. By that time, the company had a long history of successful instances of equal opportunity promotion. As early as 1899, the company hired women and black individuals as employees, which was almost unheard of at the time. Similarly, the first employment of a person with disability preceded the introduction of Americans with Disabilities Act by more than 70 years.
The streak of efforts aimed at increasing diversity and equality could be traced throughout the company’s lifetime and generated significant acclaim. Also, the said actions are credited for generating nationwide responses in the form of greater adoption of diversity strategies among competitors and business entities in unrelated business segments. However, despite the prominent orientation towards diversification and greater opportunities for minorities, the situation in the company remained unsatisfactory.
In most cases, the representatives of different minorities were not numerous enough to make a difference. According to the testimony of one of the senior executives, the company meetings were dominated by males to the point where females could be easily spotted among them. While the same situation could be observed among IBM’s competitors, it was inconsistent with the reputation of a pioneer in diversity established by the company. The most likely cause of such a situation was the meritocratic approach adopted as the company’s primary approach. While it supposedly eliminated biases by prioritizing achievement, it also deprived the employees of individuality and ignored their differences.
In an attempt to mitigate the situation, a diversity-oriented initiative was launched by the company, led by Ted Childs. Several task forces were conceived and created, all of which remain active today (some of them have their names changed). The central goal of the initiative was to bridge the workplace and marketplace – in other words, seek ways of reaching out to the diversified markets of the modernity and ensure the recognition of the individual competencies of the employees.
The new approach would eliminate the blindness characteristic for the early history of the company but retain the absence of discrimination through acknowledgment of differences. The missions of the task forces were formulated in part based on the feedback provided by the survey among the employees. The resulting areas of focus included employee beliefs, communication, training and education, workplace flexibility, and staffing policies.
They included the executives from its constituency and were assigned a sponsor whose presence ensured the possibility to overcome the unforeseen barriers. The task forces were launched in 1995 and managed to identify numerous issues that required the attention of senior management.
During the reporting meeting where each of the task forces shared their obtained information and insights, it was decided that the diversity initiative should expand beyond the executive level to provide employees an opportunity to connect and contribute to the cause. As a result, two new formation types were introduced – employee network groups and diversity councils. The former took on an encompassing goal of providing the representatives of various minorities with possibilities of communication. The latter served as scaled-down versions of task forces by focusing on the same issues but a different level.
While the launch of task forces and the subsequent formation of diversity councils and employee network groups were considered a definitive success, several issues emerged after the event or remained unresolved despite the efforts made by responsible parties. Most notably, the changes caused by the task force functioning mostly improved the outcomes at the lower levels of the corporate hierarchy, whereas the senior management remained relatively undiversified. Second, the initiative was oriented primarily on the internal affairs of the company and created little to no external effect.
At the same time, the diversifying market presented numerous opportunities that remained unnoticed by IBM. Over time, as the efficiency of its business operation increased and the cultural and political landscape transformed, the company faced new challenges. First, since each task force retained and gradually accumulated its area of responsibilities and gained greater influence, it generated more directives and recommendations which became difficult to follow.
Since all task forces were separate entities and in some cases operated similarly to independent organizations, their initiatives often conflicted with one another. Besides, since by the early 2000s some of them reached a global scale, the number of resources required for the implementation of the proposed initiatives made it impossible to adequately support all suggested directions.
Next, the initial intention of the team responsible for the global diversity strategy was to create an initiative based on the U.S. centered approach. However, the growth exhibited by the company in recent decades, as well as the tremendous effectiveness and persistence demonstrated by the task forces, made it clear that such an approach would be extremely difficult to implement. Specifically, the current distribution of IBM’s operations spans over three large areas, each of which experiences a surge in demand for workplace diversity and equality.
Even more importantly, each area has its unique set of cultural, social, and political characteristics that seriously limit the applicability of the chosen strategies in Asia-Pacific, European, and African regions. For example, in comparison to the American region, the European area has a much more diverse political structure since, unlike the former, it consists of numerous countries, some of which employ political systems significantly different from the one used in the U.S. As a result, the relevance of the U.S. centered model will be seriously compromised in these areas without adjustments.
Finally, the cultural backgrounds of certain countries contain various factors that act as barriers to the diversity strategies developed for the American setting. In some counties, the minorities involved in the diversity strategy are regulated on the legal level, such as in Singapore, where homosexuality is forbidden by law. Under such conditions, it would be extremely difficult to implement the activities of the GLBT task force.
Even more importantly, the religious background of many countries presents a significant challenge to the uniform approach taken by Childs and his team. The religious landscape of the Asian and African region is sufficiently difficult from that of the U.S. to render the existing methods irrelevant and, in some cases, inappropriate. Most importantly, unlike the political environment, the cultural and religious spheres are subject to the greater sensitivity of the population and may suffer from inappropriate and poorly planned actions. For example, it is possible to imagine a scenario where the application of the established set of corporate values will be viewed by local representatives as an attempt to impose their domestic values onto the local community.
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Finally, several smaller issues can be pointed out, such as the necessity to increase the accessibility of the company’s locations and ensure the emergence of a globally inclusive workplace. However, these issues can be viewed as tied to the major problems described above and thus the successful resolution of the former will likely lead to the improvements in the latter.
To sum up, the identified issues are not related to technology and are only partially related to managerial practices. It can be said that they stem primarily from organizational factors. While none of the issues has the potential to influence the company’s performance directly, it is possible to suggest significant indirect effects. The steadily improving standards for diversity and equal opportunities worldwide imply the possibility of backlash for organizations that fail to comply. The consequences may include damage to corporate image, compromised reputation, failure to tap into new market segments, loss of existing customer base, and reluctance to cooperate with existing and potential suppliers and business partners.
Alternative Courses of Action
Based on the information above, several courses of action can be suggested to improve the situation. First, it is possible to develop the concept of inclusiveness based on the existing diversity policies by incorporating it into partnership strategies. In other words, it would be necessary to readjust the focus of the company on smaller businesses run by minorities to tap into the segment currently overlooked by large corporate entities.
The second option is the introduction of numerous readjustments to the existing task forces by the demands presented by different geopolitical regions. Such an approach requires sufficient background information to be performed, so numerous inquiries should be conducted before it.
Finally, the company can pursue the initially intended U.S. centered character of the initiative. While on the surface it seems like the least feasible alternative since it does not offer any improvements, a closer inspection reveals several advantages. First, while the incompatibility between the cultural and political landscapes of different regions is presented as a reason for alarm, the actual gap might be not as wide as perceived. In the modern world, the presence of American values has reached an unprecedented degree, and while it merges with the local cultures in each specific case, it can still be recognized.
It is, therefore, possible to assume that the diversity strategies can be applied to more areas than initially asserted without adjustment. While it is hard to deny the factual existence of such settings as that of Singapore, where one of the initiatives is essentially illegal, such situations are uncommon and probably rare. As a result, it is possible that large-scale adjustments are not cost-effective and can be implemented locally on a smaller scale or avoided altogether.
The first approach would be relatively easy to execute since the respective task forces likely possess the information necessary for a successful shift in priorities, and the businesses in question are expected to be highly cooperative because of IBM’s desirability as a partner. Besides, the company already had limited experience of organizing such initiative in 1997 which led to the emergence of 53 new partners in a relatively short period.
The familiarity with the strategy allows cutting the costs of the strategy, and the existence of data makes it possible to model the likely outcome of the suggested action. However, it should be acknowledged that this alternative does not constitute a lucrative financial opportunity and may lead to loss of revenues. Small businesses are traditionally avoided by big companies because of the insignificance of the possible profits and lower predictability of risks. Therefore, this alternative can be implemented relatively easily but also is the least certain in terms of possible benefits.
The second course of action is arguably the most promising because it can resolve the fundamental issues of global diversity strategy – the cultural, religious, and political differences that restrict the uniform application of the American model across all locations. Therefore, the eventual resolution of related secondary issues (e.g. the creation of a globally inclusive workplace) can be expected over time.
However, such an approach does not contain tools needed to establish partnerships and is much more oriented towards, long-term results rather than immediate and measurable results. Besides, such readjustment would require a tremendous amount of resources. In the current state, the task forces operate with a significant degree of independence, which would make the coordination of readjustment a challenging task. Besides, their complexity has reached a level where it would be very difficult to facilitate and sustain the necessary changes. Finally, without the information at hand, it is hard to evaluate the likely cost-effectiveness of the move until later in the process, which adds to the uncertainty.
The third approach is the least resource-demanding since it does not require the introduction of new actions of any kind. However, it still necessitates preliminary research to ensure that it would not compromise IBM’s reputation. Finally, it is risky in the sense that even in a situation where no actual harm will be done by using U.S. centered initiative in an unsuitable setting because it may create a negative reaction from the stakeholders.
Cultural context and recognition of diversity is not only an organizational prerogative – it is a norm expected from all major players in the industry. For a company with an established reputation such as IBM, even a minor setback may result in a massive public outcry followed by the impact on business feasibility. Also, such action does not acknowledge the long-term dynamics of the trend. Therefore, its financial benefits are outweighed by the risks that accompany it.
As can be seen from the evaluation above, the first and the third alternatives are more focused on measurable, short-term financial gains while the second one aims at long-term social and cultural benefits without the possibility of definitive measurement. Two factors should thus be acknowledged. First, IBM’s history in equal opportunity promotion combined with the increased attention of stakeholders towards diversity issues makes the focus on diversity strategy a practical necessity. Likely, the negligence towards diversification and inclusiveness of the third alternative and lack of long-term planning in the first one will eventually nullify the achieved benefits.
At the same time, the investment in readjustment will open up new business opportunities for the company. Second, the size and scope of IBM’s operations make long-term investment both a possibility and necessity. In other words, it would be unwise to choose short-term improvements over the less tangible enhancements if the risks associated with the former are accounted for. Therefore, the investment in the readjustment of respective task forces’ strategies is both the most promising and least risky alternative.