The Notion of Organizational Diversity and the Role of Women in Business Organizations

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Organizations use a variety of efforts to capitalize on diversity, including recruiting and selection policies, as well as training and development practices. Effective, comprehensive workforce programs encouraging diversity have three distinct components. First, they teach managers about the legal framework for equal employment opportunity and encourage fair treatment of all people regardless of their demographic characteristics. Second, they teach managers how a diverse workforce will be better able to serve a diverse market of customers and clients. Third, they foster personal development practices that bring out the skills and abilities of all workers, acknowledging how differences in perspective can be a valuable way to improve performance for everyone. Much concern about diversity has to do with fair treatment. Most negative reactions to employment discrimination are based on the idea that discriminatory treatment is unfair. Regardless of race or gender, people are generally in favor of diversity-oriented programs, including affirmative action, if they believe the policies ensure everyone a fair opportunity to show their skills and abilities. Some diversity programs are truly effective in improving representation in management. They include strategies to measure the representation of women and minorities in managerial positions, and they hold managers accountable for achieving more demographically diverse management teams (Robbins and Judge, 2013).

The Notion of Organizational Diversity and the Role of Women in Business Organizations
The Notion of Organizational Diversity and the Role of Women in Business Organizations

Women in Organizations

Several studies show that business organizations stand to gain from the presence of women, especially on their Boards of Directors. Although women will remain a distinct minority on boards for the foreseeable future, women continue to be appointed to boards through their personal relationships as well as track records and appropriate expertise (Burke, 1997). Findings appear to show that, among others: (1) firms employing more women managers have probably done a better job of recruiting capable managers from the total available talent pool, and consequently will be in a better position to link with customers, employees, and other constituencies (Shrader et al., 1997); (2) firms having a higher proportion of women serving on their boards do engage in charitable giving to a greater extent than firms having a lower proportion of women serving on their boards. Further, the results suggest a link between the percentage of women on boards and firm. philanthropy in the areas of community service and the arts, but found no link between women board members and firm giving issues (Williams, 2003); (3) investors (in Singapore) value the diversity and potential contribution of women on the board of directors, that is, the appointment of female directors may be viewed as a means of improving corporate governance affirms whose boards may be dominated by old-boys networks, besides adding to the diversity of corporate boards (Ding and Charoenwong, 2013); and (4) since women represent a significant proportion of the customer base in many corporations, the presence of female directors would bring the female perspective to the boardroom and positively impact the bottom-line of companies, as explained by evidence that male CEOs find the viewpoints of female directors beneficial in understanding female clients (Burke, 1994). 

An oft-repeated research topic in this area is whether and how the participation of women in the firm’s board of directors and senior management enhances financial performance. Some findings show that firms operating in complex environments do generate positive and significant abnormal returns when they have a high proportion of women officers. Although the participation of women as directors does not seem to make a difference in this regard, firms with a high proportion of women in both their management and governance systems generate enough value to keep up with normal stock-market returns. These findings tend to support the policies currently being discussed or implemented in some countries and organizations to foster the advancement of women in business (Francoeur et al., 2008). Likewise, firms employing higher percentages of women are likely to perform better inasmuch as they are more progressive and more competitive because their management contingents more closely mirror the composition of existing markets (Shrader et al., 1997).

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