1. Running Head: STRATEGIC MANAGEMENT PLAN 1
STRATEGIC MANAGEMENT PLAN 2
STRATEGIC MANAGEMENT PLAN
Professor’s Name
Student’s Name
Course Title
Date
Internal Portion
Apple in an American corporation which designs manufactures
and sells personal computers, media devices and mobile
communication. The organization has various internal factors
which informs the decisions of the management in developing
the company. The company has a strong brand image. It has one
the strongest and the most valuable brands in the globe. This
helps it to introduce new products in the market by virtue of its
strong brand. However the company has limited distribution
networks. This is attributed to its policy of exclusivity. For
instance the organization selects sellers of its products. This
limits their market reach despite their having a strong brand
(Blenko et al., 2016).
The organization has an opportunity to develop new
products. Their current products have been well received in the
market. However, innovating further, the organization can
achieve more success in the market just as it has happened with
the Apple watch. Development of new product can significantly

2. support business growth not only in the local market but also in
the international market (Castro, 2016). One internal threat that
affects the organization is employee turnover. Some employees
feel that they are not given an opportunity to develop their
careers through training. Some other employees could leave the
organizations after being motivated by a higher pay. Employees
will likely consider leaving your organization if they are offered
a better pay no matter how much they love their work.
External Portion
The company enjoys stable political environment in developed
countries. Developing countries have developed free trade
policies which helps the apple company to distribute more
products to different geographies in the world. Few political
issues affect their business therefore giving the company an
opportunity to grow. The company has a weakness of
overdependence of high end market. This process only attracts
customers from the high income bracket and prevents low
income customers from purchasing their products (Chen & Ann,
2016). The low income customers represent the largest global
market while high income earners represent the minority and
this affects the organization in a big way. This weakens the
distribution of their products in the market.
Technological factors such as growing app market,
technological integration and cloud computing trends present
the company many opportunities. Cloud computing is gaining
significant popularity among many organization and
individuals. The company can offer cloud friendly apps and
devices to exploit this opportunity. Technological integration is
becoming a popular trend and Apple can use this opportunity to
provide products which can easily connect to each other. The
company is facing the threat of tough competition in the
industry. Their competitors such as Samsung use rapid
innovation to grow their market share. They also face the threat
of imitation. Due to their rapid innovation many other firms
design products which have the same features as of apple’s
products (Kim & Jun, 2017).

3. Strategic Goals
One of the main strategic goals for Apple Company is broad
differentiation. This strategy aims to differentiate the
organization as well as its products from competitors. This will
help the company to stand out in the market (Khan, Alam &
Alam, 2015). Product development is another strategic goal for
the company. Product development will need the company to
design attractive products which will help in growing its market
share. The company will implement this strategy by innovation
through the development process. The third strategic plan is
market penetration. This involves gaining a larger market share
by selling current products.
References
Blenko, D., Waldron, K., Cornelius, J., Nespoli, G., & Lee, D.
(2016). ORGANIZATIONAL ANALYSIS: APPLE RETAIL
STORES.
Castro, R. B. (2016). Apple Inc.–A Marketing Success Story.
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-
performance analysis for the leading smartphone brands of
Apple, Samsung and HTC. Total Quality Management &

4. Business Excellence, 27(3-4), 227-249.
Kim, J. M., & Jun, S. (2017). Integer-valued GARCH processes
for Apple technology analysis. Industrial Management & Data
Systems, 117(10), 2381-2399.
Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical
analysis of internal and external environment of Apple
Inc. International Journal of Economics, Commerce and
Management, 3(6), 955-961.
Running Head: COMPANY SELECTION 1
COMPANY SELECTION 4
COMPANY SELECTION
Name
Institution
Company selection.
I choose to develop a strategic management plan for the Apple
Company. The company is famous since it is among the most
significant manufacturing iPhones, MacBook, iPad, Apple
watches as well as breakthrough camera systems. It has a unique
manufacturing system in that it produces products with high
quality graphics and improved progress and dependability. Its
pricing policy is also efficient within the competitive market
(Blenko.et.al, 2016).

5. The company is known for the manufacture of high quality
technological devices. The company works towards advancing
the world’s mobility by creating products that offer workers all
they need to become better decision-makers at all times. It
ensures the connectedness of people through manufacturing
secure, intuitive and compelling devices through which they can
communicate effectively (Daniel.et.al, 2017).
I choose this company for the reason that it has a clearly
outlined vision of what it works to achieve. Having a clear goal
shows the enthusiasm of the company in its bid to make the
world a highly connected region. By providing products that are
necessary for communication, different individuals are at a
better position to communicate, which promotes international
unity. It also helps in improving business transactions amongst
people by getting them more connected (Kim & Jun 2017).
Also, I believe that the progress of the company will keep other
manufacturers on their toes in a bid to match the quality of
products offered by the organization. Consequently, different
competitive organizations produce high quality goods as
required in the market. Being a global market, the company
could be a benchmark for other competitive establishments.
The company is also a source of wealth to many countries in
which it has its branches as well as those that provide a market
for it (Chen & Bai, 2016). Setting up new strategies to market
Apple products will assist the company to develop further as
well as accomplish its goal of increasing the connectedness of
different nations.
References
Blenko, D., Waldron, K., Cornelius, J., Nespoli, G., & Lee, D.
(2016). ORGANIZATIONAL ANALYSIS: APPLE RETAIL
STORES.
Chen, J., & Bai, H. (2016, September). Analysis of the Reasons
for Social Responsibility Management Deficiency of
Multinational Corporations' Supply Chain Based on PDCA
Model-a Case Study of Apple Company. In 2016 6th
International Conference on Management, Education,

6. Information and Control (MEICI 2016). Atlantis Press.
Daniel, M., Neves, R. F., & Horta, N. (2017). Company event
popularity for financial markets using Twitter and sentiment
analysis. Expert Systems with Applications, 71, 111-124.
Kim, J. M., & Jun, S. (2017). Integer-valued GARCH processes
for Apple technology analysis. Industrial Management & Data
Systems, 117(10), 2381-2399.
Running head: APPLE COMPANY 1
APPLE COMPANY 5
APPLE COMPANY
Name
Institution Affiliation
History of the Apple company, and the contributions of various
executives
The Apple company was founded in the year 1977 from very
humble beginnings in a garage. It was founded by Steve Jobs
and Steve Wozniak. The company is known for designing,
manufacturing, and marketing mobile phones, media gadgets,
computers, and digital music devices. In 2018, the company had
achieved an incredible milestone by reaching trillion-dollar
capitalization. The 10th, 9th, and 8th generations of the iPhone
product were the definite golden geese of the company due to
their worldwide recognition and generation of billions.

7. In 2003, the company launched the iTunes music store where
customers could purchase music for about ninety-nine cents.
According to Steve Jobs, this provided a legal means for the
customers to download music, and also protected the rights of
the musicians (Galloway, 2017) In 2004, the company launched
the Apple iMac and the revolutionary iPod mini gadget. The
iPod received an upgrade the following year, which enabled it
to have video capabilities.
The first iPhone was introduced by Steve Jobs in 2007, which
really helped in globalizing the company and increasing revenue
generation. As the company kept growing, they introduced the
first iPad in 2010, and smart watches in 2015. That 2015, the
company experienced its highest revenue generation of about
235 million dollars. Although this revenue had a sudden decline
in 2016, it had a six percent recovery in 2017.
The company has enjoyed such innovativeness and growth due
to its various of executives over its history. Currently, the CEO
is Tim Cook, who launched the iPhone X in 2017. Other
important figures include the likes of Phil Schiller, who is vice
president of the global marketing. In 2018, the COO of the
company, Mr. Jeff Williams, introduced the latest Apple watch
which has a wide range of cutting edge features, like the
detection of falls, and the heart rate (Daniel, 2016) 2018 also
saw the introduction of the most expensive iPhone gadget, by
Tim Cook, at a price of about one thousand dollars.
The current mission statement and code of ethics
According to Steve Jobs, a human being is creates change
within the environment, hence he/she shouldn’t be a subordinate
to systems. The mission statement of the company is somehow
unorthodox and states that the company aims at designing the
highest quality computers in the world, as well as the best
operating systems, and software. Additionally, it aims at leading
the digital music market through its innovative products like the
iTunes and iPods (Cheng, 2016). The statement also speaks
about revolutionizing mobile communication through various
devices like the iPhone.

8. The company’s code of ethics states that Apple has a
commitment to abide to the best communal and environmental
requirements. The company stores should provide the safest
working conditions, in addition to treating the employees
respectfully and with dignity, and also utilize practices that are
environmentally friendly in the production of products and
services. The code also emphasizes on the compliance to the
rule of the land, and the importance of integrity (Chen & Ann,
2016)
Areas of concern
The company’s mission statement is unorthodox and could not
be clear to some. The code of conduct should also be expanded
to cover other areas of concern like the important labor rights
and managerial practices. Incorporating the labor rights would
ensure that their employees are fully covered. Subsequently,
covering the managerial practices would ensure that everyone
knows their roles and responsibilities clearly, and also ensuring
that the right channels are followed (Paulins, Hillery & Sturgill,
2016).
New mission statement
“commitment to making the best computers, phones and other
digital media in the world, via the provision of state-of-the-art
hardware, software, and online services.”
This statement is shorter and goes straight to the point,
highlighting the general purpose of the company, in simpler
terms.
References
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-
performance analysis for the leading smartphone brands of
Apple, Samsung and HTC. Total Quality Management &
Business Excellence, 27(3-4), 227-249.
Cheng, C. (2016). Samsung Elecs. Co., Ltd., et al. v. Apple
Inc. Intell. Prop. & Tech. LJ, 21, 157.
Daniel, S. F. (2016). Apple Watch App Development. Packt
Publishing Ltd.

9. Galloway, S. (2017). The Four: The Hidden DNA of Amazon,
Apple, Facebook, and Google. Penguin.
Paulins, A., Hillery, J., & Sturgill, A. (2016). Developing
Value-Driven Mission Statements. In Developments in Business
Simulation and Experiential Learning: Proceedings of the
Annual ABSEL conference (Vol. 43, No. 1).
Running Head: APPLE COMPANY
1
APPLE COMPANY
5
APPLE COMPANY
Name
Institution
Apple Company
Industry description
It is a technology establishment based in California that trades
electronic gadgets, software and also online services. The
company also sells hardware products such as iPhone
smartphone, iPad tablet computer, Mac PC, iPod media player,
Apple watch smartwatch, Apple TV and the HomePod smart
speaker. Software sold in the company includes iOS and macOS

10. operating systems, Safari web browser, iLife, and iWork
creativity as well as productivity suites. I want to focus on
iPhones.
The Apple Company is continually growing and expanding its
markets. The company is also increasing in terms of developing
its products in a way that creates more advanced products that
meet the preferences of its clients. In 2018, the company
recorded the highest revenue of 265.6B U.S dollars. iPhone
generated most of this income with its sales amounting to 218B
U.S dollars, which is about 82% of the total revenue. Most of
this revenue is plowed back into the company to facilitate the
production of new and upgraded products.
iPhone smartphones are in the maturity stage of product
development. The company has made a lot of products and
examined new competitors, new potential markets and also any
modifications necessary in brand image. At the maturity stage,
the establishment is making many sales and is at the climax of
the business. At this stage, it is only focusing on maintaining its
competitiveness to in turn support its client base (Arocha,
2017).
Among the target markets for iPhone smartphones from the
company are college and university students, business people
and even adults. Students require smartphones to record and
also keep their notes organized. Business people need iPhones
for effective communication with their clients while adults use
these smartphones for the camera, internet connection, storing
documents and also for map directions (Ng.et.al, 2017).
Target market
I choose the business people as one of the primary target
markets for iPhone smartphones. The main features of these
people are that they make a lot of communications regarding
their businesses and also need to store a lot of data concerning
the same. This makes smartphones an ideal gadget to possess
for their companies.

11. Most business people look for different features of an ideal
smartphone to use for their business transactions. Among the
highlights are functionality, design and data security, among
which are the top priorities for iPhone smartphones. The iPhone
has set a high benchmark for other mobile phone providers
through setting high quality for their products. They are,
therefore, a favorable choice for any business person.
Business people are the main topic for the iPhone smartphones
industry. The clients' reviews posted on the company's website
and social media platforms are taken seriously, and the company
strives towards fulfilling the needs of clients.
Competitive analysis
Among the main competitors of Apple Company in the line of
iPhone smartphone production is Samsung Company.one of the
strengths of the competitor company is that it has a broader
range of products extending to home appliances, semiconductors
and even consumer electronics. The company is also a strong
brand with a stable client foundation form Europe, and Asia.
However, the company has a weakness in that it has an
extensive product portfolio. Hence, it fails to create its identity
in the minds of its clients and cannot perform to its optimum
level for all of its products (Rani.et.al, 2016).
The target market for Samsung is broad in that it targets any
individual from 20s and above who can purchase their products.
I believe that the company should have a specific target
population that will create the basis of their production. It is
essential since the company will be able to come up with the
best products they could offer by focusing on a specified line of
products.
The marketing strategy for both companies is different in that
Apple Company is more specific than the Samsung Company.
Apple Company checks the needs of the clients to produce
goods that meet their preferences while Samsung Company, on

12. the other hand, is much diversified and does not focus on any of
the target markets (Peñaloza, 2018).
Regulations
Apple Company is based on the privacy policy that guides its
operations. The system guides the company in covering
collection, usage, disclosure, transfer and even storage of
private data. The company's products, therefore, contain data
and privacy information for specific features that require access
to an individual's private information (Reyes.et.al, 2018).
References
Arocha, J. B. (2017). Getting to the Core: A Case Study on the
Company Culture of Apple Inc.
Ng, S. F., Hassan, N. S. I. C., Nor, N. H. M., & Malek, N. A. A.
(2017). The Relationship between Smartphone Use and
Academic Performance: A Case of Students in A Malaysian
Tertiary Institution. Malaysian Online Journal of Educational
Technology, 5(4), 58-70.
Peñaloza, L. (2018). Apple: from subculture to cultural
dominance. The Business & Management Collection.
Rani, H. M. N. S., Zuber, F., Yusoof, M., Zamziba, M., &
Toriry, S. (2016). Managing Cross-Cultural Environment in
Samsung Company: Strategy in Global Business. International
Journal of Academic Research in Business and Social
Sciences, 6(11), 605-613.
Reyes, A., Qin, P., & Brown, C. A. (2018). A standardized
review of smartphone applications to promote balance for older
adults. Disability and rehabilitation, 40(6), 690-696.
2005 Research Quarterly
Workplace Diversity:
Leveraging the Power
of Difference for

13. Competitive Advantage
By Nancy R. Lockwood, SPHR, GPHR
HR Content Expert
Research
2005 SHRM '̂ Research Quarterly
Abstract
Workplace diversity has taken on a new face. Today, workplace
diversity is no longer just about anti-discrimina-
tion compliance. Workplace diversity now focuses on inclusion
and the impact on the bottom line. Leveraging
workplace diversity is increasingly seen as a vital strategic
resource for competitive advantage. More companies
are linking workplace diversity to their strategic goals and
objectives—and holding management accountable for
results. Thus, HR plays a key role in diversity management and
leadership to create and empower an organiza-
tional culture that fosters a respectful, inclusive,
knowledge^ased environment where each employee has the
opportuni^ to learn, grow and meaningfully contribute to the
organization's success.
'Diversity represents a company's fundamental atti-
tude that it not only respects and values the individ-
uality of its employees but also understands how to
tap the potentially significant contributions inherent
in diversity."'
Alexandra Groess
Allianz Group's Intemational Diversity Project

14. Workplace Diversity—An Evolution
Fram compliance to inclusion, the concept of work-
place diversity is evolving. Coming from an organiza-
tional viewpoint, this article explores the changing per-
ception of workplace diversity, elements of an inclusive
corporate culture, the business case and HR's leader-
ship role to maximize the benefits of a diverse work-
force in a changing marketplace. While a broad range
of issues is covered, it should be noted that "one size
does not fit all," as organizations are in different
stages of development regarding workplace diversity. In
addition, workplace diversity is not strictly a U.S. con-
cept: a brief discussion on the drivers of workplace
diversity in the European Union is presented.
Diversity Defined Today
As predicted in the landmark study Workforce 2020.
rapid technological change, globalization, the demand
for skills and education, an aging workforce and greater
ethnic diversification in the labor market have forever
changed the employment landscape.̂ The definition of
diversity extends well beyond the traditional view Itiat
once focused primarily on gender and race and reflects
the broader perspective of workplace diversity today.
Murray. S. (2003). Diversify tnakes a difference. Retrieved
February 22.
2005. from www.alli3nigroup.com.
Judy, R. W,, & D'AmiCO, C. (1997). Workforce 2020: Work
and workers
in the 21sl century. Indianapolis, IN: Hudson Institute.
' SHRM Glossary of Human Resource Terms, www.5hrm.org

15. /hrresources/hrglossary_published/d.asp.
' Jayne. M. E, A., & Dipboye, R. L (2004, Winter). Leveraging
diversity to
Improve business performance: Research findings and
recommenda-
tions for organizations. Human Resource Management. 43, 4,
409-424.
'A broad definition of diversity ranges from person-
ality and work style to all of the visible dimensions
such as race. age. ethnicity or gender, to secondary
influences such as religion, socioeconomics and
education, to work diversities such as management
and union, functional level and classification or
proximity/distance to headquarters."'
Integration and Learning:
A New Paradigm for Managing Diversity
Diversity in the United States has evolved since the
1960s. As illustrated in Rgure 1, diversity v̂ gs first
based on the assimilation approach, with everyone
being part of the "melting pot." Compliance (e.g., affir-
mative action, equal employment opportunity) is
important in diversity, and key legislation has been an
effective tool for change {e.g.. Title VII of the Civil
Rights Act of 1964, Age Discrimination In Employment
Act of 1967, Americans with Disabilities Act of 1990).
Today, however, the impetus behind workplace diversi-
ty is that of inclusion and the business case: embrac-
ing and leveraging differences for the benefit of the
organization. The collaboration of cultures, ideas and
different perspectives is now considered an organiza-
tional asset—bringing forth greater creativity and inno-
vation—with the result that many companies are

16. increasingly focusing on corporate diversity initiatives
to improve organizational performance.'
Diversity initiatives do not always meet expectations.
The traditional schools of thought behind many diver-
sity interventions are: 1) assimilation, based on the
idea that "we're all the same" (promoting equal
opportunity); and 2) differentiation, from the philoso-
phy "we celebrate differences." Today, groundbreaking
research goes beyond the historical framework of
workplace diversity. The emerging paradigm is inte-
gration and learning. That is, companies promote
equal opportunity and value cultural differences,
using the talents of all employees to gain diverse
Figure 1 Evoiution of Approaclies to Workpiace Diversity
Approach: assimilation
Basis: melting pot myth
legal *
EEO/AA *
valuing diversity *
differences as assets *
managing diversity
multicultural
corporate cultures
Source.' Cair-Ruffino. N. (1999). Dlversi^ success strategies.
Boston: Butterworth-Heinemann.

17. Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM" Research Quarterly
work perspectives. To achieve this level of diversity
management, however, organizational leaders must
have a clear understanding of how t h ^ define diversi-
ty as weli as what exactly the organization does with
the experiences of being a diverse workforce.^
An Inclusive Corporate Culture
The concept of inclusion is increasingly important in
the discussion of workplace diversity. In many ways,
this evolution reflects societal values in the work-
place. For example, two beliefs commonly held by
Americans are that everyone deserves a chance
(equal opportunity, sometimes referred to as the
"level playing field") and that all people should be
treated with dignity and respect.^ The values of equal-
ity, respect and opportunity for all represent the cor-
nerstone of workplace diversity. Inclusiveness is thus
a win-win dynamic: it generates opportunities for
growth, fiexibility and adaptation in the marketplace
for both the employee and the organization.
The Business Case for Workplace Diversity
Increasingly, the case for workplace diversi^ as a
business imperative is gaining recognition by leaders
in the business worid. At a symposium sponsored by
The Conference Board regarding diversity in the work-

18. place, for example, 400 executives agreed that
"diversity programs help to ensure the creation, man-
agement, valuing and leveraging of a diverse work-
force that will iead to organizational effectiveness and
sustained competitiveness."'
One ofthe major drivers behind the business case is
the demographic changes that directly affect the
labor pool and available talent {see Figure 2). These
changes are significant In an oi^anization, human
capital and workforce relationships are the backbone
of success. The fiow of information between col-
leagues, work teams, customers and suppliers, for
example, depends on the quality of relationships and
talent in the workplace.^ Consequently, workplace
diversity is increasingly viewed as an essential suc-
cess factor to be competitive in today's marketplace.
Advantages
Six Key reasons to tie workplace diversily to organiza-
tional strategic goals and objectives are: 1) greater
adaptability and fiexibility in a rapidly changing mar-
ketplace; 2) attracting and retaining the best talent;
3) reducing costs associated with turnover, absen-
teeism and low productivity; 4) return on investment
(ROI) from various initiatives, policies and practices;
5) gaining and keeping greater/new market share
{locally and globally) with an expanded diverse cus-
tomer base; and 6) increased sales and profits.
Workplace diversity can be viev/ed as having both
direct and indirect links to the bottom line. In busi-
ness, the preferred equation for success is a single
action that directly impacts financial performance.

19. Workplace diversity, however, is a complex phenome-
non. Consequently, the link of workplace diversity to
financial success is not always immediately apparent,
nor is it always linear. Two examples below illustrate
scenarios with direct and indirect links of workplace
diversi^ to organizational performance."
• Direct link: Organizations that expand their customer
base most effectively do sc with a workforce that is
reflective of their clients. DuPont, for example, con-
siders diversity a business imperative vital to ongo-
ing renewal and competitiveness in the 21st century.
This philosophy was illustrated when the company
learned how one small change cculd directly trans-
late into significant profits. At DuPont Merck, the
sales of an anticoagulant drug in the Hispanic mar-
kets were low. When a Hispanic manager noticed
that the drug was only labeled in English and conse-
quently translated the instructions into Spanish.
sales improved significantly Now, educational materi-
' Thomas. D. A.. & Ely. R. J. (2002). Making differences
matter: A new
paradigm for managing diversity. Retrieved March 15. 2005,
from
Harvard Business Online, www.bbsp.harvard.edu.
• Gardenswartz. L., Rowe. A.. Digh. D.. & Bennett. M. F.
(2003). The glol
al diversity desk reference: Managing an internationai
workforce. Sen
Francisco: John Wiley & Sons. Inc.
Hart. M. A. (1997). Managing diversity for sustained
competitiveness.
New York; The Conference Board.

20. ' Carr-Ruffino. N. (1999). Diversity success Strategies. Boston:
Butterworth-Heinemann.
' Hart. M. A. 11997). Managing diversity for sustained
competitiveness.
New York: The Conference Board.
Figure 2 Demographic Trends Transforming the Workforce
• Greater diversity in the iabor pool: By 2008. women and
minorities will represent 70% of the new labor force
entrants, and by 2010, 34% of the U.S. workforce will be non-
Caucasian.
- An aging workforce: By 2010. the U.S. workforce will have an
increase of 29% in the 45-64 age group, a 14%
increase in the 65+ age group and a 1% decline in the 18-44 age
group.
• Gioiiailzatlon: In the next decade. 75% of new workers will
likely be from Asia, while North America and Europe will
have 3% of the world's new labor force.
; Hewia Associates. (2004, February). Preparir^ the workforce
of tomorrow. Retrieved March 21,2005. from www.tiewitt.com.
Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM- Research Quarterly •
als for the drug are translated into 15 languages and
bring in millions of dollars in new business.̂ "

21. • hdirect link: Having access to and retaining talent
from a worlcfwide diverse iabor pool is key to gain-
ing a competitive edge in the global marketplace.
To expand and keep their market share, Nortel
views lost revenue due to turnover as a reason to
support diversity. With the cost of replacing an
employee at $55,000 and turnover at 7% (com-
pared to 17% in the information technology indus-
try), the overall turnover cost is stiil quite high. For
example, 7% attrition for 80,000 employees trans-
lates to replacing 5,600 people. Thus, when 5,600
(people) is multipiied by $55,000 (the cost of
replacing one employee), turnover cost is $30.8
million! Thus, at Nortel, attracting and keeping tal-
ent^a key aspect of vi/orkplace diversity—has a
significant impact on the bottom line."
Firms are inoreasingly aware of the impact of diver-
sity initiatives on organizational effectiveness. For
example, factors that affect organizational profits
are highlighted in a study by the Society for Human
Resource Management on the impact of diversity on
the bottom line. HR professionals from companies
on Fortune's list of Top 100 Companies to Work For
state that diversity initiatives provide organizations
with a competitive advantage by positive improve-
ments in corporate culture, employee morale, reten-
tion and recruitment (Figure 3). For example, 40% of
companies ensure ieadership development pro-
grams are available to all employees, 34% increase
innovation by tapping talent of employees of all
backgrounds, and 31% utilize diverse experiences
for special projects and assignments."
The importance of positive community relations also

22. illustrates the link between workplace diversity and
' Ibid.
Martino, J. (1999). Diversity.' An imperative for business
success. New
Yofk: The Conference Board.
Society for Human Resource Management. (2001}. Impact of
diversity
initiatives on the bottom line. Alexandria, VA: Author.
Richard. 0. C . & Johnson. N. B. (2001. Summer).
Understanding the
impact of human resource diversity practices on firm
performance.
Journai of Managerial issues. 13, 2. 177-196.
Lockwood, N, R. (2004. Oecember), Corporate social
responsibility:
HR's leadership role. SHRM Research Quarterly. 4.
Cole. y. (2004, June/July). Top 10 companies fof diversity.
Diversityinc
Top. 3. 3. 56-96.
Humphreys, J. M. (2004, August}. The multicultural economy
2004:
America's minority buying power. Georgia Business and
Economic
Conditions. 63. 3, 1-12.
Cole. Y. (2004, June/Juty). Top 10 companies for diversity.
Oversitylnc
Top. 3. 3. 56-96.

23. Martino, J. (1999), Diversity: An Imperative for business
success. New
York; The Conference Board.
Schramm. J. (2004). SHRM 2004-2005 workplace forecast: A
strate-
gft: outlook. Alexandria, VA: Society for Human Resource
Management,
the business case. When organizations develop exter-
nal partnerships with minority communities and sup-
pliers, for exampie, this can lead to good will and a
reputation as an "employer of choice."^^ When
employees are proud of their organization for its con-
tributions and connections to the community, they are
more loyai to their employer and more iikely to boast
about their company to family and friends. The result
is lower tumover and a positive employer brand that
better attracts the best talent in the marketplace." A
prime example of diversity partnerships is that of
Pitney Bowes, the No. 1 company on the 2004
Diversityinc Top 50 Companies for Diversity iist, with
recruitment initiatives and partnerships deveioped
with organizations such as the National Urban
League and the National Society of Hispanic MBAs.
Another example is that of Ford Motor Co., the No. 1
company on the 2003 Diversityinc Top 50 list, that
made community reiatlons a priority: Ford spent 6%
of its total procurement budget ($3.2 billion) with its
first-tier diversity suppiiers."
Money Talks
The shift in purchasing power in the United States pro-
vides further evidence for the business case for work-
place diversity. According to the Selig Center for

24. Economic Grovrth, the purchasing power of minorities
in the United States wili quickly outpace that of whites
in the next five years, in 2009, for example, the con>
bined buying power of African-Americans, Hispanics,
Asian-Americans and Native Americans is expected to
exceed $1.5 triliion, more than triple the 1990 level
by a gain of $1.1 trillion or 242%. In contrast, the buy-
ing power of whites wiii increase by 140%.̂ ^
Thus, in order to ensure that the company's sales
and marketing teams reach the minority groups with
funds to purchase its products and services, one of
the most effective avenues is to utiiize the knowledge
of minori^ employees who can relate to different
groups in the marketplace. Verizon Communications,
for exampie, utilizes its African-American spokespeo-
ple, such as the actor James Eari Jones, to attract
African-American consumers.'' Fannie Mae, a leading
mortgage iending firm, wanted to reach the many
minorities who did not yet own homes; in the United
States, only 46% of African-Americans and Hispanics
own homes, compared with 72% of whites. The com-
pany utilized diversity training as a strategic business
initiative to reach a segment of the population that
could profit from their service.'*
Rnally. the SHRM 2004-2005 Workplace Forecast
notes that one ofthe top economic trends is expan-
sion into the global marketplace.'^ Organizations can
better capture, keep and serve their internationai cus-
tomer base when their own workforce—such as
A Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage

25. 2005 SHRM^ Research Quarterly
sales, marketing and customer service—understands
the needs of other cultural and ethnic groups.
Metrics—the ROI of Diversity
As with all business initiatives, measuring the retum on
investment of diversity makes good business sense.
Measurement of diversity management can be consid-
ered in a number of areas, such as organizational cul-
ture, demographics, accountability, productivity, growth
and profitability. For example, measuring diversity lead-
ership commitment may involve many individual fac-
tors, such as the development of diversity vision/mis-
sion statements by a specific date, the number of
times diversity is mentioned as a strategy in executive
presentations, the percentage of board representation
by group, the percentage of diverse employees who
were promoted due to mentorship and the percentage
of diversity strategy plans implemented."
To determine the retum on investment, hard and soft
data must tie converted to monetary values. There are
five basic steps: 1) identify a unit of measure that rep-
resents a unit of improvement; 2} determine the vaiue
of each unit; 3) calculate the change in performance
data; 4) determine an annual amount for the change;
and 5) calculate the total value ofthe improvement. '̂
The diversi^ retum on investment (DROI) is calculat-
ed by using the diversity initiative cost and benefits
to get the benefit/cost ratio {BCR). BCR = diversity
initiative benefits -i- diversity initiative costs. This ratio

26. is also referred to as a cost-to-benefit ratio.
Specifically, the DROI calculation is the net benefit of
the diversity initiative divided by the initiative costs:
DROI% = (net diversity initiative benefits -=- initiative
costs) X 100. This formula is the same basic formula
used to evaluate other investments in which the ROI
is reported as earnings divided by the investment.'^
Fbr example, the initiai cost of a diversi^ awareness
program may be $50,000. The measurable value of
the program is determined to be three years. During
a three-year period, the program will have a net sav-
ings of $30,000 ($10,000 per year). Since the aver-
age book value is approximately half the cost, the
average investment in this case is $25,000
($50,000 -r 2). The average ROI = annual savings ^
average investment: $10,000 -;- $25,000 = 40%.
Short- or Long-Term Investment
The business advantage for workplace diversity is
clear. Yet companies often expect short-term resuits.
The challenge is to demonstrate measurable impact
on financial success as well as realistically manage
expectations. Rather than a quick fix, the business
' Htjbbartl, E. E. (2004). The diversity scorecarti: Evaluating
the impact
of diversity on organizationai performance. Burlington, MA:
Eisevier
Butte rwortli-H ei nemann.
Ibid.
' Ibid.

27. Figure 3 Diversity and Competitive Advantage
In what ways does your organization actively leverage the
diversity of employees for the purpose of increasing com-
petitive advantage? {Number of Respondents = 310}
By ensuring leadership development
programs reach all employees
By meeting ttie needs of diverse
coslomers (bi-iinguai. etc.)
Sy inlegraiing diversiiy in
organization's business strategy
By increasing Innovation by lapping
employees of all backgrounds
By utilizing diverse espenence
levels on orojects/assign men is
By using diverse employees
to recruit new employees
By improving the performance of teams
8y attfactifig customers of
a particular market or demographic
By using diverse employees as mentors lo help
employees imprnve thair personal performance
By iiicreasmg productivity wrth motivation
technlQues that apply to a variety of employees
By conducting culture audits to tsenchmatk

28. diversity progress against competitors
Not applicable: rny organization doesn't
actively leverage workforce dlversrty 30%
0% 10% 20% 30% 40%
Sou/te; Society for Human Resource Management. (2004.
August 3)- SHRM/Fortune Diversify Weekly Survey. Retrieved
March 25.2005. from
wmt.atwm.oai.
a* I-:-
Workplace Diversity; Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM" Research Quarterly
case for workplace diversity is a long-term investment
and offers sustainabiii^ in a competitive marketplace.
Senior Management's Role
Visibility, communication and accountability are key to
achieving a competitive diverse workforce. A recent
study on what makes and breaks diversity initiatives
found three critical points of leadership: 1) accountabil-
ity; 2) a passion for diversi^; and 3} sustained involve-
ment. Visible commitment throughout the organization
is important: adding diversity on the agenda at execu-
tive meetings and company conferences, appointing
diversity candidates to top positions, and assigning
clear roles and responsibilities to the senior manage-

29. ment team regarding diversity management. Account-
ability creates sustained involvement—that is, holding
managers accountable to deliver diversity results.
Participation in diversity councils is recommended as a
• development path for senior leadership.̂ ^
However, simply placing women and/or minorities in
high-profile positions, for example, is insufficient.
Rather, the more effective approach is to hold man-
agement accountable for results. Consequently, to get
middle nnanagement and employee buy-in, top man-
agement must establish clear implementation and
reporting requirements. At DuPont. for example, senior
management ensures accountability for diversity man-
agement by integrating diversity into the overall busi-
ness perfonnance evaluation process, including devel-
oping cost and profit objectives as vi«ll as how com-
pensation is determined. The connpany also uses tar-
geted career development initiatives to help diverse
people fill key work assignments, thus supporting
advancement and addressing glass ceiling issues.
The Quaker Oats Company aims to keep diversity
management simple by using two key tools: 1) the
diversity progress menu; and 2) the diversity account-
ability guidelines. The connpany's goal is to supply
managers with a best practices list that offers flexibili-
ty tied to individual business cultures as well as per-
formance." Nine of the top 50 companies on the
" Matton. J. N., & Hernandez, C, M. {2004, August). A new
study identi-
ties the "makes and breaks'" of diversity initiatives. Journal of
Organizational Exceilence. 23. 4, 47-58.
" Hart. M. A, (1997). Managing diversity for sustained

30. competitiveness.
New York: The Conference Board,
" Coie. Y. (2004, June/July). Top 10 companies for diversity.
Diversityinc
Top, 3. 3. 56-96,
» Carr-Ruffino. N, (1999), Diversity success strategies. Boston:
Butterworth-Heinemann,
" Business for Social Responsibility. Board diversity. Rotriaved
March 4,
2005, from www.bsr.org,
" Catalyst, (2003), 2003 Catalyst census of women board of
directors.
Retrieved March 7. 2005, from www.cataIystwomen.orf
knowledge/
tities/fi les/fact/Snapsriot%202004.pdf.
" The Conference Boana. (1999). Board diversity In U.S.
corporations.
New York: Author.
" Richard. 0. C . & Johnson, N. 8. (2001, Summer).
Understanding the
impact of human resource diversity practices on firm
perTormance.
Journal of Managerial Issues. 13. 2.177-196.
2004 Diversityinc Top 50 Companies for Diversity list
tie diversity to managers' compensation. Fbr example,
CitiGroup measures its managers' attempts to attract
talent and develop a diverse workforce. At Verizon
Communications, 5% of bonuses for directors and
above are related to diversity.'̂ Simple daily actions

31. also communicate commitment to workplace diversity:
the CEO greets employees in their native language,
and the supervisor takes time to understand direct
reports with different cultural values and viewpoints.^
Diversity Management and the Board of Directors
Increasingly, the business case for diversity focus-
es on the board of directors. The impetus to
change the board composition is a direct result of
the trend toward corporate governance and diversi-
ty of the workforce, customer base and other
stakeholders. Organizations want a wider range of
leadership skills, work styles, perspectives and
expertise, as well as increased representation of
women and minorities among board directors.^'
There is positive evidence of change. For example,
in the Fortune 500 in 2003. women held 14% of
board seats (up from 10% in 1995), and 54 com-
panies had 25% or more women on boards of
directors (up from 11% in 1995).^^ Finally, change
in board composition is also occurring at an inter-
national level, as global organizations expand the
cultural diversity of their boards with expertise in
international business from other countries."
Managing Diversity: HR Challenges and Opportunities
With the changing marketplace and an increasingly
diverse labor pool. HR leaders are dealing with a
myriad of factors regarding diversity management.
Broadly speaking, workpiace diversity challenges
can be considered within three interrelated cate-
gories: attracting and retaining talent, greater
diversity among employees and training.

32. Attracting and Retaining Talent
Competition for talent is growing—from competi-
tion abroad, lower education levels of U.S. workers
compared with other countries. U.S. immigration
challenges and fear of terrorism in the United
States.^ Further, with the retirement of the baby
boom generation (those born from 1944 to 1960)
in the next 10 years, a key concern is retention of
older workers. Organizations are in different
stages of preparation regarding this likely loss of
talent. As of 2003, 35% were just becoming aware
of the issue. 35% did not know if their organiza-
tions were ready, 23% were beginning to examine
policies, and 4% had proposed specific changes.
Many HR leaders are looking for ways to attract
and retain older workers. Benefits and workplace
programs, such as reward initiatives and flexible
work arrangements (e.g., part-time work, phased
Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM- Research Quarterly
retirement), are key tools that offer attractive
options to older workers.^^
The skill shortage, however, will hit some indus-
tries harder and sooner than others. The nuclear
power industry, for example, faces replacing as
much as 50% of its workforce. The talent crunch
will also strike the expanding service industry:
sales positions in the United States, for example,

33. are expected to increase by 25%, yet many in
today's sales force are aged 55 or older.̂ ^
A recent study notes most firms are not paying
close attention to retention and promotion strate-
gies. For example, top minority talent is seeking
leadership opportunities; yet companies indicate
they have difficulty attracting talent for executive
leadership (42%) and professional and technical
skills (42%).^^ In corporate America, the "revolving
door syndrome" is particularly evident for women
and minorities. To retain women and minorities,
HR professionals should re-evaluate their organiza-
tion regarding taient, mentoring, career develop-
ment and succession planning. Strategic initia-
tives, such as mentoring, on-boarding and "listen-
ing" forums, are additional tactics to address
minority retention."
Greater Diversity Amor^ Employees
The term "diversity" has typically referred to
women and minorities. Today, however, employers
are beginning to formally acknowledge other
employees as well (e.g., ethnic groups, people with
disabilities and self-identified gay, lesbian and
bisexual persons). Some firms encourage a wel-
coming and inclusive environment for all employees
by creating diversity network groups. Kraft Foods
uses employee councils to build employee develop-
ment. Through nine employee councils (African-
American Council, Hispanic Council, Asian-American
Council. Rainbow Council, Women in Sales Council,
Black Sales Council, Hispanic/Asian Sales Council,
Women in Operations and African-Americans in
Operations), Kraft takes an active role in mentoring

34. and supporting its diverse workforce. For example,
the company builds relationships with universities
to bring in talent through internships and internally
sponsors career days focusing on leadership com-
petencies.^^
Different groups have different needs, and they want
their needs recognized and met. Acknowledgment of
different needs yields greater employee satisfaction,
employer loyalty and, in turn, lower tumover and
greater productivity. As a result, more organizations
offer programs to address issues such as work/life
balance and demands for more flexibility with
telecommuting, adoption support, flexible health and
dependent care spending accounts, elder care and
domestic partner benefits.*
Within workplace diversity, one ofthe least discussed
minority groups is people with disabilities. This group
is a source of under-represented taient in the work-
place. One study reveals that in the majority of compa-
nies, individuals with disabilities comprise less than
10% of their total workforce. The study recommends
top management lead by example and hire qualified
individuals with disabilities on their staff. Through
training and focus groups, HR leaders can improve
sensitivity toward employees with disabilities.^^
Training
Within the context of workplace diversity, training
plays a key role in retaining talent. The role of training
is to promote workplace harmony, learn about others'
values, improve cross-cultural communication and
develop leadership skills. Awareness training raises

35. understanding of diversity concems by uncovering hid-
den assumptions and biases, heightening sensitivity
to diversity in the workplace and fostering individual
and group sharing. Skill-based diversity training
improves morale, productivity and creativity through
effective intercultural communication.^^ Leadership
development, team buiiding and mentoring programs
are also examples of organizational training that pro-
motes growth and collaboration. An overlooked area
regarding retention is cross-cultural competence with-
in the organization, often a missed opportunity to
address minority retention concerns.^
Rnally. working in a diverse organization requires
diversity competencies for everyone, including HR
(see Rgure 4). Yet not all HR professionals are
experts in diversity. A survey notes that only about
one-third of companies think their HR staff has the
skills to serve a diverse U.S. workforce and only 22%
believe HR has the skills to serve a global
workforce/^ HR professionals best qualified to deal
•• Collison, J. {2003, June). SHRM/NOWCC/CEO older
workers survey.
Alexandria, VA: Society for Human Resource Management.
=' Towers Pemn HR Services. (2004. October). The coming
talent crisis:
Is your organization ready? Retrieved March 2 1 , 2005. from
www.towers.com.
" Hewitt Associates. {n.tS.). The workforce Is charging: Is your
organiza-
tion? Retreved March 2 1 . 2005. from www.hewttt.com.
" Hewitt Associates. (2004. February). Preparing the workforce

36. of tomor-
row. Retrieved February 10, 2005, from www.hewitt.com.
^ Cole, Y. (2004, June/Juiy). Top 10 companies for diversity.
Diversityinc
Top. 3. 3. 56-96.
^ Burke. M. E. (2004, June), SHRM 2004 benefits survey
report.
Aiexandfia, VA: Society for Human Resource Management.
'• Lengnick-Haii. M. L.. Gaunt, Ph., & Coilison, J. (2003,
April). Employer
incentives for hiring individuals with disabilities. Aiexandria,
VA:
Society for Human Resource Management.
" Grant, B. Z., & Kieiner, B. H. (1997). Managing diversity in
the word-
piace. Equal Opportunities International. 16. 3. 26-33,
" Hewitt Associates. (2004, February). Preparing me worktorce
of tomor-
row. Retrieved February 10, 2005, from swww.hewitt.com.
" ibid.
Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM'"̂ Research Quarterly
with workplace diversity have experience in areas
such as team building, change management, conflict

37. resolution and cross-cultural communication.
Aligning the Diversity Process
W}th Strat^c Business Goats
The organization that best utilizes the full potential of
all employees intentionally and thoughtfully aligns
workplace diversiiy with strategic business goals by
following these steps:
Define diversity. Clarify the role of workplace diversity
in the organization, including leadership roles and
expectations for diversity initiatives. In vision and mis-
sion statements, highlight the importance of diversity
{for example, is the organization's philosophy on inclu-
sion clearly stated?). Place the vision and mission
statements on the company Web site as a public
• statement of the organization's commitment to work-
place diversity. Communicate commitment by allocat-
ing the necessary resources—staff, budgets and
time— t̂ o move the diversity process forward."'
Establish accountability. With senior management, HR
diversity leaders should develop challenging yet real-
istic goals for diversity interventions. Demonstrate
organizational commitment: 1) appoint senior execu-
tives to diversity task forces for succession planning.
HuDbard. E. E. (2004), The diversity acorecard: Evaluating the
impact
ot diversity on organizational performance. Burlinglon, MA:
Elsevier
Butterwo^t^•He j neman n.
• Ibid.

38. ' Mscton, J. N.. & Hernandez. C. M. (2004, August). A new
study Identi-
fies the "makes and breaks" of diversity Initiatives. Journal of
Organizational Excellence. 23. 4 . 47-58,
' Nalionai Urban League, (2004, June). Diversity practices that
work:
The American worker speaks. New York: Author.
Figure 4
HR Competencies
for Diversity Management
Actlve/nonjudgmental listening.
Willingness to challenge one's own concepts about
diversity.
Collaboration skills.
Experience with conflict resolution and change man-
agement.
Sensitivity toward terms iabeiing groups regarding
diversity.
Ability to identify diversity issues and understand
related tensions.
Intercultural team building.
Ability to express respect and appreciation.
Openness to learning about others who are different.
Ability to educate others on how to build diverse
people skiits.

39. • Abiiity to provide appropriate responses.
Source: Adapted from Carr-Rufflho, N- (1999). Diversity
success
strategies. Boston: Butterworth-Heinemann.
education and training initiatives: 2) recnjit diversity
candidates for senior leadership positions; and 3)
establish diversity goals and objectives for all leader-
ship levels in the performance management process
and reward programs. Demonstrate commitment to
workplace diversity by developing solutions when
problems are identified through employee attitude
surveys, focus groups, etc."
Develop a diversity scorecanJ. Often overlooked, the
scorecard is an important tool to manage diversiiy.
The scorecard includes financial and nonfinancial
recognition of diversity ROi initiatives as v^ell as rele-
vant feedback (e.g., change management lessons).
When developing the diversity scorecard, include
measures aligned with the organization's strategic
business goals. When determining measures, keep in
mind four themes: 1) key deliverables that leverage
the role of diversity in the organization's overall strate-
gy; 2) utilization of diversity in the development of a
high-performance work environment; 3) ways in which
the corporate culture is aligned with the organiza-
tion's strategy; and 4) the efficiency of tfie diversi^
deliverables.
Studies on Workplace Diversity and the Bottom Une
Several studies link workplace diversity and com-
pany performance. The study results run the
gamut from identifying critical success factors for

40. diversity initiatives that impact organizational
effectiveness to connecting gender and diversity
with financial performance.
' The "Makes and Breaks" of Diversity Initiatives"
This study found that successful initiatives that
leverage diversity to enhance organizational
effectiveness share certain characteristics and
approaches. Specifically, successful workplace
diversity initiatives hinge on committed leader-
ship, goals/targets of measures of effective-
ness, strong diversity professionals, employee
involvement and ties to performance evaluation,
as well as data to identify, quantify and commu-
nicate progress and challenges.
- Diversity Practices That Work"
Companies with diversity practices collectively
generated 18% greater productivity than the U.S.
economy overall. The results of this study sug-
gest that, at a minimum, diversity progress may
enhance productivity through effective good lead-
ership and management practices. Key factors
that had the greatest impact on overall per-
ceived effectiveness of diversity initiatives were:
1) a track record of recruiting diverse people; 2)
management that is accountable for diversity
progress and holds others accountable; 3) lead-
ers who demonstrate commitment to diversi^;
Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM" Research Quarterly

41. 4) rewarding people who contribute in the area
of diversity; and 5) training and education to
increase awareness and help employees under-
stand how diversity can impact business results.
• The Effects of Diversity on Business Perfonnance'
This study looks at the effects of racial and gender
diversity on organizational performance. A key find-
ing reveals that racial diversity has a positive effect
on overall performance in companies that use
diversity as a resource for innovation and learning.
Further, the study results suggest that the best per-
formance outcomes occur when diversity is found
across entire organizational units.
• Connecting Corporate Performance
and Gender Diversity'^
Based on an examination of 353 Fortune 500
companies, this study connects gender diversity
• and financial performance. {The study does not,
however, demonstrate causation.) The key find-
ings show that the group of companies with the
highest representation of women on their top
management teams experienced better financial
performance than the group with the lowest
women's representation: that is, 35% higher
return on equity and 34% higher total return to
shareholders. The study results suggest there is
a business case for gender diversity (e.g.,
recruiting, developing and advancing women)—
specifically, organizations that focus on diversity
are in a stronger position to tap the educated
and skilled talent in the marketplace. This is
important because women comprise 47% of the

42. U.S. paid labor force and hold 46% of manage-
ment positions. In addition, women earn more
than half of all bachelor's and master's degrees
in the United States (57% and 59%, respectively)
and nearly half of all doctorates and law degrees
(45% and 47%. respectively).
Global DIverstty—The European Union
Focus on gender equality and antiKliscrimination by
the European Union (EU) offers a unique example of
workplace diversity outside of the United States. With
the addition of 10 member states in May 2004, the
European Union—with 25 member states in 2005
and nearly 500 million people—is one ofthe largest
economic forces in the world. Through legislation
(called Directives) under the Social Policy Agenda, the
EU is establishing significant social, economic and
political change. The goal is to be "the most competi-
tive and dynamic knowledge-based economy in the
world capable of sustainable economic growth with
more and better jobs and greater social cohesion." To
achieve the necessary economic and social renewal,
the Commission ofthe European Communities devel-
oped a five-year action plan (2000-2005) that
focused on investing in people and combating social
exclusion.'' In 2000, with the introduction of the EU
Article 13 Race and Employment Directives (to be
effective by 2006), the EU put in place measures
designed to enforce the right to be treated equally.**
1. The Racial Equality Directive 2000/43/EC pro-
hibits discrimination on the grounds of a personal
racial or ethnic origin.

43. 2. The Employment Equality Directive 2000/78/EC
prohibits discrimination on the grounds of religion
or belief, disability, age or sexual orientation.
However, the establishment of a Directive does not
guarantee immediate results or even substantial
progress. While EU Directives require member states
to meet the minimum legislative standards, more
work is needed to achieve workforce diversity. Fbr
example, a recent report notes that while gender
employment and education gaps are closing, the gen-
der gap in the EU remains almost unchanged."'
Drivers and Benefits of Diversity in Europe
In Europe, there is a growing recognition of the bene-
fits of workplace diversity for both the society and the
economy. To remain competitive, however, there are a
host of issues to address, from racial and ethnic
diversity and new roles of women to work/life bal-
ance and an aging population coupled with declining
birthrates. A recent study notes that a third ofthe top
European companies are gaining competitive advan-
tage from diversity management. These progressive
organizations, rather than seeing diversity as a regu-
latory response that requires anti-discrimination and
equal opportunity policies, view diversity management
as a vehicle to develop an engaged, motivated and
heterogeneous workforce to develop creative busi-
ness solutions in the global marketplace.*
» Kochan, T, Bezrukova, K., Ely, R., Jackson. S.. Joshi. A., Jen,
K., et al.
(2002, October). T7)e eflfects of diversity on tjus/ness
performarice:
Report of tne Diversity Research Network. Building

44. Opportunities for
leadership Development Initiative, Alfred P Sloan Foundation
and the
ScKiety for Human Resource Management,
" Catalyst. (2004). Connecting corporate performance and
gender diver-
sity. New York: Author.
" European Commission. (2000, June 28). Communication from
the
Commission to the Council, the European Parliament, the
Economic
and Social Committee and the Committee of the Regions: Social
poli-
cy agenda. Brussels: Author,
*• European Commission. (2004}. Equality and non-
tHscrimlnation—annu-
al report 2004. Brussels: Author.
*• European Commission, (2005). Report from the Commission
to tfie
Council, the European Parliament, the European Economic and
Social
Committee ana the Committee of the Regions on equality
tjetween
men and women. 2005. Brusseis: Author.
• Singh, V., & Point, S, (2004. August}, Promoting diversity
management:
New challenges and new responses by top companies across
Europe,
Management Focus [Cranfield School of Management,
www, cranfieltJ,ac.uk/som/research/centrBs/cdwBIJ,

45. Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
2005 SHRM' Research Quarterly
Another study notes the three most often mentioned
benefits of workpiace diversity by European compa-
nies are: 1) improved team effectiveness and cooper-
ation; 2) improved productivi^; and 3) improved cus-
tomer markets with broader access to labor markets.
Other drivers considered moderately beneficial are
improved employer image, more openness to change,
improved morale and commitment, ease of entry into
new markets and enhanced effectiveness of complex
organization. Overall, the most important shifts in
workplace diversity are in the areas of gender and
ethnic diversity. R)r example, as women obtain higher
professional degrees and qualifications and eam
more money in the marketplace, they are increasingly
viewed as important in the workplace. Ethnic minori-
ties are seen as a growing workforce as well as cus-
tomer ^
Enhancing Competitive Advantage Through Diversity
Management: Recommendations for HR
• Assess. Conduct a top-to-bottom critical assess-
ment of all company policies and programs.
Determine if there are biases that create potential
challenges for diverse employees. Review diversity
initiative results (e.g., recruitment of top talent,
retention strategies, succession planning, career
development goals) to determine if the workplace is
structured to exclude certain employee groups.

46. Determine where changes in organizational culture,
policies and programs need to be made.
• Capitalize. Promote diversity initiatives to the top
agendas of senior management by capitalizing on
reputation as a diversity management consultant.
• Dialogue. Develop and maintain continuous dia-
logue with 1tie CEO and senior management regard-
ing diversity as a business strategy.
" Simons, G, F. (2002). EuroDlverslty: A business guitie to
managing dif-
ference. Wbbum. MA: Etsevler Science.
Resources: Diversity in the European Union
European Council on Work-Life & Diversity:
www.conference-board,org/pclf_free/councils/353.pdf
European Disability Forum: www.edf-feph.org
European Monitoring Centre on Racism and
Xenophobia (EUMC):
www.eumc.eu,int/eumc/index,php
European Women's Lobby: www,womenlobby.org
For Diversity/Against Discrimination:
www.stop<liscrimination.info
International Labour Organization—The Gender
Toolkit: www.ilo.org/public/english/bureau
/gender/newsite2002/about/defin.htm
• Discover Through focus groups, confidential

47. employee surveys and exit interviews, determine
how diversity initiatives are viewed and gather feed-
back for improvement.
• Network, Network with other HR professionals to
learn different approaches to diversity manage-
ment, challenges encountered and recommended
best practices.
• Learn. To best utilize a diverse workforce, profit
from lessons learned.
In Closing
There is no "best way" to manage diversity. The iden-
tification, selection and purpose of diversity initiatives
and their development and implementation differ
from company to company. The likelihood of success
is dependent on business needs and workforce
issues as well as situational factors, such as Uie
organizational culture and workplace environment.
Ultimately, the strength of commitment by the CEO,
senior management and HR leadership will determine
whether the organization successfully leverages work-
place diversity for competitive advantage. •
Resources
AARP: www.aarp.org
American Institute for Managing Diversity, Inc.:
http://aimd.org
Business for Social Responsibility—Board Diversity:
www.bsr.org/CSRResources/lssueBriefDetail.cfm
?DocumentiD=443

48. Catalyst: www.catalystwomen.org
Center for Women Poticy Studies:
www.centerwomenpolicy.org
Diversityinc Top 50 Companies for Diversity:
www.diversityinc.com
Hispanic Association on Corporate Responsibility:
viww.hacr.org
National Association for Advancement of Colored
People: www.naacp.org
National Organization on Disability: www.nod.org
National Urban League: www.nul.org
SHRM Diversity Home Page: www.shrm.oi^/diversi^
Acknowledgment
The author would like to thank the members of the
SHRM Workplace Diversity Special Expertise Panel
for their sage advice and recommendations.
Workplace Diversity: Leveraging the Power of Difference for
Competitive Advantage
Leadership
Why Flat Organizations Don’t Create Great Leaders (&
What To Do About It)

49. Open and democractic loft-style workspaces have been in
fashion for 10+ years now.
And they're great. But not when it comes to building creative
leaders...
By Scott McDowell Jan 9, 2012
For some time now, the predominant workplace trend has been
to go flat and democratic –
everyone working together in a large open space with direct
access to supervisors and even
the company president. Merit is based on your skills, creative
output, and ability to work with
the team. Leadership is about having confidence and speaking
up.
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In the book The Art of Possibility, the conductor Benjamin
Zander describes this version of
leadership as “leading from any chair”; any individual player
can inspire and influence the
overall sound of the orchestra.
And “leading from any chair” does work – the system has
produced many of the most
innovative products and services that we use these days.But the
trend toward flat
organizations also has consequences – and I believe one of them
is an emerging leadership

50. gap. As the notion of “coming up through the ranks” dies off,
the traditional trajectory to
leadership has been short-circuited – without being properly
replaced.”Leading from any
chair” produces personal responsibility and teamwork, which is
great, but true leadership
takes practice, stewardship, and a thorough understanding of
how the range of your actions
affect the people around you. (Just ask New York Jets head
coach, Rex Ryan, whose erratic
leadership style has been blamed for fraying the team and
ending their season.)
Leadership is learned in two primary ways, by example and by
trial-and-error. In flat
organizations, when project heads are always shifting, there is
no distinct model and fewer
chances to practice.
As the notion of ‘coming up through the ranks’ dies off, the
traditional trajectory to leadership has been short-circuited –
without being properly replaced.
So what to do? How do we develop great future leaders while
maintaining the benefits of the
flat organization? How do we instill the development of leaders
as we continue to shift from a
hierarchical structure to a dynamic, networked structure? How
do we keep the flexibility and
freshness of rotating project teams (or “pop-up teams,” as I call
them) while also finding the
“still point,” the consistency and stability at the core of our
work?There’s certainly no silver
bullet; innovation can spring from any type of organizational
structure, whether overtly
hierarchical or flat. But there’s little doubt that strong

51. leadership is central to bringing
creative ideas to life. So how can we cultivate that?
1. Hire for personality, drive, execution, and accountability.
Skills and experience will
always be essential, but today they’re not enough. The value of
positive, responsible,
and accountable team members who take action cannot be
overestimated.
2. Reward leadership. Clearly define what leadership means
within your organization,
then reward it aggressively. Often, leadership means putting
yourself second and
supporting the growth of the organization and others. It also
means shepherding them
into growth situations. Put them, with support, in uncomfortable
situations such as
leading client meetings, or giving presentations.
3. Institutionalize mentorship. To fill the leadership gap, create
a methodical in-house
mentorship program with clear goals and a purposeful mandate.
Mentorship programs
can help new employees adjust or be used as a recruitment tool.
IBM, for example,
started its program to encourage learning and connect people in
a large, scattered
organization.
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52. 4. Establish communication hubs. The faulty flow of
information, especially in
organizations that assemble and disassemble themselves on a
per-project basis, is the
goo that mucks up the works. Hubs can be digital, or they can
be actual people.
Appointing a communication czar or even just a referee, can
save a project.
5. Build a company of listeners and question-askers. A culture
that rewards self-
awareness and emotional intelligence is a culture of leadership.
—
What’s Your Approach?
How are you minding the leadership gap?
(c) 2018 Adobe. All rights reserved
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organizations-dont-create-great-leaders-what...
Starbucks CEO Kevin Johnson (left) meets with employees and
community members in this file
photo. (Photo courtesy Starbucks.)
Johnson & Johnson CEO Jim Burke’s leadership during the
1982
Tylenol crisis is what we at Harvard Business School teach as
the
standard for handling a high-stakes public crisis. Now, we have
a
new exemplar: Starbucks CEO Kevin Johnson.
His response to the eviction of two African American men from
a
Starbucks store in Philadelphia will define for today’s leaders
how to
respond to crisis. Facebook founder Mark Zuckerberg, who
struggled
from repeated missteps in Facebook’s current data privacy
crisis,
could learn a lot from Johnson.
Let’s examine how Johnson and Zuckerberg measured up
against
what I have identified as 7 Lessons for Leading in Crisis.
#1: Face reality, starting with yourself. Johnson realized
immediately
that, as Starbucks’ new CEO, he had to take the lead. He

54. understood the incident’s implications went well beyond the
specifics, triggering widespread concerns about racial bias in
the
country and threatening to damage Starbucks’ image as a safe,
friendly place to gather with friends or work alone. In contrast,
24 APR 2018 OP-ED
Op-Ed: What Mark Zuckerberg
Can Learn About Crisis
Leadership from Starbucks
by Bill George
Starbucks and Facebook present a contrast in crisis
leadership, says Bill George. While Starbucks CEO Kevin
Johnson stepped up to take responsibility and met with
victims, Mark Zuckerberg delayed action and side-stepped
responsibility.
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Zuckerberg characterized Facebook’s issue as a political
problem
and tried to shift the blame to Cambridge Analytica’s bad actors
for
violating Facebook’s rules for application developers. He
ignored the
deeper problem that Facebook users want privacy for their
personal
information.

55. #2: Use your teammates. Johnson had the full support of
founder
Howard Schultz and his team in Philadelphia. Zuckerberg did
not
seem to rely upon the wisdom of Chief Operating Officer Sheryl
Sandberg or lead board director Susan Desmond-Hellmann.
Instead,
he trotted out his deputy legal counsel at a town hall meeting
for all
Facebook employees after four days, sending the message that
he
thought this was a legal problem rather than an issue of
consumer
trust.
“JOHNSON’S ACTIONS WILL BECOME THE
NEW MODEL FOR HOW A CRISIS SHOULD BE
HANDLED”
#3: Dig deep for the root cause. Johnson perceived that not all
his
employees understood the deeper issues of racial bias, so he
announced on the second day that Starbucks would close 8,000
stores on May 29 to train all 175,000 US employees about
unconscious bias. Zuckerberg failed to acknowledge that the
root
cause of the data privacy scandal was its model of allowing
developers to build their applications around user
preferences—without explicit permission from the users
themselves.
(Zuckerberg says this is not the same as selling user
information.
You be the judge.)
#4: Get ready for the long haul. Johnson’s planned training

56. sessions
demonstrated his commitment to ensure all employees are
dedicated
to making its stores safe, friendly, and welcoming for everyone.
Zuckerberg said that he had known about the Cambridge
Analytica
problems since 2015 but wouldn’t acknowledge he had failed to
correct them. Nor has he announced plans to do so now. This
issue
will plague Facebook for years before trust can rebuilt with
users.
#5: Never waste a good crisis. By immediately flying to
Philadelphia
and personally apologizing to the two victims, Johnson enabled
them
to become spokespeople for the broader issue of racial bias and
neutralized protesters gathered outside Starbucks. Zuckerberg
wasted his opportunity to address data privacy issues; instead,
he is
inviting government regulators to do it for him. As a result,
Facebook’s employees lack direction for using this crisis to
rebuild
confidence with 2 billion users.
#6: You’re in the spotlight: Follow True North. Starbucks’
Johnson
jumped into the spotlight the next day by apologizing for his
employees’ handling of the incident and announcing plans for a
companywide “lessons learned” meeting and training programs.
He
affirmed Starbucks’ True North, stating, “The video shot by
customers is very hard to watch, and the actions in it are not
representative of our Starbucks mission and values.” In
contrast,
Zuckerberg ducked the spotlight for five days and even then

57. tried to
shift the argument away from data privacy. In terms of public
support, this tactic backfired because he undermined Facebook’s
mission “to build community and bring the world closer
together.” In a
recent Harris poll, 88 percent of respondents think Facebook
should
be regulated, with 67 percent favoring requiring an opt-in
feature
before personal data can be used.
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213 days ago
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253 days ago
Like Reply 0
305 days ago
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307 days ago
#7: Go on offense, focus on winning now. Kevin Johnson seized
upon the incident to clarify Starbucks’ desire to overcome racial
bias

58. and encourage acceptance and integration. Johnson will benefit
from
engaging all of his employees in discussions about serving
customers well and using the company to make a positive
difference
in its communities. Meanwhile, Zuckerberg remains on the
defensive
about Facebook’s policies rather than offering clear solutions.
One
possibility: a premium site for those who want to protect all
their
information. In the meantime, users may shift to competing
social
media sites.
The greatest test of leadership
When a crisis erupts, the CEO’s actions and attitude in the first
24 to
48 hours sets the tone for the organization’s response. In
Johnson’s
case, this meant making a clear statement apologizing and
accepting
responsibility, going to the scene of the incident, and meeting
personally with people effected. Facebook’s Zuckerberg did
none of
these things. After those first days, the moment had passed and
other voices were crowding out his company’s messages.
Leading in crisis is the real test for leaders. Zuckerberg failed
his big
test and will struggle to recover. Johnson has rebuilt goodwill
with
Starbucks customers and the general public, and has given clear
direction to employees about what the company stands for. That
will
serve Starbucks well for years to come.

59. POST A COMMENT
In order to be published, comments must be on-topic and civil
in tone, with no name calling or
personal attacks. Your comment may be edited for clarity and
length.
Write a comment
COMMENTS
Deepali Sharma
Almost certainly I’m planning to bookmark your website.
You amazingly come with good writings. Thank you for sharing
your website page.
Mattwhetzel
“One would think Starbucks shareholders would be better
served by leadership that
prioritizes sound business principles over so-called social
justice initiatives,”
T M CHARI
As a leader one has to assume responsibility and take action.
The core issue therefore is
"responsibility" and demonstrating that very trait is vital. This
will be a good lesson for the
future generation of Managers.
Jimmy
I read several comments saying this it not an apple-to-apple
comparison, which I find to be

60. quite absurd. Both companies had a public relations crisis, both
companies needed to
respond, the exact details of the crises may be different, but the
core issue at hand is the
same, this is about crisis management and how an
organizational leader should respond.
Comparing 2 victims to 87 million victims is also completely
pointless, the issue isn't how
many victims, the issue is there are victims at all. A 3 year old
can figure out that it would be
impossible for Zuckerberg to personally visit and apologize to
every victim. The issue people
have with the way Zuckerberg responded to the crisis isn't that
he didn't personally visit
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Like Reply 0
309 days ago
Like Reply 0
309 days ago
Like Reply 0
309 days ago

61. Like Reply 0
310 days ago
Like Reply 0
310 days ago
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every single victim, it is that he didn't do anything at all for
days and even when he did come
out, he didn't take responsibility and he didn't take control.
Gopal
This is comparing apples to oranges to put simply..Facebook
had a difficult crisis and a crisis
at large..The Starbucks crisis on the other hand was local to a
particular city and did not
have huge implications to the tune of Facebook's.
Phoenix Alexander
Responsibility is, at its core, simply the ability to respond.
Taking responsibility does not
acknowledge being the cause of a problem, but it does clearly
position one to do something
(positive) about solving it. One who won't take responsibility
has no ability to effect an
outcome and is, by definition, ineffective. Good CEOs,
including Johnson, grasp that neither
clients/customers nor employees want to be associated with
organizations with ineffective
leaders. For many of us this understanding is inherent in who
we are as human beings. For

62. others of us it has to be learned the hard way -- but the point
here is that it CAN be learned. I
hope that Johnson, who clearly gets it, will also add this into his
training for all his
employees. It will be a valuable skill wherever they go.
Hamad Sheikh
There are very significant differences between these two cases
i.e. Facebook and
Starbucks. The later has one pair of victims and an interested
audience of millions. So there
is an opportunity to communicate a simple and effective
message to the audience while also
meeting with the victims. In the case of facebook, there are
millions of victims and an equally
large audience. MZ can simply not meet with millions of
victims on an individual level and
also has the additional burden of meeting with government
officials AND come up with a
change of direction in the company regarding security and
information rights. Therefore,
these two cases have very significant differences and require
very different approacahes
and solutions. MZ faces a significantly tougher problem.
Ayoub Dfallah
Great business leaders take action seriously and immediately
without hesitation to response
to crisis by figure out causes and effects in order to find out
smart solution this called action
contingency plan to response to criss in order to eliminate
negative impact .
CEO must learn from their mistakes ( lesson learned) by
focusing on situations , issues and

63. behavior rather than focus on the personal however make tough
decisions based on
response to crisis right away to mitigate negative impact by
response quickly right away.
Ayoub Dfallah
As a leader in the company you have to take action seriously to
face status quo , take risk
and make tough decisions to address challenge issues whatever
it is , customer issues,
users issues and so on .
CEO must enable them to accept challenges and take
responsibility about any situation
associated with customer, employees, shareholders and any
others stakeholders.
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The culture or the leader?
An organizational view of the chicken or the egg question
Deloitte Culture Perspectives
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question

64. 1
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question
At Deloitte, we’re pondering a modern version of that question.
Does the leader create the culture or does the culture create
the leader? Taking that a step further, what’s the cost to an
organization’s culture if the leader is a “bad” egg?
Culture is a system of values, beliefs, and behaviors that
shape how real work gets done in an organization. When
organizational culture is aligned to business strategy, the
workforce will act and behave in ways that support the
achievement of business goals. It’s the leader’s duty to
uphold the values and beliefs of the organization’s culture
through their actions and decisions. This, in turn, enables
the execution of strategy.
What came first, the chicken
or the egg? That question
may be as old as time itself.
2
Culture, leadership, and strategy are
the triumvirate that together steer the
organization toward excellence—and
much like any triumvirate, being in sync
is necessary for an effective working
relationship. Put simply, a stool with only
two legs topples—every time.

65. So what is the cost when a leader fails
to exhibit and balance these critical
components of their role? A leader that
does not align with, act on or uphold
the organization’s values can encounter
tensions that impact their ability to drive
results. Poor leadership can reinforce the
wrong values, behaviors, and attitudes,
creating interferences that can shape a
toxic culture and create discord between an
organization’s image and how they actually
operate. A leadership study1 conducted by
Deloitte measured the impact of effective
leadership, finding that the quality of senior
leadership had a measurable impact on
analyst opinions about whether companies
would be successful. Results showed, on
average, an equity premium of up to 15%
for organizations with perceived effective
leadership and a discount of as low as 19%
for organizations that were perceived to
have ineffective leadership.
These results reinforce an old saying:
leaders make and break organizations
every day. Leadership and culture are
the crosshairs that, when coordinated,
can make for a competitive advantage
in an organization.
Let’s take a look at three key areas where
the intersection between leaders and
culture is paramount.

66. Results showed,
on average, an equity
premium of up to
15%
for organizations with
perceived effective
leadership
a discount of as low as
19%
for organizations that
were perceived to have
ineffective leadership.
and
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question
3
An organization’s culture isn’t always
“right,” and a leader’s approach certainly
isn’t infallible either—but at the end of
the day, the leader’s example sets the
tone for the organization. Leaders’ values,
actions, and the development of their
teams need to visibly reinforce the culture
of the organization. Through the example
they set, leaders shape the culture in their
words and actions every day. These actions
then gain momentum through a variety

67. of structures, policies, and governance,
shaping how employees operate.
Some leaders tend to “go with the flow,”
leveraging existing channels to get things
done. Others may tend to move outside
of the typical way things get done, using
a different set of values or behaviors
to achieve results. Leaders in tune
with their fit in the existing culture can
more effectively drive change through
understanding when to leverage existing
ways of working and when to mix up their
approach. An effective leader uses this
self-awareness to inform an intentional
approach toward daily decision making,
recognizing each action shapes the culture
they operate within.
As discussed in our publication Take your
corporate culture off cruise control, emotions
are the driving force for human behavior,
more than rational calculation. To shape
and sustain organizational culture, leaders
need to connect with the emotional side
of the workforce, creating a shared sense
of purpose and motivation. Efforts leaders
make to shape and guide the behaviors
connected to a greater purpose can
have a multiplier effect and quickly gain
momentum across the organization.
fit with the culture
and model desired
behaviors.

68. understand his or her
fit with the culture and
use that awareness to
drive positive change.
connect with
employees’ hearts
and minds, aligning
to a common purpose.
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question
A leader needs to...
4
So what does it all mean—did the egg really
come before the chicken? Does the leader
create the culture, or does the culture
create the leader?
At Deloitte, our experience shows that a
culture aligned to an organization’s strategy
can provide a competitive advantage.
Leaders not only set the strategy,
they also play an instrumental role in
connecting with the hearts and minds of
their workforces, reinforcing the values
and habits through their own behavior
and actions, and ultimately shaping their
organization’s culture.

69. Leaders play
an instrumental
role in connecting
with the hearts
and minds
of their
workforces.
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question
5
1. The Leadership Premium, how companies win the confidence
of investors, Deloitte 2012
Endnotes
Contacts
Anthony Abbatiello
Principal, Human Capital
Deloitte Consulting LLP
[email protected]
Sonny Chheng
Principal, Human Capital
Deloitte Consulting LLP
[email protected]
Alyson Daichendt
Managing Director, Human Capital
Deloitte Consulting LLP
[email protected]
Marc Kaplan
Leader, Organization Transformation and Talent

70. Deloitte Consulting LLP
[email protected]
Karen Reid
Manager, Human Capital
Deloitte Consulting LLP
[email protected]
Deloitte Culture Perspectives / The culture or the leader? An
organizational view of the chicken or the egg question
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turePath%20Inquiry
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As used in this document, "Deloitte" means Deloitte Consulting
LLP, a subsidiary of
Deloitte LLP. Please see www.deloitte.com/us/about for a
detailed description of
the legal structure of Deloitte LLP and its subsidiaries. Certain
services may not be
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This communication contains general information only, and
none of Deloitte
Touche Tohmatsu Limited, its member firms, or their related
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the “Deloitte Network) is, by means of this communication,

71. rendering professional
advice or services. Before making any decision or taking any
action that may affect
your finances or business, you should consult a qualified
professional adviser.
No entity in the Deloitte Network shall be responsible for any
loss whatsoever
sustained by any person who relies on this communication.
Copyright © 2016 Deloitte Development LLC. All rights
reserved.
www.deloitte.com/culturepath
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Journal of Academic and Business Ethics
Organization culture as driver, Page 1
Organization culture as driver of competitive advantage
Boniface C. Madu
Grand Canyon University
ABSTRACT

72. One of the many responsibilities confronting leaders is the
creation and maintenance of
organizational characteristics that reward and encourage
collective efforts. The organizational
culture stands out as one of the components that are important
to sustaining performance, and
competitive advantage, and a good reason for becoming a great
company. The reason for ethical
failure in many organizations is the fact that while leaders
concede of culture as a powerful tool
that can create and sustain performance, only few leaders give it
the attention it deserves. The
cause of ethical failure in many organizations can be traced to
organizational failure of
leadership active promotion of ethical ideals and practices. This
paper will discuss the use of
Schein’s five primary mechanisms as a model for leaders in
creating a culture that supports
moral and ethical behavior. Examine the implications of this
model in gaining competitive
advantage, and will further critique the implications of an
unethical culture within the
organization in terms of maintaining or expanding its market

73. share.
Keywords: organizational characteristics, collective efforts,
culture, sustaining performance,
ethics, Schein’s five primary mechanisms, organization culture,
competitive advantage
Organization culture as driver, Page 2
The importance of culture in the organization
There has been growing concerns over the Ways many
organizations have chosen to do
business in the recent past. The organization culture as a
leadership concept has been identified
as one of the many components that leaders can use to grow a
dynamic organization. Leadership
in organizations starts the culture formation process by

74. imposing their assumptions and
expectations on their followers. Schein, (2004) states that As
organizations stabilizes because of
success in accomplishing its primary tasks, the leader’s
assumptions become shared and
embedding those assumptions can then be thought of more as a
process of socializing new
members. Organizational leaders achieve success by being
consistent, in sending clear signals
about their priorities, values and beliefs. Once culture is
established and accepted, they become a
strong leadership tool to communicate the leader’s beliefs and
values to organizational members,
and especially new comers. When leaders promote ethical
culture, they become successful in
maintaining organizational growth, the good services demanded
by the society, the ability to
address problems before they become disasters and
consequently are competitive against rivals.
Schein, (1999) informs that corporate culture matters, because
the decisions made without the
awareness of the operative culture forces may have
unanticipated and undesirable consequences.
Organizational leaders are confronted with many complex

75. issues, when making decisions about
the best methods to generate organizational achievements in
their complex environments. The
leader’s success will depend to a large extent, on his knowledge
and understanding of the
organizational culture. The leader who understands his
organizational culture and takes it
seriously is capable of predicting the outcome of his decisions
in preventing any anticipated
consequences. What then is organizational culture? The
concept of organizational culture has
been defined from many perspectives in the literature. There is
no one single definition for
organizational culture. The topic of organizational culture has
been studied from many
perspectives and disciplines, such as anthropology, sociology,
organizational behavior, and
organizational leadership to name a few. Deal (1999) defines
organizational culture as values,
beliefs, and behaviors that differentiate one organization from
another. Schein, (1999) outlines
the manifestations of culture as “the way we do things around
here”, “the rite and rituals of our
company”, “the company climate”, “the reward system”, “our

76. basic values” (p.15), and so on.
These are manifestations of culture because they do not
represent culture at the deeper levels
where we must understand and manage the deeper levels. In
Schein, (2004) organizational
culture is defined as a “dynamic phenomenon that surrounds us
at all times, being constantly
enacted and created by our interactions with others and shaped
by leadership behavior, and a set
of structures, routines, rules, and norms that guide and constrain
behavior” (p.1). A practical way
to define organizational culture is the environment in which we
work; these are the member’s
behaviors, attitudes, beliefs, skills, perspectives, habits and
prejudices. Some of these attributes
have been molded by past leaders, either good or bad through
years of indoctrination, influence,
and reinforcement. The truth remains that leaders of
organizations are responsible for the climate
they create in their organization.
Levels of culture:
To fully understand the meaning of culture, Schein, (1999)
characterizes organizational

77. culture as consisting of three levels. The first lever, the
behavior and artifacts level represents the
most visible level, which is characterized by our behavior and
artifacts around us. This
observable level of culture consists of behavior patterns and
outward manifestations of culture.
These cultural characteristics can be observed in the physical
layout of work environments, dress
Organization culture as driver, Page 3
codes, and levels of technology, the attitudes and behaviors of
the people. The second level the
espoused values of an organization to a large extent determine
behavior Schein, (1999). These
values are not observable as our physical behaviors and
artifacts. These values are the difference
between stated values and operating values. For example, this
company values quality, we value
our customers and so on. The operating value on the other hand
is the actual manifestation of
value that is truly in force. Most people in the organization will
attribute their behavior to the

78. stated value. To truly understand culture according to Schein,
(1999) we have to get to the
deepest level the level of assumptions and beliefs. The essence
of culture is the learned values,
beliefs, and assumptions that become shared and taken for
granted as the organization continues
to be successful. These components are taken for granted as
long as the members of the
organization agree that these values, beliefs and assumptions of
their founders and leaders led the
organization to continued success, and is therefore correct.
The opposing question confronting most organizational leaders
is whether established
cultures can be changed? Organizational cultures are created,
maintained, and transformed by
people. An organizational culture is in part, also created and
maintained by the organization’s
leaders. Organization founders and leaders at the executive
level are the principal source for the
generation and reinfusion of organizations ideology, articulation
of core values and specific
norms. Organizational values express preferences for certain
behaviors or outcomes.
Organizational norms express behaviors acceptable by others,

79. and are culturally acceptable ways
of pursuing goals. Leaders also establish the parameters for
formal lines of communication and
the formal interaction rules for the organization. Values and
norms, once transmitted through the
organization, establish the permanence of the organization’s
culture.
The primary mechanisms: In support of moral and ethical
behavior.
Leaders must operate from a foundation of high morality and
ethical discipline in the
organization at all times. They must personally act in
accordance with productive values and
beliefs, and they must teach, others to do the same. They must
establish and promote the culture.
With the awareness of culture in today’s organizations, and its
strong impact on employee
behavior, leaders in organizations can create a culture that
supports strong moral and ethical
behavior. Over the years, there has been a growing concern in
the way many organizations have
chosen to do business. With many scandals that have drawn
public and media attention to many
organizations for participating in illegal and unethical behavior,