Chua, of Harvard Business School, is one of the few academics to produce serious studies of this subject. There are trade-offs to be made, for example between the trust that comes from sharing a common background and the cultural sensitivity that comes from employing people from different parts of the word. Diversity can bring risks as well as benefits and perils as well as perks. But the subject is too important to be left to the cliché-mongers. It is far too easy to present “diversity” in one-sided terms: as a triumph of enlightenment over bigotry and creativity over closed-mindedness. Maybe I'm exaggerating, but it struck me in 1991-92 that Walmart was a vehicle for previously underachieving Scots-Irish hillbilly types to come out of nowhere and take over, like one of Ibn Khaldun's high asibya tribes coming out of the Sahara to conquer the diverse rich cities of the coast.ĭistinctive religious groups such as the Mormons in America and the Parsis in India have also made an outsized contribution to corporate life. It is also notable how many of the world’s best companies are rooted in small towns: think of Lego (Billund) or Walmart (Bentonville). It is notable how many of the world’s best companies, such as McKinsey and Apple, have cult-like cultures-probably because they are also very diverse: they need a strong culture.
Yet a glance beyond the corporate-diversity statements suggests a more complicated picture. Most important perhaps, nobody wants to come across as unsympathetic to minorities or unappreciative of cultural variety. American universities (and many others as well) are institutionally committed to the idea that diversity promotes learning and creativity. Many countries have equal-opportunity laws on their books. This is the theme of many of the corporate image ads you see during the Olympics and golf tournaments.īut what about the downside of diversity? It does not pay to ask this question. Why? Due to the synergistical magic of diversity. If, say, the Yankees have some players who speak English, some who speak Spanish, and some who speak Japanese, they will play better as a team than if, all else being equal, they all spoke one language. The fourth use is to assume that diversity means that 1+1+1=4. Whites simply don't count as diversity, even when they should. For example, hiring a white NFL cornerback would, technically, increase diversity at that position, but nobody cares. The third use is to refer to certain favored groups and to not refer to certain unfavored groups. But if you mentioned the fact that women and, surprisingly, Mexicans aren't really good enough to play much for the Yankees, people would get mad at you. And they sure don't let any women on their team. For example, the Yankees very rarely hire Asian Indians or even Mexicans. The second use of the terms "diversity" means to hire the less talented and less productive. The glamor of the diversity of the Yankees then sheds itself onto other, quite different uses of the term. Hiring people who don't speak a common language doesn't do much for clubhouse morale, but that's probably overrated versus sheer individual skill in winning baseball games. For example, they just signed the best Japanese pitcher to a $22 million per year contract. For example, the richest baseball team, the New York Yankees, has players from all over the world. The first type of "diversity" is in settings where sheer talent matters most and the talent comes from all over the world. And so on.ĭiversity has multiple meanings which get conflated. It stimulates innovation by bringing together different sorts of people. It helps them to cope with globalisation by expanding their cultural horizon. Diversity helps companies to overcome talent shortages by enlarging their talent pools. THE closest thing the business world has to a universally acknowledged truth is that diversity is a good thing: the more companies hire people from different backgrounds the more competitive they will become. Jan 21st 2014, 16:00 by our Schumpeter columnist From The Economist: The downside of diversity