Encyclopedia of Opinion
Question
Is diversity critical to a business' financial success?
Position3 of 3
Diversity has no bearing on a company's financial success
Argument2 of 2

Many companies thrive with a homogeneous workforce

There are many examples of highly successful companies with homogenous workforces. Furthermore, members of a homogeneous team will have an easier time comprehending each other's verbal and nonverbal communications, and will have more shared experiences in common.

The argument

A homogeneous workforce offers employers a pool of potential employees that share cultural and social norms. It is much more common for an employer to draw from a heterogeneous workforce that features differences in race, gender, age, disabilities and sexual orientation. However, companies still encounter regional conditions that provide a remarkably homogeneous workforce. Knowing the advantages of this can help a company prosper. According to the Encyclopedia of Small Business, how employees view the importance of saving face can offer advantages. If a business owner encounters a collectivist tradition, discipline can be geared toward encouraging the employee to fit in better with the group by avoiding disruptive or destructive behavior. The owner can take advantage of an individualist workforce by framing discipline in terms of the employee's personal responsibility. Members of a homogeneous team will have an easier time comprehending each other's verbal and nonverbal communications, and will have more shared experiences in common. The similarities can, to some extent, avoid misunderstandings, prejudices and, arguably, speed up work processes and the completion of tasks. The similarities between employees will increase their ability to communicate effectively as a team, which will improve the business’s innovation, quality, responsiveness and efficiency. By excelling in these vital areas, this will increase the financial success of the business. For example, there is a famous milk tea brand called Chayanyuese, which only sells unique milk tea in Changsha. This company consists of people typically from regions near the Hunan province, who share similarities. This tea is known all over the country, and people travel there just to drink it. The brand is highly localized, so the homogeneous team could have a deeper understanding of their regional culture. Therefore, by having a team of employees from the area, they will have the expert knowledge of the tea to improve the brand, which will increase the financial success for the company.

Premises

[P1]A homogeneous workforce shares cultural and social norms, letting employers tailor management to a collectivist or individualist tradition. [P2] Shared experiences let homogeneous teams understand each other's communication, avoid misunderstandings, and work faster, improving innovation and efficiency. [P3] The localised milk-tea brand Chayanyuese thrives because its Hunan-region team's shared culture gives it expert knowledge of the product. [C] Therefore, because many companies thrive with a homogeneous workforce, diversity has no bearing on a company's financial success.

Counter-arguments

Many studies--including one on "Cognitive Effects of Racial Diversity" published in "Journal of Experimental Social Psychology"--show that the lack of diversification in a homogeneous group stifles creativity and information processing. It is very difficult to form homogeneous teams without causing feelings of exclusion to minorities, be those racial or gender. Diversity within a company is vital for maintaining an edge in a competitive business climate. While often underestimated, the benefits of incorporating a team comprised of women, minorities and underrepresented communities is a game-changer. For example, one's diverse perspective can help one understand customers better, it can can reduce one's risk of incomplete data, and one can redefine merit and problem set, etc.

Rejecting the premises

[Rejecting P1] Tailoring management to a collectivist or individualist tradition is a claim about a shared culture, which a diverse workforce can also have; the premise conflates cultural homogeneity with the absence of differences in race, gender, age, disability and orientation. [Rejecting P2] Ease of communication is not the same as good judgement: research on racially diverse groups reports that homogeneity narrows information processing and creativity, so the smoothness the premise credits may come at the cost of the thinking the business depends on. [Rejecting P3] A single localised brand cannot establish a general rule, and its advantage is regional product knowledge rather than homogeneity as such — knowledge a firm can hire for without excluding anyone. Showing that some homogeneous companies succeed also falls short of the conclusion, which claims diversity has no bearing on financial success at all.