What generates in a company the CA? Every resource a company has can be a source for competitive advantage, meaning that the “assets, capabilities, organizational processes, information, and knowledge” can all, potentially, generate competitive advantage. But you may be wandering, can this advantages last?
This is why the sustained competitive advantage is important for a firm, because it is achieved when a resource (that generates competitive advantage) is “valuable, (…) unique or rare, (…) difficult for competitors to acquire or imitate, and it {does not} have close substitutes.” (Slater et al. 2008). The previous conditions guarantee that the company can be more efficient that its competitors for a long period of time due to that single factor.
At this point the reader has figured out what is the role of the human capital; the CA of a firm increases when it has the right employees for the right job. Meaning that the knowledge and their skills are being used to add value to that particular company, implying that the competitors will have to go great lengths in order to replicate or copy this source of sustainable CA.
This is due to the fact that it is really hard to do so. If we think of a person who is attached emotionally and physically to a specific environment that generates CA for company X, how hard will it be for company Y to replicate every single aspect which makes that person competitive? What if is not that single person but a group of a hundred people?
So far I have elaborated on how does the human capital generate sustainable CA, but now the question is how does the diversity of the human capital generate CA? Slater et al. 2008 identified three aspects in which that can be identified:
 |
| Taken From: U.S. Department of Interior at http://www.doi.gov/hrm/diversty/divpln12.htm |
“Decision quality[:] “heterogeneous (diverse) teams tend to produce superior outcomes as compared to homogeneous teams. (…) {they present} true benefits by making more creative and better decisions. (…)
Connecting with customers[:] (…) Employees who are demographically similar to customers are likely to have an easier time understanding customer preferences and how they change over time. (…)
Innovating[:] (…)The diversity of people in a corporation promotes innovation because it achieves greater diversity of ideas.”
So as to conclude we see that diversity is useful for a company in order to generate sustainable CA but it must be remembered there are costs associated with diversity that need to be avoided in order to get the diversity strategy to bear fruit for a company. See Slater et al. 2008 to get more information on this aspect.
The questions for this module are: (1) Is diversity management at IBM a source of competitive advantage? why? And (2) do you think the IBM case reflects a strong organizational commitment to diversity? why?
To refer to the first question I would like to emphasize what I stated in the previous paragraphs: the diversity is a source of competitive advantage when it is managed properly, Slater et al. 2008 identified that for diversity to bear fruit it has to become a part of the organizational culture not a mere program. This means that a company pursuing this strategy must increase “organization-wide commitment” with some activities (I will choose only two out of 10 identified by Slater et al. 2008):
“Demonstrate how diversity ties directly to the organization's business strategy to provide a foundation for linking the diversity initiative to organizational success” (Slater et al. 2008); and “The CEO and other top executives must be passionate about and create a culture of inclusion.” (Slater et al. 2008).
I find that IBM fulfills these two activities; the first one is certainly being, to say the less, taken into account: the CEO “insisted that the task force [groups of workers which focus on 8 diversity groups] effort create a link between IBM's diversity goals and its business goals - that this would be good business, not good philanthropy.” (Thomas, 2004)
The second activity is being fulfilled when the active roles the CEOs of IBM have taken in the initiative: The CEO “has played a personal and very important role. He personally asked each task force to come and report its progress and agenda to him.” (Thomas, 2004) And, as it is expressed in Thomas research, his behavior has been seen as supportive of the initiative.
In conclusion I must state that this diversity strategy is certainly generating CA for IBM, otherwise the company wouldn’t be so committed, in time and resources, to support the ideas coming from its diversity task groups.
To answer the second question I would like to present a You Tube Channel which is the IBMDiversity channel, and has a group of videos about how IBM is managing diversity within the company. I picked this one out:
In there it is shown how the company is really interested in the diversity initiative, even having people to translate sign language. This means that the company is risking the shareholders profitability to this initiative. This shows commitment.
Finally it is important to notice that pursuing the second activity that generates organization commitment, before mentioned (CEO passionate about the initiative), induces the diversity strategy to merge within the corporate culture of the company, and that guarantees a strong commitment to diversity.
For further information check:
Slater, Stanley F., Weigand, Robert A., Zweilein, Thomas J., 2008. “The business case for commitment to diversity”. Business Horizons 51: 201-209.
Thomas, David A., 2004. “Diversity as Strategy”, Harvard Business Review, September 2004, 98-108.
IBM Diversity channel on YouTube, June 20 2008. “IBM Diversity - Persons with Disability”. Retrieved from: http://www.youtube.com/watch?v=Byin-Wq28Cc
No comments:
Post a Comment