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Organizational Strategy and Diversity Management: Diversity-Sensitive Orientation as a Moderating Influence

Dansky, Kathryn H.; Weech-Maldonado, Robert; De Souza, Gita; Dreachslin, Janice L.

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Abstract

Empirical studies on diversity suggest that health care organizations have been slow to embrace diversity management. We propose that sensitivity to diversity, at the corporate level, moderates strategic decision making, which influences human resource management practices such as diversity initiatives. This study of 203 hospitals explored the relationships among organizational strategy, organizational sensitivity to diversity, and diversity management practices.

Diversity is an important subject for managers and organizations. In 1999, 28% of U.S. residents were members of a racial or ethnic minority group, and the U.S. Census Bureau1 projects that the percentage will increase to 40% by 2030. Demographic changes are resulting in an increasingly diverse labor pool and customer base. The health care industry, in particular, will be affected by demographic shifts in the workforce. The U.S. Bureau of Labor Statistics estimates that one of every three new jobs will be in the health care industry. This poses challenges for health care managers, who will face severe labor shortages and a more diverse workforce in coming years.

Emerging literature suggests that culturally diverse organizations outperform their more homogeneous counterparts.2-4 A number of empirical studies have attempted to explain and predict the relationship between workforce diversity and organizational performance. For example, Richard4 uses a resource-based view of the firm as a theoretical foundation for understanding cultural diversity's role in helping organizations obtain competitive advantage.

Under the rubric of "strategic human resource management" (SHRM), researchers have linked corporate strategy to human resource practices such as staffing and training. We add to this literature by investigating empirically the relationship between corporate strategy and human resource management. Specifically, we propose that sensitivity to diversity moderates the relationship between strategic decision making and human resource management practices such as diversity initiatives. We use the term diversity-sensitive to describe those organizations that value having a diverse workforce (at all levels) and meeting the needs of a diverse patient population. This corporate-level attitude is articulated and carried out through diversity management practices, in alignment with organizational strategy.

Diversity management is known to enhance workforce and customer satisfaction, to improve communication among members of the workforce, and to improve organizational performance.2,3 Svehla5 describes diversity management as a strategically driven process whose emphasis is on building skills, creating policies that bring out the best in every employee, and assessing marketing issues as a result of changing workforce and customer demographics.

But not all organizations exhibit a "strategically driven process," with regards to diversity management. Some organizations choose to respond to workforce and customer demographics by proactively initiating diversity management initiatives. Others resist, making only those changes necessary to comply with affirmative action guidelines. We propose that organizational strategy and diversity management are linked in both tangible and intangible ways. This article explores the relationship between an organization's strategy and its diversity management practices, in the context of organizational sensitivity to diversity.

© 2003 Lippincott Williams & Wilkins, Inc.

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