1 CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Diversity has become a central element of the modern organizational landscape- so much so that 75% of the 50 largest companies in the U.S now have diversity directors or managers. A whole new industry has even materialized diversity training to help organizations address the challenge that diversity creates. This interest in diversity would not be surprising. As firms move toward flatter organizational structures featuring groups and teams, and the global economy as a whole. Although business has been conducted on an international deal for many years, in Nigeria International business has gained greater visibility and importance in recent years, because of the growth of large multinational corporations. International businesses, involves teams action across national boundaries. These transaction includes the transfer of goods, services,
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Diversity has become a central element of the modern
organizational
landscape- so much so that 75% of the 50 largest companies in the U.S
now have diversity directors or managers.
A whole new industry has even materialized diversity training to
help organizations address the challenge that diversity creates. This
interest in diversity would not be surprising. As firms move toward flatter
organizational structures featuring groups and teams, and the global
economy as a whole.
Although business has been conducted on an international deal for
many years, in Nigeria International business has gained greater visibility
and importance in recent years, because of the growth of large
multinational corporations.
International businesses, involves teams action across national
boundaries. These transaction includes the transfer of goods, services,
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technology, managerial knowledge and skills, and capital to other
countries. This in twin fostered diversity in workforce among business
organization.
This research however chose to investigate the “EFFECT OF
WORKFORCE DIVERSITY ON ORGANIZATIONS
PERFORMANCE”. Many multi-nationally owned organizations today
employs workforce comprising of indigenes and non-indigenes as well as
mix of genders (male and female) and age groups. The diversity among
each employee profers different kind of input from each individuals.
What began for many U.S organizations for instance, as an effort to meet
governmental and legal requirements has evolved into a strategic priority
aimed at positioning organizations more competitively in the market
place. It is estimated that organizations spend 18 billion annually on
diversity training. In addition, organizations devote resources to a variety
of other diversity-related initiatives, including dedicated diversity
management staffs and workplace programs and benefits such as flexible
work arrangements, domestic partner benefits, corporate-sponsored
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employee affinity groups, and other programs designed to attract and
detain a diverse workforce.
Organizations devote resources to diversity initiatives because they
believe diversity is a business imperative and good for the bottom-line.
And for any business organization to accomplish their objectives they
must make use of both their human and material resource effectively and
efficiently. Organization devote resources to diversity initiatives because
they believe diversity is a business imperative, demographic slights in the
U.S labour market, for instance, specifically the projected rapid growth
of the minority labour force over the 10 years, impacts organisations on a
number of fronts Konrad (2003), has stated three (3) primary arguments
in the business case for diversity. First, competition for the best talent
requires organizations to reach out and embrace an increasingly diverse
labour pool. Secondly, a global economy requires that organizations have
a diverse workforce so that they can effectively deal with an increasingly
diverse customer base. Thus, a diverse workforce can lead to an increased
market share, where as lade of diversity in the workforce can lead to a
shrinking market share.
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A third argument is that demography diversity unleashes creativity,
innovation, and improved group problem solving, which in turn enhances
the competitiveness of the organization. In addition, one could add that in
the context of the debate and controversy surrounding affirmative action
programme, diversity is a more palatable and socially acceptable way to
address race and gender issues. Finally, it can also be seen that in a
multicultural society, attempting to increase workforce diversity is
simply the right and ethical thing to do as corporate citizens, regardless
of the economic implications.
Performance in the business realm is judged by the amount or level
of productivity recorded by an organization, which will in turn foster the
„going-concern‟ phrase of business. The relationship between workforce
diversity and performance in organization brings out both the positive
and negative effect of diversity of workforce on organisation‟s
performance.
Therefore, if an organization plans to survive as well as achieve its
objectives, it must keep in check its workforce diversity, making sure that
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the positive effect is greater than the negative effect on their
performance.
1.2 STATEMENT OF THE PROBLEM
The statement of problem tends to provide answers to the question; what
are the effects of workforce diversity on organisation‟s performance in
Dangote Group of companies, Ilorin plant?
1.3 AIM AND OBJECTIVE OF THE STUDY
1.3.1 GENERAL OBJECTIVE
The general objective of this research is to examine the effect of
workforce diversity on business performance in Dangote Group of
Companies,with a view of recommending ways to improve and promote
diversity through developing external relationships with underrepresented
groups outside the Dangote organization.
1.3.2 SPECIFIC OBJECTIVE
These are as follows:-
-To investigate the impact of workforce diversity on productivity in
Dangote Groups of Companies,Ilorin plant.
-To examine the impact of workforce diversity on labour force.
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-To examine the impact of workforce diversity on customers
relationship/sales
-To make recommendations as to how workforce diversity can have
positive impact on corporate performance
1.4 SIGNIFICANCE OF THE STUDY
This research is significantly on the following aspects:
Provides the framework for the managements of any organisation,
in reducing the negative (problems) impact of workforce diversity
in the organization.
The report revealed problems of workforce diversity and help in
seeking solutions to such problems in the proliferation of
establishment with workforce diversity
Finally but not the least, the report of the study adds to the existing
literature on the effect of workforce diversity on business
performance.
1.5 SCOPE OF THE STUDY
The research focuses on the effect of workforce diversity on
business performance, its delves further into the effect of workforce
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diversity on productivity in Dangote Group of Companies, from 2005-
2008.
1.8 HISTORICAL BACKGROUND OF DANGOTE GROUPS OF
COMPANIES
Dangote Group of Companies is a success story in a developing
economy. Founded by a sole Owner, Alhaji Aliko Dangote, who is the
president and CEO of Dangote Group of Companies.
While recognizing and understanding the constraint of operating in
a developing economy such as Nigeria, Alhaji Aliko Dangote and his
business has remained committed to creating and sustaining excellence in
the Nigerian economy. The core business of the Dangote Group is to
provide their customers with a high level customer case and devices, the
group in continually interesting in qualified staff and Information
Technology (IT). And also has a well diversified work force. The
network that will ensure that these high levels of services i.e. carried
through into a market place that is becoming more sophisticated.
The Dangote group has founded (4) regional office located in
strategic locations throughout Nigeria. Each of these offices has regional
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autonomy and responsibility for specific targets, by having these regional
offices, the Dangote Group ensured easy and frequent communication
with all their customers, which again allowed for superior customer care.
The groups understand the inherent constraints of operating in a
developing economy and has actiuctived their business around an
extended value chair, thereby ensuring the case and services that the
Dangote Group has become known for. The Group‟s primary activities
are manufacturing imports, packaging, and nationwide distribution. In
line with the Nigerian Government stated objectives of driving economic
growth, importation of view materials will gradually be replaced by the
manufacturing or cultivating of these materials within the country
(Nigeria). Some of these products are also exported to Ghana, Benin
republic, and other numezone west. African countries.
Although currently a small contribution to the overall business
exports are expected to show growth of between 15% - 20%. And
presently the company has under them over 20,000 Nigerians and other
countries citizens working with them.
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Alhaji Aliko Dangote name comes up whenever people are talking
about successful Nigerian Business man, but today his company have
gone public one to the advice given to him by the banks in other to
enable the company have a more resounding and strong image to its
finances. This was made clear to him that bus being a role owner and
holding all stocks, in case of any mix harp, the company‟s continuity
might be jeopardized. And with it going public, the company will have
greater expansion opportunities and more financing options that can in
turn facilitate the developmental process of the company as well as that
of the nation in the view of job creation for the citizens.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Diversity as defined in the Oxford Advanced Learners Dictionary
is
a range of many people or things that are very different from each other.
If also goes further to elucidate it as the quality or fact including a range
of many people or things.
Kochan (2003) sees diversity in business as “a situation when
human resources practices supports the creation of a workforce that has
the skills needed to twin workforce diversity into an advantage, diversity
is more likely to lead to positive performance outcome”.
Jordeson (1995) Posit that. “diversity can have negative effects, as
well as positive effects on organizations performance”. However, the
empirical literature supports the nation that more diverse groups, teams,
or business units perform better, feel more committed to their
organization and experience higher level of job satisfaction.
Diversity is about recognizing, respecting and valuing differences
in people with different ethnicity, gender, colour, age, race, religion,
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physical ability, national origin and sexual orientation. It also includes an
infinite range of individual unique characteristics and experience such as
communication styles, career path, life experiences, educational
background, geographical location, income level, marital status and other
variables that influences personal perspectives.
John (2001), in support of the negative-positive effect of workforce
diversity on business performance posit that “diversity may
simultaneously produce more conflict and employee in turnover. As well
as more creativity and innovation in business”. Example of this negative-
positive effect of workforce diversity is found in two studies that
examine diversity within top management teams in banking industry.
In one study, diversity in top management teams was associated
with greater innovation within bank branches. While in another team,
diversity also associated with higher dates of turn over among staffs and
top management team members.
Although these two (2) examples try to show both the negative
impact as well as the positive impact of workforce diversity on business
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performance, the major aim is to harness, thereby creating more benefits
for business organizations.
However, the effects of workforce diversity on business
performance was further analysed by William (1998) with the model
below
ORGANIZATIONAL CONTEXT
ORGANIZATIONAL CULTURE
BUSINESS STRATEGY
HR POLICIES AND PRACTICES
WORKFORCE DIVERSITY GREAT PROCESSES OUT COME
– CULTURAL – COMMUNICATION – HIGH PERFORMACE
– DEMOGRAPHY – CONFLICTS – JOB STATISFACTION
– TECHNICAL – COHESION – LOW TURNOVER
– COGNITIVE – INFORMATION
– RELIGIONS – CREATIVITY
– GENDER
SOURCE: EFFECT OF WORKFORCE DIVERSITY ON GROUP
PROCESSWILLIAM K. (1998): “Demography and Diversity”. A review of
to years of research. Vol. 20
(pp 77-140) Greenwich, CT: JAI PRESS.
The above model present, the model that guided the suggestion, that
reflects both theory and empirical study suggesting whether workforce
diversity has a positive or negative impact on performance of business. It
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further highlights that, the business performance may depend on several
aspects of an organizations strategy, culture, and human resource (H.R)
practices. In addition, the model also proposes that these effects are likely
to operate through group or team processes, such that under facilitating
conditions, workforce diversity is associated with positive group
processes and is therefore beneficial to business performance; where as
under inhibiting conditions, workforce diversity is associated with
negative group processes and is therefore detrimental to business
performance; where as under inhibiting conditions, workforce diversity is
associated with negative group processes and is therefore detrimental to
business performance.
John (2001) further explains this model in her review of it that
“however, the connection shown in the model that link workforce
diversity to exam processes and then to business performance seem
logical, but it must be recognized that past research has not always found
strong linkages between the two (workforce diversity and performance).
Infact, past research suggests that there may be no direct positive or
negative relationship between diversity and performance outcomes. In
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some groups, diversity may improve performance, while in other it may
be detrimental to business performance.
2.2 THE IMPLICATION OF RESEARCH AND THEORY FOR
DIVERSITY PROGRAMS
Cose (1991) persist that although the research in industrial and
organizational psychology and related areas casts doubt on the contention
that diversity programs will yield a cornucopia of benefits, the research
and theory have identified at least four general conclusions that have
important implications for diversity initiatives.
1. THE BENEFITS OF DIVERSITY ARE PERTINENT ON THE
SITUATION.
The accumulated research and theory in industrial and
organizational psychology provide little comfort for those who seek
simple rules and procedures that apply across all situation. Based on the
research, a variety of contingency models have been proposed for
leadership, motivation, group behaviors, and organizational effectiveness.
Likewise, there is unlikely to be “one best way” with regards to diversity
programs. The probability of success is likely to depend on situational
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factors such as the organizational culture, strategies, and environment, as
well as the people in the organization and their jobs. In one typology,
Cose (1991) described organizations as ranging from “monolithic”,
where, there are relatively few minority employee and diversity efforts
are subject to resistance, to the multiculture organization, in which
minorities are at all levels of the organization and diversity is
incorporated as a basic value in the corporate culture. Diversity programs
are more likely to be accepted in multicultural organizations with
“diversify climates” and in firms that are growth-oriented rather than
engaged in down sizing.
2. SUCCESSFUL DIVERSITY PROGRAMS ARE BASED ON
SPECIFIC GOALS WITH FEEDBACK PROVIDED ON HOW WELL
THE PROGRAMS ACHIEVE THESE GOALS:
Locke (1990) posit that “in its simplest form, goal-setting theory
states that explicit goals that are difficult but also acceptable lead to
higher performance on a wide variety of tasks than goals that are
ambiguous, easy, or non existent”. Goals are need here to refer to
whatever the diversity program is designed to achieve. Goals should not
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be confused with quotas. Although increasing the diversity of employees
is one potential goal, the use of quotas in hiring, promoting, or placement
can result in charges of reverse discrimination. Consequently, diversity
programs should be designed with other goals in mind than quotas. For
examples, one could have goals for improved relations with minority
comities, mentoring of minorities, cross-cultural knowledge, and a
variety of other outcomes in addition to goals for members of minorities
and women hired and promoted. Furthermore, any goals regarding
workforce representation should be developed in conjunction with legal
counsel to ensure it is consistent with applicable employment law.
Whatever the specific nature of the goals, they should be realistic and
based on a careful assessment of the current organization and translated
into specific targets against which the program can be evaluated. To
achieve the full benefits of goal setting, progress must be evaluated and
feed back provided on progress in achieving goals.
Goals focus attention on what needs to be achieved, encourage the
development of effective strategies, and energize efforts to achieve them.
There is little reason to believe that specific goals set for participants in a
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diversity program do not have the same benefits. On the other hand,
stating vague and all-encompassing objectives (e.g. greater appreciation
for diversity) without specific goals to accomplish ambiguous results is
likely to do little to focus attention, generate strategies, or energize
participants.
3. The sources of diversity initiatives depends on how they are formed.
Hoffman (2003) in his own research stated that “research in a variety
of area of psychology has shown that powerful influence of psychological
framing on how messages are perceived and how the recipients of these
messages respond to them”. An implication of previous research on the
framing of goals in complex task environments is that diversity
programme should be firmed as challenges fund opportunities rather than
as threats to overcome. In support of this point. Ely (2001) contrasted