Measuring the impacts of diversity is a key step in securing organisational commitment to diversity. While there is an expanse of literature focusing on the impact of diversity on shareholders and stakeholders, there is much to be gained from also considering the impact of diversity on regulatory and global value chain outcomes.
Current academic literature and practices in global organisations suggest that shareholder and stakeholder outcomes continue to dominate the conversation when it comes to building a business case for diversity management. An additional focus on the regulatory context and the impact of diversity on global value chains has the capacity to provide a more well-rounded view of the business case, and one relevant to both local and global organisations. A well rounded business case not only assists in accessing organisational funding to address diversity, it can help to identify structural inequalities beyond the workplace.
The research of Professor Mustafa Ozbilgin (Brunei University), Dr Ahu Tatli and Gulce Ipek (Queen Mary University of London) and Mohammad Sameer (University of Bedfordshire) explores four distinct approaches that are used to account for diversity outcomes; shareholder, stakeholder, regulation and the global value chain.
Shareholder accounting refers to the measurable relationship between workplace diversity and profit/return on investment. Stakeholder impact refers to the relationship between diversity and people (current and future employees, consumers, the community, suppliers), profit (shareholder value) and planet (environmental impact). A regulatory accounting focus attends to both voluntary and coercive measures (peer pressure, legislation) and brings in notions of fairness and structural inequality to diversity outcomes. The global value chain considers local approaches to diversity against global or universal aspirations of equality.
Published in the journal of Critical Perspectives on Accounting, the authors emphasise the need to move from a narrow framing of diversity’s impact (based around shareholder and stakeholder considerations) towards a more comprehensive framework which also includes regulation and the global value chain if one is to truly “account” for diversity.
The research aims to explore how organisations measure diversity in order to pinpoint diversity interventions and access organisational funding.
The authors hypothesised that organisations account for diversity narrowly, and a broader understanding (beyond shareholder and stakeholder interests) to include regulatory pressures and the global value change would more appropriately “account” for diversity outcomes and thus access organisational funding to address structural inequality.
The authors conducted semi-structured interviews with heads of diversity or finance and accounting leaders in 22 globally significant organisations. The interviews were designed to elicit comprehensive evidence on how their organisation account for diversity outcomes.
Findings were grouped into the four distinct approaches to accounting, the effectiveness of which were considered in terms of accessing organisational funding and addressing structural inequalities.
It has become clear that the social, cultural, political and economic context plays a critical role in how an organisation measures the impact of workplace diversity on organisational outcomes. The authors have tried to take a new approach to “accounting” for diversity outcomes, broadening it from traditional approaches which focus on shareholder and stakeholder value to incorporate regulatory compliance and the global value chain. In this way, the authors commend a more holistic analysis of workplace diversity drivers and outcomes, with a view to garnering more of the organisational budget for diversity management.
To read the full article, see O¨zbilgin, M., Tatli, A., Ipek, G and Sameer, M., (2015) Four approaches to accounting for diversity in global organisations.Critical Perspectives in Accounting Article in press: http://dx.doi.org/10.1016/j.cpa.2015.05.006