Asia School of Business

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The Challenges and Opportunities of Diversity, Equity, and Inclusion for Asian Businesses

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The DE&I Movement in Asia

In the face of globalization, today’s workforce will be characterized by ever-growing diverse teams, including members from social groups that have been traditionally underrepresented in business. Such a diverse team embraces unique individual characteristics on different dimensions, including gender, race, national origin, religion, sexual orientation, beliefs, socioeconomic status, and etcetera.

Knowing how to build a successful diverse workforce and make every member feel equally valued has become more important to business leaders than ever. Research has shown that having a diverse and inclusive workplace is beneficial to businesses. It not only helps establish a positive reputation of “doing the right thing to protect human rights” as a business, but also enhances innovation, the size of the talent pool, decision-making quality, and marketing opportunities.

Asia is unique in its multi-dimensional diversity. As the biggest continent in the world, Asia is home to nearly five billion people with more than 2,300 languages and dialects spoken in total. Southeast Asia is particularly unique in its racial, ethnic, religious, cultural, and linguistic diversity. Yet a BCG survey [1] based on 6,100 participants in six Southeast Asian countries suggests that only 58% of Southeast Asia businesses incorporate some forms of diversity and inclusion (D&I) initiatives, a much lower rate compared to the global average of 96%.

Western countries, such as the United States, where the concept of diversity management originally developed, have evolved from coming up with solutions to prevent discrimination and prejudice, to leveraging unique talent in individual workers. Some Asian countries, on the contrary, seem to be still struggling with or have only just begun discussing workplace discrimination and prejudices.

Barriers to workplace equality are rooted in historical, political, and cultural factors. For instance, in Japan, gender inequality and the underrepresentation of women in top management are still controversial topics to discuss. In South Korea, the unequally greater power distributed to “seniors” based on their age or tenure is still an unbreakable workplace norm. In Malaysia, ethnic tensions are still high.

In India, the caste system still leaves an imprint on society, making it difficult for those born in lower castes to enjoy equal opportunities as their more advantageous counterparts. In many Asian countries, the rights of the lesbian, gay, bisexual, and transgender (LGBT) population are not legally protected.

National Culture as an Influence

The difference in the maturity of the D&I movement between Western and Asian countries seems to be at least partially explainable by their national culture. According to Hofstede’s cultural dimensions theory[2], with some exceptions, most Asian countries are higher on two cultural dimensions: collectivism and power distance. Collectivism refers to the extent to which people are integrated into social groups and emphasize collective welfare over self-interests.

Views underlying D&I initiatives that all people are unique individuals and that their uniqueness should be celebrated seem to be more inherent in the social values of individualistic countries (ie. low collectivism). However, such views may be at odds with the values of collectivistic countries, in which group harmony and a shared similarity among group members are prioritized.

Power distance, the extent to which people accept that power is distributed unequally in society, could also hinder D&I movements. People in countries higher on power distance may react less strongly in the face of injustice and may be more likely to legitimize the unfavorable treatments others receive, as evidenced by empirical research[3].

These cultural characteristics may help explain why D&I programs that focus on ensuring everybody is equally treated and valued are not implemented as much in some Asian business contexts.

Creating a Diverse and Inclusive Workforce for Asian Businesses

Despite these differences, businesses in Asia should not stop thinking of ways to build a diverse, inclusive, and fair workplace for members from all social groups, as there are many benefits to be reaped. Despite the potentially strong influence of national culture, researchers have argued that the impact of national culture on an organization is weaker than we typically expect.

There is sufficient room for businesses to craft their own unique organizational culture, independent from the national culture[4]. In addition, research shows the influence of the national culture on an organization becomes weaker when it has its own initiatives to enhance workplace diversity and inclusion[5]. Businesses in Asia can also regard these strong national cultures as an opportunity rather than a constraint.

If we believe that the core of diversity management is to reach a balance between individuals’ uniqueness and similarities, then collectivistic cultures tend to be more skilled in terms of building similarity among individuals in their pursuit of group harmony. Businesses in such contexts could take the advantage of the existing group harmony while exerting specific efforts towards valuing individual uniqueness.

In other words, while maintaining group harmony, organizations in collectivistic cultures should not overlook the fact that everyone is a unique individual and permit equal opportunities for everyone to contribute, voice out, and grow. Business leaders should also question the illegitimate grounds on which power imbalances are based and reinvent workplace norms that fairly distribute power and resources.

For example, [6]a study investigating the causes of airplane crashes in South Korea in the 90s found that the Korean culture of always respecting seniors, even when they were exercising poor judgments, was a major contributor. After the pilots and co-pilots were only allowed to communicate in English, a language that does not come with built-in terms designed specifically for showing respect to those of higher ranking, the co-pilots spoke up more against their senior colleagues when noticing questionable decisions are being made.

They were thus treated more fairly. This change in organizational norms led to reductions in airplane accidents. Another advantage of leading employees from Asian cultures is that people in Asia may be better at noticing contextual influences on others’ behaviors, compared to people from individualistic cultures. Stereotypes towards members of a different group are often a product of mistaken assumptions or interpretations of why others behave the way they do.

One unconscious bias that people often fall prey to while explaining others’ behaviors is the fundamental attribution error, which is the tendency to attribute outgroup members’ failures and shortcomings to dispositional and personality-based explanations, rather than situational or environmental explanations. Such an attribution error can reinforce stereotypes of members outside one’s tribe.

Cross-cultural research[7] indicates that people in collectivistic cultures tend to fall prey to this bias less and give more benefit of the doubt when observing others’ failures. For example, when explaining why a colleague performed poorly, people in collectivistic cultures may be more likely to consider the possibility that it may be due to some situational factors outside their personal control rather than attributing it entirely to personal attributes, such as laziness, gender traits, race, or age.

Such mindsets are important to maintain and reinforce while productively building an inclusive workplace. Although the concept of DE&I initially evolved from the West, in this new era of globalization, learning how to work effectively with workers that are traditionally underrepresented in workplaces is a critical lesson for all businesses in the world. This article presents some unique challenges and opportunities for businesses to consider while promoting DE&I in an Asian context.

Citations:

[1] https://www.bcg.com/publications/2020/diversity-dividend-in-southeast-asia

[2] https://www.hofstede-insights.com/product/compare-countries/

[3] Brockner, J., Ackerman, G., Greenberg, J., Gelfand, M. J., Francesco, A. M., Chen, Z. X., … & Shapiro, D. (2001). Culture and procedural justice: The influence of power distance on reactions to voice. Journal of Experimental Social Psychology, 37(4), 300-315.

[4] Gerhart, B. (2009). How much does national culture constrain organizational culture?. Management and Organization Review, 5(2), 241-259.

[5] Lee, Y., & Kramer, A. (2016). The role of purposeful diversity and inclusion strategy (PDIS) and cultural tightness/looseness in the relationship between national culture and organizational culture. Human Resource Management Review, 26(3), 198-208.

[6] Gladwell, M. (2008). Outliers: The story of success. Little, Brown.

[7] Carpenter, S. (2000). Effects of cultural tightness and collectivism on self-concept and causal attributions. Cross-Cultural Research, 34(1), 38-56.