Race and Commercial Organizations
The globalization of the economy, namely its transformation into a single interconnected system, is a characteristic of the beginning of the XXI century. Inline, the share of multinational enterprises has considerably increased; they usually employ workers that come from different races and ethnicities. Moreover, the principles of equality and diversity are becoming the basic factors that shape the organizational culture of the majority of modern companies. However, one cannot guarantee that they are always followed by the managerial staff. This statement is particularly true for non-governmental commercial organizations since each of them operates in accordance with different ethical principles and moral norms, as well as a unique organizational culture. Therefore, it is necessary to analyze the connection between the race and such entities in order to obtain an insight into the state of affairs in the light of the globalization and political correctness.
It is important to note that in the Western corporate culture, it is believed that the observance of principles of the political correctness, especially in terms of the employment and personnel management, benefits business considerably. In particular, companies that are heterogeneous in sex, age, and race of their workers tend to introduce innovative ideas and find new customers and markets with a high chance of success. The primary reason for that trend is the positive effect of the diversity of the personnel as groups consisting of representatives of different nationalities produce better results and are more prone to the innovation (Bendl, Bleijenbergh, Henttonen, & Mills, 2015). Additionally, boundaries between various cultures are gradually blurring due to the globalization, which also facilitates the adoption of diverse staffing practices by the commercial organizations. At the same time, this situation requires a better understanding of ethnic and religious backgrounds, family values, and national sub-cultural phenomena from managers. The evolution of the business that previously focused on the domestic market into a globally-oriented one resulted in the need for developing the new thinking and skills (Bendl et al., 2015). In turn, these factors potentially lead to the design and implementation of more sophisticated and efficient managerial techniques; thus, they improve the overall productivity and profitability of companies that embrace the principle of diversity.
The understanding of this fact has resulted in the introduction of appropriate measures that promote the diversity in the workplace. In particular, the majority of developed countries have enacted a set of legislation for prohibiting any discrimination in hiring. For example, in the US, the discrimination based on the race, color of skin, religion, sex, and national origin, for example, is punishable by law (Wright & Conley, 2016). In other words, the diversity in the workplace is promoted officially; in theory, it means that the race of an employee is not to be a concern of an employer, even in the commercial organization.
At the same time, it is possible to point out that despite the described measures, the problems of a racial nature, specifically the ones related to the employment in the non-governmental commercial organizations, still exist in the developed world. For example, in the United Kingdom, the citizens originating from Africa and the Caribbean are mostly unemployed or engage in low-paid jobs that do not require any proficient professional skills. In the past years, these people also reported the highest possibility of losing their jobs or being denied the employment at all. As it was demonstrated by nationwide polls, more than half of the UK citizens believed that they lived in a racist society, where, in their opinion, the biggest problem was the racial discrimination in hiring (Wright & Conley, 2016). In particular, charges of such practice were brought against the British media companies, including BBC. It turned out that the ethnic minorities composed only 8% of the corporation’s personnel despite the fact that they account for around 30% of London’s population (Wright & Conley, 2016). Thus, the principle of diversity tends to exist mostly on paper.
The situation in the US, the country that actively promotes the principles of racial equality and bans any discrimination, including the one in the employment, is not much better. The policy of equal opportunities is yet to reach its goal; in other words, its benefits are unnoticed by citizens that belong to racial minorities. As a rule, they are less educated and earn less. Even despite equal conditions, the average income of an African American family is approximately 60% of that of the white one (Wright & Conley, 2016). In other words, the racial inequality in the workplace continues to exist in the modern days. Given the fact that commercial organizations employ the majority of the country’s population, as well as provide a considerable amount of income, such a situation can be explained by the unique nature of the payment for labor or the salary. In particular, it can be described as a figure that is primarily determined by social factors while being rather independent of the productivity of work. These factors may include the overall situation in the society, the level of literacy, outlook, and, most importantly, the race of a worker (Braverman, 1974). Therefore, an African American employee may earn less despite the complexity and efficiency of the own work that is equal to one of other professionals engaged in a similar activity. Such social dependence contributes to the racial discrimination in the workplace.
The described issue can somehow be addressed by the principle of meritocracy – an approach to the management of the personnel that is based on the principle of the promotion of the most capable people regardless of their social background and financial prosperity. In these terms, it can be utilized in the following ways. In the first case, it is manifested as a system, in which leaders (managers) are appointed on the basis of their specific talents. The second, more common, the manifestation involves the creation of equal possibilities for gifted and hard-working individuals when it comes to the reimbursement and promotion under conditions of the free competition (Castilla, 2008). In theory, this approach allows avoiding problems related to the discrimination as a whole as all employees are put on an equal footing. However, in practice, the assessment of workers’ merits is often biased. For example, at the initial stage of this process (performance rating), certain candidates may be ignored because of their race. Moreover, in some cases, it is followed by the performance-reward bias (Castilla, 2008). It means that even after the contribution of a worker is confirmed, a possibility of him or her receiving lower reward due to the belonging to a particular race still remains.
It is possible to point out that even multinational corporations, which are among the first to implement the principles of equality and diversity, resort to such practices, primarily, when it comes to the performance rating. In this regard, an example of Microsoft is particularly vivid; it is a company that operates at the global scale and provides services to a wide range of consumers; thus, it usually becomes the target of the racial discrimination lawsuits. In 2001, several employees of the organization demanded the compensation of $5 billion for being subjected to the discrimination in hiring, promotion, and bonus payments. From the reports of human rights defenders, it became known that, out of more than 20,000 workers, only 2.6% were African Americans. In the case of the managerial staff (around 5,000 people), the share of African American employees was only 1.6% (Wright & Conley, 2016). In other words, the majority of African Americans did not pass the assessment. These figures also allow assuming that when it comes to the promotion, the merits and skills of a person are secondary; it may also explain the situation with the lower earnings of the black families in America.
Of course, there are many commercial organizations that embrace the principle of diversity, including such corporations as IBM, BASF, MasterCard, Novartis, and many others. Moreover, their growing numbers can be perceived as a sign of diversity becoming a norm in the global society (Bendl et al., 2015). However, deep roots of the reviewed problem may slow down this process, meaning that the racial discrimination in non-governmental companies will continue to exist.
The globalization of the economy has resulted in the emergence of the new working conditions for business (multiracial and multicultural society), leading to the need for developing a new approach to the management of companies. In turn, the principles of diversity, equality, and meritocracy have become important factors of success of business entities. However, problems of the racial nature still remain in the majority of commercial organizations as the organizational culture of such entities does not always prioritize the values described above in the paper. The issue is exacerbated by the social dependence of the payment for labor and biased evaluation of the workers’ contribution to the success of a firm, as well as the fact that even large multinational corporations resort to such practices. As a result, despite the recent increase in the number of diverse companies, the problem is likely to persist in the long-term perspective.
Bendl, R., Bleijenbergh, I., Henttonen, E., & Mills, A. J. (2015). The Oxford handbook of diversity in organizations. New York, NY: Oxford University Press.
Braverman, H. (1974). The degradation of work in the twentieth century. New York, NY: Monthly Review Press.
Castilla, E. J. (2008). Gender, race, and meritocracy in organizational careers. American Journal of Sociology, 113(6), 1479-1526.
Wright, T., & Conley, H. (2016). Gower handbook of discrimination at work. New York, NY: Routledge.