Figure 2.11

When you are a company that operates in over 170 countries with
a workforce of over 398,000 employees, understanding and managing
diversity effectively is not optional—it is a key business
priority. A company that employs individuals and sells products
worldwide needs to understand the diverse groups of people that
make up the world.
Starting from its early history in the United States, IBM
Corporation (NYSE: IBM) has been a pioneer in valuing and
appreciating its diverse workforce. In 1935, almost 30 years before
the Equal Pay Act guaranteed pay equality between the sexes, then
IBM president Thomas Watson promised women equal pay for equal
work. In 1943, the company had its first female vice president.
Again, 30 years before the Family and Medical Leave Act (FMLA)
granted women unpaid leave for the birth of a child, IBM offered
the same benefit to female employees, extending it to one year in
the 1960s and to three years in 1988. In fact, the company ranks in
the top 100 on Working Mother magazine’s
“100 Best Companies” list and has been on the list every year since
its inception in 1986. It was awarded the honor of number 1 for
multicultural working women by the same magazine in 2009.
IBM has always been a leader in diversity management. Yet, the
way diversity was managed was primarily to ignore differences and
provide equal employment opportunities. This changed when Louis
Gerstner became CEO in 1993.
Gerstner was surprised at the low level of diversity in the
senior ranks of the company. For all the effort being made to
promote diversity, the company still had what he perceived a
masculine culture.
In 1995, he created eight diversity task forces around
demographic groups such as women and men, as well as Asians,
African Americans, LGBT (lesbian, gay, bisexual, and transgender)
individuals, Hispanics, Native Americans, and employees with
disabilities. These task forces consisted of senior-level,
well-respected executives and higher-level managers, and members
were charged with gaining an understanding of how to make each
constituency feel more welcome and at home at IBM. Each task force
conducted a series of meetings and surveyed thousands of employees
to arrive at the key factors concerning each particular group. For
example, the presence of a male-dominated culture, lack of
networking opportunities, and work-life management challenges
topped the list of concerns for women. Asian employees were most
concerned about stereotyping, lack of networking, and limited
employment development plans. African American employee concerns
included retention, lack of networking, and limited training
opportunities. Armed with a list of priorities, the company
launched a number of key programs and initiatives to address these
issues. As an example, employees looking for a mentor could use the
company’s Web site to locate one willing to provide guidance and
advice. What is probably most unique about this approach is that
the company acted on each concern whether it was based on reality
or perception. They realized that some women were concerned that
they would have to give up leading a balanced life if they wanted
to be promoted to higher management, whereas 70% of the women in
higher levels actually had children, indicating that perceptual
barriers can also act as a barrier to employee aspirations. IBM
management chose to deal with this particular issue by
communicating better with employees as well as through enhancing
their networking program.
The company excels in its recruiting efforts to increase the
diversity of its pool of candidates. One of the biggest hurdles
facing diversity at IBM is the limited minority representation in
fields such as computer sciences and engineering. For example, only
4% of students graduating with a degree in computer sciences are
Hispanic. To tackle this issue, IBM partners with colleges to
increase recruitment of Hispanics to these programs. In a program
named EXITE (Exploring Interest in Technology and Engineering),
they bring middle school female students together for a weeklong
program where they learn math and science in a fun atmosphere from
IBM’s female engineers. To date, over 3,000 girls have gone through
this program.
What was the result of all these programs? IBM tracks results
through global surveys around the world and identifies which
programs have been successful and which issues no longer are viewed
as problems. These programs were instrumental in more than tripling
the number of female executives worldwide as well as doubling the
number of minority executives. The number of LBGT executives
increased sevenfold, and executives with disabilities tripled. With
growing emerging markets and women and minorities representing a
$1.3 trillion market, IBM’s culture of respecting and appreciating
diversity is likely to be a source of competitive advantage.
Based on information from Ferris, M. (2004, Fall). What everyone
said couldn’t be done: Create a global women’s strategy for IBM.
The Diversity Factor, 12(4), 37–42; IBM
hosts second annual Hispanic education day. (2007,
December–January). Hispanic Engineer,
21(2), 11; Lee, A. M. D. (2008, March). The power of many:
Diversity’s competitive advantage. Incentive,
182(3), 16–21; Thomas, D. A. (2004, September). Diversity as
strategy. Harvard Business Review, 82(9),
98–108.
Discussion Questions
- IBM has been championed for its early implementation of
equality among its workforce. At the time, many of these policies
seemed radical. To IBM’s credit, the movement toward equality
worked out exceptionally well for them. Have you experienced policy
changes that might seem radical? Have these policies worked out?
What policies do you feel are still lacking in the workforce?
- If you or your spouse is currently employed, how difficult
would it be to take time off for having a child?
- Some individuals feel that so much focus is put on making the
workplace better for underrepresented groups that the majority of
the workforce becomes neglected. Do you feel this was the case at
IBM? Why or why not? How can a company ensure that no employee is neglected, regardless of demographic
group?
- What types of competitive advantages could IBM have gained from
having such a diverse workforce?