Pt Chevron Pacific Indonesia and Hsbc free essay sample

Summary This case study report describes a research on two large organizations namely PT Chevron Pacific Indonesia and HSBC in relation to their approaches to managing workforce diversity. The goal of this report was to identify workforce diversity theory and its advantages and disadvantages of managing workforce diversity. It also aims to analyse two organizations approaches to managing workforce diversity and evaluate advantages and disadvantages of the organizations’ approaches based on workforce diversity theory. The report concludes that workforce diversity is one of the primary concerns for most of the businesses; therefore, managing diversity is an important element of management in today’s organisation. Workforce diversity could lead the company into chaos. However, if the company is able to manage it with good approaches, it could be a competitive advantage for the company. There are some approaches that the company use to manage the diversity in their workplace. As it is stated on the research part, Chevron and HSBC manage their workforce diversity with different approaches. Yet, there are also advantages and disadvantages in each approach. The advantages are such as an increase in their productivity, maximizing their workers potential, and employee affinity groups have grown rapidly. On the other hands, the disadvantages are such as an increase in the cost of training, a conflict between a major and minor group, and also a tense working environment between their workers. Hence, in order to gain benefits from the diversity, every organization has to manage it effectively. Table of Contents 1Introduction1 1. 1Background1 1. 2The objectives of the report1 . 3Layout of the report1 1. 4Conclusion drawn from the research2 2Workforce diversity2 2. 1Definition of workforce diversity2 2. 2Approaches to Managing Diversity2 2. 3 Advantages and Disadvantages of Workforce Diversity3 2. 4Advantages and Disadvantages of Different Approaches to Managing Diversity3 3Identification and analysis of organization4 3. 1About the 1st organisation4 3. 2The approaches to managi ng workforce diversity5 3. 3 Advantages and disadvantages experienced6 4Identification and analysis of organization 26 4. 1 About the 2nd organisation6 4. The approaches to managing workforce diversity7 4. 3 Advantages and disadvantages experienced8 5Conclusions8 Reference List10 1Introduction 1. 1Background Nowadays, the change and diversity in the workforce and organisational environment has been increasing (O’Leary Weathington, 2006; Waddel, Devine, Jones George, 2007; McMahon, 2010). Consequently, this has led to the emergence of diversity management which has become important issue for today’s organisations. It is believed that managing diversity can have positive effects toward organisation’s performance. Regarding this issue, there is an attempt to explore diversity management in today’s organisations by conducting research on two large organisations and describing the research result in this case-study report. Furthermore, this case-study report is also carried out as one of the assignments in MMM132- Management subject. 1. 2The objectives of the report The purpose of this report is first to identify workforce diversity theory and its advantages and disadvantages of managing workforce diversity. Then, this report examines two large organisations namely, PT. Chevron Pacific Indonesia and HSBC, which have ways to manage their organisation’s diverse workforce. Furthermore, this report also analyses both organisations’ approaches to managing workforce diversity, describing benefits and drawbacks each organisation has experienced with its diversity management strategies. 1. 3Layout of the report This report consists of four (4) main parts. The first part gives a brief description of workforce diversity and its benefits and drawbacks of managing workforce diversity for today’s organisations. After that, this report describes the identification and analysis of the first organisation in relation to its approaches to managing workforce diversity, including any advantages and disadvantages experienced. In the third part, it explains the identification and analysis of the second organisation in relation to their approaches to managing workforce diversity, including advantages and disadvantages experienced. Finally, summary of the main findings from the research of both organisations will be in the conclusion. 1. 4Conclusion drawn from the research The research found that a diverse workforce is one of the primary concerns for most of the businesses; therefore, managing diversity is an important element of management in today’s organisation. Managing workforce diversity can be done by using some difference approaches, yet there are also advantages and disadvantages in each approach. In other words, workforce diversity could lead the company into chaos. However, if the company is able to manage it with good approaches, it could be a competitive advantage for the company. Finally, the rest of the detailed results of this research will be discussed in each section of the following. 2Workforce diversity 2. 1Definition of workforce diversity What is workforce diversity? Generally, workforce diversity refers to the way in which people in a workforce are similar and different from one another. To be specific, Thomas and Cox (1991, cited in Panaccio Waxin 2010, p. 54) define diversity, in business terms, as a set of differences of individual traits including socio demographic variables and professional variables, which can be found in an organisation’s various levels. For example, Waddel et al (2007) see diversity as differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background and capabilities/disabilities. Schwind, Das, and Wagar, (2007, cited in PanaccioWaxin 2010) categorise those differences by Waddel et al as core dimensions of diversity. Moreover, Schwind, Das, and Wagar (2007 cited in PanaccioWaxin 2010) also add secondary dimensions of diversity which include education, status, language, income levels, etc. Nevertheless, McMahon (2010), Burgess, French and Strachan (2010, p. 8) argue that diversity itself remains an unclear concept. 2. 2Approaches to Managing Diversity There are many approaches to managing diversity. According to Burgess, French, and Strachan (2010), there are two main approaches to managing diversity, namely ‘productive diversity’ which is based on business case for diversity management and ‘valuing diversity’ which is based on human resource or organisational development approach. However, O’Leary and Weathington (2006) believe that organisations must go beyond the business case for diversity management if they want to use the existing diversity effectively. In addition, according to Das (1998, cited in Panaccio and Waxin 2010), there are 4 steps in managing diversity. They are the identification of current and ideal future state, the analysis of present systems and procedures, the changing of policies, procedures, and practices, and the evaluation of results and follow-up. Furthermore, there are 4 essential features in the third step. They are senior management commitment, establishment of a diversity committee, education and training, and finally wide communication of changes (Das, 1998, cited in Panaccio and Waxin, 2010). Waddel et al (2007) also agree with Das (1998, cited in Panaccio and Waxin, 2010) about senior management commitment as one important element for successful diversity management. 2. 3 Advantages and Disadvantages of Workforce Diversity It is believed that there are many benefits of a diverse workforce. Waddel et al (2007), Panaccio and Waxin (2010) suggest that the advantages of workforce diversity are that it can give better service to diverse customers as well as can provide good image and credibility of the organisation. In addition, differences can also increase productivity, provide a wider range of creativity, facilitate innovation, improve coorperation and enable resolution of problems (O’Leary Weathington, 2006; Waddel et al, 2007; Burgess, French Stratchan, 2010; Panaccio Waxin, 2010). However, it is also found that a diverse workforce can have negative effects on how organisational members interact and perform. For instance, O’Leary and Weathington (2006, p. 3) state that diversity can increase interpersonal conflict, reduce workgroup cohesiveness, have lower levels of commitment and less interpersonal communication, and have fewer innovations. . 4Advantages and Disadvantages of Different Approaches to Managing Diversity Business approach to managing diversity has both benefits and drawbacks. The advantages of business approach are that it can increase productivity and gain competitive advantage, through the utilisation of the different talents and abilities, including skills of diverse individuals (O’ Leary Weathington, 2006; Burgess, French Stratchan, 2010). Another advantage is that it can also result in cost savings (O’ Leary Weathington, 2006). However, as suggested by O’ Leary and Weathington (2006, p. ) business case approach can lead to marginalisation of minority employees hired to represent ‘their’ group to appeal to others of ‘their kind’. This means that business case has limited approach to promoting diversity. Further, Burgess, French and Strachan (2010) add that thebusiness case for managing diversity is acknowledged to offer a narrow approachto achieving equity. Another approach involves the valuing of difference. It is believed that the advantage of this approach is that the acknowledgement of the changes required to cultural, political, and structural system within organizations (Burgess, French Strachan, 2010, p. 2). It means that this approach becomes proactive end of equal opportunit y because it sees differences between people in terms of their treatment and experiences at work based on their social group membership (Burgess, French Strachan, 2010, p. 83). Nevertheless, limitation of using this approach is that any changewill be extremely slow, with no guarantee that the major changes required toworkplace systems can or will actually take place (Burgess, French Strachan, 2010, p. 83). 3Identification and analysis of organization 3. About the 1st organisation The first organisation is Chevron. To be specific, the name is PT. Chevron Pacific Indonesia (CPI). Chevron is a local unit of US energy giant Chevron Corporation. As one of the world’s largest integrated energy companies, Chevron conduct the business all around the globe, including in Indonesia. In fact, Chevron is Indonesia’s largest oil producer. PT. Chevron Pacific Indonesia (CPI) was formerly known as PT. Caltex Pacific Indonesia. Chevron is a major partner in Indonesia’s economy and an active member of the community. Chevron’s operation in Indonesia help make Chevron the largest producer of geothermal energy in the world. As a global energy company, diversity is very important issue in Chevron, including in CPI. In carrying out its business, Chevron is guided by the Chevron way. The Chevron wayexplains who we are, what we do, what we believe and what we plan to accomplish. Itestablishes a common understanding not only for those of us who work here, but for allwho interact with us. According to The Chevron Way (2010), supporting diversity is one of the seven values in Chevron. In fact, the demographic and socio economic changes are effecting diversity management in this company. The change are such as the lengthening of working (age population), the composition of workforce and women in the workforce. Based on The Chevron Way (2010), Chevrongains competitive advantage by giving value and respectingthe uniqueness of individuals and the varied perspectives and talents they provide. In addition, Chevron has an inclusive work environment and actively embrace a diversity of people, ideas, talents and experiences. Diversity and inclusion here mean going beyond acceptance of cultural, ethnic, national and religious differences. Chevron also values and encourages diversity of thought and perspectives. The richness of creative diversity increases the ability to achieve Chevron’s vision, and enhances Chevrons work environment (The Chvron Way, 2010). Therefore, the workforce diversity appears at all levels 3. 2The approaches to managing workforce diversity To manage diversity in general, Chevron uses some approaches. One of the approaches is that Chevron tie managers performance ratings to their hiring of diverse candidates and ensure that our selection teams and candidate slates represent a range of backgrounds including sexual orientation in our nondiscriminatory policies (The Chevron Way, 2010). In addition, Chevron also has project-based and programs such as diversity training, diversity moments, personal diversity action plans and lunch-time diversity learning sessions to ensure that the employees understand our policies and know how inclusion is practiced throughout our company (Chevron, 2007). Being valued for your contribution and treated with respect is an important factor in managing workforce difference in Chevron (The Chevron Way, 2010). Furthermore, in specific case like in CPI, Chevron uses approach that based on Indonesia’s traditional culture, ‘gotong-royong’(meaning offering assistance, sharing burdens and working with others). In this case, the company and its employees have contributed in many ways to education and vocational training, health and human services, and small business and micro-enterprise development (Chevron, 2010) 3. Advantages and disadvantages experienced The benefits experienced by Chevron, including in CPI by using their approaches to managing diversity are numerous. One example is that employee affinity groups have grown rapidly. Approximately 21,000 Chevron employees participate in one or more employeenetworks. These include networks for ethnic minorities, women, the disabled, baby boomers, gays and lesbians, and younger employees. Networks help eliminate barriers, improve communication between employees and cultivate links with the communities where we work. Furthermore, diversity councils exist throughout the company to help promote a work environment in which every employee has the maximum opportunity to contribute to company goals. Several Chevron employees were recognized by the Hispanic Engineer National Achievement Awards Conference for their technical expertise and their community engagement work. The most marketable employees effectively work with people from all walksof life. In this case, inclusion leads to more ideas and better business decisions. When we can attract and retain the best talent, we all benefit by workingwith talented people who are here to stay. When people work well together, it makes for a happier and more productivework environment. Many people find that working in a diverse environment is much more interesting and dynamic because they learn more from people with different perspectives. 4Identification and analysis of organization 2 4. 1 About the 2nd organisation The second organisation is HSBC. It is one of the largest banking and financial services organizations in the world. The HSBC stands for The Hong Kong and Shanghai Banking Corporation Limited, which was named after the founding member and established in 1865 to finance the growing trade between Europe, India and China. The entities, which form the HSBC GROUP, provide a comprehensive range of financial services to personal, commercial, corporate, institutional and investment, and private banking clients. HSBC is a well-known bank around the world, from Asia Pacific, Europe, North America, Latin America, Middle East and Africa. Diversity is a central for HSBC. HSBC believes that employing and managing diverse people give them a more rounded and balanced organization and make them more adaptable to new situations because HSBC is global organization. As a global organization, one of HSBC’s goals in diversity is the need to reach out to all parts of employment and customer markets, existing and potential, for maximum productivity and value. HSBC have a diverse workforce of over 335,000 people and have a diverse customer base of over 100 million. 4. 2 The approaches to managing workforce diversity Dealing with diversity, HSBC manages some approaches in order embed diversity into the values and practices of organization. Some of the approaches are HSBC manage to understand the importance of the each individuals contribution to business success; each individual is a valuable asset for the organization. To deal with the diversity, HSBC also manage their workers to understand the diversity and try to respect it. HSBC maintain to maximizing workers potential and inspiring them. A commitment to diversity helps attract and retain talented staff. HSBC recruit the best people to meet its business priorities and manage the workers to realize their full potential. HSBC focus on the diversity itself in order to discover potential employees and untapped skill. In order to demonstrate their commitment to diversity, HSBC prove it by leadership in words and in actions so that people throughout the organization will be able to learn by example and to understand that it is an integral part of good management practice. By managing diversity through this way, HSBC be able to encourage their workers to give their full potential and inspire their workers in effectively managing diversity, it is all has becomes an advantage for HSBC. Another way HSBC uses to manage diversity effectively is to see the diversity in a positive way as an opportunity to create a better relationship between the employees and customers. By understanding the diversity, HSBC manage their workers to be able to think differently and openly so that they will understand and retain customers. HSBC has to maintain and improve their position in the customers markets that has a lot of different profile and keeps changing; therefore, their understanding of diversity becomes their part of competitive advantage. 4. Advantages and disadvantages experienced HSBC approaches to managing workforce diversity are in many ways. First, HSBC manage to understand individual’s workers contribution and demonstrate their commitment to diversity through proof by leadership. As McMahon (2010, p. 41) suggests, â€Å"organisations can manage diversity effectively by building senior management commitment and accountability with a thorough assessment of the peo ple†. Hence, by using this approach, HSBC will be able to motivate their workers and discover their full potential and also make a good management practice. HSBC has also another approach which tries to manage their workers to accept the workforce diversity and respect. However, in order to give a lesson for their workers to manage the diversity, it may increase in the cost of training. Henry et al (2007,p. 75) states that â€Å"this increase comes from costs associated with seminars, programs and lectures given to promote diversity in the corporation’. So the company should add more cost for the training. The other approach is HSBC try to see the diversity in a positive way. In this case, McMahon (2010, p. 0) believes that â€Å"rather than as threats to overcome, they should be framed as challenges and opportunities†. As it is stated, by seeing the diversity itself in a positive way, it could be an opportunity for the company to be better with their business strategy. Yet, to see the diversity in a positive way sometimes can be hard and may lead to conflicts. Henry and Evans (2007) also mention that in the case of divers ity, conflicts occur mainly because of ignorance. The conflict is between the majority group and minority group. Conflicts always arise whenever there are certain people could not work together in certain situation. The minority groups often feel less valued due to stereotyping, ethnocentrism and prejudice. Nevertheless, Henry et al (2007) believe that creativity and performance can be increased when conflicts can be managed and controlled. 5Conclusions To sum up, managing diversity is an important element of management in today’s organisation as workforce diveristy is one of the primary concern for most of the businesses. Workforce diversity could lead the company into chaos. However, if the company is able to manage it with good approaches, it could be a competitive advantage for the company. There are some approaches that the company use to manage the diversity in their workplace, as it is stated on the research part, Chevron and HSBC manage their workforce diversity with different approaches. Chevron manage to hire a differ candidates for their manager team, and in addition, Chevron also has project-based and programs such as diversity training, diversity moments, personal diversity action plans and lunch-time diversity learning sessions. HSBC manage their diversity with understanding the diversity itself and see it in a positive way. Like Chevron, HSBC also hires differ workers and manage to understand the importance of each individual’s contribution. There are some advantages that both organizations experienced such as an increase in their productivity, maximizing their workers potential, and employee affinity groups have grown rapidly. However there are also some disadvantages such as an increase in the cost of training, a conflict between a major and minor group, and also a tense working environment between their workers. In other words, managing workforce diversity can be done by using some difference approaches, yet there are also advantages and disadvantages in each approach. Therefore, in order to gain benefits from the diversity, every organization has to manage it effectively. Reference List Burgess, J ,French, E Strachan, G 2010, ‘The Diversity Management Approach to Equal Employment Opportunity in Australian Organisations’, The Economic and Labour Relations Review, vol. 20, no. 1, pp. 77 – 92. Chevron 007, Safety Moment, Diversity Info, retrieved 4 December 2010, Chevron 2010, Indonesia Fact Sheet, Chevron in Indonesia, retrieved 4 December 2010, Henry, et al 2007, ‘Critical Review of Literature on Workforce Diveristy’, Full Length Research Paper, p. 72-76. HSBC 2010, HSBC Diversity, HSBC holdings plc-2010, retrieved 18 December 2010, HSBC 2010, About HSBC, HSBC holdings plc-2010, retrieved 18 December 2010, McMahon, AM 2010, ‘Does Workplace Diversity Ma tter? A Survey of Empirical Studies on Diversity and Firm Performance 2000-09’, Journal of Diversity Management, Second Quarter, vol. 5, no. 2, pp. 37 – 48. O’Leary, BJ Weathington, BL 2006, ‘Beyond the Business Case for Diversity in Organisations’, Employee Responsibilities and Rights Journal, Dec, vol. 18, no. 4, pp 1 – 10. Panaccio, A-J , Waxin, M-F 2010, ‘HRM Case Study: Diversity Management: Facilitating Diversity Through The Recruitment, Selection and Integration of Diverse Employees in A Quebec bank’, Journal of the International Academy for Case Studies, vol. 16, no. 4, pp. 53 – 66. The Chevron Way 2010, Diversity, Chevron Human Energy, retrieved 4 December 2010, Waddel, Devine, Jones and George, 2007, Contemporary Management, Mc Graw-Hill, Australia