Managing Workforce Diversity in Supply Chain Integration for Improved Business Performance

Abstract

Today, with increasing globalization, workforce diversity management is attracting strategic attention. Businesses are under increasing pressure to employ people from diverse backgrounds and different cultures as a survival strategy than as an operational issue. To achieve improved business performance in such environments, the role of diverse workforce management cannot be overemphasized. The critical question that emerging research must address is:” is it even worth managing diverse workforce?” This study partly addresses this question by examining the implication of managed-workforce diversity (MWD) on internal supply chain (SC) integration and business performance. Data was collected from one hundred and twenty-six respondents using mainly questionnaires. Rigorous statistical analysis involving ANOVA, exploratory factor analysis (EFA) and then confirmatory factor analysis (CFA) and Structural Equation Model (SEM) in LISREL 8.5 was carried out to validate the research instrument and the data collected. This study concludes that MWD is beneficial in enhancing internal SC integration and SC responsiveness, which in term enhances business performance; and that SC integration acts as a conduit through which MWD influences business performance. We accordingly argue that effective workforce diversity management (which is creating a positive affective climate where employees do not feel intimidated, looked down upon, or discriminated against just because of background differences) is a very necessary strategy for positively driving business performance through internal SC integration and responsiveness. We also argue that while each focal firm within the supply chain network could benefit individually from managing its diverse workforce, aligning such initiatives or efforts with that of members at either stream could be beneficial for an extended SC integration. The managerial implications and the theoretical relevance of the study’s findings are discussed in detail in the subsequent sections.