The Tragedy of the Uncommons: Reframing Workforce Diversity

Human Relations http://hum.sagepub.com/ The tragedy of the uncommons: Reframing workforce diversity Karsten Jonsen, Ahu Tatli, Mustafa F Özbilgin and Myrtle P Bell Human Relations 2013 66: 271 DOI: 10.1177/0018726712466575 The online version of this article can be found at: http://hum.sagepub.com/content/66/2/271 Published by: http://www.sagepublications.com On behalf of: The Tavistock Institute Additional services and information for Human Relations can be found at: Email Alerts: http://hum.sagepub.com/cgi/alerts Subscriptions: http://hum.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav >> Version of Record - Jan 29, 2013 What is This? Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 466575 2013 HUM66210.1177/0018726712466575Human RelationsJonsen et al. human relations The tragedy of the uncommons: Reframing workforce diversity human relations 66(2) 271–294 © The Author(s) 2013 Reprints and permission: sagepub. co.uk/journalsPermissions.nav DOI: 10.1177/0018726712466575 hum.sagepub.com Karsten Jonsen IMD, Switzerland Ahu Tatli Queen Mary, University of London, UK Mustafa F Özbilgin Brunel University, UK Université Paris Dauphine, France Myrtle P Bell University of Texas at Arlington, USA Abstract This article presents a reframing of workforce diversity as a social tragedy. We draw on Hardin’s concept of ‘tragedy of the commons’, which explored the conflicts between individual and collective good. We identify two dilemmas that underscore the social tragedy of diversity and explain why they prevent workforce diversity from progressing: (1) voluntarism and (2) individualism. We critique the simplistic models of managing diversity and suggest an alternative conceptualization as a way forward. We advocate an approach that captures the potential contradictions between individual and social good and accounts for the role of multiple actors in tackling the tragedy of the uncommons. A reframing of organizational self-interest and collective interests in the context of diversity is presented and solutions to social tragedy of diversity are proposed. Keywords coercion, collectivism, individualism, social dilemma, tragedy of commons, voluntarism, workforce diversity Corresponding author: Karsten Jonsen, IMD, 23 ch. de Bellerive Lausanne 1001, Switzerland. Email: karsten.jonsen@imd.ch Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 272 Human Relations 66(2) Introduction In this article, we illustrate why and how workforce diversity should be reframed to capture the tension between individual and collective interests, and repositioned as a societal issue and a collective good. We examine the tragedy of workforce diversity, drawing on the concept of the tragedy of the commons, in which Hardin (1968) described a situation where a number of herders graze their herds on a limited area of common grass. Each herder rationally decides to increase his or her herd size, which eventually leads to disaster and a collapse of the commons, as consumption exceeds the available good (grass). This story illustrates the social dilemma between optimization of individual and collective resources, interests and benefits. We build on previous work on social dilemmas (Barry and Bateman, 1996; Schneider and Northcraft, 1999), which has focused on the relationships between individual and collective interests in the context of workplace diversity. Developing a societal perspective, we refocus the debate on social dilemmas of workforce diversity on the contradictions between interests of organizations and society at large. Social dilemmas have been used extensively to describe the individual interest vis-a-vis the common good, thus the individual has been the traditional unit of analysis (e.g. see Biel et al., 2008; De Cremer and Van Dijk, 2002; De Cremer et al., 2008). We argue for attention to the contradiction between organizational and societal interests because organizations experience the same fundamental conflict as do individuals. Following several scholars (e.g. Demuijnck, 2009; French, 1996; Pies et al., 2009) we acknowledge the importance of viewing organizations as a part of the community (Maak and Pless, 2009), and argue for the need for corporations to recognize their societal role (Crozier, 1964: 310). In the same way, there is a societal dimension to workforce diversity and its management in organizations (Dickens, 1997; Greene and Kirton, 2009; Healy et al., 2010; Litvin, 2006). Social dilemmas are problematized in Hardin’s (1968) influential piece ‘The Tragedy of the Commons’, and have been referred to by scholars in many disciplines such as population control, economics, sociology and biology (Messick and Brewer, 1983). Social psychologists and behavioural economists have long used social dilemmas, such as the prisoner’s dilemma, extensively for research and experiments. Social dilemmas (Tullock, 1974) include the problems associated with the provision of public goods (Dawes and Messick, 2000) and are characterized as having two properties (Dawes, 1980: 170). First, the social payoff to each individual or organization for defecting behaviour is higher than the payoff for the cooperative behaviour, regardless of what the other society members do. Second, all individuals or organizations in the society receive a lower payoff if all defect than if all cooperate. Wade-Benzoni et al. (1996: 111) express such dilemmas this way: ‘When a large number of people make self-interested choices, the costs accumulate. As a result, everyone is worse off than if they had decided not to act in their own self-interest.’ Social dilemmas are also sometimes referred to as social traps (e.g. Barry and Bateman, 1996; Platt, 1973) and can be divided into two categories (see e.g. Van Dijk et al., 2009). Resource dilemmas concern the scarcity of resources, while public good dilemmas concern the contribution to a public good. The latter are particularly relevant to our reframing of workforce diversity as a societal issue. Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 273 Jonsen et al. Workforce diversity is often perceived and treated by corporations as a strategic choice (Jonsen et al., 2011a). Yet, the cumulative effect of dilemmas of workforce diversity is a social tragedy: if each business opts for non-meritocratic methods of recruitment and retention (e.g. based on homophily, discrimination and exclusion), and does not seek to promote diversity at all levels, society is worse off. The social tragedy is induced by non-optimal division of labour and the myriad social problems and unrest that potentially follow from many people being deprived of opportunities to use their talent and to realize their full potential. Workforce diversity is a public good because the public has invested in educating and developing the quality and the skills of the workforce and because without an educated, skilled workforce that has equal opportunities in employment, a society will invariably be worse off. Diversity literature has been heavily preoccupied with symptoms of inequality, including demographic distribution and headcounts (DiTomaso et al., 2007). There are dozens of formulas for calculating diversity (e.g. Blau’s), and the way it is counted, such as fault lines, surface versus deep, relational demography, dyadic. However, there is a need to explore societal solutions, as we are currently ‘trapped in incrementalism and institutional interlocks’ related to diversity (Martin and Meyerson, 2008: 553). Interlocks occur when change efforts in one institutional context are undermined by other institutions’ reluctance to change. Along with these interlocks, we cannot rely on the assumption that companies are working for ‘the common good’, as societal issues remain peripheral to most companies (Porter and Kramer, 2011). Recent corporate scandals in the not-so-diverse financial industry on Wall Street and elsewhere tragically, convincingly and repeatedly show the case in point. Focusing on social systems rather than on their individual components in isolation, may help our theorization out of interlocks. We reframe workforce diversity in terms of our conceptions of social dilemmas and social tragedy and explore the tensions between organizational and collective interests. The uncommons in our title refers to individuals from less powerful or under-privileged backgrounds. The word tragedy is believed to originate from the songs of sacrifice in ancient Greece. Modern societies continue to make sacrifices of their uncommon members, albeit in more subtle and covert ways. Persistent inequalities and mismanagement of diversity is one such case. We begin by explaining the concept of social dilemmas, which generate social tragedies. Next, we elaborate the ways in which workforce diversity presents two dilemmas that lead to the tragedy of the uncommons. Finally, we offer solutions to overcome the social tragedy of workforce diversity. Drawing on Özbilgin and Tatli (2011), we focus on two trends associated with management of diversity: voluntarism and individualism. We conceptualize these two prominent trends as dilemmas in the sense that they help generate the tragedy of workforce diversity by feeding into the contradiction between organizational and social good. In doing so, we make a case for reframing workforce diversity as a multi-faceted societal issue. The tragedy of workforce diversity Diversity is a societal reality. Yet, a societal reality of diversity does not imply a responsibility to pursue diversity and equality among employees. As Kalev et al. (2006: 592) argue, ‘[i]f diversity efforts are everyone’s responsibility but no one’s primary Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 274 Human Relations 66(2) responsibility, they are more likely to be decoupled’. Therefore, not only do we run the risk of tacit coordination merely to protect self-interests (see Van Dijk and De Cremer, 2006; Van Dijk et al., 2009), by which organizations collectively do not care, we also run the risk that organizations will only care if they are assured that other organizations do the same. This is the key problem at the heart of the tragedy of workforce diversity. In fact, workforce diversity presents a social tragedy, because maximization of payoff for individual organizations may lead to collective irrationality (Kollock, 1998), and the cumulative consequences of apparently rational organizational choices may be disastrous (Messick and Brewer, 1983) at the societal level. The social payoff to each organization for mismanagement of diversity (e.g. homophily, discrimination, and exclusion) is often considered higher in the short run than that of promoting diversity and inclusion at all levels (see Noon, 2007). If too many organizations choose to ignore effective and thoughtful management of diversity, this may leave large numbers of people unemployed and marginalized, and their skills underutilized. In essence, the tragedy is that the inclusion of less powerful groups in the workforce at all levels would be better for society as a whole. However, this societal interest may contradict with the strategic choices of individual firms. For example, Richard (2000) found that high racial diversity for firms pursuing a growth strategy was related to higher productivity. For firms with other strategies, more diversity was related to lower productivity, however. Richard (2000: 164) proposed that racial diversity ‘does in fact add value and, within the proper context, contributes to firm competitive advantage’. When the ‘proper context’ does not exist, a large number of organizations may make self-interested choices, the costs accumulate and everyone is worse off. O’Leary and Weathington (2006) argue that there is a need to change the academic and practitioner outlook in a way that goes beyond endlessly discussing workforce diversity and towards concentrating resources on managing diversity. Our proposed perspective suggests refocusing the attention on the relationship between the organizational self-interest and collective interest, and redistributing the resources accordingly. Corporations have become the most powerful institutions on the planet (Korten, 1995); but instead of ‘cocooning themselves in contented pockets of the planet where usefulness is often unrelated to human communities’ (Gladwin et al., 1995: 898), corporations should assume responsibility and accountability for their social, civil and political involvement (Matten et al., 2003). A radical change of perspective would require companies to have multidimensional performance goals including accountability for equality, diversity and inclusion at work. Yet, having multidimensional performance goals may come at a cost of losing business opportunities, especially in the short run (e.g. consumer boycotts against companies like Disney and Pepsi due to their gay-friendly policies) (see also Kumar et al., 2002; Lamb et al., 2005). If technical rationality and instrumental reasoning prevail in the upper echelons of corporations, then diversity is inherently difficult to ‘sell’ by appealing to a company’s sense of justice, equality or fairness (Kersten, 2000). From a short-term organizational perspective, the business case for diversity may pose a dilemma in the absence of a centrally enforced strong legal case, and a societally imposed ethical case (see Dickens, 1997). In the following section, we explain two social dilemmas of workforce diversity: voluntarism (versus coercion) and individualism (versus collectivism). Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 275 Jonsen et al. We explain that these two dilemmas lead to the tragedy of workforce diversity due to the consequential contradictions they impose between individual and collective good. The dilemma of voluntarism versus coercion Wettstein (2009) illustrates that normative demands and expectations from corporations are driven by voluntarism rather than coercive legal measures. The premise of voluntarism lies in the belief that organizations, without recourse to coercive regulation, will proactively pursue workforce diversity at all levels because it is in their interest to do so. However, as Greene and Kirton (2009) argue critically, voluntarism is offered as a way to revitalize organizational efforts for creating inclusive, fair and diverse work environments. The tension between voluntarism versus coercive measures presents a dilemma because compliance to societal needs cannot be assured through voluntarism (Hardin, 1982; Latané, 1981). That is, there is an asymmetry between organizational interests and societal needs and therefore the willingness to pursue workforce diversity will vary tremendously. Some diversity scholars have argued that making a business case is the first step in organizational commitment to diversity (e.g. Cox, 1991; Dobbs, 1996). Yet, several authors warn that the promise and the reality of a business case for diversity may be more elusive and contradictory than diversity advocates had hoped for (Chrobot-Mason et al., 2009; Jayne and Dipboye, 2004; Joshi and Roh, 2008; Mannix and Neale, 2005). The explanation of the business case for diversity, which is at the core of voluntarism, entails logical, causal and empirical inconsistencies. While there seems to be a business case in terms of creativity and innovative outcomes, these advantages are often neutralized by process losses and increasing conflict levels (Stahl et al., 2010). Furthermore, Noon (2007: 778) questions: ‘If the business case for diversity were so compelling, why are not all firms adopting it?’ Noon notes fatal flaws in the business case for diversity: a) that employers have a more short-term view than what may be required for the benefits of diversity to take full effect; and b) that some benefits are either less beneficial than they might first appear, or they are not easily measured. A critical flaw in the business case is the time-range one has to assume when assessing it. If they are well-managed, diverse teams can outperform homogeneous teams, but they may experience higher number of conflicts in the early phases of their inception (Watson et al., 1993). The business case for diversity has been criticized for contributing to the status quo (Litvin, 2002) because it can be used to avoid dealing with moral and ethical issues surrounding diversity and to resist regulation (Tatli, 2011). Several critical theorists, such as Kersten (2000), have argued that the business case for diversity cannot serve as a catalyst for deep-rooted change, as it creates an iron cage of reality as logical and rational. In other words, the business case facilitates an adherence to a worldview in which reality is predictable, controllable, and in which people and objects are considered valuable only to the extent to which they can contribute to a desirable outcome (Janssens and Zanoni, 2005; Lorbiecki and Jack, 2000). An excessive focus on the business case may eventually shortcircuit the ability to focus on alternative and perhaps more structural constructions of reality. In fact, Wrench (2005) has argued that the business imperative has removed the moral imperative for equal opportunity action, such that fighting discrimination may only be seen as important if there is a recognizable business case for it. Not only is it Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 276 Human Relations 66(2) illusionary to think there is a continuous match between business needs and the rights and needs of disadvantaged groups (Dickens, 1997), the business case often represents the wrong debate. The focus on voluntarism based on a business case for diversity has created a blind spot towards other arguments or reasoning. Some corporations may not see a business case for diversity and may sense no urgency or external pressure in their immediate environment to change the composition of their workforce (Jonsen et al., 2011b). Voluntarism is one of the tragedies of workforce diversity because through its emphasis on self-interest of the companies based on the business case, it contributes to the polarization of the organizational and collective interests. In doing so, voluntarism legitimizes and justifies firms acting solely on the basis of self-interest without being constrained by coercive regulation (e.g. equality legislation). Voluntarism leads to the tragedy of the uncommons where workforce diversity becomes merely a matter of optional choice for the firms, and is disconnected from its impact on the collective good. The dilemma of individualism versus collectivism The second dilemma of workforce diversity relates to the treatment of employees as isolated individuals at the expense of any collective framing of diversity. The gospel of individualism, which was predicted to fade sooner or later because it only had the conditions necessary to thrive as a continuous mode of social functioning in the USA (Whitehead, 1948), has colonized the welfare regimes of Europe since the 1980s (Young, 2000). Individualization of difference has been one of the building blocks of the new managing diversity paradigm, which discursively replaced the more collectivist approaches of equal opportunity and affirmative action in the post-1980s (e.g. Glenn, 2007; Jonsen et al., 2011a; Kirton and Greene, 2009). The ideology of individualism has major implications for workplace diversity and equality as individualism depoliticizes and essentializes difference, and silences systematic inequalities (Kelly and Dobbin, 1998). As a result, organizations tend to define diversity on individual terms and ignore structures of power and inequality (Tatli, 2011). Agocs and Burr (1996) found that the language of diversity training programmes is replete with words such as diversity and multiculturalism, while there is hardly any mention of racism, sexism or discrimination. Individualistic framing of diversity predominantly deals with the diagnoses of difference, such as prejudice and stereotyping and may include many trivial differences (e.g. pet ownership) (Embrick, 2011), instead of deeply rooted systemic inequality and discrimination at work (DiTomaso and Hooijberg, 1996). We frame individualism versus collectivism as the second dilemma of workforce diversity leading to the tragedy of the uncommons. By focusing on individual employees and defining difference as a matter of individual uniqueness, this dilemma reinforces the contradiction between the individual and collective good. Individualism serves to obscure the collective dimension of inequality and discrimination. Accordingly, solutions based on this philosophy fail to address societal interests and to promote solutions that will effect change in allocation of resources across groups through a fairer redistribution at both organizational and societal scales. As the unequal distribution of resources is overlaid on the categories of difference that were generated historically between Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 277 Jonsen et al. various groups of people, there is a continual reinforcement of the association between competence and worth with categorical distinctions (see Acker, 2006). Therefore, just appealing to employers to recognize the value of unique diversity of each individual employee is not likely to change much in terms of how people get treated, rewarded, or recognized in the workplace (Tatli and Özbilgin, 2012). In other words, race- and sexbased wage disparities, job segregation, and the glass ceiling will not simply disappear. Critical scholars argue that an individualized conception of diversity attempts to depoliticize gender and racial conflicts within organizations (Lorbiecki and Jack, 2000). Furthermore, the rise of the diversity management approach took place in a neoliberal cultural setting where social class differences have increasingly become legitimate and individualist discourses have gained currency. The marginalization of social class in equality and diversity research and practice should be treated with caution because class is a key cross-cutting category, which is intertwined with all other forms of difference (Acker, 2006; Zanoni, 2011). For example, while exploring the American ghetto and the French banlieue, Wacquant (2007) explains how poverty and class relations are racialized, creating a new form of marginality and fixed pockets of long-term unemployment for those excluded from secure wage work in the formal sector. Defining difference as an individual rather than collective construct engenders blindness towards the historical and social dynamics that constructed the difference in the first place. Even the differences that seem to be more individually specific, such as lifestyle, taste, work style, functional or educational background are, often, a reflection of individuals belonging to historically and socially constructed groups on the basis of their gender, sexuality, ethnicity and social class identity. For example, women’s choices of certain female-dominated occupations, such as nursing or teaching, are construed by some to be more a function of constraint than of choice (Orenstein, 2002). Furthermore, individualization of difference leads to a paradox that difference is seen as innate to the person, which means that it becomes fixed and essentialized (Nkomo, 1992). In the next section, taking into account the implications of dilemmas of voluntarism versus coercion and individualism versus collectivism, we offer solutions to the tragedy of the uncommons. Tackling the tragedy of the uncommons Throughout the last four decades of social dilemma scholarship, we have been presented with a range of solutions, typically divided into two general classes: individual and structural (see Messick and Brewer, 1983). We focus here mainly on structural solutions, because a common weakness in the two dilemmas we have reviewed is a lack of structural conditions for societal well-being. Simply focusing on the small wins (Weick, 1984) or headcount gains (e.g. Catalyst, 2007) provides ‘only piecemeal, smallscale solutions’ (Martin and Meyerson, 2008: 552). In offering solutions, we do not disregard these suggestions and recommendations. However, perhaps we have been looking too long at the symptoms. This has led to a primary concern for the why [diversity] and the how [to manage diversity], instead of asking the initial question of who. We contend that the solution needs to first and foremost address the question of with whom does the solution lie? Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 278 Human Relations 66(2) The actors in the tragedy of the uncommons In addressing the tragedy of the uncommons, there are multiple actors with varying degrees of power and influence. One of the key reasons behind the social tragedy of workforce diversity and the two dilemmas associated with it (i.e. voluntarism and individualism) is the overemphasis on the voluntary involvement of organizations in managing diversity without any need for enforcement from other actors or stakeholders. Social good and long-term vision may make business sense in avoiding social disorder and underutilization of talent, but the expectation that individual businesses will voluntarily act to curb their short-term competitiveness and profits may be unrealistic. This is the case particularly because we live in an increasingly connected world, where competition takes place at a global scale, driven by (perceptions of) free market capitalism, which does not necessarily impose any morals of social and community responsibility, but primarily has a goal of profit maximization. In fact, Hardin (1968) specifically states that self-correcting market mechanisms (such as the business case for diversity) and social morality (such as the ethical case for diversity) are unrealistic solutions to the tragedy of commons in the absence of centrally enforced regulation. The solution to the tragedy of the uncommons requires an attention to the multiplicity of actors beyond individual organizations because the tragedy of the uncommons takes place in a multiactor environment characterized by differential access to power, voice and legitimacy (Özbilgin and Tatli, 2011). In the following section, we identify the key actors (e.g. organizations, consumers, workers, the public at large and the state) and discuss the interplay between them with a view to understand where solutions to the social tragedy of workforce diversity might lie. Organization and its stakeholders Organizations are accountable to and rely on their stakeholders, the actors who are influenced by and/or may exert influence on the realization of an organization’s objectives (Freeman, 1984). In their attempt to integrate the instrumental and normative versions of the stakeholder theory, Jones and Wicks (1999) explain why the moral organization is competitive, and state that convergence of moral and financial goals will take place ‘if we as a society desire a moral and practical organizational response to the spread of intensely competitive global markets’ (1999: 218). In the absence of national and international legislation and institutional reinforcement, it is naive to expect organizations to recognize their social and moral responsibilities automatically, and forego their short- and medium-term profits and competitive position in the market for some future collective social good. Prioritizing the long-term collective interest over and above the individual commercial interest of an organization also conflicts with the ‘winner-takes-all’ culture of contemporary industrial democracies (Frank and Cook, 1995). We do not claim that corporate morality and good ethical behaviour cannot be associated with instrumental benefits and integrated with economically driven activities (see Jones, 1995; Margolis and Walsh, 2003; Wu, 2010). The problem becomes one of competing strategic choices for organizations when there is a vacuum of coercive regulation. Jensen (2000) argues that one cannot maximize more than one strategic dimension at the same time. If firms value profit maximization as the primary objective and if there is a Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 279 Jonsen et al. lack of sanctions for socially irresponsible corporate behaviour, including exclusion and inequality, the collective good is doomed to deteriorate. If we assume the worst-case but not unrealistic scenario that many companies are greedy, selfish and short-termist, the solutions to the tragedy of the uncommons need to address mechanisms through which workforce diversity could appeal to selfish and short-termist interests of organizations (e.g. making diversity attractive and exclusion costly). We explained earlier that the classical business case is not sufficient to achieve this as the evidence supporting the business case is mixed. Furthermore, there is no strong evidence that indicates that organizations are widely convinced that there is a genuine business case for diversity beyond its use at a rhetorical level (see Tatli, 2011). Therefore, a societal case based on the role of multiple actors and the interplay between them is necessary. Our assertion that solutions to the tragedy of workforce diversity require attention to the role that might be played by different actors has parallels with Campbell’s (2007) framing of corporate social responsibility (CSR). He argues that institutional mechanisms, social sanctions and pressure groups mediate the relationship between economic factors and CSR, mitigating socially irresponsible corporate behaviour. However, drawing on more critical CSR literature (e.g. Donaldson, 1999; Gioia, 1999), we recognize that all stakeholders do not enjoy similar levels of power and privilege. CSR as an area itself suffers from similar tragedies due to the conflict between the individual interests of firms and collective social interest. We see partial utility in borrowing stakeholder approach of the CSR literature, allowing us to link the tragedy of commons to workforce diversity with recognition of the multiplicity of the stakeholders, which originates from mainstream CSR literature, and the asymmetries of power and influence between these stakeholders, which is explored in critical CSR literature. The stakeholders of an organization, including the shareholders, consumers, employees and the general public, might be considered as important actors in finding solutions to the tragedy of workforce diversity. However, stakeholders do not comprise a homogenous entity with identical interests and levels of influence. Instead, they have divergent asymmetric interests and priorities, and it is unrealistic to assume that organizations are equally responsive to all stakeholder groups, particularly to the rather abstract stakeholder category of the general public. Interests of some stakeholders may take precedence over those of others in terms of their effect on corporate decisions (Gioia, 1999). As Donaldson (1999: 240) put succinctly, ‘[t]he corporation is, in an important sense, the shareowner’s property. The shareowner is more than a first among equals’. Of course, it is ironic that the state (e.g. France, the UK, the USA) is indeed becoming a major shareowner of many large corporations from banks to automobile manufacturers. This new situation could, potentially, accelerate a reprioritization of social responsibility. As ‘statecontrolled companies are making a comeback’ (The Economist, 2010: 51) the intervention-approach seems perhaps more timely and appropriate than ever. In addition to shareholders, another key stakeholder group is consumers, who may pressure firms to take socially responsible action through active campaigning or positive or negative purchasing decisions with a direct effect on profitability (Creyer and Ross, 1997; Mackey et al., 2007; Sen and Bhattacharya, 2001). If the key imperative for the organizations is profit and shareholder value maximization, as some scholars point to (e.g. Campbell, 2007), the accountability of the firms is first and foremost to their Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 280 Human Relations 66(2) customers and shareholders rather than to society at large. The makeup of these two groups will strongly influence the decisions of a firm regarding diversity and equality. A majority of shareholders and consumers with significant purchasing power in many industries are likely to be ‘white and wealthy’. Firms logically feel most accountable to and responsible towards the privileged and dominant in society rather than the dispossessed and the disadvantaged, who lack economic capital in the form of monetary resources and material assets and symbolic capital in the form of legitimacy, power and influence in affecting decision-making processes (see Bourdieu, 1986). This also speaks to the ‘mirror-argument’ for diversity, namely that organizations are supposed to benefit from mirroring their customers in the composition of their own workforce. So, there is perhaps a (partial) case for appealing to diverse segments of the society by prioritizing their concerns, but not necessarily for promoting equality and diversity. In other words, the promise of voluntarism based on a business case, which is inspired by deregulation of labour markets, is self-defeating in gendered and racialized societies. The state As social tragedies become more pressing, there is an increasing need for policies that will either change the rules of the game or eliminate the dilemmas that lead to tragedies. These policies need to be imposed by society, for which the state can be thought of as an approximation. The state, which is the legislator, regulator of the markets and provider of public services, has an essential role to play in tackling the tragedy of workforce diversity. It is a truism to note that state regulation has been widely resisted by the corporate world. However, one of the ironies unveiled during recent financial downturns was that some businesses and institutions that were once passionate supporters of deregulation have now accused governments of not managing markets well enough (Masciandaro et al., 2011; Sakoui, 2011). This irony encapsulates important lessons about the dilemmas of voluntarism (versus coercion) and individualism (and collectivism). Pearce (2001a) and Ring et al. (2005) point out the lack of research interest in the role of the state in shaping organizational and institutional fields. Pearce (2001b) argues that non-facilitative states, which do not enforce uniform and strong legislation, create a vacuum of rules and values in markets and organizations. A weak central authority and lack of strongly enforced regulation then results in a situation in which individual firms develop their own strategies to conduct their business. This brings us back to our use of the ‘tragedy of the uncommons’. Each organization acts as a herder seeking to maximize its profit in the short term without preoccupying itself with the long-term consequences of its actions for the society at large. This is the most predictable path for organizations, which compete with others for survival and profit. Only through an overseeing body of some kind, which has the ‘social good’ as its raison d’être, can the collapse of the diverse workforce, and its equal representation, be prevented. The state has an important role to play, not only in enforcing legal and ethical cases for diversity through legislation and policy, but also in creating a credible ‘business case’ with short- and long-term consequences for organizations through redistribution of economic and symbolic resources (see Özbilgin and Tatli, 2011). Ironically, the state can make the ‘business case’ come true. As Pearce (2001a: 87) notes, ‘[g]overnments establish and enforce the rules under which organizations operate. They can make a course of organizational action profitable or illegal’. Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 281 Jonsen et al. As an example of the power of state interventions, diversity was kick-started in the USA by the Equal Pay Act of 1963 and the Civil Rights Acts of 1964 (Bell, 2012; Ellickson, 2001), which made it a salient issue for employers, and subsequent legislation drove much of the early interest in this field. According to Kalev et al.’s (2006) analysis, one of the most effective steps in terms of government action in the USA with regard to workforce diversity policies was the introduction of executive orders regarding affirmative action. Similarly, Özbilgin and Tatli (2008) examined the reasons for adopting diversity management approaches in British workplaces. They identified that coercion in the form of equality legislation was the strongest driver for an organization’s decision to take up diversity management activities. One of the cases demonstrating the significance of legal measures has been the Norwegian quota system, which has radically transformed the representation of women on company boards, whereas voluntary measures have failed to deliver such outcomes earlier in Norway and internationally elsewhere (Seierstad and Healy, 2012). Kerr (1992) recommended that structural solutions may combat social dilemmas. In relation to equality and diversity at work, Dickens (2006: 305) notes that ‘state interventions are critical to an equality agenda because markets tend to produce discrimination’. We contend that state action is necessary in order for the disadvantaged to be empowered and the marginal brought into the mainstream through a redistribution of resources to minimize inequality in access to economic and symbolic capital. The most prominent example of this is the relative success of welfare states in Northern Europe and Scandinavia in eradicating inequities through mechanisms of income redistribution and interventions. Therefore, the state’s role in providing solutions to the social tragedy of workforce diversity goes beyond the sanctioning of organizations and involves readjusting the distribution of common resources to promote equality of opportunity and of outcomes (Jewson and Mason, 1986). A redistribution of both economic and symbolic resources is equally important in overcoming the tragedy of the uncommons. The redistribution of economic resources by the state and promotion of fairer access to economic capital involves social policies that go beyond employment and include areas such as housing, health and education in a way to improve the life and employment chances of diverse segments of the population. The fairer distribution of symbolic resources, on the other hand, means promotion of voice mechanisms and empowerment of less powerful stakeholders in a way to strengthen their legitimacy and influence in affecting decision making in communities, organizations and society at large. But, why should governments take action? Given that governments are made up of individuals who are part of the political elite benefiting from the status quo that is based on sustaining historical structures of privilege, is there any rationale for governments to be more socially responsible and less self-interested compared with the private organizations? The answer is yes, because through the mechanisms of representational democracy the political elite, unlike the economic elite, is accountable to and dependent upon the voting potential of disadvantaged and under-privileged groups as well as the advantaged white, middle-class male in order to sustain its position. Indeed, the privileged in the society are socially and economically dominant but remain a numerical minority compared the disadvantaged population. So, the political elite rather than the corporate economic elite is more likely to see a case for self-interest for Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 282 Human Relations 66(2) promoting diversity, equality and inclusion in the society. Therefore, it is more reasonable to rely on the government to take proactive action for diversity and equality, via legislation of market relations and redistribution of wealth to promote greater fairness and justice, than to expect businesses to take voluntary radical action. Some have argued that in a globalized world businesses are political actors and that they replace some government functions by assuming roles and responsibilities that go beyond their legal obligations and also filling regulatory vacuums induced by liberalization and the decline of the nation state (e.g. Habermas, 2001; Margolis and Walsh, 2003; Matten and Crane, 2005; Scherer and Pallazo, 2011; Scherer et al., 2009). On the other hand, the debate is not fully settled. As Banerjee argues, ‘corporations cannot replace governments’ (Banerjee, 2008: 74) and Devinney (2009) points out that a socially responsible organization is an oxymoron. Furthermore, it is questionable if ‘the end of the nation state’, presented by Ohmae (1990) and many others before and after him, is continuing to ring true in all regions, or if this discourse is dissipating. In their analysis of the legitimacy of corporate political activity, Scherer et al. (2006) speak about ‘the democratic deficit of global corporate citizenship behavior’ (p. 519), which is a result of a gap between traditional mechanisms of national governance and emerging yet incomplete transnational mechanisms of governance. In this article we would paraphrase this to mean the ‘demographic deficit’, referring to diversity deficit, of global corporate citizens, insofar that the gap between corporate jobs and privileges, and the demographic spread of the population, may only, realistically, be squared by voting rights and ultimately government initiatives. However, there remain certain conditions under which the state and politics can facilitate change at societal level in a way to overcome the social tragedy of workforce diversity. Writing on the chronic limitations of neoliberal capitalism, Knyght et al. (2011) recently urged for a shift to social capitalism, which integrates the non-market forces such as the state and civil society. The neoliberal model not only reduces the effectiveness of governmental social policies due to retrenchment of the state’s influence and resources (Wacquant, 2008; Zuran, 1995), but may also undermine a truly functioning democracy because of the concentration of power in the hands of the few, widening gap between haves and have nots and the resulting citizen disenfranchisement (Lindblom, 1977; Putnam, 1993). An example of the neoliberal model’s effects on promoting equality and diversity is the retrenchment of the state in the USA, where many of the original conversations about diversity began, but where effectiveness of legislation and government sanctions for discrimination have been curbed as a result of perceptions that minorities have done too well and that discrimination and inequality are things of the past (Henry and Sears, 2002; Krysan and Faison, 2012). These (mis)perceptions exist despite ample evidence that in many cases similarly qualified minorities are less likely to be hired and more likely to be laid off than whites, among other types of discrimination (e.g. Bertrand and Mullainathan, 2004; Castilla, 2008; Elvira and Zatzick, 2002). Therefore, the success of the state intervention in solving the dilemmas of workforce diversity depends on state power and influence, and thus on the socio-economic model adopted (Tatli and Özbilgin, 2009). Moving away from neoliberal approaches to state models which promote equality and diversity for its residents and citizens is a condition to address the tragedy of commons. Only in such political economic order will the state have the power, influence and Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 283 Jonsen et al. resources to mobilize for sanctioning discrimination and exclusion, and redistributing symbolic and economic resources in more equitable ways. Solutions to the tragedy of the uncommons In this section, we move towards a discussion of pragmatic solutions to the tragedy of the uncommons. We adopt Platt’s (1973) article about social traps as a lens through which we can see plausible solutions to the social tragedy of workforce diversity, and thus easing the tension between the rationality of the individual firms and collective rationality. The core of Platt’s suggestions is based on short-term versus long-term focus (Dawes, 1980), which perhaps exemplifies the major discrepancy between the way corporations look at diversity and the way society has to look at it. As shown in Table 1, Platt provides six ways out of social traps: (1) change the delay needed to convert long-range consequences into more immediate ones; (2) add counter-reinforcers, such as social incentives or punishments; (3) change the nature of the long-range consequences; (4) add shortterm positive reinforcement for competing behaviour; (5) get outside help in changing the reinforcement patterns of locked-in loops; and, (6) set up superordinate authority to prevent entrapments, to allocate resources, to mediate conflicts, and to redirect immediate reinforcement patterns to more rewarding long-range goals. The fundamental premise of these suggestions is an attempt to change situations within which individuals or groups face the prospect of adopting seemingly beneficial behaviours that have negative consequences over time (Platt, 1973). Solutions aim to mobilize motivational and structural mechanisms through three key strategies. The first is to increase the salience of the potential trade-off and consequences because decision makers vary in their understanding of these dynamics. Second, altering the time between behaviour and expected consequences is an important dimension of solving a social dilemma, because swift consequences in the form of sanctions or rewards motivate choices by actively helping the decision maker to see how actions are linked to outcomes (Skinner, 1969; Vroom, 1964). Finally, introduction of mediators or institutional agents is necessary in order to prevent the dilemmas, and solve or influence the choice between individual and collective interests (e.g. the conflict between short run individual benefits of acting in self-interest and delayed [or absence of] punishment for doing so). This can be a skilled third party or new superordinate authorities. In the right column of Table 1, we offer short- and long-term diversity actions, which correspond to Platt’s six ways out. We recommend that regulation and state intervention, including new legislation and funding, is implemented to support these diversity actions. In our suggested solutions, regulation and funding by the state are at the heart of ways out from the tragedy of workforce diversity in agreement with Hardin’s (1968) argument that solution to the tragedy of commons lies in centralized enforcement, regulation and control. First, we recommend a short deadline for evidence of results of any non-discrimination efforts, such as affirmative action in the USA or quotas for women on boards in Norway and Spain, with immediate and serious monetary consequences for non-compliance. Importantly, these initiatives should be wider than board level concerns. Second, we propose that a model of simultaneous positive and negative reinforcement needs to be available in a way to combine sanctions for non-compliance, and rewards Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 284 Human Relations 66(2) Table 1 An application of Platt’s ‘ways out’ of social traps to the tragedy of the uncommons Platt’s ways out Diversity action (1) Change the delay to convert longrange consequences into more immediate ones (2) Add counter-reinforcers, such as social incentives or punishments (1) Impose short deadlines for nondiscrimination efforts with immediate and serious monetary consequences (2) Include simultaneous positive and negative reinforcement combining punishment for non-compliance and rewards for good practice and role-modeling (3) Require long-term changes of institutional or structural character (4) Provide incentives for being ‘best-inclass’, such as prizes and tax breaks, or preferential treatment in regards to government contracts (5) Provide or finance knowledge transfer from other countries or sectors, and facilitate trickle down effects from large corporations to small and medium businesses particularly through practices of procurement and business-to-business interfaces (6) Provide regulatory bodies with significant resources and certain authority for interventions (3) Change the nature of the long-range consequences (4) Add short-term positive reinforcement for competing behaviour (5) Get outside help in changing the reinforcement patterns of locked-in loops (6) Set up superordinate authority to prevent entrapments, to allocate resources, to mediate conflicts, and to redirect immediate reinforcement patterns to more rewarding long-range goals and recognition for good practice. Many tax systems already offer such incentives and disincentives for environmental issues. For organizations to take the issue of workforce diversity seriously, the scope and nature of positive and negative consequences need to be strengthened in order to overcome the conflict between individual and collective interest. Third, as monetary punishment alone can easily lead to cost/benefit speculations, policies and initiatives of more institutional or structural character, which change the nature of long-term consequences, can be investigated. For example, social policies in areas such as housing, education and employment have a potential to redistribute wealth and resources among diverse groups in a more equitable manner, thereby changing the future labour and talent pool available to organizations and making diversity more likely to provide a competitive advantage. The fourth way out involves provision of short-term positive enforcements, particularly by the state. Such reward mechanisms would be linked to progressive and proactive diversity initiatives, and provide incentives for being ‘best-in-class’. Diversity prizes and benchmarks already exist in many countries such as the UK, the USA and France. However, symbolic rewards need to be linked to tangible outcomes such as tax breaks, or preferential treatment in regards to government contracts. Fifth, we recommend Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 285 Jonsen et al. provision and financing of knowledge transfer from more advanced countries or sectors, and facilitation of trickle down effects from large corporations to small and medium businesses, particularly through practices of procurement and business-to-business interfaces. Large firms, because of more government scrutiny and formalized human resources activities are more likely to have less discriminatory hiring mechanisms, such as structured interviews (e.g. McCarthy et al., 2010). The state would have a crucial role in planning, foreseeing and competitively funding knowledge transfer activities through which conventional practices could be altered by introducing new progressive approaches. Sixth, we recommend that regulatory equality and diversity bodies be funded by the state and provided with significant resources and certain authority for interventions in the cases of malpractice. Such regulatory bodies need to remain independent and represent the voices of the multiple stakeholders including employees and employers but also local communities, pressure groups and NGOs. This final suggestion also offers a safeguard against malpractice by not only organizations but also governmental bodies responding to the crucial question of ‘who shall watch the watchers themselves?’ (Hardin, 1968: 1245–1246). So what can organizations do? State enforcement can encourage organizations to consider their responsibility and to comply with regulations and sanctions. However, there is need for organizations to take actions to implement diversity policies on the ground in line with their circumstances. First, organizations are required to prepare for a progressive shift, by creating environments based on psychological safety and wellbeing (Edmondson, 1999) and inclusion (Roberson, 2006). Such preparation is necessary to help welcome the diversity within the workforce, and it necessitates a wider culture change as well as more targeted initiatives such as providing information and training to raise awareness. Second, organizations need to tailor strategies and policies in order to implement centrally enforced rules and regulations in accordance with their own specific circumstances and needs. Organizational differences may render one best way or blueprint approaches too unrefined for the purposes of all organizations. There is also a variation in diversity challenges in the potential and actual labour pool of organizations in different sectors and of different sizes, which necessitates specifically tailored approaches to management of diversity. Therefore, it may also be of relevance for organizations or industries to lobby governments (in a positive sense) instead of organizing progress themselves (Hardin, 1982). Concluding remarks The United Nations suggests a triple bottom line for companies, corresponding to the triple P: profits, people and planet (Elkington, 1998). The roles of organizations and countries have become intertwined in many aspects (Pfeffer, 2010). But whose responsibility is workforce diversity? As in classic social dilemmas (e.g. Dawes and Messick, 2000), we cannot rely on the individual or the organization to adhere to the public concern of diversity. Furthermore, there is a considerable risk of diffusion of responsibility (Latané, 1981). Solutions must primarily come from those who have authority and influence over businesses and the business environment, and this may take a collective approach including many stakeholders, as suggested by Blockson (2003). According to Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 286 Human Relations 66(2) Ellickson’s (2001) analysis of what can trigger norms to change, the state may provide an exogenous shock that can alter the composition of groups. We argue that society should ensure that equality and diversity at work is pursued holistically and across levels. For organizations, the existence of a business case for diversity is dubious. Legal and ethical cases are often viewed as irrelevant in the increasingly deregulated and polarized society of the neoliberal era. We highlight an urgent need to focus our diversity discussions on a new approach based on diversity as a collective good, which includes structural issues that must be dealt with at a societal level by a central authority such as the state. In this respect, we acknowledge a significant variation among societies with different business environments, and with different historical, economic, political social and technological contexts. For example, the immigrants in North Europe and Scandinavia have a different status than immigrants in the USA or the UK and the integration mechanisms vary (e.g. Berry and Bell, 2012; Forsander, 2004). Although workforce diversity has been extensively discussed in some academic and practitioner circles, this focus has resulted in too little progress. Organizations are slowly becoming more diverse due to talent shortages and increased diversity in education in advanced economies, but women, ethnic minorities and people with disabilities continue to be over represented in lower paid and less secure jobs (Özbilgin and Vassilopoulou, 2010). An integral worldview, as suggested by Taylor and Taylor (2007), and multidimensional thinking, as suggested by Jonsen et al. (2010) and Martin and Meyerson (2008), may spark transformation rather than collapse of the commons. We suggest that the state as a regulator and as an agent of the redistribution of symbolic and economic resources needs to be reintroduced in conceptualizations of workplace diversity and equality. Through legal and welfare interventions, the state may ensure that a long-term perspective on diversity and equality is taken. However, state action alone is not sufficient. The influence of other external agents such as pressure groups, employees, consumers and society at large is crucial. This means that such external actors need to counterbalance corporate power and influence corporate decisions. Thus, individual and institutional actors such as employees, consumers and the public at large, who subscribe to a common human rights agenda, have a role to play in shaping the diversity and equality agenda of the state and organizations. On the one hand, they may exert influence over the political elite through democratic processes of election to enact their managerial and redistributory authority so as to reduce inequalities. On the other hand, they may enforce organizations to be more inclusive, diverse and fair by mobilizing their economic capital as consumers, symbolic capital as employees and as members of pressure groups. Corporations are at the receiving end of the actions of the state and other stakeholders. In order to survive, organizations will need to respond both to state initiatives and legislative sanctions (see Yamagishi,1986), and to the ethical and fairness concerns of consumers, employees and individuals in the society. Researchers and business leaders may have overlooked the dynamics of indirect reciprocity (Alexander, 1979, 1987, cited in Nowak and Sigmund, 1998) through which an organization may not expect a direct return from the ‘recipient’ but from someone else – for example, societal institutions. The indirect reciprocity could also be in the form of reputational gains, as Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 287 Jonsen et al. organizations compete for scarce reputational benefits (Barclay, 2004), which have been claimed to potentially solve the tragedy of the commons (Milinski et al., 2002). In recent years, indirect reciprocity through reputational gains has become one of the legitimate drivers through which organizations pursue a diversity agenda (Özbilgin and Tatli, 2008). In our framework, there is a circular relationship of reinforcement between the multiple stakeholders. Therefore, addressing any one of the levels requires action also in other levels for social change in terms of equality and diversity to be substantial and sustainable. However, the state is the first and foremost stakeholder, which can change the dominant organization of life and by doing so overcome the tragedy of the uncommons. Our approach requires a turn in framing of workforce diversity as a societal rather than a strategic choice. Funding This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors. References Acker J (2006) Inequality regimes: Gender, class, and race in organizations. Gender & Society 20(4): 441–464. 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Journal of Personality and Social Psychology 51(1): 110–116. Young B (2000) Disciplinary neoliberalism in the European Union and gender politics. New Political Economy 5(1): 77–99. Zanoni P (2011) Diversity in the lean automobile factory: Doing class through gender, disability and age. Organization 18(1): 105–127. Zuran M (1995) The challenge of globalization and individualization: A view from Europe. In: Holm HH and Sorensen G (eds) Whose World Order? Uneven Globalization and the End of the Cold War. Boulder, CO: Westview, 173–264. Karsten Jonsen is a research fellow in Organizational Behaviour at IMD, Switzerland and a visiting professor at several European universities. He earned his MSc in Economics from CBS in Copenhagen, MBA from ESCP-EAP in Paris, France and a PhD from the University of Geneva, Switzerland. His research interests and publications cover a variety of issues in cross-cultural business including generation Y/Z, work-family balance, team performance, virtual teams, leadership, stereotyping, cosmopolitanism, research methodology, career mobility, and gender and diversity. Dr Jonsen has served as advisor to large corporations in the field of workforce diversity and he is the co-winner of the Carolyn Dexter Award for best international research paper at the Academy of Management 2010. He has published a variety of book chapters and articles in Journal of International Business (JIBS), International Journal of Human Resource Management, International Journal of Cross-Cultural Management, British Journal of Management, and other fine journals. [Email: Karsten.Jonsen@imd.ch] Ahu Tatli is a senior lecturer in the School of Business and Management at Queen Mary University of London, UK. The focus of her research is equality and diversity at work. Her empirical research explores power and strategies of the key equality actors, intersectionality of disadvantage and privilege in organizational settings, diversity management, agency and change in organizations, and inequality and discrimination in recruitment and employment. She has widely published in edited collections, practitioner and policy outlets and international peer-reviewed journals such as Academy of Management Review, British Journal of Management, Canadian Journal of Administrative Sciences, European Journal of Industrial Relations, Entrepreneurship and Regional Development, International Business Review, Human Relations and International Journal of Management Reviews. [Email: a.tatli@qmul.ac.uk] Mustafa F Özbilgin is Professor of Organizational Behaviour at Brunel Business School, London and Co-Chaire Management et Diversité at Université Paris Dauphine, France. His research focuses on equality, diversity and inclusion at work from comparative and relational perspectives. He is the editor-in-chief of British Journal of Management. He has conducted field studies in the UK and internationally and his work is empirically grounded. His book Global Diversity Management (co-authored with Ahu Tatli, Palgrave) provides evidence from international field studies. He has authored and edited 10 books and published large number of papers in journals such as Academy of Management Review, Academy of Management Learning and Education, British Journal of Management, Journal of Vocational Behavior, International Journal of Human Resource Management, Human Relations, Gender Work and Organization, and Social Science and Medicine, among others. [Email: mustafa@ozbilgin.net] Downloaded from hum.sagepub.com at Brunel University on February 24, 2013 294 Human Relations 66(2) Myrtle P Bell is Professor of Management at the University of Texas at Arlington, USA. Her research, focusing on diversity, social issues, and human resources appears in outlets such as Academy of Management Journal, Learning & Education, and Perspectives, Journal of Managerial Psychology, Journal of Vocational Behavior, Human Resource Management Review, International Journal of Selection and Assessment, Journal of Organizational Behavior, Journal of Applied Psychology, Human Resource Management, Gender, Work and Organization, and in numerous edited volumes. Her book, Diversity in Organizations (2012), in its second edition, is a comprehensive, research-based book for teaching and learning about diversity. She is past chair of the Academy of Management’s Gender and Diversity in Organizations division and has served on the Board of Governors (2009–12). [Email: mpbell@uta.edu] Downloaded from hum.sagepub.com at Brunel University on February 24, 2013