Profession Comm. 8

T h e J o u r n a l o f D e v e l o p i n g A r e a s Special Issue on Sydney Conference Held in April 2015

Volume 49 No. 6 2015

NOTES SECTION

CULTURAL DIVERSITY COMPETENCIES OF

MANAGERS IN THE AUSTRALIAN ENERGY

INDUSTRY

Linda Dalton Charles Sturt University, Australia

Brian D’Netto

Curtin University, Australia

Ramudu Bhanugopan

Charles Sturt University, Australia

ABSTRACT

Australia has one of the most culturally diverse populations in the world with 27% of the population

born outside Australia. This has resulted in increasing diversity in the Australian Energy Industry.

Managers within this industry need a much greater level of capability in managing cross culturally.

Yet organizations have not focused adequately on developing these diversity management

competencies. This study developed an original model called the Diversity Management Competency

Model (DMCM) based on a comprehensive review of the literature. The model consists of four

quadrants which encompass understanding self, understanding others, workplace analysis and

workplace application. The model was used to investigate the extent to which managers in this

industry believe they have developed diversity management competencies. The sample consisted of

thirty managers from the electricity industry in Victoria (Australia). The sample was obtained

through the use of an extensive network of personal contacts and the snowballing process. Every

attempt was made to gain participants from across the industry (from generators through to retail

distributors of electricity). The participants included functional managers; principally in operations

and maintenance and in support functions like procurement, finance and human resources. Some

participants were contacted through their employing organization while other participants were

contacted directly. A total of thirty managers were interviewed for the research. The managers

participated in individual semi structured interviews of approximately thirty minutes. Each interview

was conducted on an individual basis, either face to face or via the telephone. The main research

question investigated the extent to which managers in the Victorian Energy Industry believe they have

developed the competencies identified in the DMCM to effectively manage diversity in the workplace.

Analysis of the data indicated that the level of competencies possessed by managers in Quadrant 1 was

“Moderate”. Participants were able to provide some examples of the steps they took to improve diversity

awareness. They also indicated that they possessed a learning orientation and were able to revise their

own strategies to manage diversity. However, the responses indicated that managers had a “Low” level

of competencies for the other three quadrants which included understanding others, workplace analysis

and workplace application. Participants really struggled to provide examples to support the competencies

identified in the last three quadrants. The DMCM can be used to identify competency deficiencies and

organizations can provided management development programs to address these deficiencies. In

addition, the model can be used as a screening device in the recruitment process.

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JEL Classifications: M12, M54

Keywords: Cultural Diversity, Management, Workforce Diversity

Corresponding Author’s Email Address: [email protected]

INTRODUCTION

In the current dynamic environment, the role of managers has changed considerably.

Managers require additional competencies to deal with an ethnically diverse workforce.

One of the most important aspects of diversity in the Australian workforce is multiculturalism.

Australia has one of the most culturally diverse populations in the world (D’Netto and

Sohal, 1999; Dunn, Thompson, Hanna, Murphy and Burnley, 2001; Lewis, French and

Phetmany, 2000). The objective of this study is to develop a new Diversity Management

Competency Model (DMCM). This study focuses on managing cross-cultural diversity in

Australia. The study aims to provide tangible benefits to organizations, as the diversity

management competencies in the model can be used for selection and development of

managers. In addition, this study assesses the extent to which managers believe they

possess these diversity management competencies.

LITERATURE REVIEW

Competencies have been part of the language of management for at least three decades.

Brownell and Goldsmith (2006: 309) says “preparing the next generation of leaders is a key

goal of both human resource professionals and graduate business educators, and competence-

based approaches have been recognized as one method of achieving this outcome”. The

earliest work by McClelland (1973) defined competencies as standards of performance.

Boyatzis (1982) included skills and knowledge at a behavioral level and the remaining were

considered to be “underlying characteristics”. Hornby and Thomas (1989) defined

competencies as “knowledge, skills and qualities”. Spencer and Spencer (1993) stated that

behaviours had scaling properties and managers’ stories of achievement could be

differentiated on the basis of a number of action oriented steps. The Oxford Dictionary defines

“competence” or “competency” as “the ability to do something successfully or efficiently”.

The starting point for all of the competencies contained in the model has been two

significant works i.e., Turnbull et al., (2010) and from the large body of work on cultural

intelligence and the classification of competencies using the Cultural Intelligence Scale

(CQS) (Ang et al, 2007; Van Dyne, Ang and Koh, 2008). The model proposed by Turnbull

et al., (2010) includes competencies at the organizational, team and individual levels. The

organizational and team competencies are outside of the scope of the current model, but

some competencies have been considered relevant at the individual manager level. The

CQS was designed as a global leadership tool. As such, some of its components are based

on concepts that are also not specific to the management of culturally diverse workgroups.

Therefore, only the components of both models deemed directly relevant have been

incorporated into the DMCM. The proposed diversity management competency model

(DMCM) is developed on the basis that the competencies included are those unique to the

challenge of managing in a culturally diverse environment. The model has four components

as there were four key competency themes or groupings apparent in the literature. These

components have been categorized into four “Quadrants”. The first two are at the

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“Individual Level” and the second two are at a “Workplace Level”. Quadrant 1 is

“Understanding Self”, Quadrant 2 is “Understanding Others”, Quadrant 3 is “Workplace

Analysis” and finally, Quadrant 4 is “Workplace Application”.

The entire model is based on the idea of forming alliances across cultural

difference (Kivel, 1995) which is an integral feature of the Australian workforce. Hence,

our main research question is:

TABLE 1: THE DIVERSITY MANAGEMENT COMPETENCY MODEL

Quadrant 1: Understanding Self

 Ability to understand one’s own beliefs and how they affect one’s

life and work.

 Ability to monitor one’s own diversity sensitivity and its impact

on others.

 Makes a conscious effort to learn about those who are different.

 Is proactive in exposing one’s self to a range of cultural experiences.

 Takes steps to improve one’s own diversity awareness.

 Is flexible and open.

 Possesses a learning orientation and reviews and revises own

strategies.

Quadrant 2: Understanding Others

 Ability to acquire cultural knowledge.

 Understand and have empathy for cultural norms - recognize and

perceive others’ cultural norms before

and during interactions.

 Exhibit situationally appropriate verbal and non-verbal actions when

interacting with people from different

cultures.

 Have cultural empathy: Interact with and value difference.

 Know economic, legal, value and social systems of different

cultures/subcultures.

 Foreign language proficiency.

Quadrant 3: Workplace Analysis

 Know how the advantages and disadvantages of diversity manifest

themselves in the workplace.

 Understand the diversity composition of the workplace and

value differences as opportunities

for business and learning.

 Identify workplace management practices and HRM systems which

prevent discrimination and

disadvantage.

 Monitor and comply with legislation in relation to EEO.

 Find opportunities for cross cultural learning through

workplace functioning.

Quadrant 4: Workplace Application

 Open communication with workgroup members, e.g. “Open door policy”.

 Manage conflict over difference. Identify sources of conflict and use

culturally appropriate and sensitive

methods of managing conflict in the

workplace.

 Value and be an advocate for positive cultural interaction - encourage

workplace debate on cultural diversity

issues.

 Educate on the effects of prejudice and racism and take remedial action

in the incidence of racism, hatred or

violence.

 Afford opportunities for cross-cultural learning.

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RQ 1: To what extent do managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Management Competency Model

(DMCM) to effectively manage diversity in the workplace?

Components of the DMCM

The DMCM can help individual managers to assess their own competency development

throughout their career especially when working in culturally diverse environments. An

explanation for each Quadrant of the DMCM and the relevant competencies contained in

a quadrant is presented in the following paragraphs.

Quadrant 1: Understanding Self

This first Quadrant was called “Understanding Self” as it contains those competencies

identified in past research, which appear to collectively refer to “internal perceptual

processes” – like how a particular personality attribute, attitude, cognition, preference or

motivation plays out in the workplace. Managers “must gain an awareness of their own

cultural drivers before they can understand what drives individuals from other cultural

backgrounds (Peppas, 2004: 42)”. This leads to our related research question:

RQ 2: To what extent do managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Management Competency Model to

“understand self”?

Quadrant 2: Understanding Others

This quadrant was called “Understanding Others” and was motivated initially by the work

of Covey (1989) in his work “The 7 Habits of Highly Effective People” when he espoused

the “habit” of “first seek to understand and then to be understood”. Quadrant 2 contains

those competencies that provide for successful comprehension and sympathetic awareness.

Hence, our next research question is:

RQ 3: To what extent do managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Management Competency Model to

“understand others”?

Quadrant 3: Workplace Analysis

The third Quadrant includes those competencies which are necessary to analyse the

functioning of the workplace in terms of how it performs against the goal of creating an

inclusive and effective workplace where the benefits of diversity may be realized. This

quadrant was named “Workplace Analysis”. More importantly, it contains those

competencies with the objectives of “integration and learning” and “fairness and equal

opportunity”. Ely and Thomas (2001: 38) made a number of recommendations for

successful workplace diversity management, although stopping short of structuring their

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recommendations as competencies. These recommendations have been interpreted as

competencies in the third Quadrant of the DMCM. This leads to our next research question.

RQ 4: To what extent do managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Management Competency Model to

conduct “workplace analysis”?

Quadrant 4: Workplace Application

Competencies in the fourth Quadrant relate to implementation of the workplace actions

which set the context for positive cultural diversity outcomes. This is achieved through

taking specific action against those disadvantages of cultural diversity which provide

barriers to achievement of realizing the opportunities of diversity. Therefore, this Quadrant

has been named “Workplace Application”. There are a number of competencies in this

Quadrant which have been derived from the work of Turnbull et al., (2010), in particular

from the Team Level competencies – like practicing inclusive behaviours and intervening

when exclusionary behaviours occur. Hence, our final research question is:

RQ 5: To what extent do managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Competency Model for “Workplace

Application” of cultural diversity management competencies?

METHODOLOGY

The Sample

This study included participants from organizations who had membership in the Energy

Supply Association of Australia (ESAA). Victoria is the State where the greatest degree of

privatization had occurred and presumably most exposed to the global business

environment. A sample of managers from organizations in the Victorian component of the

Australian electricity industry was obtained through the use of an extensive network of

personal contacts and the snowballing process. Every attempt was made to gain participants

from across the industry – from generators through to retail distributors of electricity. The

criteria for selection of participants was that they were “managers” who were accountable

for the performance of one or more people who directly reported to them. The participants

included functional managers; principally in operations and maintenance and in support

functions like procurement, finance and human resources. Some participants were

contracted through their employing organization while other participants were contacted

directly. A total of thirty managers were interviewed for the research. Each interview was

conducted privately on an individual basis – either face to face or via the telephone.

Data Collection and Analysis

Data was collected via semi structured interviews with voluntary participants from across

the industry. Each interview was completed in about thirty minutes. The questions were

based on the researchers’ proposed Diversity Management Competency Model (DMCM).

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The interviews were conducted using a semi-structured questionnaire. The interview

commenced with several demographic and work experience questions. The second section

of the interview was based on the Diversity Management Competency Model (DMCM).

In this section the participants were asked to provide behavioural examples to demonstrate

that they understood behaviors which would be consistent with the performance of each

component of the DMCM. Participants were all asked to discuss each competency – talking

about their personal attainment in the development of each of these, and where possible to

give a demonstrative behavioral example from their own experience (as opposed to a

theoretical example). Thematic analysis was the method used to examine the data in this

study. Thematic analysis is defined as ‘a method for identifying, analyzing and reporting

patterns (themes) within the data’ (Braun and Clarke 2006, p. 79). This study adopted a

deductive approach. In this approach, the researcher looks for themes with the research

questions in mind, rather than for themes emerging from the data. In addition, an

independent reviewer who was familiar with cross cultural diversity and qualitative

research processes, reviewed the transcripts and the themes identified. Initial inter-rater

agreement defined as the proportion of agreement on codes and themes was eighty five

percent. The independent reviewer and the researchers discussed and refined the themes

and then reached an agreement on the categories.

RESULTS

The sample for this study consisted of thirty managers from the various sectors of the

energy industry (generation, distribution and retail). The main research question

investigated the extent to which managers in the Victorian Energy Industry believe they have

developed the competencies identified in the Diversity Management Competency Model

(DMCM) to effectively manage diversity in the workplace. Analysis of the data indicated that

while the level of diversity competencies in Quadrant 1 was “Moderate”, the remaining three

Quadrants were more appropriate to a rating of “Low”. Research question two sought to find

the extent to which participants believe they have developed competencies to “Understand

Self”. Participants believed they had the ability to understand their own beliefs and how

they affect one’s life and work. Examples of answers were “I am very aware of my own

attitudes and beliefs and how they affect employees” and “I have an open approach to

people and culture”. Based on the data analysis, the overall assessment of competencies of

the managers for Quadrant 1 is “Moderate”. Research question three sought to find the

extent to which participants believe they have developed competencies to “Understand

Others”. Seventy three per cent of participants were not competent. Hence, the overall

assessment managers for competencies in Quadrant 2 was “low”. Research question four

sought to examine the extent to which participants believe they have developed

competencies to conduct “Workplace Analysis”. Since forty percent of the participants

could not demonstrate one or more competencies, the overall rating for Quadrant 3 is

“Low”. Research question five assessed the extent to which managers possess the

competencies identified in Quadrant 4, called “Workplace Application”. Most participants

were not able to give specific examples of how they implemented diversity in the

workplace. Therefore, the overall assessment for this quadrant is “Low”.

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CONCLUSIONS

The findings of this study indicated that managers have moderate level of competencies

related to “understanding self”. However, for all the other quadrants their competency level

was “low”. It is hoped that this exposure to the DMCM may ultimately assist in

development of the competencies either now or in the future. Participants appear to have

realized that cultural diversity management is an important competency which a manager

requires. However, participants did not seem to be able to view non-work experiences as

learning opportunities and their definition seemed confined to very formal learning

methods; like the completion of a course or a degree, and not that of participation in local

cultural events, actively watching the TV news and teaching yourself where cultural news

comes from. Based on the recommendations of Van Dyne et al (2008) it is recommended

that strategic HRM in this industry consider increasing this motivation through initiatives

such as recognition of managers who make a contribution to cultural knowledge in the

workplace. With respect to “understanding others”, the researchers believe that the

demonstration of the competencies in this Quadrant was significantly underdeveloped.

When asked about their ability to acquire cultural knowledge a significant number said

they just could not be bothered as it is not an interest of theirs. The competency of foreign

language proficiency was also one which participants showed a very low level of

development. As managers need to fully understand their workforce, organizations should

focus on developing this competency among their managers. The researchers found that

managers had a low level of competencies needed to conduct workplace analysis. Given

this is a principal motivator for the development of the DMCM, this is particularly

alarming. Orgaizations should focus on identifying workplace management practices and

HRM systems which prevent discrimination and disadvantage. Managers also had a low

level of competencies for “workplace application” of cultural diversity policies.

Organizations should include these competencies in their reward systems so that managers

actively try to improve diversity management in the workplace.

This research has some limitations. The participants in this study were all volunteers

approached individually by the researchers and largely came from the senior and middle

managerial ranks of the electricity industry in Victoria. Random sampling could not be

adopted. In addition, only qualitative data was collected through interviews. Future

research can include a larger sample and use a questionnaire to collect data for quantitative

analysis. Random sampling can be adopted and the study can be conducted across a range

of industries. Future research can also include global managers. Australia has experienced

multiculturalism somewhat later than other countries like the United States of America, the

United Kingdom and Canada. This research has shown, that for one major industry at least,

preparedness remains disappointingly low, but participants’ enthusiasm for the topic was

undeniable. This study has contributed to managers’ growing awareness of the demands

upon their professional development in the years ahead. There is much to be done,

practically and theoretically as the challenge of managing diversity in the workplace will

continue to grow.

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