Feature Stories


Unleashing Diversity’s Potential

Besides being the spice of life, variety, in the form of demographic diversity, is an important field of research. Pointing to a key finding, Professor Gong Yaping, Head of the Business School’s Department of Management, says: “Diversity provides teams and organizations with upside potential, but the realization of that potential is dependent on how it’s managed.”

In the course of his career, Professor Gong has seen significant progress made in the accommodation of difference. He notes that more companies and organizations are now promoting greater diversity and inclusion through policies and practices related to anti-discrimination and anti-harassment. In his view, the range of factors considered by those engaged in the field has also developed in important ways. 

“These days, we’re studying gender, age, race, ethnicity, educational background, functional background and, more recently, disability and sexual orientation,” he says.

Fairness and productivity

Professor Gong is keen to point out that he and his colleagues are not simply interested in studying the economic effects of diversity. Their research work considers the issue from multiple angles.

“We talk a lot about fairness and fair treatment,” he notes.

He believes that most people readily understand the fairness argument. The need to treat everyone fairly and justly can be seen in terms of a moral imperative. “The business case, however, is harder to make, at least based on the research evidence.”

He adds that in firms and organizations, research doesn’t show a consistent and straightforward relationship between diversity and performance. There are, though, nuances to consider. “First is the type of performance you’re looking at, and second are the conditions under which diversity is likely to enhance performance,” he says.

In his own work, Professor Gong, a specialist in organizational behavior, has looked at the effect of diversity on market performance and labor productivity. Overall, the findings point to the fact that diversity is something we value as a society, but is also something we need to manage.

“If you have a more diverse group of people working together you need more time to integrate, coordinate and communicate with them,” he says. “All this may create some kind of loss in efficiency.”

He has found, though, that management practices, particularly factors such as profit sharing, employee stock ownership schemes and engagement programs, can noticeably make the effect of diversity on productivity become more positive.

“Having diverse team members provides you with potential,” he says. “But you can only deliver the business case by managing the differences and unleashing that potential.”

Doing this requires managers who can integrate a diverse workforce or team, fully tap into their skills, and recognize and reward different abilities.

Delving into diversity

He notes too that, over time, our understanding of the issues around diversity has become more refined. For example, surface-level diversity relates to differences in terms of observable attributes, such as age, gender and race, while deep-level diversity refers to less obvious attributes like values and knowledge.

One tends to have greater influence in the early stages of team development, because the relevant attributes are seen immediately and form the basis of initial assumptions. The other tends to have a greater long-term influence.

Diversity has also been viewed as separation, variety, and disparity. Diversity in terms of separation refers to differences among members along a continuous dimension such as values, beliefs, and attitudes and can reduce a group’s cohesion. There is also diversity in terms of variety, especially of knowledge, skills and information. Within a team, this has the potential to generate creativity and innovation. The third category is diversity as disparity, which refers to differences in access to valued social resources such as status and prestige.

In the real world, since the members of teams and organizations usually differ in multiple attributes, Professor Gong says it’s useful to look at diversity in two or more demographic attributes and the extent to which they are aligned (correlated). 

Seizing opportunities

Regarding degrees of gender diversity in the workplace, Hong Kong ranks a creditable third in Asia according to Community Business. However, when compared to progress being made on the global stage, the city still has some ground to make up. For example, according to Deloitte’s 2017 Human Capital Trends survey, female boardroom representation in Hang Seng Index companies is slightly over 12 per cent. In contrast, for Britain’s FTSE-listed businesses, it stands at almost 27 per cent and, on comparable boards in Australia and Canada, at over 20 per cent.

The research conducted by Professor Gong and his colleagues has thrown up some surprises. “The more technologically intensive industries, or what we call the creative and innovative industries, tend to be less diverse,” he says. 

This may be because many people still have fixed mindsets. They still see engineering, for example, as a predominantly male preserve. “But the data shows that if they could become more diverse, they would reap the benefits,” he says.