Action Programs for Ethnic Minorities

Abstract

With increasing globalization and migration the workplace is becoming more and more culturally diverse. Although cultural diversity is found worldwide, handling of diversity as a corporate social responsibility (CSR) varies depending on national as well as organizational contexts. This article presents cross-national research linking macro level and meso level of analysis to identify national and organizational factors influencing an organization’s implementation of action programs for ethnic minorities. Utilizing techniques of multilevel modelling with 1,865 organizations from 10 countries, the study analyses the influence of normative and economic reasons as well as managerial discretion to act socially responsible. The patterns of influencing factors identified suggest that the main reasons are neither economic nor normative ones. The factors go beyond and represent rather social reasons. This article gives an overview of relevant predictors that increase the likelihood of action programs in organizations. Societal decision makers can find the direct relevance of political decisions and public perceptions on actions taken that address issues of interethnic group relations in organizations.

Keywords

action programs ethnic minorities organizational fields institutional context diversity policies

This article builds a multilevel model identifying driving forces behind the implementation of action programs for ethnic minorities. Directing attention to issues of cultural diversity is important because it is one of the biggest challenges of the world today. Depending on historical developments and geographic location, the culturally diverse makeup of a society differs across national contexts. Groups of people may have a distinct cultural background from the majority of the population due to relocation, development of new states, colonialization, or migration thus affecting intergroup relations in society and organization (Carr, 2010; Riordan, Shaffer, & Stewart, 2005; Sam & Berry, 2006).

In 2005, for example, about 4 million permanent migrants arrived in Organisation for Economic Co-operation and Development (OECD) countries, along with almost 1.8 million temporary workers (not including unauthorized migrants). These numbers have been growing exponentially and are expected to continue to increase in the future (Garson & Dumont, 2007). Supranational institutions like the OECD have begun to emphasize the relevance of how individuals, organizations, and groups cope with migration and state that many OECD countries now pay more attention to labor market needs in relation to managing migration (OECD, 2009). Not only first- and second-generation migrant groups who have a distinct cultural background from the majority of the population in their country of settlement but also nonmigrant visibly different groups (e.g., indigenous peoples) are minorities in relation to their ethnic background as these groups share a nondominant social position in the society. Questions concerning equal opportunities and special rights for indigenous people (e.g., First Nation People in Canada, Aborigines in Australia, or Maori in New Zealand) and ethnic groups who were relocated or became part of a new state (like German Russians in Germany, Roma in Austria, or African Americans in the United States) are an ongoing challenge. Such ethnic minorities are numerically smaller than the rest of the population and have a cultural background, language, religion, and so on distinct from the majority of the population (Šmihula, 2009).

Due to different historical developments and legislations—the distinction between ethnic minority and migrant groups is blurred and varies across countries. For example, the Office of Ethnic Affairs in New Zealand focuses on people whose culture and traditions distinguish them from the majority in New Zealand and does not differentiate between newly arrived migrants or people who have been living side by side with the dominant West European settlers since the midst of the 19th century (Liu, McCreanor, McIntosh, & Teaiwa, 2005; Office of Ethnic Affairs, 2011). As this study’s dependent variable (action programs for ethnic minorities) as well as the potential predictors (e.g., diversity policies) refer to the same national framework for ethnic minorities, using the term in a wider sense is more appropriate. Therefore, ethnic minority actions are actions targeted at groups that may be in a minority position in an organization based on their perceived cultural differences due to their ethnic or national background (Carr, 2010; Hofstede, 1980; Riordan et al., 2005; Schneider & Northcraft, 1999). Those groups may be viewed differently within a society, but in organizational contexts, categorizations of coworkers and employees based on perceived cultural background, not necessarily knowing the ethnicity or nationality of their peers (Podsiadlowski, 2002).

Altogether, people of migrant and ethnic background comprise an important part of a country’s labor force leading to an increasingly culturally diverse workforce. Organizations face the challenge to address intergroup relations with regard to the different cultural background of their employees, may it be due to ethnicity or nationality (Schneider & Northcraft, 1999). Regardless of the high relevance of integrating people of culturally diverse background and equal treatment (Deitch et al., 2003; Ensher, Grant-Vallone, & Donaldson, 2001), actions taken on the organizational level in many countries are scarce. Although part of the public discourse, institutional pressures have not yet reached a level that makes ethnic minority programs a matter of course in all well-developed countries (see Carroll, 1991; Carroll & Shabana, 2010).

Actions taken by organizations depend on both the institutional pressure a firm faces and the judgment of the organization’s top management (Greening & Gray, 1994; Pfeffer & Salancik, 1978). Within the constraints imposed by the institutional environment, there is also room for managerial discretion in organizations to fulfill broader societal goals such as issues of fairness to support specific groups in minority positions (Bhawuk, Podsiadlowski, Graf, & Triandis, 2002; Ely & Thomas, 2001). Therefore, this article follows an approach that stresses context while accounting for variation within one context due to varying managerial decisions in the organizations (e.g., Greening & Gray, 1994; Wood, 1991). A multilevel approach allows for comparing different countries and organizational fields (DiMaggio & Powell, 1983). Campbell (2007) argues that work investigating the impact of institutional context on the country level is very scarce and variables describing organizational fields have only recently been identified as relevant for corporate social responsibility (CSR; Acar, Aupperle, & Lowy, 2001). This article also adds to the request to explain “organizational behaviour from a broader societal perspective” (Lee, 2008, p. 53).

While to a great extent normative (e.g., policies, public perceptions, cultural norms) and economic pressures (e.g., skills shortages, international market orientation) arise on a national and organizational field level (such as sector or industry), managerial discretion to act socially responsible is executed on the organizational level. The factors named are not only considered as levels of macro and meso analysis but also into the categories of normative, economic, and social (Carroll & Shabana, 2010; Lindgreen & Swaen, 2010). Action programs are a potential outcome of organizations acting socially responsible. Examining the influence of normative, economic and social factors on action programs for ethnic minorities allows us to shed light on driving forces behind a common CSR variable (Frederick, 2006).

This article aims to identify the driving forces behind organizational action programs for ethnic minorities. The empirical analysis considers the influence of economic and normative pressures as well as managerial discretion to act socially responsible on a macro and meso level. The identifications of enablers that positively influence the implementation of action programs for ethnic minorities allows examining whether they indeed are a reflection of organizations’ CSR.

The Concept of CSR

The concept of CSR has evolved both through academic and practitioner community discourse (Carroll & Shabana, 2010) and is based on the idea that organizations have various categories of responsibilities (Carroll, 1979, 1991; McGuire, 1963). These responsibilities include legal and economic requirements categorized as “required responsibilities” (Acar et al., 2001) or the “inner circle” (Committee for Economic Development, 1971) and as having the biggest “magnitude” (Carroll, 1979) among the responsibilities. The total of social responsibilities further includes ethical or philanthropic and discretionary issues (Acar et al., 2001; Carroll, 1979). While authors agree that organizations have various responsibilities there is dissent on meeting which of these responsibilities actually constitutes CSR. Some authors (e.g., McGuire, 1963) explicitly state that only actions going beyond maximizing profits while obeying the law can be labeled as socially responsible (Carroll & Shabana, 2010). The conceptualization of CSR as a “business case” (Carroll & Shabana, 2010) that emerged in the 1980s led to the perception that economic interests and CSR are compatible and that organizations can do well by doing good. Moreover, actual motivations behind actions are empirically very hard to grasp. Given these inconsistencies in definitions and problems in measuring, this article refers to McWilliams and Siegel (2001, p. 117) as well as Griffin and Prakash (2010, p. 179), who view CSR as “going beyond obeying the law” and as “firms policies, programs and, outcomes that are beyond the requirements of extant law.”

During the time of data gathering, none of the countries in the authors’ sample companies were obliged to implement actions programs for ethnic minorities. Following the above definition, programs specifically aiming at the support of ethnic minorities appear to further some social good that is beyond legal requirements. Thus, having action programs for ethnic minorities constitutes one potential outcome of CSR.

In its history the concept of CSR has been progressively rationalized. The business case view on CSR led to a big amount of studies determined to find a positive effect of CSR on performance (Acar et al., 2001). CSR was understood as an independent variable moving away from utilizing CSR as an outcome variable and dealing with factors that influence it. The exploration of institutional effects on the “tendency for firms to behave in socially responsible ways” (Campbell, 2007, p. 948) was no main interest anymore. This one-sided perspective on CSR and the missing integration of contextual factors have recently been criticized (Acar et al., 2001; Campbell, 2007; Lee, 2008). This research aims to fill this gap by taking a multilevel approach examining potentially relevant predictors for one aspect of CSR. We investigate how normative, economic, and socially driven factors that are located on the national and the organizational level influence the likelihood of having action programs for ethnic minorities.

Proposed Driving Forces for Ethnic Minority Action Programs

The goal of our study is to identify driving forces for organizations to implement action programs for ethnic minorities considering the role of nation-state, organizational fields, and managerial discretion. The driving forces examined are grouped into normative, economic, and socially driven located on the country and the organization level.

Normative Driving Forces

The central premise of neoinstitutionalism is that organizational life is shaped by rules prevailing in wider institutional environments. Pervasive societal rules, norms, and mindsets shape and give meaning to organizational activity. Organizations incorporate these systems of meaning because complying to the rules increases their legitimacy, which gives them access to resources that ensure survival (Meyer & Rowan, 1977). What happens in organizations is thus shaped by institutional forces. These forces do not only include binding rules but also common values and beliefs and shared logics of action (Scott, 2001).

Considering normative variables follows the call by a number of authors (e.g., Acar et al., 2001; Campbell, 2007; Lee, 2008) to investigate the relevance of institutional context for CSR. Scott (2001) organizes normative forces into three “pillars” of institutional order: regulative, normative, and cultural/cognitive. The regulative pillar refers to legal requirements and policy frameworks, the normative pillar to rules and norms, and the cultural pillar to shared conceptions and frames through which meaning is understood. Based on this framework three groups of relevant influencing factors on organization’s strategies and practices are identified: regulative in form of a country’s policies, normative as expressed in public perceptions, and cultural referring to collectively shared values and beliefs.

Diversity policies as regulative forces

Countries differ greatly in their approach to dealing with immigration and ethnic minorities (OECD, 2009). The approaches can range from multiculturalism and assimilation to protectionism and differ in the way they get reinforced and communicated. Overall, national ideologies (e.g., pluralism versus assimilation) and beliefs about state unity, immigration patterns and policies, the extent of within-society cultural diversity, human rights legislation, media representations, and national values have all been suggested to impact on ethnic minority groups’ experiences of equality and discrimination (Bourhis, Moïse, Perreault, & Senécal, 1997; Vedder, van de Vijver, & Liebkind, 2006; Verkuyten & Yildiz, 2006). Berry, Phinney, Sam, and Vedder (2006) propose a diversity policy index that captures the degree to which governments and other administrative bodies in a country promote cultural diversity as a national goal, thus constituting a “regulative pillar.”

Research Proposition 1: Action programs are more likely to be implemented in countries with a medium- and high-diversity-policy index than in countries with a low-diversity-policy index.

Normative forces expressed in public perceptions

Not only do specific policies influence organizational strategies and practices, the public perception of those policies in turn effects how these will be carried out. Results of the executive survey on government and business efficiency demonstrate that policy perceptions vary greatly across countries on how efficient a government is assessed when it comes to a country’s economic development (International Institute for Management Development [IMD]; IMD World Competitiveness Yearbook, 2007). One aspect of the measure on a government’s efficiency relates to how internationally open it is—perceived by executives (e.g., with regard to globalization, image abroad, discrimination, or embedding foreign ideas). Thus, the perception of international openness reflects normative expectations on interethnic group relations.

Research Proposition 2: Action programs are more likely to be implemented in countries that are perceived to be more internationally open.

Cultural values

According to the cross-cultural school of thought (Aycan, 2000; Berry et al., 2006; Hofstede, 1980), the sociocultural environment has an influence on organizational practices, particularly with regard to interethnic group relations. People refer to different cultural values and belief systems that, in turn, influence their approach to uncertain situations, perceived threat, and discrimination (Dipboye & Collela, 2005; Gudykunst, 2005; Stephan, Ybarra, Martinez, Schwarzwald, & Tur-Kaspa, 1998). Cross-national research in a workplace context (Hofstede, 1980; House, Hanges, Javidan, Dorfman, & Gupta, 2004) has shown that there are nation-level differences in dominant value orientations and workplace practices. Waldman et al. (2006) propose that societal-level values should be predictive of values held at the firm level and influence more specific values and beliefs relevant to the functioning of organizations, such as how CSR enters the decision-making of executives.

The GLOBE study identified nine dimensions of dominant value orientations. We regard three dimensions as the most directly related to a country’s orientation towards interethnic group relations: (a) future orientation, (b) humane orientation, and (c) uncertainty avoidance. Future orientation addresses a country’s dominant value system of proactively approaching current and future challenges. With increasing globalization and intercultural mobility, integration of ethnic minorities into the workforce comprises one of those current and future challenges. Humane orientation refers to a country’s dominant value system of preferring to be fair, altruistic, friendly, generous, caring, and kind to others. This orientation exhibits and promotes altruistic ideals, including the wish to fight discrimination, an important aspect of implementing action programs for ethnic minorities (Ensher et al., 2001; Sanchez & Brock, 1996). Uncertainty avoidance expresses the need to avoid uncertainty and ambivalence through strict social norms, rituals, and bureaucratic practices and is closely linked with the perception of threat, often in interethnic/cultural group encounters (Gudykunst, 2005; Stephan et al., 1998). Though dimensions such as power distance, in-group, and societal collectivism are also relevant for intergroup relations, the degree of their relevance depends on the specific ethnic groups involved varying widely national contexts. For example, some countries high on power distance may predominantly receive people from countries of less power distance, and some others may receive people from countries equally high on power distance implying different degrees of cultural distance. Thus, their assumed relationships should be more indirect and less linear than for humane orientation, future orientation, and uncertainty avoidance.

Research Proposition 3a: Action programs for ethnic minorities are more likely to be implemented in countries with a higher future orientation.

Research Propositions 3b: Action programs for ethnic minorities are more likely to be implemented in countries with a higher humane orientation.

Research Proposition 3c: Action programs for ethnic minorities are less likely to be implemented in countries with higher uncertainty avoidance.

Economic Driving Forces

There are also potential economic interests organizations may have to specifically address minority group issues. Those economic interests can relate to the external (such as socioeconomic context) as well as internal environment of organizations (such as industry, type of production, and stage of development; Aycan, 2000).

Socioeconomic context

Apart from the sociopolitical and sociocultural context, the socioeconomic context needs to be considered as driving force for Human Resource Management (HRM) practices (Aycan, 2000). The integration of ethnic minorities into the labor market due to skills shortages has become a constant in public discourse as part of the socioeconomic context. For example, OECD work on convincing countries that they “get the policies right to increase the benefits of migration and reduce the cost” (Garson & Dumont, 2007, p. 3), for example, by pointing out the reduced chances of first-, second-, and even third-generation immigrants on the labor market of many “rich” countries. A number of countries have understood that they rely on ethnic minorities to replenish their labor market. In fact, in specific professions and industries (e.g., health care) most developed countries state clear skills shortages (Podsiadlowski & Ward, 2010). The executive survey on government and business efficiency (IMD World Competitiveness Yearbook, 2007) demonstrates that public perceptions on the socioeconomic context vary greatly across countries, for example, when addressing labor market needs such as skills shortages. If countries are seen to address proactively skills shortages, they provide a socioeconomic context that facilitates the employment and support of ethnic minority group due to economic reasons.

Research Proposition 4: Action programs are more likely to be implemented in countries that specifically address labor market needs and skills shortages.

International market orientation

The most popular rationale behind economic reasoning for supporting ethnic minorities is that an ethnically and nationally diverse workforce will bring diverse perspectives and specific knowledge to the organization that will ultimately be beneficial for the organization’s performance (Kochan, Berzukova, & Ely, 2002; McKay, Avery, & Morris, 2009; Williams & O’Reilly, 1998). One way to utilize ethnic minority backgrounds is to gain access to minority groups within society and international markets. Ely and Thomas (2001) recognize that an organizations’ markets and stakeholders are inherently culturally diverse. Hence, having an ethnically diverse workforce is a valuable tool for gaining knowledge about and access to diverse markets. Thus, organizations with an international market orientation should have more economically driven reasons to specifically support cultural diversity in their organization.

Research Proposition 5: Action programs for ethnic minorities are more likely in organizations with an international market orientation.

Social Driving Forces

CSR are seen as actions that appear to further some social good beyond the requirements of extant law (McWilliams & Siegel, 2001). To examine whether an organization acts in a socially responsible manner the study includes potential social driving forces that cannot sufficiently be explained by normative and economic reasons.

Support for other groups in minority positions in organizations

Organizations may not only employ and support ethnic minorities but also members of other groups who are in a disadvantaged position in organizations, for example, facing unequal vertical and horizontal distribution and segregation, such as older people, people with disabilities, or women (Baron & Pfeffer, 1994; Reskin, McBrier, & Kmec, 1999). However, legal regulations and public discourse tend to differ across groups and perceptions are often quite specific, as reflected in prevalent stereotypes or openness towards different lifestyles. In Austria, for example, there is strong pressure to provide equal employment opportunities for women as disadvantaged groups in organizations but less for ethnic minority groups, whereas fostering careers of ethnic minorities is on the agenda of most organizations in the United States (Equal Employments Opportunity Trust, 2004; Linehan & Hanappi-Egger, 2006; Stuber, 2007). Furthermore, the concrete economic reasons to employ and support specific groups differ from group to group. Most often the reasons are uniquely related to the envisaged potential contribution of a specific group through their distinct qualifications, motivation, and access opportunities. For ethnic minority groups those assumed benefits are more likely to relate to languages, cultural competencies, networks to the local communities, and knowledge of and access to international markets (Podsiadlowski, 2010). As potential normative or economic reasons vary across such different groups of people (different legal regulations, varying benefits through specific skills, experiences, and perspectives) they do not sufficiently explain why organizations should implement action programs for several disadvantaged groups. The next proposition, thus, identifies action programs for other groups in minority positions in organizations as a socially driven factor.

Research Proposition 6: Action programs for ethnic minorities are more likely in organizations that also have action programs for other groups in minority positions in organizations.

Industries in the social economy

Industries as part of the social economy include nonprofit distributing organizations that have social objectives and reinvest their surpluses for the achievements of their aims (European Commission, 2010). Consequently, such industries do not necessarily have a wealth-generating function and drive for profit maximization but follow social responsibilities.

Research Proposition 7: Action programs for ethnic minorities are more likely in industries that are part of the social economy.

Method

Sample

The different driving forces and the dependent variables are located on different levels of analysis. The outcome variable “implementation of action programs for ethnic minorities” (yes-no) is measured on the organizational level, while the independent variables refer to organizations, organizational fields, and countries. Data at the organizational (field) level have been generated within Cranet, a research network dedicated to analyze developments in HRM in public and private sector organizations with more than 200 employees in a national, cross-national, and quasi-longitudinal way since 1989 (see Brewster, Mayrhofer, & Morley, 2004). Currently, 41 countries are part of the network. Each country is represented by a national university that is responsible for creating a representative sample of the respective company population. Postal surveys are filled out by HRM specialists, most often the top HR person. For the current analysis, data from the survey round of 2004 is used. Thus, 1,865 companies from 10 countries are included in the multilevel analysis. Table 2 lists the countries and their macro-level variables. This selection aims to cover a wide range of diverse countries that provides this study with a high level of between-country variance and countries with a low-, medium-, and high-diversity-policy index. Data for the country level stem from various secondary sources and were gathered during a comparable time frame as the Cranet database (Berry et al., 2006; House et al., 2004; IMD World Competitiveness Yearbook, 2007). Each source is specified when the respective country-level variable is explained.

Measures

Dependent Variable

The dependent variable is measured on the organizational level and has been gathered within the international network of Cranet. Information on organizations’ use of action programs for ethnic minorities is categorical in that the HR specialist answering the questionnaire is asked whether action programs for ethnic minorities exist (1) or not (0). Interviews with HR managers in the Netherlands, New Zealand, and Austria made clear that their interpretation of the term “ethnic minorities” also includes immigrants. They perceive cultural diversity as an ongoing organizational challenge not specifically referring to the origin of such diversity (Podsiadlowski & van der Zee, 2010).

Variables Relating to Normative Driving Forces

Diversity policy index

In Berry et al. (2006)’s project on Intercultural Youth in Transition, 13 societies not only varying in their cultural diversity characteristics but also in their diversity policies with regard to interethnic group relations were selected. With diversity policy, those authors refer to political science literature specifying the degree to which governments and other administrative bodies promote cultural diversity as a national goal. Some of the societies (like Australia or New Zealand) are explicitly multicultural in public policy and supportive public attitudes, some (such as Finland, France, or Germany) prefer to achieve culturally homogeneous societies and some (such as the Netherlands, Sweden, the United Kingdom, and the United States) are intermediate in their acceptance of pluralism (Berry et al., 2006, pp. 18-19). High acceptance of pluralism is reflected in a high-diversity-policy index and coded as 3. Medium acceptance—and hence a medium policy index—is coded as 2. Low acceptance is coded as 1 and serves as the reference category.

Public perceptions of international openness

The IMD analyses different facets of competitiveness in 55 countries on the basis of 323 criteria divided into economic performance, government efficiency, business efficiency, and infrastructure (IMD World Competitiveness Yearbook, 2007). Part of the data are derived from surveys with executives in top- and middle-management positions in all 55 countries (n = 3,700). On a Likert-type scale ranging from strongly disagree (0) to strongly agree (10) respondents rated their perceptions on government and business efficiency relevant for the country’s economic development

The study uses a selection of all items of government and business efficiency that explicitly deal with globalization, migration, or ethnic minorities. An exploratory principal component analysis with varimax rotation and Eigenvalue criterion (using data from 28 countries) revealed that the selected items combine into two factors. The first factor includes: positive attitudes towards globalization, national culture open or closed to foreign ideas, discrimination hindering economic development, and image abroad encouraging business development. These items express the perceived international openness of a country. The second factor consists of items addressing labor market issues and captures economic rather than normative driving forces as explained below. The factor loadings after rotation for each item are presented in Table 1. Factor values resulting from the principal component analysis are used to measure Factor 1 named “international openness.”

Table 1.

Factor Loadings for Government and Business Efficiency.

	Factor 1: International openness	Factor 2: Skills shortage
Item
Positive attitude toward globalization	.907	.023
National culture open to foreign ideas	.814	−.027
Discrimination hindering economic development	.778	.232
Image abroad encouraging business development	.767	.340
Availability of skilled labor	−.025	.795
Brain drain not hindering competitiveness	.415	.774
Usefulness immigration laws	−.002	.696
Attraction to foreign high-skilled people	.437	.617

Note: Negative factor loadings are italicized.

Cultural values

The GLOBE (Global Leadership and Organizational Behavior Effectiveness) project investigated the relationships between societal and organizational cultures in 61 countries asking middle managers from 3 industries on how they perceive values for the future (“as should be”) and now (“as is”) in their societies and organizations on 9 core dimensions (House et al., 2004). Their national-level data provide a source of information on a country’s dominant cultural value and belief system. For the present study the “as is” scores of humane orientation, future orientation, and uncertainty avoidance are utilized. These dimensions are measured on a scale ranging from 0 to 7.

Variables Relating to Economic Driving Forces

Public perception of skill shortage

As previously outlined, the eight items on globalization and migration from the International Institute’s for Management Development survey on government and business efficiency combined into two factors in a principle component analysis (see Table 1). The first factor refers to international openness. The second factor captures perception of skill shortage and consists of items on the availability of skilled labor, brain drain not hindering competitiveness, usefulness of immigration laws, and attraction to foreign high-skilled people.

International market orientation

International market orientation is captured using a binary variable. Organizations were asked about the main market they serve. Serving a national, regional, or local market was coded as 0, whereas international market orientation was coded as 1.

Variables Relating to Social Driving Forces

Action programs

For each minority group in organizations, for example, older workers, disabled, and women, HR managers stated whether the organization has action programs for them (1) or not (0). This process results in three binary variables.

Social service industry

The social service industry is one of the industries from the ISIC classification. Since agriculture serves as the reference category organizations from the social service industry are coded as 1 while agriculture is 0.

Control Variables

To control for different available resources the companies may have for implementing action programs, company size and company performance are included in the analysis. Size is measured as total number of people employed by the company. Company performance is controlled for by using a binary variable that indicates whether the organization’s profitability compared to others in the same industry is among the top 10% (1) or not (0).

At the country level, foreign-born population as percentage of the total population is used as a control variable; data by the OECD (2008), which include all persons who have ever migrated from their country of birth to their current country of residence, were used as the measure. Criteria are not only nationality and place of birth but also persons who are born in the host country but have a definite migration background via the place of birth of their parents.

The state with its respective federal government does not only exert direct influence on organizations but also through organizational fields. The classical definition states that an organizational field refers to a set of organizations that, “in the aggregate, constitute a recognized area of institutional life” (DiMaggio & Powell, 1983, p. 148). Multiple mechanisms of isomorphism make similar behavior of organizations in one field very likely. This study uses industries (Hawley, 1968) and public sector (Frumkin & Galaskiewicz, 2004) to differentiate between organizational fields.

Industry

Organizations’ industries are coded following ISIC, the classification provided by the United Nations Statistic Division (2010). Organizations fall into seven categories: agriculture, infrastructure, manufacturing, nonmanufacturing, services, social services, and others. Agriculture, the industry with the lowest percentage of organizations with ethnic minority action programs, serves as the reference category.

Public sector

In the Cranet survey respondents indicated whether their organizations belonged to the public or private sector. A binary variable with 1 for public and 0 for private sector organizations was created.

Method of Analysis

The data are hierarchically structured since factors that potentially influence the existence of action programs for ethnic minorities in organizations are located on various levels. In our sample, organizations are nested within countries. Thus, the observations within one country are not independent from each other; rather they exhibit stronger similarities within groups than between groups. In the present case, organizations bear more similarity to each other within a country than to others in different countries. To account for this hierarchical data structure, we utilized multilevel modeling techniques. Hierarchical or multilevel modeling is a theoretical and statistical means of combining different levels of analysis into a single framework. Thus, it is an appropriate technique to analyze our data. In particular, hierarchical modeling takes into account nested sources of variability and the following dependency of the data, meaning that parameters are calculated on all levels simultaneously (Luke, 2004).

Generally two types of multilevel models can be differentiated: models in which the regression constants of the groups vary (random intercept models) and models in which both the regression constants of the groups and the coefficient of one or more explanatory variable vary randomly across higher-level units (random slope models). Random intercept models were employed exclusively for these analyses of the influencing factors on action programs for ethnic minorities. In the models, the additive constants (intercepts) vary between countries. The dependent variables under consideration exist in binary form: action programs for ethnic minorities implemented or not implemented. Hence, a multivariate multilevel logistic regression model is calculated. The probability that an observation adopts one of two characteristics is modeled (e.g., having action programs for ethnic minorities or not) taking into consideration other attributes, which lie on differing levels. Predictive quasi-likelihood approximation is used for linearization and iterative generalized least squares for estimation. Since parameters in discrete response models are not normally distributed, approximations have to be used in order to test for the significance of between-country variation and for a variance partition coefficient informing about the percentage of variation located on the organizational level (Rasbash, Steele, Browne, & Prosser, 2005).

Results

Descriptive statistics of the country-level variables show considerable differences between the 10 countries investigated. Table 2 displays the values of the independent country-level variables. In the first column the aggregate dependent variable is presented. The percentage of companies that have ethnic minority action programs ranges between 2% in Germany and 63.4% in the United States. The 10 sample countries exhibit all 3 values of the diversity policy index. Australia and New Zealand are high; Austria, Germany, Finland, and France are low; and the remaining four countries, including the Netherlands, are intermediate in their acceptance of pluralism. The two factors of perceived government and business efficiency, too, cover a wide range of values. Australia (high) and France (low) constitute the two extremes of the factor “international openness.” The Netherlands, New Zealand, Austria, and Sweden show intermediate levels of international openness values of “skills shortage” have less variability. They range from 1.12 in Austria to −0.91 in New Zealand.

Table 2.

Descriptive Statistics Country-Level Variables.

	N = 1,865	% ethnic minority programs	Diversity policy index	International openness	Skills shortage	% foreign-born population	Future orientation	Humane orientation	Uncertainty avoidance
Country
Australia	66	27.7	High (3)	1.39	−0.35	24.10	4.09	4.28	4.39
Austria	152	2.7	Low (1)	0.56	1.12	14.1	4.46	3.72	5.16
Finland	164	8.2	Low (1)	−0.22	0.13	3.60	4.24	3.96	5.02
France	93	3.2	Low (1)	−2.38	0.88	8.30	3.48	3.40	4.43
Germany	221	2.0	Low (1)	−0.22	0.69	12.9	4.27	3.18	5.22
The Netherlands	188	39.3	Medium (2)	0.90	−0.05	10.6	4.61	3.86	4.70
New Zealand	124	12.4	High (3)	0.84	−0.91	21.20	3.47	4.32	4.75
Sweden	191	29.8	Medium (2)	0.51	0.32	5.32	4.39	4.10	5.32
United Kingdom	570	20.4	Medium (2)	−0.15	0.63	10.10	4.28	3.72	4.65
United States	96	63.4	Medium (2)	0.06	1.04	13.00	4.15	4.17	4.15

Percentages of foreign-born population are very diverse. While in Australia and New Zealand 24.1% and 21.2% of the population respectively is foreign born, in the Nordic countries Finland and Sweden only 3.6% and 5.32% of the population, respectively, were born in a foreign country. Percentages for Austria and the Netherlands are 14.1% and 10.6%, respectively. With regards to cultural value orientations, variability is rather small. High future orientation is found in the Netherlands (4.61%), Austria (4.46%), and Sweden (4.39%), whereas New Zealand (3.47%), France (3.48%), and Australia (4.09%) score rather low. In contrast, humane orientation is high in New Zealand (4.32%) and Australia (4.28%), Germany has the lowest value (3.18%), and Austria and the Netherlands are similar in their medium humane orientation. Uncertainty avoidance is highest in Sweden (5.32%), Germany (5.22%), and Austria (5.16%), whereas the lowest values are found in the United States (4.15%), Australia (4.39%), and France (4.43%). The Netherlands and New Zealand have very similar medium degrees of uncertainty avoidance.

Table 3 displays the percentage of companies having implemented action programs for ethnic minorities per industry. While across all 10 sample countries in agriculture only 12.2% do have action programs, the proportion reaches more than 35% in social services. The correlation matrix in Table 4 shows Spearman rank coefficients of all company-level variables apart from industry not taking into account the nested structure of the data but using all companies. The existence of action programs for ethnic minorities is significantly connected to all the company-level variables. Public sector, bigger size, noninternational markets, and high profitability of a company all positively influence the existence of action programs for ethnic minorities. In addition, action programs for ethnic minorities, older workers, disabled, and women are strongly connected to each other, indicating that action programs normally coexist in companies.

Table 3.

Descriptive Statistics Action Programs per Industry.

	% of companies with minority action programs
Industry
Agriculture	12.2
Infrastructure	21.0
Manufacturing	17.3
Nonmanufacturing	16.3
Services	16.5
Social services	35.5
Other	20.0

Table 4.

Correlations Company Level.

	Public-private sector	Size	International-national market	High-low profitability	Action program for older workers	Action program for disabled	Action program for women
Action program for ethnic minorities	.272***	.179***	−.112***	.127*	.400***	.575***	.530***
Public-private sector		.150***	−.339***	−.200***	.111***	.222***	.180***
Size			−.033+	.074**	.072**	.167***	.162***
International-national market				.082**	−.050**	−.078**	−.58**
High-low profitability					.006	.013	.001
Action program for older workers						.468***	.400***
Action program for disabled							.466***

Note: N = 1,865.

p < .05. **p < .01. ***p < .001.

Logistic multilevel regression analysis with the software MLwin was used to test the propositions. The dependent variable is binary—whether or not a company has an action program for ethnic minorities—and measured on the company level. Independent variables assumed to influence the existence of action programs are located on the organization as well as the country level. A Wald test is used as an approximation to test for significance of the between country variance and reveals (χ² = 4.383, p < .05) that there is significant variation between countries. Snijder and Boskers’ (1999) approximation that allows calculating a single variance partition coefficient for binary response model reveals that 34% of the variance is attributable to differences between countries.

Table 5 displays the coefficients, their standard error, and the odds ratios for the predictors. From the control variables, financial resources of the company are positively related to the dependent variable. Highly profitable organizations are more likely to have action programs for ethnic minorities. The industry a company belongs to makes a significant difference in the probability of having action programs for ethnic minorities. Agriculture is used as the reference category. Compared to agriculture all other industries have a higher probability of offering action programs for ethnic minorities. For all industries but for nonmanufacturing the coefficients are significantly positive. There is also a difference between public and private sector organizations with public ones having a bigger chance of ethnic minority action programs.

Table 5.

Logistic Multilevel Regression.

	B	SE B	e^B
Normative driving forces
Diversity policy index, medium	2.379***	0.422	10.794
Diversity policy index, high	−0.4880	1.694	0.614
International openness	1.949**	0.756	7.022
Future orientation	−1.990	1.436	0.137
Humane orientation	0.970	0.761	2.638
Uncertainty avoidance	−1.456***	0.417	0.233
Economic driving forces
Skill shortage	−0.275	0.599	0.760
International market orientation	−0.101	0.211	0.904
Social driving forces
Action program for older workers	0.725**	0.264	2.065
Action program for disabled	2.566***	0.224	13.014
Action program for women	2.282***	0.232	9.796
Social services industry	2.918***	0.877	18.504
Control variables
Percentage of foreign-born population	−0.074	0.091	0.927
Company size	0.000	0.000	1.000
High profitability	0.482*	0.215	1.619
Infrastructure industry	2.081*	0.873	8.013
Manufacturing industry	1.967*	0.852	7.149
Nonmanufacturing industry	1.28	0.902	3.597
Service industry	1.879**	0.876	6.547
Other industry	1.833*	0.852	6.253
Public sector	0.75*	0.263	2.117

Note: N = 1,865.

p < .05. **p < .01. ***p < .001.

The grouping of the predictor variables follows the propositions relating to potential normative, economic, and social driving factors. In all groups besides economic driving forces and on various levels of analysis, factors significantly affecting the probability of a company to have action programs for ethnic minorities are found. From the group of normative variables, diversity policy index, the perception of international openness, and the cultural value of uncertainty avoidance show significant influences. More precisely, a medium-diversity-policy index compared to a low one significantly increases the probability for having action programs for ethnic minorities. However, a high-diversity-policy index compared to a low index does not increase the probability of having action programs for ethnic minorities. Proposition 1 is partly supported. There is an increase in probability when a medium-diversity-policy index prevails, but there is no difference between low- and high-diversity policy. International openness also has a significantly positive effect on the implementation of ethnic minority action programs. Thus, Proposition 2 is supported. Among the group of dominant cultural value orientations in a country, only Proposition 3c on uncertainty avoidance is confirmed, whereas future and human orientation do not show any significant effects.

None of the two potential economic driving forces tested have a significant effect on the likelihood of having action programs for ethnic minorities. Neither perceived macro-level skills shortage nor international or national market of the organization increase the probability of supporting ethnic minorities. Propositions 4 and 5 are not supported. The strong connection between action programs for different groups seen in the correlation matrix (Table 4) is also confirmed in the logistic regression. Having action programs for older workers, disabled, or women all three significantly raise the probability of also having programs for ethnic minorities. Especially having action programs for disabled increases the probability of having programs for ethnic minorities by a factor of 13. Proposition 6 is thus fully supported. Proposition 7 is supported as well: For the social services industry, compared to agriculture, the probability significantly increases by a factor as high as more than 18. This result shows that social driving forces beyond normative ones and apart from economic pressures play a very important role when it comes to action programs for ethnic minorities.

Ethnic Minority Programs—A Matter of CSR

Our results clearly identify driving forces for implementing action programs for ethnic minorities on an organizational as well as at a national level. Organizational actions targeting ethnic minorities vary greatly across countries and organizations. The high proportion of variance at the country level points to the importance of considering macro-level factors when examining antecedents of H practices in organizations, specifically because normative driving forces can be identified.

The results suggest that the national diversity policies have an impact on whether action programs are implemented within organizations. Especially a medium score on the diversity policy index positively influences the likelihood of having action programs, whereas high and low index scores do not. In addition, the way in which organizational policies are publicly perceived or the concept of “international openness” has a significant positive effect on the implementation of action programs in organizations. Thus, normative reasons such as a medium diversity policy and a public perception of an internationally open country increase the likelihood of organizations implementing action programs for ethnic minorities in the respective countries. Cultural value systems (except uncertainty avoidance), however, seem to matter less than policy issues and their public perceptions, a finding that is in line with research that hints at overvaluation of cultural differences in comparative HRM (Weller & Gerhart, 2012).

Organizational field also affects HRM practices and policies, as is reflected in the differences between public sector organizations and specific industries (particularly social services) showing mechanisms of isomorphism. In contrast to normative driving forces, economic reasons as expressed in the public perception of addressing “skills shortages” and an organization’s international market orientation do not show any significant effects. Overall, economically oriented reasons do not seem to have an influence on the implementation of action programs for ethnic minorities. In fact, it is much more likely that action programs are found in social service sector industries and in organizations with action programs for other minority groups, effectively reflecting socially driven reasons.

Our results indicate that issues of fairness and social responsibilities, above and beyond normative and economic issues, are major reasons for organizations to implement action programs for ethnic minorities. Structural aspects like organizational size as well as country demographics do not show any direct effects, whereas firm performance as potentially important prerequisite of CSR initiatives does (see Campbell, 2007; Waddock & Graves, 1997). The overall conclusion is that, if action programs for ethnic minorities are implemented, it is a question of CSR driven by normative and social driving forces.

Discussion

The research at hand clearly shows the importance of macro- as well as meso-level factors for explaining whether ethnic minority action programs are implemented. The article gives an important overview of the predictors that increase the likelihood for action programs and demonstrates the importance of exploring institutional effects on CSR. Action programs for ethnic minorities can be seen as one potential outcome of organizations acting socially responsible. Building such a comprehensive model using macro-level factors, like the sociopolitical and sociocultural as context, as well as micro-level factors like sector and industry, follows calls from CSR researchers to consider context factors like varying institutional backgrounds in different countries (Campbell, 2007) and organizational fields (Acar et al., 2001). Distinguishing between normative, economic, and social driving forces and by interpreting the pattern of relevant predictors enables a deeper understanding of why organizations implement action programs for ethnic minorities. This exploratory approach has proved to be fruitful, as results suggests that the collectivity of influencing factors clearly shows that CSR is the driving force behind ethnic minority support, an aspect less frequently studied in the CSR and diversity management literature.

Looking at relevant contexts more closely, societal decision makers can find the direct relevance of political decisions and public perceptions on action programs for minority groups. By learning more about the characteristics of organizations that take action, these decision makers can develop conditions for supporting organizations and motivating them to take over more CSRs. The identification of factors supporting the implementation of action programs allows the specification of institutional and organizational antecedents of potential CSR initiatives, referring to action programs as one possible manifestation. Although there is a clear need for differentiation between very different groups such as women and disabled, for some issues, an integrative approach that takes into account diversity of all kinds might be useful allowing us to make more general conclusions about CSR initiatives.

As national context factors play such an important role, researchers need to consider the specific demographical, economical, and political issues in a country when advising organizations on how to act in a socially responsible way. CSR initiatives successful in a U.S. context for instance might not work in another country. Different issues may arise in different countries, making it necessary to specifically identify relevant target groups and objectives and to use culturally sensitive approaches, not only considering the specific (ethnic) groups involved but also the national context.

It is important to note the different results with regard to medium- and high-diversity policies. For organizations in countries with a medium-diversity-policy index, the probability of having implemented action programs is higher than when diversity policy is high. In the Netherlands, as an example with a medium-diversity-policy index, the percentage of organizations with ethnic minority programs is much higher than in New Zealand where the policy index is high (Berry et al., 2006; Podsiadlowski, 2010). There is a possibility that people who live in a very multicultural society with strong diversity policies have a different approach to dealing with interethnic group relations than those in societies with a medium-diversity-policy index and that this is reflected at the organizational level. Our dependent variable “action programs for ethnic minorities” implies a special need for supporting clearly identifiable social groups. It may be that a high-diversity-policy index, such as in New Zealand, reflects a more inclusive understanding of interethnic group relationships moving beyond the distinction between minorities and majorities. Ethnic diversity may be understood as valuing everybody’s unique contribution due to his or her diverse background. Organizations within such a political environment may refer more to an integration and learning approach (see Ely & Thomas, 2001), embedding diversity strategically into all their HR activities addressing all employees and not only specific groups like ethnic minorities. Another explanation could be that organizations in countries with high-diversity-policy indices do not feel urged to deal with the challenge of multiculturalism within their company as a CSR because the issue is already a national priority.

Compared to policy and organizational needs, sociocultural forces do not seem to be that influential (although they are also transmitted via institutions like policy systems). A missing reflection of higher humane orientation in action programs in organizations may also be a reflection of a high national priority on values such as fairness and altruism and may decrease the need for managerial discretion to act socially responsible in the organization. Future orientation may be linked to a country’s need to deal with issues of integration due to labor market requirements and prove to be as irrelevant as skills shortages are. It is interesting to note that uncertainty avoidance as one of the three cultural value systems plays a significant role when it comes to questions of inteethnic group relationships: The more important it is to avoid uncertain situations the less actions are found to proactively approach interethnic group relationships in organizations. This result implies a need to publicly deal with perceptions of threat and competition, particularly in countries like Austria that are high on uncertainty avoidance.

There is a clear need for academic knowledge focusing on the management of diversity (Vedder et al., 2006). Research like this may provide evidence for national-level policy and decision makers on the importance of working on immigration and ethnic diversity practices. For businesses to be efficient, a low-diversity-policy index is not helpful to attract and retain skilled labor and prevent discrimination for business efficiency. Considering how policies are perceived publicly is equally important. With regard to the European policies, the study finds significant variation among the variables even within the European Union countries. This variability suggests that national legislation is dominant and that policies on the European level do not seem to have a strong equalizing effect on the EU countries.

Limitations and Future Research

Cranet, the database used for the company-level variables of this study, is unique in its scope and size. The data provided are different from data that come from supranational institutions like the European Commission or the OECD and informs about private and public sector organizations instead of focusing on a macro labor market perspective. With six major survey rounds already being conducted, and more than 40 countries being captured, the database is impressive and well suited for trend studies as well as country comparative analyses.

Including data from various national contexts—which is the biggest strength of Cranet—comes with the price of challenges associated with international comparative research. One important issue is that of “likeness” and equivalence (Cavusgil & Das, 1997); although the latter is a “universal” issue in research, it becomes especially salient when considering multiple countries (Tregaskis, Mahoney, & Atterbury, 2004). Specifically relevant to this research is the fact that the same empirical phenomena can be labeled differently in different countries. While Cranet applies a sophisticated procedure of translation and back translation there is a possibility that in the study on hand the terms “action programs” and “ethnic minorities” are understood differently in various countries. Also, by asking whether or not action programs for ethnic minorities are implemented consistently throughout various national contexts, the analysis does not capture particular aspects that may actually be important for the integration of minorities. For example, the questions do not capture whether companies embed their action programs and support for ethnic minorities or other CSR-related initiatives into their general HRM practices. Other types of HRM activities may be implemented that reinforce mutual learning and inclusive understanding not specifically referring and supporting specific ethnic groups. Future research, therefore, should examine different types of approaches such as the link between an integration and learning approach and an active policy on multiculturalism like in New Zealand.

Another important point to examine is the characteristics of companies that do not have action programs for ethnic minorities. There could be a variety of reasons why they do not implement programs: They might ignore the issue, they might consciously apply a color-blind perspective, or try to reinforce homogeneity (Podsiadlowski, 2010; Podsiadlowski & van der Zee, 2010). In order to find out about these companies, integrating actual diversity in the organizations into future research questions would be helpful. A very valuable first step is distinguishing between companies having and not having implemented action programs, and a second step should go into more detail about the particular form of initiative. Results show that it is not only a question whether something is implemented or not but also what is implemented. What are the particular measures? Are they embedded in general HRM activities or perceived as a separate set of tools? And how are those related to other CSR initiatives and mechanisms?

As societies become more and more culturally diverse, actively dealing with cultural diversity is and will remain a necessity for a society’s and organization’s future. Knowledge and insights on successful diversity management have great long-term economical and social benefits for the individual countries and Europe as a whole. Knowledge-based economies require diversification of inputs as well as effective methods to manage those inputs. Globalization of markets is promoted if individual countries and Europe manage to effectively use different cultural resources within the continent. Because of the fact that Europe comprises these growing different cultural resources, it is high time to collect scientific data to manage these new societies the right way thus addressing an increasing need to understand why and under which conditions organizations take action.

Footnotes

Authors’ Note

The data on the organizational level stem from Cranet, The Cranfield Network on International Human Resource Management. This international research collaboration is coordinated by the Cranfield School of Management in the United Kingdom. An earlier version of this article was presented at the 6th Biennial Congress of the Academy for Intercultural Research (IAIR), August 2009, Honolulu, HI.

Both authors contributed equally to the article. Names are in alphabetical order.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was part of a European Union (EU) funded project on Workplace Diversity for which the first author received funding from the Commission of the European Communities as a Marie Curie International Reintegration Grant (FP/-PEOPLE-2007-4-3-IRG) under grant agreement Number PIRG02-GA-224818.

Author Biographies

Astrid Podsiadlowski (PhD, Ludwig-Maximilians-University, Munich) has been working as lecturer and research fellow in the field of international management, discrimination, and social inequalities in organizations as well as diversity management and inclusion. As a cross-cultural and organizational psychologist she has conducted research on the effects of demographic changes with regard to ageing, gender, and ethnic origin, potential interventions, and facilitating migrants’ integration into the workforce in different national contexts. She now works at the Fundamental Rights Agency of the European Union.

Astrid Reichel works as an assistant professor at the Department of Management at WU, Vienna University of Economics and Business. She received her master and doctoral degrees in management from the University of Vienna. Her main research interest is in international human resource management focusing on the influence of contextual factors on HRM policies and practices and the status and organization of HR work. Her work has been published in journals such as the Human Resource Management Review and the International Journal of Human Resource Management.

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