WE KNEW IT ALL ALONG: THE BENEFITS OF DIVERSITY

This truth isn't a shocking revelation to those who have always proposed that companies who manage their Diversity in a healthy manner will reap positive beneifts. However, it is new that we now have something more definitive to hang our sombreros and caps.

The Ohio State University Fisher College of Business, along with assistance from the University of Delaware , Michigan State University , and Florida A&M University , has published a paper touting the benefits of having a good diversity plan. The paper indicates a well thought out and enforced diversity plan can have a positive impact on financial performance.

In the 34 page study (found at:  http://fisher.osu.edu/fin/dice/seminars/diversity20.pdf), the statistical correlation between diversity management and financial performance is clearly outlined. The report states, "Contrary to prior studies, we find that affirmative action awards and discrimination lawsuit settlements have no significant impact on stock prices. The filing of discrimination lawsuits, however, does produce a negative and significant price reaction. We contend that our results indicate competitive advantages for firms that promote and manager diversity, rather than firms which meet minimum affirmative action standards." Further, the paper's introduction begins with, "Human resource theorists expect improved performance and increased value for companies providing programs that integrate diversity initiatives. At the very least, market share and productivity may be in jeopardy for firms that lag in developing a diverse workforce or that fail to create an environment that encourages positive interactions among heterogeneous groups of workers."

"The evidence suggests that it is not compliance with affirmative action standards, but proper management of diversity initiatives that is viewed positively by shareholders." The report is very thorough in its examination of the link between creating a diverse and respectful working environment and the financial performance of the company. "The evidence suggests that it is not compliance with affirmative action standards, but proper management of diversity initiatives that is viewed positively by shareholders."

Told ya'...

United Nation’s Principles on Tolerance

“Tolerance is respect, acceptance, and appreciation of the rich diversity of our world’s cultures, our forms of expression and way of being human.  It is fostered by knowledge, openness, communication and freedom of thought, conscience, and belief.”

2002 Rank

Company

Revenues ($ millions)

1

Fannie Mae

50,803

2

Sempra Energy

8,029

3

Denny's

1,391

4

SBC Communications

45,908

5

McDonald's

14,870

6

PNM Resources

2,352

7

Southern California Energy

12,184

8

U.S. Postal Service

65,834

9

Freddie Mac

35,523

10

BellSouth

24,130

11

UnionBanCal

2,912

12

Lucent Technologies

25,132

13

Consolidated Edison

9,634

14

Xerox

16,502

15

PepsiCo

26,935

16

Colgate-Palmolive

9,428

17

Wyndham International

2,105

18

Silicon Graphics

1,854

19

Hyatt

3,950

20

Procter & Gamble

39,244

21

DTE Energy

7,849

22

Hilton Hotels

3,050

23

Levi Strauss

4,259

24

Marriott International

10,152

25

United Parcel Service

30,646

26

Applied Materials

7,343

27

Washington Mutual

17,692

28

TIAA-CREF

24,231

29

American Express

22,582

30

PG&E Corp.

22,959

31

Verizon Communications

67,190

32

Coca-Cola

20,092

33

Avon Products

5,995

34

Cisco Systems

22,293

35

Abbott Laboratories

16,285

36

Nordstrom

5,634

37

S.C. Johnson & Son

4,500

38

J.P. Morgan Chase

50,429

39

Darden Restaurants

4,021

40

Pitney Bowes

4,691

41

Bank of America Corp.

52,641

42

Knight-Ridder

2,900

43

Eastman Kodak

13,234

44

Allstate

28,865

45

Intel

26,539

46

AFLAC

9,598

47

Citigroup

112,022

48

Prudential Financial

27,177

49

Ford Motor

162,412

50

UAL

16,138