Organisations these days understand the value of cultural diversity. The business case is clear: greater diversity means an increased pool of knowledge, perspectives, and ideas to draw from.
Yet is there a risk in having too much diversity? Do the benefits of diversity outweigh the importance of a distinct local culture? To answer these questions CEMS students from the Rotterdam School of Management researched the English Premier League, an organisation that has been struggling to balance the advantages of increased diversity with maintaining a strong local culture.
Between 1992 and 2011 the number of foreign players in the League has grown exponentially. From a mere 7% in 1992/93, foreign players now make up 60% of the League. The numbers tell an incredible story: increasing diversity has been directly and linearly linked with the League’s growing revenues and profit, professional success in the European Champions’ League, and increasing attractiveness among football fans around the world.
However, the League's local identity has suffered. Out of the 44 top flight and first division clubs, 24 are now controlled by foreign owners and ‘local’ Englishmen are a minority among the players, coaches, owners, and viewers. The English Football Association noted that the League lacks a common image, and clubs can be said to experience an ‘identity crisis’. Most notable is the example of Cardiff City, which was bought by Malaysian investor Vincent Tan in 2012. He decided to rebrand the club’s colours from blue to red, and replace the club’s image of a bluebird with a dragon – all in the name of securing funding and appealing to the Chinese market.
The loss of local identity in the League has also led to a decrease in the number of skilled English football players. Local youth players were finding it increasingly difficult to break through into their club’s first team, which had a detrimental result on their development. This in turn has contributed to mediocre performances by the England national team on international stages.
The story of the Premier League is a telling one, with implications for organisations and HR managers more widely: while diversity offers many advantages for organisational performance, it leads to an array of other changes that are often overlooked.
Increased diversity inevitably affects the organisational culture and norms, and may lead to a redistribution of power and resources among the members of the organisation. Just like any other change initiative, such a transformation might involve resistance and unrest, as well as feelings of detachment and frustration among employees.
Externally, increased diversity may also affect the public image of the organisation and its ability to attract new talent. Our research show that organisations that measure diversity policies’ success only in terms of composition may deter high-performing jobseekers because they signal that a firm’s values may be at odds with ideals of meritocracy.
Diversity is important as it has the potential to bring wide benefits to organisations. However, organisations too often measure the success of diversity programmes by solely focusing on their effect on organisational performance and compositional changes. This narrow view of diversity runs the risk of overlooking major influences on other processes and outcomes.
The experience of the Premier League teaches us that when we broaden our view on the effects of diversity, in some cases there might be risks. To avoid that risk our definition of a successful diversity strategy must be broadened.
Meir Shemla is assistant professor of organisational behaviour at Rotterdam School of Management, and CEMS professor for global management practices
