Managing Workforce Diversity and Inclusion under the Globalizing Economies

Japanese companies expand into foreign markets and generate increasingly more value from international trade and transactions, and make foreign direct investments to manage overseas operations directly. Demands from global markets are more divergent than Japanese domestic markets. Japanese companies benefit from the inputs the host country’s workers make, and HR managers are expected to be able to manage a divergent workforce. It was only at the end of the 1990s when Japanese managers started to learn about the importance of integrating divergent workforce.

Workforce diversity reflects differences among individuals regarding sex, race, nationality, language, religion, education, color of skin, marital status, beliefs, physical or mental disability, sexual orientation, and so on. The management of workforce diversity involves two activities: one treating a homogeneous workforce equally, another combining a divergent workforce effectively.

Japanese employers tended to prefer men to women even though they were equally productive. Such employers pay men premium wages, but will be eventually wiped out by competitors due to the higher labor costs. Japanese HR managers nowadays are busy advancing an equal footing for both men and women with the hope of building a competitive organization.

A NPO, J-Win, has been actively assisting its member companies to improve their diversity and inclusion (D&I) initiatives, especially developing women in business organizations. It points out several elements that are useful to advance D&I at the enterprise level. They are, among others, the commitment of the top management to D&I, establishing a professional organization unit in charge of advancing D&I, HR development programs to advance women’s careers, creating role models and assigning mentors to women. The bundle of these elements, combined with the managing capability of D&I initiatives, resulted in better corporate outcomes, according to J-Win Report 2014. It is important to note that the D&I initiatives are clearly combined with corporate level management strategies.

Japanese HR managers in global corporations are also busy developing a global HR system to integrate the divergent talents available in their affiliates abroad. They tend to establish a system on the basis of bureaucratic/mechanistic organizations. This, however, appears to be a first stage of their global talent management system. They are interested in advancing it eventually to a motivational organization.

There must be HR managers in neighboring countries who are used to managing a divergent workforce thanks to their workforce mix. The Japanese managers would find a lot to learn from the overseas counterparts and figure out whether the aspired motivational organization is feasible at the global level. Strategic perspectives on HR/IR remain to be crucial to generate HR/IR business models.