“The Diversity Index” by Susan E. Reed

The Book Corner — Review

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The Diversity Index: The Alarming Truth About Diversity in Corporate America…and What Can Be Done About It

by Susan E. Reed

Amacom, 2011

294 pages

 

 

3 stars: Valuable information and a good readNineteen graying or balding men in suits gathered around Hobart Taylor, Jr., an attorney and MBA graduate with more than twenty years of corporate experience from Texas, for a historic photo. In the midst of an exceptional career, he was exception here as well. All the men were white, except Hobart. The photo of the twenty powerful business leaders gathered by the President of the United States to guide U.S. corporations through “affirmative action” in 1964, highlights at once the promise for the future, the limited progress made to that point, and the ignorance of the multivariate aspects of the diversity issue. This is just one of the striking images from Susan Reed’s latest book.

In The Diversity Index, Reed raises one of the most critical issues facing managers today. It is an issue that has largely been ignored in the academic press, particularly in the United States. As the globalization trend continues, what happens to the qualified female and traditional minority candidates? Candidates who are still trying to push through ceilings, which have kept them under-represented in executive jobs and on corporate boards, are now joined by qualified candidates with the intimate knowledge of non-U.S. markets so sought after among U.S. firms.

As Michael Porter reminds the managers that take his Harvard course, strategy is about trade-offs. The author appears to have been in the classroom at some point as she explores in depth how corporations do not appear to be adding diversity to their executive and board ranks, but rather promoting non-U.S. executives and officers from under-represented groups at the expense of women and traditional minorities.

The book is more a documentary than an explanation. The mechanisms by which diversity helps (or hinders) the management process and the development of talent are not clearly explicated. The introduction suggests that, biologically speaking, the more diversity present, the healthier the environment, and therefore, the healthier the company. The author maintains that approach throughout the book. The costs of integration for companies and individuals are largely ignored. In one example, a major U.S. corporation has to work very hard to recruit and then find housing for a minority engineer in a Northeast U.S. city where there are few other minorities who are also professionals. This would have been a difficult situation for the engineer and his family and it would have been a difficult situation for the company to help him find meaning and acceptance within the company and within the larger community. The issue is raised but then dismissed by the author.

That said, this highly accessible book is part history and part case study. It is at its best when documenting the efforts of major U.S. corporations, including General Electric, Walgreens, and Lockheed Martin. These parts of the book should be of particular interest to academics looking for cases on corporate diversity, under-represented populations, and executive leadership. Historians, particularly U.S. presidential historians, will find the book interesting as much of the book is centered on the early 1960s and the Civil Rights Act of 1964. The heroes here are men like Hobart Taylor, Jr., John Feild, and Lyndon Baines Johnson.It was an interesting sidelight to read Civil Rights leaders lining up behind Johnson, rather than Kennedy, before they combined efforts on the 1960 Democrat ticket.

Researchers will find that Reed, a journalist by training, has conducted an extensive review of the records of major U.S. companies. Conclusions are limited and the evidence to support her main hypothesis is in the form of raw percentages documenting the inclusion of women and traditional minorities. She does offer up several fruitful paths for researchers and I was, in particular, left wondering whether the inclusion of non-U.S. board members for U.S. corporations moving into non-U.S. markets has been mirrored by non-U.S. firms moving into U.S. markets. If so, what has been the diversity experience for these European, South American, and Asian companies and what does this predict for the next round of the diversity discussion here in the United States.

About the Author(s)

Richard Herko, teaches at Pepperdine's Graziadio School and conducts research in the field of strategy, specifically corporate governance, top management teams and competitive intelligence. While at the University of Pittsburgh, he earned several teaching awards including CBA Teacher of the Year in a Core Course. He has published several works, has presented at more than a half dozen conferences, and is a member of the Academy of Management.

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