2006 Volume 9 Issue 3

Gen Y and Organizational Life

Gen Y and Organizational Life

Historically, network groups have been formed in corporations by groups that have experienced discrimination or limitations to advancement in the workplace (i.e. ethnic minorities, women, gay people, older people, disabled people). This article provides a vehicle for discussing whether or not members of Generation Y, who represent the newest crop of corporate managers, see the value of network groups or whether the value of these groups has outlived its original purpose of providing professional support to individuals that may experience discrimination at work.

Network Groups Defined

Employee network groups, also more recently called affinity groups or employee resource groups, can be beneficial to both management and employees. First formed in the late 1970s and early 1980s, network groups typically focused on race and gender. Today network groups are more likely to be acknowledged for improving overall company performance as they are to be credited with improving recruiting and retention efforts and with providing an avenue for broader perspectives regarding company performance.[1] Texas Instrument’s (TI) diversity director Terry Howard says, “I think employee networks are part and parcel of any effective diversity strategy. I can’t imagine working in an organization that didn’t have them.”[2]

In spite of the benefits of network groups, the 2005 Workplace Diversity Practices Survey Report by the Society for Human Resources Management (SHRM) states that still only 29 percent of companies support network groups.[3] And where network groups do exist, often companies are underutilizing their potential. Nonetheless, companies such as Hewlett-Packard, Eli Lilly, and Ford each have multiple employee network groups which increases the likelihood that these companies are friendly, not just tolerant, to groups that can experience marginalization in the workplace. Such groups make it more likely that all employees will have a voice and thus contribute to a more collaborative, vibrant, and participative environment.

These groups can improve organizational competitiveness by providing a form of environmental scanning, since diverse employees also represent segments of the marketplace. For example, at each of the three companies mentioned, members of resource groups are asked for their feedback on new product designs and testing, on advertising campaigns, and for their help in promoting various programs.[4] Finally, these affinity groups can help bridge gaps between various stakeholders such as the Japanese, Chinese, and Korean employee resource groups at TI that helped with translation services for clients and suppliers.

Network groups have traditionally existed in larger companies, with smaller companies having traditionally feared that such groups might turn into lobbying groups. This risk can be avoided if companies maintain control of the process that creates the groups by providing for, among other things, an application process that requires a mission, goals, and leadership structure. Companies should also encourage such groups to provide alternative solutions for the problems they identify. More recently, companies of varying sizes are recognizing the benefits of affinity groups and their potential to improve business results.

A case study from Harvard Business Review that is used in graduate management courses today[5] highlights a CEO and his HR team wrestling with the conflict generated when employees request permission to form work-based support groups, or network groups. In this particular case, a corporate social group forms in seeming opposition to a marginalized minority group that was meeting for the purpose of professional networking.

This case offers a real life example to foster discussion about a polarizing topic that is still relevant today. It is the authors’ observation that current MBA students particularly younger students studying the case often express confusion about the purpose network groups serve for minorities working in companies.

Specifically, the HBR case underscores the leadership team’s struggle of whether to allow a Christian group to form a group not typically known to experience marginalization in 21st century America in one plant location within their company.[6] This struggle began when “closeted” gay employees who feared reprisals against them by the Christian group expressed alarmed concern in response to news of the group’s formation. In fact, a letter had already been widely circulated within the company by a plant manager who was a key proponent of the formation of the Christian Network Group. The letter denounced homosexuality as “an abomination” and stated a formal position against gay lifestyles. The case also references other groups of employees that have considered forming network groups to provide support for employees who share other common concerns.

Common issues raised among Generation Y managers and employees when discussing this case are whether the CEO will allow the Christian Network Group to form or not, and concurrently, whether all existing network groups should be eliminated. When encouraged to explain their answers to such a dilemma, often Gen Y managers comment that it makes them uncomfortable for special groups of employees to be formally recognized in an organization, and that furthermore, they believe the risks of sponsoring formal network groups outweighs the potential benefits of forming such groups.

The purpose of this article is to discuss the place that network groups hold in corporate settings and the potential impact that the perceptions of Generation Y managers may have regarding such groups. We briefly explore the purpose of network groups and then ask the questions that Generation Y managers are already asking: Is there value in workplace network groups in the 21st century? If such value exists, what criteria should be considered by organizational leaders regarding whether to approve the creation of such groups? Finally, what management practices are needed to ensure that the planned benefits of such groups are made manifest in employee satisfaction, motivation, advancement, and in individual and organizational productivity?


Organizational management literature has long included the importance of the existence of informal groups inside organizations. Informal groups not only can reinforce the mission, goals, and culture of the formal organization, but they can also meet social and psychological needs of organization members. Such groups serve as one kind of informal social network that is critical in successful organizational change initiatives and in leveraging the use of communication technologies in accomplishing work.

Employee network groups seen increasingly in the past 20 years or so are an emerging organizational phenomenon.[7] They are a specific kind of informal group in that they form to support the success of a group of employees who share similar characteristics and thus are typically made up of various minority groups in a particular organization.[8] Usually created in a grassroots way, the groups’ aims are for their members to enable each other in successfully navigating aspects of contemporary organizational life, more specifically, those particular aspects of that life which groups of employees may experience in similar ways. The stated purpose of most network groups is to enhance the careers of members by providing social support, information, and leadership opportunities to their members. Designed to overcome discrimination, these groups are part of an organization’s formal HR system. As a case commentator regarding the HBR case noted above has stated, “The past and ongoing purpose of network groups is to help their members contribute their full talents to an organization.”[9]

Worth the Risk?

It can be generally stated that Generation Y employees and managers have a different concept of network groups than do Baby Boomers and Gen Xers. Gen Y workers typically use online networks to communicate across the country and around the world.[10] They exchange photos, trade stories with online friends, and get the latest “news” in their areas of interest. As U.S. school children, they grew up observing multicultural events in their schools such as honoring Black History Month and Cinco de Mayo.

As adults they are aware that the United States has had a history of types of discrimination, but many feel that they have not experienced it firsthand. Many Generation Y managers comprised of Latinos, Asians, African Americans, and women may remark that they do not want special privileges and may even deny having experienced “glass ceiling” events at work. They move from job to job, eager for new responsibilities and willing to work long hours, planning for the day when they will start their own businesses. They network with each other informally based on shared interests, personal affinities and sometimes because they share ethnicity or gender. However, most often such employees and managers have in common a shared need for and exchange of services. It is no wonder that many of the Generation Y managers that we’ve spoken to see workplace network groups as passé and legally risky.

Nevertheless, discrimination in the workplace has a long history. The Federal Glass Ceiling Commission, founded in 1991 under Title II of the Civil Rights Act of 1991, stated in its final report, “Workplace discrimination presents a significant glass ceiling barrier for minorities and women.”[11] The Commission had a vision of “a national corporate leadership fully aware that shifting demographics and economic restructuring make diversity at management and decision-making levels a prerequisite for the long-term success of the United States in domestic and global marketplaces.”[12] The Commission was mandated to study and prepare recommendations regarding “(1) eliminating artificial barriers to the advancement of women and minorities; and (2) increasing the opportunities and development experiences of women and minorities to foster advancement of women and minorities to management and decision-making positions in business.”[13] The Commission’s final report was issued in November 1995 and found that while white males constituted just 43 percent of the labor force, they held 95 percent of the senior management jobs.[14]

If it is true that Gen Y workers are less aware of workplace discrimination, several factors could be at play. First, Gen Y is characterized as a highly diverse cohort in terms of age, gender, ethnicity, and life pursuits.[15] Seventy percent of 21-year-old Gen Y Americans are in the workforce, and are influenced by changing cultural expectations.[16] Not having the experience of the Baby Boomers or even Gen X in the workplace, it would make sense that a fresh, current view of career possibilities would not be influenced by slights they do not expect to experience.

Second, as the workplace generally becomes more global, virtual, diverse, and autonomous, issues of discrimination and oppression will change, perhaps becoming more subtle and going underground, or perhaps changing in terms of which populations and cohorts get marginalized. The American workforce is becoming more multicultural. As McManus writes, “By 2015 the White population will increase 3 percent, compared with increases of 30 percent for Asians, 28 percent for Hispanics, and 13 percent for African Americans.”[17] As with the Baby Boomers, Gen Y’ers are entering the workforce in an age of relative affluence, and this is shown in their optimism and perhaps in their expectations of being paid fairly well, being recognized for work well done, having interesting work, and having large amounts of freedom and flexibility on the job.[18]

Gen Y’ers may describe what others would call marginalization to a boss’ management style, or an organization’s culture, and because they can change jobs relatively easily, do not view these artifacts as related to them individually. Perhaps they are not curious enough to pursue understanding such organizational factors and prefer jumping ship to a new firm. Thus, the lack of recognition of discrimination does not mean that discriminative practices and behaviors do not take place.

For the last 20 years, corporations have committed to creating increasingly diverse workplaces. For example, a Lexmark website states, “Lexmark diversity network groups are organizations of Lexmark employees who voluntarily come together with the shared goal of making Lexmark an even better place to work.”[19] Paul Curlander, chairman and CEO of Lexmark, has said that “Without this fundamental commitment to embracing and understanding different needs, different perspectives, different cultures, different markets we simply could not serve our customers as well as we do.”[20] Diversity Network Groups provide “opportunities for networking, mentoring and coaching,…reaching out to the community,” and helping “its members become more satisfied and effective employees.”[21]

Companies frequently link their financial success to the diversity and fair treatment of people belonging to various minority groups within the company. For example, according to Duarte McCarthy of Citigroup, it is important to Citigroup’s bottom line that employees “feel that their talent, who they are, and what they bring to the company is what will enable them to be successful. We don’t want any bias or subjective opinion to be viewed as an inhibitor keeping them from being as successful as they can be.”[22] Other than the anecdotal information that we cite here, we did not find data to support a link between financial success and the use of network groups. Intuitively, however, if network groups encourage employees to remain with a company, then such financial indicators as reducing turnover and recruitment costs are likely to be improved.

In his groundbreaking article, Michael Keeley poses the notion that organizational effectiveness procedures go beyond stereotypical measures of revenue and production. He suggests that “Organizations are effective to the extent that they attempt to satisfy the interests of participating individuals. It is only when persons feel that their own interests are protected by some equitable distribution principle that they may value the overall attainment of a collective outcome or goal.”[23]

Given the two competing philosophies cited, what is the future of Network Groups and how do managers of today’s fast paced, global corporations meet the needs of their diverse employees, including members of Generation Y?

Considering Whether to Support the Idea of Network Groups

Network groups are more than interest groups. They represent a present day approach to reshaping the social environment for minority employees.[24] Such groups can help their members contribute their full talents to the organization by improving organization-wide cooperation across teams and the other internal and external boundaries of a company.

Therefore, HR professionals need to foster and provide ongoing support to such groups as value enhancing components of the organization. If we consider organizations as living systems powered by collective intelligence, we must also grant that the importance of employees holding conversations centered on matters that concern them is key to improving organizational performance. As Juanita Brown, founder of the World Café states: “Seeing organizations as dynamic networks of conversation and meaning-making provides the opportunity to re-conceive organizational learning, strategy innovation, technology design, and leadership development based on the ways living systems co-evolve the systemic intelligence they need to learn, adapt and thrive.”[25]

While the intention of a potential network group may be clear to its would-be founders, its purpose must also be clearly understood by the organization. Furthermore, its formation must typically be approved by HR, thereby creating potential conflict among groups that may also want to form. What might appear to be support to one group of employees may seem to be suppression to others. This type of dichotomy is also a risk within groups, where the sharing of what seems to be work-related experiences by one group member may have what appear to be political implications for a member of the same group.

As a consequence, the criteria and the methods used in the creation of network groups must be clearly articulated by company HR functions.

  • Will the network groups be approved as part of the company’s strategy to manage and leverage its diversity?
  • Will membership in such groups be limited to a criterion of ethnicity?
  • Will formation of such groups be approved for any group that feels it lacks support from the parent organization regarding work-related issues?

As stated by case commentator Scully, “Network groups make sense when they exist to remove obstacles to performance” and accordingly, their approval and creation should reflect this purpose.[26]

Criteria to Consider When Supporting Network Groups
We believe that there is value in workplace network groups, both formal and informal. However, we also agree with many Generation Y managers and employees that there are risks if an organization is not clear about its criteria for supporting workplace network groups. Therefore, we outline some questions management may want to consider when creating its policies for forming and maintaining workplace network groups. Criteria for the formation of formal Network Groups include the following:
#1: Is the presence of network groups part of a larger organizational strategy to leverage the diversity in the organization? This strategy may include harnessing workplace diversity arising from different ethnicities, religions, personalities, learning styles, and so on. Is the organization authentically committed to the selection, promotion and support of persons who differ?If network groups are indeed part of the organization’s strategy to leverage diversity, then as part of its diversity work the organization must develop a mission statement regarding the creation of network groups, against which diversity related requests could be measured. As an example, JP Morgan Chase actually works to increase the diversity of its staff by offering group supports to ethnic minority employees, gays and lesbians, parents, and its older workers. As head of diversity with JP Morgan Chase, Frank Howell says that the bank’s diversity focus is central to its aim of radically overhauling the firm’s hierarchical culture. He believes network groups help staff to “feel accepted at work, improve retention and assist individuals with their career development.”[27]
#2: Will network groups benefit employees who might otherwise experience roadblocks to effectively contributing to the organization?Criterion #2 suggests that there are times when it is appropriate for religious groups to be included in formal workplace network groups, as for example if there are employees who are underrepresented in their workplace and lack a sufficient voice unless their voices are united with those of others in an effort to share a perspective otherwise not being considered. In the case of a religious network group, Scully argues that the Christian Network Group should not be part of the formal organization because most of the employees in this plant have identified themselves as Christian and therefore they are not a minority. She argues that the Christian group should therefore be an informal network group, not a formal one.
#3: Might the formation of a group in some way hinder the professional or personal growth of individuals, whether they are members of a group or not?While generally considered a benign trend, groups that form only around sharing common beliefs and that are not specifically linked to fair treatment practices of employees should be limited within organizations. Legal implications may be still forming around issues such as these, but ethical issues are clear: Groups should first form around a general commitment to uphold the mission, vision, and values of the organization and to the respect of that commitment by employees in all communications and in practice.


While it is clear that network groups do not always form to combat outright discrimination, the fact that many successful companies actively support formation of network groups indicates their belief that tacit oppression can and does creep into places of work. Not only does the possibility of oppression present an ethical concern for Gen Y managers, but it is also one that impacts individual and group performance. On the positive side, all network group activities should create a general sense of acceptance of and well-being for all employees, thereby increasing the amount of energy that can be expended by employees in creativity and productivity.

Thus, implications for Gen Y managers include the need to acknowledge that simply because they may not have witnessed or experienced discrimination does not mean that it does not exist, either in their workplace or in those of others. Effective managers develop a robust sense of self-awareness to allow themselves to influence organizational dynamics that they themselves may not yet have consciously experienced. Successful managers and leaders increasingly find ways to improve the integrity of their organizations. Such managers often find ways to do this by actively supporting and encouraging employees, including removing obstacles for those who do not find themselves “in the mainstream.”

Despite our arguments that workplace network groups hold an important place in organizational life, it is possible that future organizational life with Gen Y managers in charge will look different. Because Gen Y employees and managers have established informal networks via the Internet, instant messaging, and blogs, they may not experience the same isolation and need for support that minority Gen Xers and Baby Boomers have felt in generations past. Network groups may take on the shape and form of virtual and synchronous communications rather than physical meeting places and times. Since Workplace Network Groups are formed on the basis of employees’ needs, and if Gen Y’s needs for support are met outside of workplace boundaries, then we predict that workplace network groups will change as well.

[1] Arnold, J.T. (June 2006). “Employee Networks: Supporting affinity groups allows some companies to reach and retain more-diverse talent.” June 2006 HR Magazine, 145-152.

[2] Ibid, 145.

[3] Ibid.

[4] Ibid, 150.

[5] Friedman, Raymond A. “The Case of the Religious Network Group,” HBR Case Study, July 1999, Harvard Business Review.

[6] Friedman, R. A. & Craig, K. M. (2004). “Predicting Joining and Participating in Minority Employee Network Groups.” Industrial Relations, 43, (4). Malden, MA: Blackwell Publishing.

[7] Friedman, R., Kane, M., & Cornfield, D. B. (1998). “Social Support and Career Optimism: Examining the Effectiveness of Network Groups Among Black Managers.Human Relations, Vol. 51, (9).

[8] Scully, M. (1999). In Ray Friedman. “The Case of the Religious Network Group.” Harvard Business Review, July-August.

[9] Retrieved March 24, 2006. http://www.lexmark.com/US/hr/employ/current_student/diversity.html: LEXMARK, Diversity at work, http://www. (no longer accessible).

[10] Wikipedia; Demographic profiles in marketing: US Demographic birth cohorts. Retrieved 24 May 06: http://en.wikipedia.org/wiki/Demographics [Baby boomer cohort #1 born from 1946-1954; cohort #2 born from 1955-1964; Gen X cohort born from 1965-1976; Gen Y cohort 1983-2007].

[11] U.S. Glass Ceiling Commission (1995). A Solid Investment: Making Full Use of the Nation’s Human Capital (Final Report of the Commission). Washington, DC: U.S. Government Printing Office, 39.

[12] Ibid, 3.

[13] Ibid.

[14] Ibid, 12-13.

[15] Tucker, E., Kao, T., and Verma, N. (July 2005) “Next Generation Talent Management: Insights on How Workforce Trends are Changing the Face of Talent Management.” Business Credit, 106 (7), pp 20-27. Hewitt Associates LLC. 3.

[16] Ibid.

[17] McManus, J. (2005). Retail Traffic, 34 (6), Special section p. 1-4. 3.

[18] Compensation & Benefits for Law Offices, (2004), 4 (9), p. 6-12, 2.

[19] Ibid. http://www.lexmark.com/US/hr/employ/current_student/diversity.html.(no longer accessible)

[20] Ibid.

[21] Duarte, M. (2006). Minority Corporate Counsel Association. Retrieved at www.mcca.com/site/data/magazine/2006-01/employee.shtml.

[22] (1984). “Impartiality and Participant-Interest: Theories of Organizational Effectiveness.” Administrative Science Quarterly, 29: 1-25. Ithaca, NY: Cornell University.

[23] Friedman, R. A. & Holtom, Brooks. (2002). “The Effects of Network Groups On Minority Employee Turnover Intentions.” Human Resource Management, Winter, 41 (4).

[24] Brown, Juanita. (2001). “The World Café: Living Knowledge through Conversations that Matter.” Dissertation. Santa Barbara, CA: Fielding Graduate Institute.

[25] Scully, M. (1999). In Ray Friedman, “The Case of the Religious Network Group.Harvard Business Review, July-August.

[26] Howell, Frank. (2002). “Network Groups focus on diversity.Personnel Today, 19 November.

[27] Ibid.

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Authors of the article
Teri C. Tompkins, PhD
Teri C. Tompkins, PhD

Teri C. Tompkins, PhD, as managed diverse functions such as marketing, human resources, strategy, and operations in the corporate, small business, and not-for-profit markets. She has consulted and conducted research for firms such as Motorola, LA Cellular, Boeing, TRW, US Forest Service, Xerox, LearnShare at Comcast, Canadian Imperial Bank of Commerce Canada, and Phillips Europe and North America. As associate professor at Pepperdine’s Graziadio School, Dr. Tompkins teaches in the Executive MBA and fully-employed MBA programs. She is the author of six textbooks and teaching manuals, the most recent International Cases in Management and Organizational Behavior. Her co-authored GBR article, “Using Conflict to Your Advantage: Butting heads is not always bad,” has been reprinted in corporate newsletters.

Nancy C. Wallis, PhD
Nancy C. Wallis, PhD, is a full-time faculty member in Organizational Theory and Management in the Graziadio School at Pepperdine. She received her MBA and MSPH degrees from UCLA, holds a Change Management Leadership Certificate from NTL, and earned her PhD in Human and Organizational Systems. Dr. Wallis has 23 years’ experience improving organizational performance and leadership capacity including her service in numerous executive roles with leading healthcare insurance companies and has held management positions with PricewaterhouseCoopers and KPMG Peat Marwick. Dr. Wallis currently works with senior executives and their teams to assist them in becoming more effective agents of change. She speaks regularly on leadership and transformational change topics and facilitates executive workshops on these and other strategic management topics.
Kent Rhodes, EdD
Kent Rhodes, EdD, serves as a participating faculty member at Pepperdine in the area of Organizational Behavior, Theory and Leadership. He is an entrepreneur who maintains a successful coaching and consulting practice for a variety of privately held and family-owned enterprises. Rhodes founded OnCourse Network, Inc., an Internet education company, and served as chief executive of the company. He successfully negotiated the sale of the company to a Silicon Valley publicly traded corporation and subsequently served as a principal with that company in San Jose, California until he successfully completed its acquisition and integration growth strategies in 2001, when he joined the Pepperdine faculty as visiting professor.
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