Introduction

This chapter is based on the insight that today’s organizations in many national and societal contexts face the challenge of managing an increasingly diverse workforce. This increase in workforce diversity is partly due to a changing business environment, but also due to new technologies and social media, increasing individual mobility and profound socio-political and economic shifts (Urry 2007). Even though the need to manage a diverse workforce is shared across nations and societies, organizations nonetheless need to do so within specific frameworks. The latter are often country-specific and extend to the very meanings of diversity. For strategic international HRM, this is a relevant finding. It suggests that HR first needs to identify what diversity ‘means’ to those involved prior to being able to manage it or to assess the international and global scope of corporate diversity management campaigns. Based on this insight, this chapter highlights the meanings of diversity in the German context and provides the reader with the background knowledge for investigating the contextual dimension of diversity.

Key Aspects of Workplace Diversity

Diversity does not merely refer to matters of difference: In the end, all individuals are different from each other. Diversity at work considers those aspects of ‘who individuals are’ or as ‘who they are perceived’ which might advantage some groups over others (Prasad et al. 2006). For analysing these effects, diversity studies focus on six diversity markers which contribute to our perceptions of ourselves and others. These are gender, ethnicity (or race), age, ability, religion (or worldview/Weltanschauung) and sexual orientation (overview in Plummer 2003: 25; Bührmann 2015: 23–42). For considering diversity, two arguments are given in the literature, namely, a business case (diversity increases performance) and the human case (individuals should have equal opportunities in life). In the words of Van Dijk et al. (2012: 73), the business case means ‘supporting diversity as a means to achieve, ultimately, organizational profit’, whereas the human case ‘depart(s) from the perspective that power inequalities in societies exist in organizations too and that, as a consequence, organizations should pursue diversity in order to empower minority groups and transform these inequalities’. In addition, the critical perspective not only advocates equal opportunities but also suggests favouring those groups who are historically or structurally disadvantaged or excluded, so-called positive discrimination (Prasad et al. 2006).

Diversity is also linked to our ‘social identity’ (Tajfel and Turner 1986), that is: who we are in relation to others, and the social categories to which our self is related. Social identity is not an objective category; rather, it refers to how others perceive us (ascription), to how we relate to our self (self-referencing) and to how we experience potential discrepancies between the two (Mahadevan 2017: 84). This reminds us that a self-identification also needs to be recognized by others in order to make a person feel that they ‘belong’ to a certain group (Hall 1990). Even a category such as ‘race’ is not a biological given, as it might seem. For instance, Barack Obama is often referred to as the ‘first Afro-American president of the United States’. In reality, however, his background is both multi-racial and multi-ethnic. Still, if he fails to be recognized as ‘Caucasian’ or ‘bi-racial’, he might – voluntarily or in-voluntarily – self-identify as ‘Afro-American’. As this example suggests, we tend to perceive social identities as more dichotomist than they might actually be. This is of particular importance when we consider those markers of diversity which are visible, in contrast to those which might be disclosed voluntarily or remain hidden.

Studies also suggest that hierarchies are attached to diversity markers and related social identities and that this might have critical implications (e.g. Tretheway 1999; Ward and Winstanley 2003; Zanoni et al. 2010; Acker 2012; Levay 2014; Mahadevan and Kilian-Yasin 2016; Mik-Meyer 2016). For instance, in international management, it is the ‘white, heterosexual, western, middle/upper class, able man’ (Zanoni et al. 2010: 13) who constitutes the implicit point of reference for all, and this makes other social identities a ‘minority’ identity. Therefore, when analysing social identities, one needs not only to consider diversity markers objectively but to reflect upon how some social identities are more ‘normal’ than others, as they are represented by the majority or those in power (Eriksen 2010). Furthermore, individuals tend to value their own group identity (social identity) over others, and this is called an ‘in-group’ bias (Tajfel and Turner 1986). The likelihood of in-group biases tends to increase if competition is felt towards members of another group or if another social identity seems to challenge or endanger own identities (e.g. Weichselbaumer 2016). It might then be that some individuals are discriminated against, excluded or marginalized at work, based on ‘who they are’ or as ‘who they are perceived’ (Prasad et al. 2006). For international HRM, this is problematic, for it thwarts the assumptions that workplaces should be merit-based and provide equal opportunities to all. A critical condition emerges if perceptions of negative difference are even institutionalized on the level of structures and practices, for instance, if members of a certain religion are not selected for employment (practice) or if national laws don’t permit their employment (structures). To prevent explicit discrimination on the level of structures, most greater regional units, such as the European Union, or countries, such as Germany, have anti-discriminatory legal frameworks considering the Big 6 diversity markers (Bendl et al. 2012: 79). Often, however, discrimination is more subtle and does not show in formal structures (it is implicit), and it is this type of discrimination that is the hardest to be tackled by (international) HRM, for it is related to what we consider ‘normal’, how we have learnt to perceive ourselves and others and what we hold to be the most favourable social identity.

Diversity Recontextualization and International HRM

In multinational companies, HR managers need to design diversity management campaigns in a global context. For understanding how the meanings of diversity might differ across contexts, the concept of re-contextualization is helpful (Brannen 2004). This term was coined by Mary Yoko Brannen (2004) who investigated the success of Disneyland in Japan and its near failure in France. Her study showed that, in the case of Japan, the values and image of Disneyland was successfully translated into the local context, whereas, in the case of France, this did not happen. Brannen concluded that companies cannot be sure that intended meaning, for instance, what Disneyland ‘represents’, will automatically be interpreted the same way in another context. Rather, meaning will be subjected to an unforeseeable and dynamic process of recontextualization, and companies need to monitor this process and its success. When doing so, they should pay particular attention to the minimum ‘semantic fit’ which is required for meaning to be successfully linked to a new context.

A recent study by Fiona Moore (2015) has applied this understanding to diversity management campaigns in multinational companies, specifically to the BMW/Mini plant at Cowley, United Kingdom (UK). She showed that, whereas ‘diversity’ in a UK setting tends to refer to diverse ethnicities and also includes a certain class element of the gender role, in Germany it concerns questions of how to increase gender equality (Moore 2015). A German multinational company such as BMW operating in the UK might therefore experience difficulties in transferring certain diversity management initiatives to its subsidiary, in this case: to the production facility at Crowley, UK. The intended ‘global’ message by German BMW headquarters – namely, to promote women to executive positions – was not understood in the local UK context wherein the learned and already established understanding was that ‘diversity’ concerns equal opportunities for members of all ethnic groups. At the same time, the focus on the gender dimension of diversity at BMW does not consider ethnicity, race or other potential factors. This suggests that every diversity management initiative has certain ‘blind-spots’ which are beyond what diversity ‘normally means’ and which are not considered in HRM policies.

Based on the previous considerations, HR managers need to become and remain aware of how diversity is normally understood in the national, societal and organizational context wherein they operate. It also suggests that we, as individuals, have also learnt certain context-specific meanings of diversity (an HR manager originating from the UK might instinctively promote ethnic diversity in a multinational company, whereas an HR manager originating from Germany might focus on gender equality). This implies that individual HR managers also need to reflect upon themselves and what they consider the purposes and meanings of ‘diversity management’.

Case Example: The Meanings of Diversity at Robert Bosch

Robert Bosch (short: Bosch) is one of the biggest German companies and located in the federal state of Baden-Württemberg (IHK 2016). It is headquartered in the Stuttgart region and known for its long tradition, innovation and excellent quality. Founded in 1886 as ‘Workshop for Precision Mechanics and Electrical Engineering’, the Bosch Group is present in 150 countries across the world, it has no less than 440 subsidiaries and regional companies, and at the end of 2015 it employed a total workforce of 374,800 (Bosch, Annual Report 2015). Bosch is one of the world’s largest automotive supplier, drive and control technology supplier and power tools and accessories supplier and its activities are divided into four main business sectors: Mobility Solutions, Industrial Technology, Consumer Goods and Energy and Building Technology (Bosch, Annual Report 2015: 21–25). The Bosch Group’s reported a sales revenue for 2015 of 70.6 billion euros and the earnings before interest and taxes (EBIT) rose to 4.6 billion euros, in comparison to the 3.0 billion euros generated in 2014 (Bosch, Annual Report 2015: 46). In the annual report of Bosch, diversity is presented as a core value of the group and a factor of success (Bosch, Annual Report 2015: 38): ‘we strongly believe that mixed teams of men and women, embracing different generations and lifestyles and from diverse backgrounds, promote excellence and increase our capacity to innovate’.

Bosch also dedicated a section of its webspace to ‘diversity’. In 2013 (Bosch 2013) the diversity webpage is further divided into ‘gender’ and ‘intercultural competency’. Diversity management goals were defined as follows (Bosch 2013): ‘Besides an equal representation of women and men in leadership positions, our most important goal is the involvement of different cultures in our worldwide work relations’. This means that two diversity markers are explicitly mentioned, namely, gender and cultural diversity. However, these are linked to different implications and requirements: Whereas gender equality should be reached and is mentioned as a definite goal, the considerations regarding ‘cultural diversity’ remain fuzzy and are not further specified (what does involvement mean and how can it be measured?).

Accordingly, ‘securing and promoting women’ (Bosch 2013) is already institutionalized and implemented in the company on the level of practice and indicators. For instance, in 2013, the corporate webpage read (Bosch 2013): ‘We want to increase the number of women in executive positions. In the last ten years, we increased the proportion to almost ten percent. Our ambitious goal is to achieve 15 percent at the end of 2013’. In 2017, the corporate webpage reads (Bosch 2017): ‘Until 2020, 20 percent of all executive positions worldwide shall be filled with women’. What is notable is that the new webpage now explicitly mentions ‘worldwide executive positions’. This suggests that, despite the fact that the total number of female executives being targeted has increased, it is not certain whether this increase will actually take place in Germany.

In 2017, the same webpage (Bosch 2017) is structured into ‘securing and promoting women’, ‘(not) a question of age’, ‘intercultural competency’, ‘work and private life’ and ‘individuals with disabilities’. The diversity management goals are presented as:

Besides an equal representation of women and men in leadership positions, it is also about valuing employees of different generations and nationalities. In addition, we continually work towards a flexible work culture and place value upon a good reconcilability of work and private life. This involves a change from a ‘culture of presence’ towards a ‘culture of results’, which does not put presence, but achieved results centre stage.

This suggests that certain diversity markers, such as age and ability, have become more prominent, based on the national and EU-wide legislative requirements for anti-discrimination (see the following section). At the same time, the underlying rationale for diversity is corporate success (Bosch 2017), which is a new aspect in comparison with the 2013 webpage. Furthermore, we can see specific interpretations of ‘work-life balance’, which is the international diversity term used, namely, ‘reconcilability of work and private life’. This can be linked to a specific German understanding of work, namely, as work and private life being two separate spheres of living and as work requiring full-time presence (called ‘culture of presence’). In the end, diversity is rationalized by a new ‘culture of achievement and results’ against which all groups need to measure themselves against.

In contrast, the goals on the subsection ‘intercultural competency’ are fuzzy at best and have remained so, throughout the years. In 2013, the corporate webpage on ‘intercultural competency’, stated:

multinational teams create openness, facilitate understanding and acceptance of the other culture and, this way, reduce obstacles to everyday interaction and working together. Due to the fact that working in international teams is a key aspect of our daily business, we develop the intercultural competencies of our employees continuously. Just in the past two years, we founded two intercultural forums, on the one hand, the Turkish Forum at Bosch (TFB), and on the other hand, the Cameroonian Forum. The goal of both is to promote intercultural understanding and to contribute to more equal opportunities via more educational, athletic and leisure time offers.

The content of the 2017 Bosch webpage is more or less the same; however, the visitor is redirected to ‘Internationality’ of which its content is now a part. This suggests that intercultural competency is not understood as a diversity requirement at home, but rather as an additional aspect of ‘international work’. The content of this item also implies that ‘intercultural understanding’ is somehow an outcome of voluntary activities and not a corporate obligation. It does not concern matters of ethnic or religious diversity of the German workforce.

Managing Diversity in Germany: The Wider Frameworks

The previous example shows how a specific German company interprets ‘diversity management’. These meanings of diversity do not emerge in a corporate vacuum but rather are related to macro-environmental, meso-organizational and micro-individual levels; they involve structure, practices and individual action. For a more holistic diversity management, HR managers should investigate these effects, they should reflect upon current and past diversity trends, and they should uncover the underlying corporate rationale for managing diversity. We do so in the following for the case of Germany.

Structural Aspects and Wider Frameworks

Germany is a member state of the European Union (EU) and EU legislation prohibits discrimination on grounds of gender, sexual orientation, ethnic or racial origin, disability, age and nationality (European Commission 2015a: 4). Additionally, most of the member states have adopted at national level other criteria in order to offer a wider protection against discrimination. The French legislation covers, for example, discrimination on grounds of health, political opinion, physical appearance and place of residence (European Commission 2016a). In Germany, discrimination on grounds of race, ethnic origin, religion or philosophical beliefs, gender, sexual identity and disability is addressed by the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz – AGG) which was adopted in 2006 (European Commission 2016b).

This suggests that explicit discrimination on structural level regarding the Big 6 diversity markers is prevented by anti-discrimination legislation in Germany. At the same time, actively promoting diversity is not a corporate requirement in Germany. The only legal requirement is non-discrimination, as specified in EU law and the German AGG. For Germany, this implies that companies do not feel the need to move beyond demographic variables, which also Research suggests that the term ‘diversity management’ is not commonly institutionalized in German companies. For instance, in 2007, Süß and Kleiner found that ‘no generally accepted catalogue of diversity management actions [could] be found in the corresponding literature and no systematic empirical research findings existed for the German-speaking area’ (p. 1941). They also found that 42.4% of the 160 German companies ‘do not know about diversity management at all’ (Süß and Kleiner 2007: 1943). To close this gap, they suggest a set of 12 diversity management actions for German companies, such as flexible working time agreements, mixed teams, determining the requirement for diversity management, mentoring programmes, integrating diversity management into corporate culture, consulting services for diversity groups, works council agreements, communicating diversity management, diversity trainings, institutionalizing diversity management, diversity-oriented facilities, diversity-oriented design of human resource management and evaluating diversity management.

Nonetheless, a so-called Charta der Vielfalt (Diversity Charta) exists, which has been signed by numerous companies. In 2016, a study by Ernst & Young and the Diversity Charta Association that promotes the Diversity Charta investigated the actual conditions of corporate diversity management: 349 German companies who had signed the diversity charta and 250 companies who had not participated in this survey (Ernst & Young and Charta der Vielfalt e.V. 2016). Across all companies, increasing the number of women in companies and the number of women in leadership positions, in particular, is viewed as the key diversity management focus (Ernst & Young and Charta der Vielfalt e.V. 2016: 15). At the same time, the study finds that ‘2/3 of the German companies did not implement any diversity management actions, and only 19% intend to do so in the future’ [p. 17, translated by the authors]. 60% don’t assume sexual orientation and gender identity to require any action, and 52% hold the same opinion for religion and worldview (p. 17). This brings about the question as to whether these topics might be taboo for some of the German companies. For instance, in the 2015 Eurobarometer on discrimination, 68% of the German respondents believe that it is being done enough to promote diversity in their workplace in terms of gender. Yet, only 35% and 46% of the respondents believe that enough is being done with regard to gender identity, respectively sexual orientation (European Commission 2015: 86). The following section investigates the underlying reasons for why this specific diversity management focus on gender might have emerged.

Two Diversity Trends and the Business Case for Diversity

Historically and presently, Germany is a societal context which depicts two divergent diversity trends. These concern firstly the markers ‘ethnicity’ and ‘religion’, as linked to immigration, and secondly, the question of gender. For instance, it is reported that ‘about 20% of all German residents today have a background of immigration’ (European Commission 2016b: 6). In this context, it can be stated that Germany has become a country of immigration, the accompanying discourse on pluralism/diversity shifting from the claim ‘Germany is not a country of immigration’, to multiculturalism (Schwarz 2007; Ramm 2010) and to intended integration and labour market absorption of the immigrants (IMF 2016). From a social identity perspective, immigration in Germany is linked to questions of ethnicity and religion: Muslim minorities experiencing combined in-group biases (Forstenlechner and Al-Waqfi 2010), some of them also involving gender (Weichselbaumer 2016).

Diversity management in Germany seems to be driven less by the fairness perspective and more by a business case perspective. Süß and Kleiner (2007) suggest that the main driver for companies to implement diversity management is the expectation of gaining legitimacy: ‘Large, listed companies in particular strive for legitimacy for their actions. They have to comply with public expectations that discrimination of minorities in companies should be prevented…’ (pp. 1950–1951). Therefore, legitimacy in the eyes of the stakeholders and law compliance determine the adoption of diversity management in companies.

It is at this point that public images and dominant in-group biases become relevant to diversity management: For instance, if one group, e.g. women at work, has a more positive image than another group, e.g. migrants, it is likely that a business-case-oriented diversity management will focus on the more positive social identity, as stakeholders are more likely to accept such an initiative. Together, the previous considerations suggest that ‘diversity’ on the level of corporate strategy and practice is largely related to ‘gender’ in the German context. In the case of Bosch, we can see that gender is promoted, and, instead of ethnicity, ‘culture’ is chosen as the fuzzy ‘international’ and presumably more positive alternative. We can also observe that Bosch interprets diversity within the business case argument, unless otherwise specified by legal frameworks (e.g. regarding disability or age).

The Gender Equality Meaning of Diversity

The actual diversity findings regarding gender are paradoxical for Germany and also suggest a recent trend. For instance, the principle of gender equal pay for equal work was enshrined in the Treaty of Rome in 1957. Nonetheless, Germany had in 2014 the third highest gender pay gap (the difference in average gross hourly wage between men and women in an economy) in the EU – 22.3% – while the average gender pay gap in the EU in the same year was 16.7% (European Commission 2016c). The pension wage gap might be an even better indicator than the gender pay gap, as it contains ‘cumulated employment outcomes over the entire life course’ (Allmendinger and von den Driesch 2015: 36). While women receive lower pensions in all member states of the EU, Germany had the highest gender gap in pensions: 45% in 2012 in comparison to the EU-28 average (38%) and this gap translates into higher poverty risk for German women in old age (European Institute for Gender Equality 2015: 20–21). This suggests that the promotion of gender equality via corporate action is a recent trend in Germany.

The mechanism chosen for promoting women at work in Germany is a quota for women in top positions. This is linked to a general, EU-wide debate on the discrepancy between the high number of well-qualified women, which even outperform men in terms of educational attainment (European Commission 2015c: 1), and their underrepresentation in top-level positions. Due to a slow progress in the gender balance of corporate boards, the European Commission decided in 2012 to introduce a legislative measure: by 2020, 40% of the non-executive directors of listed companies ought to be female (European Commission 2015d). However, the member states were free in designing their national policies, ‘on condition that their approach delivers concrete results’ (European Commission 2015d). The United Kingdom, for example, embarked on a voluntary-led business approach, with a voluntary target of 25% female directors to be achieved by 2015 by the 100 companies of the Financial Times Stock Exchange (FTSE) Index. In 2011, France (which was therefore ahead of the directive of the European Commission) introduced a mandatory quota of 40% (applicable to non-executive directors in listed and non-listed companies) to be achieved by 2017. In Germany, a mandatory quota of 30% was adopted and it became effective in January 2016.

Opinions diverge on the topic. Jutta von Falkenhausen, vice-president of the Initiative for More Women in Advisory Boards (FidAR), considers quotas a necessary instrument to implement change: ‘We don’t like quotas, we don’t like coercion. But if we don’t have mandatory rules, nothing will change’ (Barrett 2014). The European Commission, though it also sustains voluntary measures in improving gender balance, argues in favour of binding legal regulation: ‘The figures show that it is the legislative measures that result in substantial progress, especially if they are accompanied by sanctions’ (European Commission 2012: 13). Michel Ferrary considers quotas a temporary but necessary measure: ‘Quotas help to change unconscious barriers and allow companies to learn diversity. In a decade or two, when gender equality has been established, quotas can then be removed’ (cf. Chan 2015).

Germany is among the few member states which registered a significant progress in the percentage of women on boards (+12.8%) between October 2010 and April 2015, reaching 25.4%. This is an advance of 4.2% in comparison to the EU-28 average (European Commission 2015d). The 2016 gender quota should accelerate the change, at least with regard to the numerical representation of women on German boards. However, in a special gender barometer of the European Commission, 6% totally agreed and 28% of the German respondents tended to agree with the statement: ‘Women are less willing than men to make a career for themselves’ (European Commission 2015e). For those respondents believing that women are less assertive than men in pursuing a career, imposing a gender quota might have seem senseless and it might be indeed so, if the quota does not bring in the long run also a change in mentality. In the short run the quota should be able to change the existing representations of the working world at the top. Together, this suggests that, whereas the structural frameworks of gender inequality have been addressed by the quota in Germany, the implicit meanings of gender – namely, women being the primary caretaker at home – has not changed.

Allmendinger (2010) identifies another paradox: while there was an ongoing debate on the existence of a shortage of skilled labour in Germany, the employers did not seem to consider the untapped potential of 5.6 million unemployed women (representing 28% of the women between 25 and 59 years old), of which only 1.8 million were officially registered as seeking for a job. Moreover, it has to be noted that there are no formal or legal requirement to increase the number of men in jobs which are traditionally dominated by women, for instance, childcare or nursing. From a critical diversity perspective, these jobs are also rather low-paid and unattractive compared to favourable industry jobs, and therefore this only reinforce findings on the gender pay or pension gap as well as traditional ‘gender roles’ also on the level of whole industries and professions. Also the finding that women between 25 and 59 do not officially register as seeking employment contributes to the insight that the meaning given to gender roles in Germany is still linked to traditional gender role differentiation. For instance, the Special Eurobarometer 428 ‘Gender Equality’ also finds that 20% of the German respondents ‘totally agree’ and 32% ‘tend to agree’ with the statement ‘men are less competent than women at performing household tasks’ (European Commission 2015e: 19). We can therefore identify a strong discrepancy between ideal (gender equality) and meaning (traditional gender roles) and need to doubt whether a structural diversity mechanism (quota) can actually change such meaning and prevent related in-group biases and implicit discrimination. In the case of Bosch, corporate diversity management also appears to focus on structural gender aspects (quota) which might result in a neglect of other diversity markers, such as ethnicity or religion. The paradoxical findings regarding gender equality in Germany suggest that gender roles in Germany might have remained traditional. This can be considered an additional blind-spot of the contextual dimension of German diversity management.

Suggested Case Study Questions

  1. 1.

    What are the specifics of the German context, both on corporate and wider levels, and how can they be differentiated into macro-, meso- and micro-levels?

  2. 2.

    How and to what extent are the policies of Robert Bosch representative of the wider frameworks wherein they emerge?

  3. 3.

    How and to what extent are the policies of Robert Bosch related to theoretical insights on diversity management – is this a ‘good’ policy from your perspective and why (not)?

  4. 4.

    Why could the Robert Bosch approach ‘make sense’ to the company?

  5. 5.

    Considering the previous question: It is always easy to judge HR limitations ‘from the outside’. What are the meanings of diversity in your country of origin or societal and national contexts you are familiar with? Which corporate or organizational diversity management aspects have you encountered?

  6. 6.

    What are the challenges and opportunities, and strengths and weaknesses of the German approach to diversity? What are their blind-spots?

  7. 7.

    Why and how can corporate HRM never be ‘context-free’? What HRM theories do you know that argue in favour of the ‘embeddedness’ of corporate HRM?

  8. 8.

    How can national laws and societal sentiments influence corporate diversity management to the better or to the worse?

  9. 9.

    What is re-contextualization and what are the HRM challenges associated with it?

  10. 10.

    Do HRM managers also need to ‘re-contextualize’ themselves in their role as HR managers? If so, how should they achieve semantic fit with multiple contexts in a multinational company or an international HRM environment?

  11. 11.

    Regarding Robert Bosch, please look into other countries wherein the company operates or compare this company with another company or national context you are familiar with: What aspects of the Bosch understanding of diversity management might be easy or difficult to recontextualize? Why? How would you achieve semantic fit, and is this even possible?