DIVERSE AND INCLUSIVE WORKFORCE 2 How Diversity And Inclusivity Influence Leadership Name
DIVERSE AND INCLUSIVE WORKFORCE 2
How Diversity And Inclusivity Influence Leadership
Table of Contents
List of Tables 6
List of Figures……………………………………………………………………………..7
Section 1: Introduction 8
Background of the Problem 9
Purpose Statement 13
How the Research Questions Relate to the Study Purpose 14
Nature of the Study 15
Research Paradigms 15
Design and Research Methods 18
Single Case Study 20
Research Framework 21
Diagram of Frameworks 23
Job satisfaction depends on perceptions of productivity 24
Influence of a sense of belonginess on diversity 24
Maslow’s Motivational Theory 25
Social cognitive paradigm 25
Cognitive diversity model 25
Transformational leadership theory 26
Leadership Style 27
Intrinsic Motivation 27
Barriers to Diversity Management 28
Relationship between Concepts, Theories, Constructs, and Actors 28
Definition of Terms 29
Assumptions, Limitations, and Delimitations 30
Significance of the Study 33
Implications for Biblical Integration 33
Benefit and Relationship to Leadership Practice 34
Summary of Significance of the Study 35
Literature Review 36
Reduction of Gaps in Literature 38
The Problem 43
Problem Statement 46
Purpose Statement 47
Constructs and Variables 52
Related Studies 53
Anticipated Themes and Discovered Themes 55
Summary of Section 1 59
Transition to Section 2 60
List of Tables
List of Figures
Figure 1. Diagram of Framework…………………………………………………………….….23
Figure 2. Immigration in the U.S. ………………………………………………………………44
Section 1: Introduction
Leadership is a significant element in the management of a company. The following study will seek to advance the use of leadership in organizations by analyzing how two concepts, namely diversity and inclusivity, influence the development, quality, and sustainability of leadership in companies. The study will be guided by a comprehensive topic that will investigate how diversity and inclusivity influence leadership. The topic is highly relevant to organizations in need of improving the stability of their leadership status, with the study focusing on delivering a clear map of how diversity and inclusivity in the work force influence the leaders performance.
The dominant value of the study is drawn from the current social changes attributed to the rise in globalization (Stevens et al., 2008). The study is valuable in understanding the importance of diversity and inclusivity in organizations, which will offer companies a conclusive direction on both why and how they can achieve diversity and inclusivity. The study is guided by the need to identify how diversity and inclusivity influence leadership by including both stable and unstable companies in the research, which will offer a significant opportunity for comparison of the role played by diversity and inclusivity. To support the need for comprehensive and thorough research, the study will follow a single case study approach that will be further supported through equally extensive research methods. The case study approach will be supported by interactive methods, which will bring the researcher and the population being studied together on a personal level where data can be directly gathered. The case study will focus on analyzing local companies through interactive research methods that will provide more knowledge about the impact of diversity and inclusivity on the capacity of leaders to achieve and maintain a healthy work environment and job satisfaction among employees.
The first section of the study includes the background of the problem where the issue being investigated is defined. The background of the problem is followed by a section that identifies the problem statement, which will effectively summarize the importance of the study while also offering an adequate description of the knowledge gap that the study seeks to assess and fill. The next element in the first section is the purpose statement, which differs from the problem statement in that it will expound on the purpose of the study. This will include a summary of the benefits expected from the study. The research questions will also be an element included in the study. The research questions will be matched to the purpose of the study and the desired level of comprehensive research. The research questions section will be followed by the nature of the study section where the depth and content of the study will be thoroughly described. The nature of study section will create an image of what is expected from the case study. The research framework segment will be followed by the definition of terms where all the major words and phrases will be defined. The next element is the assumptions, limitations, and delimitations area that will be followed by the significance of the study. The last major element of the first section is the significance of the study, review of literature, appendices, and references, which are sections that will offer a presentation of the evidence and affirmations of the presented research questions and knowledge gaps.
Background of the Problem
Diversity and inclusivity within the organizational workforce are vital ingredients for ensuring an increase in employee’s productivity (Stevens et al., 2008). Diversity is a term used to explain the uniqueness and differences among various individuals within the organization (Stevens et al., 2008). Notably, understanding the components that make up the diversity among individuals includes cultural affiliations, religious inclination, political ideologies inclination, race, gender, and sexual orientation (Stevens et al., 2008). Therefore, within the organizational framework, diversity means the organization is compromised of individuals who have different backgrounds and perspectives. Thus, the presence of diversity within the labor-force comes with the added advantage of bringing new perspectives and new ways of doing things. Having a diverse workforce within an organization is an advantage to the management as well as other stakeholders (Stevens et al., 2008). Alternatively, inclusivity develops from the capacity of an organization to create a working environment that allows employees with different traits to work together without conflict (Stevens et al., 2008). Inclusivity means despite everyone being from different cultural, social, and economic background, they feel respected, valued, involved, and treated fairly.
Diversity and inclusivity are two mutually related components that must be implemented simultaneously to ensure positive productivity of employees within the organization. For instance, failure to create a good working environment that facilitates diversity and inclusivity among the employees may resort to the development of toxic interaction (Stevens et al., 2008). Significant research shows that organizations that have diversity within the labor-force enjoy an increase of cash flow by 30% per employee compared to those without (Stevens et al., 2008). Companies that have embraced inclusivity and diversity have reported 19% increase in revenue for previous financial year (Riordan, 2014). However, despite the significant amount of effort being put forth by corporate management to implement diversity and inclusivity within their respective organizations, 40% of employees feel there is more that needs to be done (Riordan, 2014).
In the past few decades, a number of immigrants from different geographical positions across the world have moved to America with the aim of seeking greener pastures (Riordan, 2014). As a result of the influx in the number of immigrants, the labor market has experienced changes in the composition and diversity of individuals seeking employment opportunities. Notably, the above scenario has led the human resources departments to recruit individuals with diverse social, political, and economic backgrounds. The number of immigrants moving to the country is projected to increase exponentially in the coming years, increasing the need for organizations to enhance knowledge of diversity (Riordan, 2014). Stipulating the need for organizations to adopt mechanisms to support employee’s diversity and inclusivity (Riordan, 2014). The dominant reasons for the increase in immigrants within the American economy are as follows; deterioration of some part of the global economy, wars and political instability among others (Riordan, 2014). Thus, it is the right time for organizations to adopt inclusivity of the entire diverse group within their workforce.
The benefits experienced by organizations as a result of enhancing diversity and inclusivity within its human resources outweigh the implications of cost to be incurred (Stevens et al., 2008). Having people with diverse backgrounds in culture, political affiliation, or sexual orientation is crucial in providing the management with a wide range of opinion and inputs, resulting in increased productivity. Empowering the recruitment process in organizations is essential in enhancing the organization with the ability to access a wide pool of individuals with different talents and skills. Accessing a wider talent pool allows a company the freedom to select from different individuals that hold diverse personalities, skills, and quality in performance, which is a source of competitive advantage for businesses (Grisson, 2018). Besides, the advantages presented by the diversity and inclusivity to the business, research shows that more than 70% of employees are interested in the diversity indexes of the firm in the course of seeking employment (Grisson, 2018). A significant percentage of the minority races such Blacks, Asians and Latinos perceive diversity to be crucial for them when selecting an organization to apply for a job opportunity. It is therefore crucial for business entities within the economy to adopt strategies and policies that encourages inclusivity and diversity for the purposes of achieving an increase in employee’s productivity.
The other crucial benefit that comes as a result of companies supporting inclusivity and diversity is the increase in engagement and trust of the employees of the management. Employees feel more engaged, valued, included as a result of an organization investing in inclusivity and diversity, which encourages the work force to go an extra-mile in ensuring they become more productive. Due to employees being highly engaged within the operations of the organization, they tend to cause a positive ripple effects on essential business aspects such as improvement of team morale, profitability and reduction of employees turn-over (Joubert, 2016).
The presence of a diverse and inclusive work environment leads to better decisions compared to the environment that is dominated by organizations with low diversity features. A working environment that has individuals with different cultural backgrounds, political, affiliation, age, or sexual orientation and experience makes better decisions due to the availability of different perception. Diversity and inclusivity also improve the ability of the business to come up with new solutions and innovations to address the tastes and preferences of the customers. Businesses that support inclusivity and diversity within their labor-force are more likely to come up with new innovations compared to those will low index of diversity.
The general problem to be addressed is the inability of leaders to effectively develop a diverse and inclusive workforce resulting in decreased organizational performance. Diversity in the workplace is the state of having people of different cultures in an organization (Saxena, 2014). Inclusivity is the process of incorporating all the different cultures into achievement of the company’s goals (Grissom, 2018). Makhdoomi & Nika (2018), when leaders’ fail to develop a diverse inclusive workforce by discriminating against their employees based on ethnicity, religion, gender, culture, and physical appearance, there is a higher possibility of a dysfunctional conflict, implanting negative perceptions, and biased decisions. The research by Olsen & Martins (2016) and Wiles (2020), established that leaders’ failure to develop diversity and inclusivity within organizations negatively impacts its attractiveness and reduces employee confidence. Furthermore, it affects the decision-making process, recruitment practices, acculturation, and firm culture. Joubert (2016) posits that because of leaders’ failure to integrate outdoor activities such as sports, charity, and community services as the primary strategies for fostering organizational diversity and inclusion, the employees require mentorship and coaching to intensify their ability to team with others and cooperate, resulting in higher workforce productivity. The specific problem to be addressed is the potential inability of leaders to effectively develop a diverse and inclusive workforce resulting in decreased organizational performance at Greensville Transport.
The main purpose of this research is to determine the potential inability of leaders to effectively develop a diverse and inclusive workforce resulting in decreased organizational performance. Specific course of actions are needed to facilitate diversity and inclusivity within the organizational employees’ framework. Despite the availability of diverse individuals within the qualified skills and experience within the labor market, the human resource recruiters are still finding it difficult to develop inclusivity. The lack of complete comprehension on the benefits the business is bound to experience as a result of facilitating diversity and inclusivity is a key constraint to coming up with the needed solutions.
Given the change in market and economic dynamism, business entities are in dire need of coming up with solutions to enable them to remain competitive. Therefore, the research will aim at finding out what needs to be done for businesses to acquire the much-needed diversity and inclusivity within their workforce. Understanding the difficulties experienced by management while supporting diversity and inclusivity will be integral in suggesting procedures and measures needed to address this issue.
RQ1. How can leaders establish diversity and inclusion strategies through team building exercises?
RQ2. What do the leaders need to do to be involved in the team-building exercise in order to maximize the impact?
How the Research Questions Relate to the Study Purpose
RQ1. How can leaders establish diversity and inclusion strategies through team building exercises?
The question is critical to the specific problem by exploring the different leadership practices that managers can adopt to ensure delivery.
RQ2. What do the leaders need to do to be involved in the team-building exercise in order to maximize the impact?
To achieve diversity and inclusivity within an organizational, the stakeholders need to develop and adopt certain strategies. Offering training and creation of awareness on the importance of organizations having diverse and inclusive workers will be crucial. Besides, achieving diversity and inclusivity within the organization plays an integral role of facilitating enhanced performances. Therefore, all the stakeholders within the organization have a role to play in order to ensure diversity and inclusivity is achieved.
Nature of the Study
Diversity and inclusivity within an organizational environment are crucial for enhanced productivity (Stevens et al., 2008). This discussion involves research on the impact of a diverse and inclusive workforce for trucking companies. The study focuses on the productivity of the trucking companies’ organizational approach with recognition of how the behavior and social values contribute to the outcome. The explorative and explanatory study will detail the ways companies can embrace diverse and inclusive cultures and the quality of values and behavior. Trying to understand the impact created by workers’ relations and interaction in the day-to-day routines is crucial for explaining enhanced productivity. When workplace management becomes demanding, the grouping of different employee values comes into play (Stevens et al., 2008). The research content of this paper will explain different research paradigms giving insight into the concepts that build up reliable research and highlighting the most appropriate paradigm for the diverse and inclusive workplace influence on productivity. The design methodologies involving fixed, flexible, and mixed methods will be explored to describe the elements contributing to understanding diverse and inclusive workforce productivity for a trucking company. The constructivism paradigm and a flexible methodology are applied in the research using the data collection for processing information for impact discovery and explanation.
The proposed research relies on properly selected beliefs and understandings that build background knowledge about the research subject. The paradigms will guide research modeling and identify values that develop the study topic. A background understanding of the subject under investigation is needed, and the beliefs selected should be understandable to the one who chose them.
The positivism paradigm is based on the idea that human behavior can be understood through observation and reason. According to Hammersley (2019), positivism conforms to the assumption that a single tangible reality gained through observation exists that guides the understanding of concepts and situations. Positivists rely on a qualitative research approach that emphasizes the importance of experimentation, observation, measurement, validity, and reliability. Thus only factual knowledge gained through observation is trustworthy. The positivism paradigm limits the role of the researcher to data that is objectively collected and interpreted. Post-positivism Post-positivism approach argues that experience, ideas, and identity influence what we observe and the conclusion we make. According to Creswell & Creswell (2018), post-positivism pursues objective answers by subjectively building on knowledge and theories that past theorists developed. The essential element of post-positivism is the notion of pluralism in the additional information. The adherence to different features and observations developed through credible theories and knowledge explains the various attributes (Hammersley, 2019). In the research phenomenon for a diverse and inclusive workforce in trucking company productivity, the post-positivism paradigm will be used to support the idea that past experiences determine future employee behavior and performance. The descriptions about theory and information collection in the content context of trucking companies will be explained in more detail through the post-positivism paradigm to feature the representation beyond what displays.
The constructivism paradigm highlights a research modality where finding the essence of reality includes a practical approach to finding examples in the study environment (DeCarlo, 2020). The idea of constructivism explains how humans build their lives, experiences, or operation of norms through truth and observing how they work (DeCarlo, 2020). Constructivism prioritizes human efforts in interaction to form interesting assumptions about a situation. Explaining constructivism contributes to people’s learning and adaptation.
This paradigm involves a unique research approach compared to others when it comes to truth and reality assumptions. Pragmatism focuses on approaching research through problem identification and solution-finding (DeCarlo, 2020). The pursuit of reality and truth gets replaced with ideas on what process, activity, or schemes can work without relying on prevailing circumstances or observations (DeCarlo, 2020). The significant evidence develops by finding actions and values that build on theories that associate with the research findings. The research will focus on workable plans and executable activities to lead to further steps with a clear view that is easy to comprehend. Selected Paradigm The research will apply the constructivism paradigm for the diverse and inclusive workforce impact on productivity with the trucking company. The constructivism paradigm includes the aspects of social interaction and bridging the gap between positivism and post-positivism. The individual and researcher roles will help accomplish the study’s goals through thoughtful interpretation (Tamunomiebi et al., 2019). Workforce behavior, values, views, adaptation, and acceptance of each other’s capabilities will explain the researcher’s target (Bonache & Festing, 2020).
Design and Research Methods
Questionnaries, surveys, and interviews will be used in the proposed research methodology. In selecting the design, the technique will need to match the methodology chosen to complement the paradigm.
Fixed Design with Quantitative Research
The fixed design explains the approach of studying data samples to understand components, information, and agents (Kumar, 2019). The selection of a fixed design uses data collection tools and organization of study areas using the quantitative information finding metrics. The fixed design will include a standard scheme that utilizes data and facts as tangible elements responsible for representing the research variable (Kumar, 2019). The quantitative research methodology is a fixed design that emphasizes objective measurements and numerical, statistical, and mathematical analysis of data collected through manipulating pre-existing statistical data using computational techniques. Flexible Design with Qualitative Research The procedure presents an approach that accommodates data modifications and selects an appropriate information collection and presentation method (Kumar, 2019). Within the scope of the flexible design information collection, case studies, cohorts, experiments, and the use of surveys are involved among the qualitative methods adopted (Kumar, 2019). For the workforce, impact on productivity in trucking companies, the aspects of inclusiveness will contribute to the testable variable in the research.
Mixed Design with both Qualitative and Quantitative Research
The mixed design incorporates fixed and flexible methods in various quantitative and qualitative methods. The mixed model allows the research to mix qualitative and quantitative techniques in a single study to ensure an in-depth understanding of the research problem. The general view of the study area can be represented with non-changeable content and other variations that enable proposal adjustments to align it with the hypothesis designs. Identifying different levels of engagement, experiments, surveys, interviews, case studies, quasi-experiment, and other integrated methods variables are essential in building on diversity in the study design. The proposal of diverse and inclusive workforce influence on operations can allow quantitative data to build knowledge for factual views. Selected Design for the Research The chosen design for the proposed topic will utilize flexible design with quantitative methods. Applying a single case study to explore and understand the implications of inclusive and diverse employees’ teams in a trucking company productivity will assist in completing the research. The reliability of qualitative measures in data collection and interpretation of information acquired in the business environment can present the human and social values study context with facts and viable beliefs.
Method of Research
The research study will utilize a flexible design with qualitative methods. The nature of information required for the scope aligns with the qualitative methods developing insight into different organizations, assembling, and analyzing data that will apply triangulation after the discussion of the method.
The research uses a qualitative research approach where the details are based on personalized stories that entail essential information. The utilization of the narrative method finds its way in the community or group-based study to identify critical content that reflects the situation or subject in the research topic (Carter et al., 2014). The nature of the qualitative narrative method involves its ability to examine human experiences, knowledge management, and knowledge transfer (Carter et al., 2014).
Phenomenology derives its meaning from phenomenon study, focusing on science and social aids. The use of phenomenology occurs in either hermeneutic or transcendental phenomenology (Elkatawne, 2016). The hermeneutic aspects involve textual explanation for a specific group of people whose experience in the past or current situation explores a particular experience (Elkatawne, 2016). The phenomenology approach uses human experience in practice or phenomena context views. The situations in which phenomenology can apply are cases like minority group experiences during public events, election campaigns, or community public contexts build a phenomenon acquired experiences (Elkatawne, 2016).
The underlying ideas about grounded theory involve an investigative approach to using human experience and views (Elkatawne, 2016). The overall purpose of grounded theory is to examine the responses that illustrate a given subject. Grounded theory is a qualitative approach in which a researcher studies a particular phenomenon and discovers new theories based on real-world data collection and analysis (Elkatawne, 2016). The new theory discovered becomes an essential component of the study’s outcome.
Single Case Study
This qualitative method involves people, events, scenarios, incidents, or even a community (Elkatawne, 2016). Developing a single case study provides an information acquisition strategy to address a single problem, issue, or situation with a chosen border-defined study case (Elkatawne, 2016). The approach identifies the necessity for population and the single problem to simplify the study circumstances and relevance of the bounded scenario to find the results and connect details for a definite solution finding process (Elkatawne, 2016). The impacts of a diverse and inclusive workforce in trucking company productivity will utilize a single case study analyzing the social cohesion of workers and production issue determinants within the identified business. As specified in the qualitative method discussion, the single case study approach will recognize the people’s experiences within the trucking company environment.
The last aspect of the research proposal concept involves triangulation presented to help organize, represent, and display the collected information. The design involves a flexible technique with a single case study methodology. The study acknowledges situations where statistical and experiment dynamics recognize the importance of the quantitative research approach in breaking down the facts and content in the study (Carter et al., 2014).
The methods chosen should show and relate to how a workforce is inclusive and how a workforce is also diversified. The manner in which these methods are addressed plays a significant role in supporting the paradigm chosen. The triangulation procedure will apply in the diverse and inclusive workforce domain to test how valid good team’s impact on production is and display the case study information. The process highlights experience, issues, commitment, and job satisfaction among other evidence when relying on qualitative findings.
Companies strive to introduce elements to their workplaces that enhance structure and efficiency by focusing on advancing employees. Greensville Transport trucking company has a challenge with diversity and productivity since every employee in the workplace holds different characteristics, traits, and beliefs that make introducing a unified approach to leadership difficult. The differences are best referred to as diversity, with most companies focusing on advancing their diversity through inclusivity, highlighting stable leadership. Diversity does not have a single defining element because it is a combination of individual experiences and cultures that define each individual, including age, gender, disabilities, educational background, sexual orientation, and religion (Shahid et al., 2016). Embracing diversity in a company warrants the use of various systematic approaches, which results in changes in the leadership structure, resulting in improved productivity and performance. Diversity results in more effective leadership and increased productivity because of the introduction of structures that eradicate discrimination, increase motivation, and enhance job satisfaction (Shahid et al., 2016).
Diagram of Frameworks
(How diversitinfluences productivity)
(How diversitinfluences productivity)
Developing patterns from findings
Developing patterns from findings
Developing an implementation plan
Developing an implementation plan
Blue boxes: Main parts of the framework
Blue boxes: Main parts of the framework
Note. The above diagram is a summary of the frameworks pertaining to the research on the influence of diversity and inclusivity on leadership and productivity in an organization
Diversity in the workplace is supported by various concepts that seek to achieve and embrace inclusivity of all characteristics shared by different levels of employees in an organization. Concepts are essential to research because the offer a clear path of the topic being investigated. The concepts selected for the study will offer a distinct description of the influence of diversity on the leadership in companies. The following concepts will guide the research.
Job satisfaction depends on perceptions of productivity
Job satisfaction is important for higher productivity which is a dominant concept relating to diversity in the workplace. Storey et al. (2019) identify the concept that an employee’s perception of productivity, both individually and collectively within the workplace, influences the development of higher job satisfaction. The development of a higher sense of productivity is a concept that significantly influences job satisfaction (Storey et al., 2019). Job satisfaction seeks to develop a clear visualization of how inclusivity and diversity influence the company’s productivity by focusing on how the elements influence the employees’ perception of themselves and the company.
Influence of a sense of belonginess on diversity
The concept of acceptability and feelings of belongingness held by employees significantly influence the development of diversity and inclusivity in the workplace. Roberts (2020) describes that employees who feel like they belong to a given workplace attribute such feelings to respectful inclusivity that is fostered through consideration of their diversity and a balance between creativity, self-honesty, and dedication. The concept identifies a significant correlation between the emotional attributes of an employee to the successful integration of diversity and inclusivity in a workplace.
Diversity and inclusivity in a workplace are elements strongly linked to various established theories that explain the social, emotional, and psychological aspects of achieving productivity.
Maslow’s Motivational Theory:
The theory identifies that an individual can only achieve motivation once five needs, namely physiological, safety, social, esteem and self-actualization needs are effectively met, which is a theory based on materialistic naturalism that focuses on the personalistic demands of an individual for them to direct quality input to a workplace (Acevedo, 2018).
Social cognitive paradigm:
The theory establishes a correlation between and individual’s willingness to learn with the
behavior displayed by others by dictating that learning other people’s culture and beliefs is dependent on an individual’s categorization tendencies where they group people based on their compartmentalization of such characteristics, which is also influenced by the ethical and spiritual climate in the workplace (Otaye-Ebed, et al., 2020). However, the theory posits that such compartmentalization of cultures and beliefs held by others may reduce the success of diversity by introducing bias.
Cognitive diversity model:
The theory identifies that investing in employees’ cognition enhances the creativity and
innovation standards in the workplace, which further develops teamwork efficiency through increasing individual levels of commitment (Mitchell, et al., 2019).
Transformational leadership theory:
The theory dictates that leadership plays a vital role in developing diversity and
inclusivity in a workplace because the leaders are given the responsibility of conducting themselves in a manner that inspires certain behavior, beliefs, and practices in employees (Arokiasamy & Tat, 2020).
Managers are the dominant actor in the research because the topic of diversity and inclusivity in an organization is dependent on the structures applied by leaders such as managers. The position is granted to individuals with a deep understanding of how to effectively interact with employees in a manner that embraces their diverse characteristics, blends these differences, and results in a positive work environment that enhances productivity. In the research, managers will be given priority because they will offer data on how different approaches towards diversity apply to work environments and how they influence diversity, inclusivity, and productivity levels.
The employees are the receiving end of every leadership structure and diversity approach, and employees have different demands and display varying input depending on their stability. This actor will be applied to the research to compare how different diversity and inclusivity levels affect the employee’s capacity to be productive. Employees are essential actors to the research because they are directly inbfluenced by the leadership in companies. Employees will be used as actors because they will provide a measurability of the influence of diversity in organizations.
Every organization focuses on pleasing a given set of customers, making them vital actors in developing specific productivity standards. Customers are vital actors because their interaction with the company influences the sustainability of an organization. The customers will be included in the research because of their understanding and comparison of the productivity levels in work settings with or without diversity and inclusivity. The customers will be classified as an actor that will help determine and measure the lobgevity of the influence of diversity and inclusivity on an organization.
The construct of leadership style identifies that different leaders apply varying styles to control, motivate, and influence their teams (Arokiasamy & Tat, 2020). The construct will include assessing how managers lead their teams towards inclusivity and diversity guided by various structures and practices introduced to a workplace. The research will focus on assessing the factors that encourage the development of diversity and inclusivity in the construct.
The construct covers the internal sources of motivation that encourage an employee to engage with the company’s goals and targets without being influenced by external factors (Arokiasamy & Tat, 2020). The construct will be assessed to identify how various elements of intrinsic motivation combine with diversity and inclusivity to advance productivity.
Barriers to Diversity Management
The construct identifies that diversity is not a simple element to achieve in a workplace. The construct will be assessed to identify the different factors that challenge the full implementation of the benefits of diversity and inclusivity in the workplace.
Relationship between Concepts, Theories, Constructs, and Actors
The constructs, concepts, theories, and actors have an irrefutable relationship that helps develop an understanding of how diversity and inclusivity in the workplace can be achieved. The concepts included in the research will be a dominant feature in determining the action plan for the research because they will influence the selection of data collection approaches. The concepts and theories have a significantly dominant relationship within the research that is rooted in the affirmation of external and internal elements that influence diversity development. For example, the concept that productivity is determined by job satisfaction is strongly linked to Maslow’s motivational theory (Mitchell, et al., 2019). Also, the actors and constructs share a relationship that determines the application and the flow of information. The actors will be the primary source of reliable data that will aid in affirming or nullifying a correlation between the constructs identified with the research question seeking to verify the influence of diversity and inclusivity on productivity in the workplace. For example, managers as a vital actor in the research will correlate to the data sought to support or nullify leadership style as a construct because an assessment of the input directed to employees by managers will identify how a leadership style contributes to successful diversity and inclusivity.
A diverse and inclusive work environment offers vast benefits to an organization, including developing a conflict-free workforce, increasing productivity, and leadership stability (Mitchell, et al., 2019). These benefits assert the need for organizations to embrace practices and structures that establish diversity and inclusivity with the assurance of maximizing competitive advantage in a given industry. Diversity and inclusivity transform an organization’s internal and external climate, which is attributed to facilitating creativity and innovation through diversity. This element embraces individual beliefs and cultures to learn aspects that can be used to enhance sustainability. However, achieving diversity and inclusivity depends on the focus on each employee’s motivation and position in the organization, which motivates them and makes them feel valued despite their differences.
Definition of Terms
Diversity: The capacity to acknowledge and include individuals from different backgrounds in terms of ethnicity, gender, and other social elements that mark individuals as unique from others (Kapoor, 2011). The term refers to the intermixing of people’s different values and views toward the world (Fisk, Silvera, & Haun, 2019).
Inclusivity: The practice of assuring equal opportunities to individuals or groups that are viewed differently to offer them a sense of belongingness (Hardick et al., 2019).
Equity: Offering individuals from different backgrounds and of varying status access to fairness and equal distribution of resources and attention (Lewis, MacKenzie, & Kaminsky, 2021).
Unconscious Bias: The stereotypes developed toward certain groups in society that people might not fully understand or identify when they display them (Zelevansky, 2019). The term can be summarized as the thoughts people develop without an actual realization of their thoughts (Oberai & Anand, 2018).
Assumptions, Limitations, and Delimitations
The researcher makes assumptions that are believed to be correct, but they are not validated or verified. They are founded on logic or arguments, and they aid the researcher in developing a feasible research procedure capable of addressing the highlighted questions and confirming the hypothesis (MacLehose et al., 2021). Assumptions are essential in the research process because they serve as the foundation for the research questions. To build a favorable working environment for employees, the researcher will investigate possible factors influencing leadership through a strategic framework, including leadership strategies and other potential factors associated with leadership ability. The first assumption applied to the research is that the leaders are tasked with developing teams that they deem feasible for duties and responsibilities in a given work environment. This assumption is rooted in the affirmed responsibilities of leaders in a workplace to build their teams into productive and interactive units that match the company’s goals (Ellis, 2021). The assumption will control the research by offering a foundation for the researcher to understand leaders’ different approaches on their teams.
A second assumption applicable to the study is that every company and leader utilizes diversity and inclusivity. This belief will allow measurability of companies’ diversity and inclusivity levels. The additional assumption will guide the premise that companies are aware of the benefits of introducing diversity and inclusivity to the workplace. Therefore, companies will be focusing on benefitting from different perspectives towards business operations due to diversity and inclusivity (Jonsen et al., 2021). This will support the assumption and its role in the research by helping identify the organizations or leaders who do not hold any importance towards inclusivity and diversity.
Also, the assumption that leaders have a strong relationship with employees will be made to aid the research. Leaders can best influence their work environment if they have a certain relationship with their employees, which may vary based on the leadership style practiced (Ali et al. 2015). This will offer the researcher a chance to measure and compare various leaders and their interaction with their employees, which will make it possible to attribute certain characteristics to the use of diversity and inclusivity.
Limitations are elements that impact the research process and how the findings are interpreted beyond the researcher’s control (Price & Murnan, 2004). On the other hand, appropriate risk management strategies can help mitigate these constraints. One of the study’s shortcomings is the participants’ unwillingness to submit useful information owing to the risk of it being released into the public domain. On the other hand, the researcher will pledge to maintain anonymity and secrecy. This will encourage participants to provide reliable information, with a particular focus on their opinions on the suitability of the leadership in their organizations. The unwillingness to offer quality data on the impact of diversity and inclusivity on leadership may stem from the fact that leaders might seek to offer reserved opinions about the applicability of diversity and inclusivity to their organizations, which may stem from the fear of consequences of offering genuine opinions. An additional reason for the unwillingness to provide useful information may be the fear of consequence, which may be more pronounced if regular employees are involved in the study.
Another key constraint is time. Time limits the researcher’s ability to collect a large amount of data from many potential participants. To meet this challenge, researchers will need a flexible study design. According to Bouncken et al. (2021), a flexible design demands a commitment to time management that allows a researcher to collect a large number of data and information in a short amount of time by generating applicable sets of patterns. It gives the researcher the capacity to process and collect vital data to help them achieve their goals. In this situation, the investigator will concentrate on a particular research strategy. The study will focus on assessing leaders in given work environments. Time may be a limitation because of the need to balance between participating in the study and controlling and managing their work teams to avoid losses or delays in job delivery.
Also, diversifying our data may be a limitation to the study. The research is focused on identifying how leadership is influenced by the introduction of diversity and inclusivity, which makes it important to have an equally diverse participant group for the study to achieve applicable data. The problem may be the inaccessibility of reliable partners willing to engage in research that seemingly measures their stability and strategy in business by displaying a curiosity towards their leadership, which may be intimidating to some companies. The limitation may influence the study by making the data lack generalizability. According to Carminati (2018), generalizability is the factor that adds to the coherency of research by guaranteeing that the research conducted can be used by individuals, organizations, or groups and that it fits into varying situations. A lack of generalizability may challenge the actual purpose and relevance of the study.
The study will be achieved using a case control research design. A case control is based on observational standards and does not seek to alter any element in a given group, which allows for various real-life and applicable factors to be deducted and revealed (von Ehrenstein, 2019). The study will use a qualitative approach that will be experimental in that the focus group data collection approach will be applied. The study will focus on diversifying its data, which means that it will need different participants and a reliable sample size. The sample for the research will be selected from five companies of different business sizes, including SMEs and stable companies. The five companies will be used to source leaders as the main focus of the research and employees who will act as a control segment for the research. The leaders to be applied will include HR managers, team leaders, CEOs, Hiring managers, and Chief operating officers to result in 15 leaders from each company. Also, each company will provide one employee to participate, which will mean that the study will use a total of 20 participants. Data will be collected through interviews, which will advance the observational aspect of the study.
Significance of the Study
The study is significantly important to businesses across various industries because it will focus on offering an approach to sustainability by encouraging companies to invest in their leaders. The goal of the study is to increase the researcher’s familiarity with the importance of diversity and inclusivity in the workplace. The study will also seek to outline how diversity and inclusivity can negatively impact the leaders or the company. Research indicates that diversity can introduce challenges such as increased conflict, miscommunication, and the development of ill behavior among employees as part of the rejection of the concepts (Dover, Kaiser, & Major, 2019). This makes the research significant in developing a manual to introduce the concepts.
Implications for Biblical Integration
The study will focus on achieving the one body notion that is biblically endorsed as a source of functionality. The Bible identifies that “For just as the body is one and has many members, and all the members of the body, though many, are one body” (1 Corinthians 12:12-27 ESV). In non-church organizations, this biblical emphasis of having “one-body” can be drawn from the effective functionality developed if employees think as one in terms of their motivation, goals, and purpose. This denotes that organizations need to embrace the individuality held by each employee because these unique aspects are a source of functionality that make the organization run smoothly as one. The research will also focus on meeting the Bible’s emphasis on social elements such as race and ethnic differences. God commands that people must embrace each other’s race because he created “every nation of the human race that they should inhabit the earth” (Acts 17:26, ESV). This indicates that no race is superior to the other, which is an approach to social elements such as gender, sexuality, race, social status, and disability that will be encouraged by the research.
Benefit and Relationship to Leadership Practice
The research study focuses on offering businesses a source of stability and structure in their operations. The study will describe the relationship between leadership and company success by identifying how factors such as job satisfaction and motivation can be achieved through diversity and inclusivity. The study will seek to advance the number of companies that are aware of the benefits of using diversity and inclusivity in the workplace. This comes after statistics indicate that only 34% of companies have equipped themselves with diversity and inclusivity and that men are two times more likely to find employment during the hiring and recruiting events regardless of the gender of the hiring manager, which indicates that a low value towards inclusivity and diversity in workplaces (Corrigan, 2022; Reiners, 2020). This poses a challenge for the leadership in companies because it translates to a poorly functioning work environment.
The study will benefit leadership practice by introducing a structure and measurability of leadership practices that can be merged into different leadership styles to achieve diversity. The study will focus on expounding on what diversity and inclusivity look like, which will eradicate the time and cost of effective adoption of the concepts. This will include identifying reasons why diversity and inclusivity fail in organizations. Leaders may be willing to apply diversity and inclusivity to influence their leadership, but strategies may fail because of focusing on recognition rather than respect, not using diversity to solve a problem in the workplace and negative and accommodative mindsets in a company. The research will thus help companies avoid court cases that arise from the lack of diversity and inclusivity, which may lead to millions of losses as companies seek to justify why they failed to prevent groups such as women and the disabled from being discriminated against by their leaders, especially in large companies that are vulnerable to discrimination cases (Dadanlar & Abebe, 2018). This shows that the lack of diversity and inclusivity may disrupt the functionality and image of the company.
Summary of Significance of the Study
The study is significant because it offers organizations the chance to explore their structure by reflecting upon the status of their leadership. For companies seeking to strengthen their company’s leadership, the study offers them applicable solutions and strategies for using diversity and inclusivity to steer such changes. The study will identify various visible issues that arise from the lack of diversity and inclusivity in the workplace, including challenges in achieving the company’s goals and increased conflict among employees arising from the lack of respect that leads to employee bullying and challenges achieving goals (Høgh et al., 2021). The study will also offer leaders an understanding of how to identify effective diversity and inclusivity while also empowering them with the appropriate approaches for sustaining the practices.
Leadership is a vital element in society that promotes stability in an organization. However, workplaces function based on the introduction of different individuals with both varying skills and backgrounds, which is described as diversity and inclusivity in companies. The two concepts, diversity and inclusivity, have become a point of interest across organizations with the growing rates of interactions among cultures because of the rise of globalization as people and organizations grow their interests in trade. Diversity and inclusivity have introduced strengths and challenges to organizations. Significant scrutiny being directed to the role of diversity and inclusivity in developing workplace leadership. The following study will focus on assessing the relationship between leadership and inclusivity and diversity, which will be a highly comprehensive assessment of how leaders develop their skills and performance based on the two concepts of interest. The topic of how diversity and inclusivity influence leadership is relevant to organizations. The research will focus on providing companies with an applicable strategy for balancing diversity and inclusivity to ensure that leaders have effective skills to manage workplaces. The research topic is highly relevant because it will provide a roadmap as to how companies can improve their performance by embracing inclusivity and diversity.
The value of the research stems from the growing changes in society that have forced organizations to rethink their approaches to business. Globalization has encouraged the transfer of skills and cultures from one region to another, introducing significant structural changes. Contractor (2022) outlines that the growth of globalization has resulted in economic changes such as the increase in multinational companies, enhanced global supply chains, and enhanced production, which is attributed to the increase in diversity and inclusivity across organizations. The research will focus on expounding on the different reasons that diversity and inclusivity are important to organizations. This will be characterized by a thorough assessment of how the two concepts, diversity and inclusivity, influence leadership through an assessment of how leaders gain skills, knowledge, and management strategies through embracing diverse and inclusive workplaces. The study will focus on employing comprehensive theories, frameworks, and research methods to ensure that the data collected is applicable to generating a clear image of whether there is a positive or negative relationship between leadership and diversity and inclusivity.
The analysis will begin with a description of the problem promoting the study, followed by a description of the study’s purpose, research questions, and nature of the study. The purpose statement, which differs from the problem statement in that it will elaborate on the study’s purpose, is the following component in the first section. This will contain an overview of the advantages anticipated from the study. A component of the study will also include the research questions. The study’s goal and the required level of thorough research will determine the research questions. The nature of the study section will come after the research questions section and will include a detailed description of the scope and content of the investigation. The study section’s structure will give readers a sense of what to anticipate from the case study. The definition of terms section will come after the study framework section, which defines all the key terms and phrases. The assumptions, constraints, and delimitations sections are also vital to the analysis, which will be followed by the significance of the study, review of literature, appendices, and references, which will show the evidence and reinforce the research questions and knowledge gaps that are discussed and exploited by the study.
Reduction of Gaps in Literature
Leaders have different perspectives on achieving effective leadership, leading to a gap in the implementation of concepts that seem to introduce a one-size-fits-all approach to employee management. The study will focus on reducing the gap between stereotyped notions of diversity and inclusivity. One major stereotypical notion that the study will seek to address is showing companies that diversity and inclusivity are more of a practical element achievable through incorporating strategies and structures rather than a theoretical factor. Spaaij et al. (2021) describe that diversity and inclusivity should be delegated over and introduced under sufficient preparedness to achieve full functionality and benefits to an organization. The research will fill this gap by identifying stereotyped elements that are wrongfully referred to as diversity and inclusivity when they are not. This is because such stereotypical notions have led to companies focusing on showcasing their diversity and inclusivity status based on percentages and numbers of people from different cultures and races, which should not be automatically translated as diversity. The research will focus on negating the use of percentages to showcase diversity and inclusivity by emphasizing that diversity should be reflected in the actual correlation and harmonious interactions of each form of diversity, be it sexual, ethnic, racial, or age diversity in a company.
Diversity and inclusivity are elements in a company that are heavily reliant on the leadership practices in the organization. According to Chaudhry et al. (2020), diversity does not magically introduce itself into a company because it should be backed by standards and practices that uphold fairness. A dominant leadership practice that facilitates diversity and inclusivity is transformational leadership. Strong leadership is essential in organizations that support the growth of diverse workforces, which s facilitated through the incorporation of transformational leadership styles. According to transformational leadership theory, leaders must emphasize involving their team members and fostering optimism and diversity in the workplace (Ashikali et al., 2020; Arokiasamy, & Tat, 2020). Leaders are the dominant party that can successfully incorporate behaviors and actions that foster good perceptions of diversity among employees. This is attributed to the fact that leaders are able to create a perception that is essential for the management of equality in the workplace (McCallaghan et al., 2019). These aspects of leadership make the transformational leadership style an essential element when incorporating diversity and inclusivity. Ali et al. (2015) evidence the relationship between diversity and inclusivity and transformational leadership through a study involving university presidents, which concluded that presidents using the transformational leadership style facilitated changes in perceptions across employees where the perceptions were transferred from supervisors to lower-level employees. This is vital to understanding how practices are used to harness the strengths of diversity and inclusivity.
Research also identifies that diversity and inclusivity also influence leaders through introducing the practice of effective talent management. According to McCallaghan et al. (2019), leadership guided by diversity and inclusivity should be guided by the practice of proper talent management because the concepts emphasize on vital elements of talent management, including building on positivity and morals among the task force. Research indicates that the introduction of diversity and inclusivity can only be successful if an organization focuses on having a wider talent pool, which makes it easy to develop a fair workplace guided by respect for each other because of the unique purpose and roles attributed to each employee (Chaudry et al., 2020). This is vital to leaders that seek to embrace diversity and inclusivity because leadership departments such as human resource management are responsible for developing a company. Anlesinya and Amponsah-Tawiah (2020) outline the intersection between diversity and inclusivity and talent management in leadership using a study that proposes a talent management model, which identifies vital constructs that support the model, namely responsibility, equity, and equality. Incorporating a range of talents improves the workplace and can help meet diversity goals, which include making each employee belong and valuing their individuality. Sen and Bhattachary (2019) demonstrate the importance of talent management in leadership that seeks to achieve diversity and inclusivity through an analysis of three successful companies in India, revealing that team management is a vital element in the three firms because teams are founded on shared values such as belief in excellent customer services despite their diverse differences. Research indicates that such leaders are able to make reliable decisions that influence the structure and stability of the work environment. Instride (2021) identifies that the ultimate influence of diversity and inclusivity on the leadership is statistically asserted by the evidence that diverse teams have an 87% success rate in making reliable and better decisions compared to non-diverse teams. Such teams have more reliable and effective leadership structures, making it crucial for businesses to incorporate diversity into every aspect of the workplace.
Diversity and inclusivity also influence the leadership in an organization by infiltrating the development practices used in a company that purpose to promote an advanced workforce, which is achieved through cognitive development. A crucial leadership practice that facilitates diversity and inclusivity is leaders’ unlimited practice of cognitive investment. Diversity requires investing in workers’ cognitive abilities to guarantee that they are inspired to combine their knowledge, skills, and cultural backgrounds for improved performance. Companies can use cognitive diversity as a strategy to improve their staff members’ attitudes toward different cultures, especially stereotypical subcultures (Meissner, & Wulf, 2017). According to cognitive diversity theory, investing in cognitive diversity in terms of performance, cultures, and abilities leads to a more inventive workplace since it enables teams to think beyond the box, especially the stereotyped or biased minorities. Adrienne et al. (2019) exemplify the application of the practice of cognitive development using a simple set of schools. Young people might also be more perceptive to social cues about diversity, numerical representation and balance, and power dynamics between various ethnic groups at school. Adrienne et al. (2019) take into consideration that youthful students might also be considering their own ethnic identity and their position with respect to others because adolescence is a period when adolescents start to more actively orient themselves toward peers, which is important to remember. Conflict among students may occur more frequently as a result of the convergence of these trends. According to the study, students may practice being prosocial and fixing social problems when their schools have leadership that values diversity and inclusivity. They can also learn new things from their peers and have their needs for belongingness addressed. According to research, extra activities that will create a productive culture that supports the goal of successful diversity and inclusivity should be applied to workplace settings to avoid such tensions relating to cultures (Leon et al., 2018). Leaders are equally susceptible to blind spots that prevent them from recognizing some barriers to diversity, which translates to the burden for diversity should not be primarily placed on them in the workplace (Lokko et al., 2016; Otaye-Ebede et al., 2019). Cultural respect is more important for diversity than cultural competency. This demonstrates that recruiting individuals from diverse cultural backgrounds alone will not be sufficient to achieve diversity since other methods of integrating the cultures with one another and the overarching organizational aim are essential.
The incorporation of diversity and inclusivity also impacts leadership by transforming the practices used to develop reliable cultures that support productivity and high performance. A leadership guided by diversity and inclusivity demands the use of team-building as a way of harnessing innovation skills among employees, which also works to support the practice of cognitive development that influences the behavior and thinking of employees (Meissner, & Wulf, 2017; Lee et al., 2021). Successful leaders integrate diversity to boost creativity and innovation in the workplace, which increases job satisfaction and motivates workers. By making sure that individuals have a feeling of belonging and that their input to the firm is appreciated and favored regardless of their cultures and particular social norms, diversity increases employee creativity, commitment, and compliance levels (Jankelová, Joniaková, & Mišún, 2021). Innovation is strongly emphasized by the concepts of diversity and inclusivity that are rooted in need to merge different skills and values to develop a more functional team. Janzen et al. (2018) relate the practice of innovation training introduced by leaders to diversity and inclusivity by studying software companies, which is a research that achieves a positive correlation between the influence of innovation practices and the improvements in gender inclusivity across software organizations that are required to develop applications and software that relates to customer needs. Jones et al. (2021) avail additional support to the need for innovation training across organizations where leadership applies diversity and inclusivity by generating a framework on how the concepts intersect, revealing that such leadership practices develop highly engaged and dedicated teams to the course of the organization. The use of inclusivity and diversity in leadership must be supported by effective innovation training to ensure that the differently abled employees feel comfortable and involved in the innovation process.
Businesses have identified a growing need to incorporate diversity and inclusivity into companies, which has proven challenging for most organizations. The need comes from research indicating that a diverse and inclusive leadership influences various aspects of the task force to increase creativity and innovation, making employees more satisfied and willing to work (Wang et al., 2013). Diversity and inclusivity are stoutly rooted in globalization, which has led to significant organizational structures and functioning shifts. Globalization is a process that introduces significant changes to social, economic, and political structures as different traditions, practices, and beliefs are spread across the globe (Reddy & Kota, 2019). The resulting changes have been highly felt in the business sector as more people become exposed to skills held by individuals with differing backgrounds, forcing companies to rethink how they handle their employees. Globalization is a highly favored process that allows companies to expand their task forces and business operations, which makes it a change that is gradually becoming permanent. Khan (2018) outlines that globalization has forced companies to transition over time, with organizational leaders tasked with maintaining a workforce balance. This is evidenced by the number of individuals moving from lower-income countries to developed nations hoping to find better workspaces. According to Figure 1, the U.S. has become a hub for immigrants seeking better job opportunities, with statistics indicating that the country received 43.7 million in 2016. This is a significant indicator of the influx of new cultures and traditions introduced into the American task force. According to McCartthy (2017), the 43.7 million immigrants in 2016 represented an increase of over half a million migrants since 2015, a drastic increase expected to hit 72 million in 2030. The rise in immigrants in the U.S. represents a change in the task force in terms of skills, behavioral beliefs, and presentations. The most interesting attribute of globalization is that it not only causes the transit of employees to other regions but also causes the movement of leaders to different societies, forcing leaders to shift their approaches to workforce management.
Immigration in the U.S.
Source: McCarthy, 2017
Source: McCarthy, 2017
Financial responsibilities are also a crucial part of the background that supports the research into diversity and inclusivity. Leaders are constantly under pressure to ensure maximum profit guided by the needs presented by stakeholders, which has resulted in the restructuring of approaches applied by leaders. Harsch and Festing (2019) explain that financial demands have increased demand for organizational agility, which has prompted leaders to use their recruitment powers to restructure workforces through outsourcing and seeking new skillsets among employees. This has introduced different cultures to organizations, which has shed light on the concepts of diversity and inclusivity. O’Brien et al. (2015) describe that a diverse and inclusive workforce is not merely introducing people from different races into an organization, but it is the actual incorporation and appreciation of the differences and similarities carried by each individual from a foreign background into the performance of the organization. This has been a challenge to organizations because of interests among stakeholders and shareholders, especially with the ultimate goal of a company being financial performance and growth.
The problem is further highlighted by research indicating that companies have failed in giving life to the goal of introducing diversity and inclusivity into their companies. The failure of most companies to articulate diversity and inclusivity is attributed to the difficulty in ensuring a political, racial, sexual, political, and religious dimensions of diversity and inclusivity are balanced (Ely & Thomas, 2020). This shows that diversity and inclusivity in workplaces is a challenge that affects the decision-making and functioning of organizations, making the concepts highly valid for assessment and research. A major problem within organizations is the imbalance between male and female endorsements in the diversity and inclusivity practices by leaders. Nations like Belgium, where the percentage of women managers increased to 16% in 2018 from the prior figure that stayed between 9% and 10% in previous years, which asserts the lack of equality (Babic & Hansez, 2021; Williams et al., 2014). The problem is further heightened by the affirmation that failed incorporation of diversity and inclusivity has worse consequences than not practicing the concepts. A leader’s poor practice of diversity and inclusivity has been linked to an increase in conflict in organizations, increase in sexual stereotypes, and overall heightened discrimination (Kormanik, 2009; Dover et al., 2019). The problem is significant to all companies and regions because research and statistics indicate a growing need for diversity and inclusivity in organizations, which makes studying the successful mode of introduction of the concepts and their benefits an urgent objective of research.
Diversity and inclusivity in the workplace are identified as a problem because most companies have been challenged with the process of acknowledging disparities and similarities shared by employees. This is attributed to the fact that the societal and economic changes in society, mainly stemming from the increase in globalization, have promoted the reassessment of leadership strategies and skills. The main problem to be addressed within the study is identifying the importance of diversity and inclusivity to the leadership in organizations. The study will focus on uncovering the relationship between leadership and diversity and inclusivity in organizations, which is an essential study that will provide companies with additional insight into the importance of having leaders who embrace and effectively manage diverse workforces. Patrick and Kumar (2012) describe that diversity and inclusivity is a problem that needs extensive research to protect companies from poor performance, which a significant consequence is arising from the aimless introduction of diversity and inclusivity because of the changes introduced by cultural differences. This is a crucial area for study that presents the knowledge gap on how leaders are influenced by having proper diversity and inclusivity strategies. The study will advance the understanding of inclusivity and diversity by presenting an evidence-based framework that indicates how leaders can adopt the concepts and the benefits of applying diversity and inclusivity.
The major goal of this study is to ascertain whether leaders’ probable incompetence in establishing a diverse and inclusive workforce leads to poor organizational performance. Specific courses of action are required to promote diversity and inclusivity among organizational personnel,. Although a variety of people with suitable skills and experience are available in the labor market, human resource recruiters still have trouble fostering diversity. The inability to fully comprehend the advantages that promoting diversity and inclusivity will bring to the company is a major barrier to developing the necessary solutions. The scope of the problem makes it vital to use a qualitative research design that will deliver factual data on the relationship between diversity, inclusivity, and leadership in organizations (Bouncken et al, 2021). Chaudry, Paquibut, and Tunio (2021) describe that the engagement of different cultures within organizations is a significant strategy for reducing and eradicating vices such as stereotypes and biases that affect employees. This attribute of diversity and inclusivity is best approached using facts and experiences from the population directly. The following research will answer questions on how embracing diversity and inclusivity helps leaders become more effective. The study will avail an answer to the questions on why diversity and inclusivity are important to leadership. Data collection will be conducted using a case study focusing on interviews with leaders. The interviewing will focus on developing factual data on the observable effects of leaders practicing diversity and inclusivity standards. The scope of the study is rooted in generalizability, which will make it essential to use leaders across companies in the U.S. as the target population, ensuring that varying companies are included.
The role of diversity in increasing the intrinsic motivation of the taskforce will be a major concept incorporated into the study. Zubiri-Esnaola et al. (2020) identify that collaboration is a major source of strength from the introduction of diversity and inclusivity in an organization, which further influences the financial performance of an organization. The concept is drawn from the identified advantage of diversity and inclusivity highlighted by existing literature is the influence of diversity and inclusivity in leadership on the financial performance of companies. The realization that no two people are alike leads to the establishment of a varied and inclusive workforce, which increases productivity and financial performance (Saxena, 2014; Zubiri-Esnaola et al., 2020). The concept is supported by vast studies that seek to offer the correlation between productivity, collaboration, and financial performance. A study by McKinsey & Company defined diversity as a higher share of women, and a more mixed ethnic or racial composition in large companies’ leadership, which was research achieved using data from 336 organizations in the United Kingdom, Canada, Latin America, and the United States (Hunt, Layton, & Prince, 2015). Gender diverse organizations were 15% more likely to have financial returns above their national industry median (Hunt, Layton, & Prince, 2015). In comparison, those with higher levels of racial diversity boasted a higher possibility of 35% having higher financial returns, which is attributed to the statistical evidence that such companies are 87% more likely to make wiser and more sensible decisions (Hunt, Layton, & Prince, 2015; InStride, 2021). In terms of financial returns, businesses in the worst quartile for both gender and ethnicity/race lagged below the norm. The study proves reliable because it diversifies the understanding of the concepts by basing its analysis on different countries, which advances its generalizability.
The concept of diversity and inclusivity influencing the intrinsic motivation in employees will also be vital to the research. According to Booker and Campbell-Whatley (2018), a diverse and accepting work environment enables individuals to embrace their uniqueness and understand themselves with the business by demonstrating their appreciation for these distinctions, fostering a sense of belonging to the organization since employees feel understood. Additional research introduces the benefit of increased employee intrinsic motivation as scholars direct their efforts towards explaining why a leader’s choice of embracing diversity and inclusivity results in better financial performance. Beraki et al. (2022) assert the correlation between diversity and inclusivity and leadership through a study of 249 organizations listed on the New York Stock Exchange, which correlated a high financial performance in diverse organizations to the added advantage of attracting a wider talent pool that ensured employees remained motivated to work and enhance their input to their firms. Additional studies on the element of diversity and inclusivity in leadership, which focus on assessing leadership boards with more women, revealed that such companies experienced improved financial performance because they introduced practices such as better corporate oversight and making less risky bids (Wilson & Altanlar, 2009). These factors indicate that having diverse and inclusive leaders allows a company to have leadership guided by the incorporated management of employees and improved decision-making. Diversity and inclusivity also allows leaders to foster stable relationships characterized by open communication and information sharing that inspire employees to provide the greatest ideas, inclusive leadership encourages leaders in an organization to appreciate the distinct diversity held by employees (Minbaeva, 2017; Metzger et al., 2020). The concept of intrinsic motivation is vital to understanding how employee motivation interacts with the strengths in leadership introduced by diversity and inclusivity.
The first theory relating to the relationship between leadership and diversity and inclusivity is the cognitive diversity hypothesis theory. The theory dictates that the perceptions held by individuals are developed based on their exposure and interactions with different cultures (Chow, 2018). The theory refers to these interactions as the environment for conditioning certain perceptions that directly relate to the behavior they present with. The theory asserts that the conditioning of the perceptions based on interactions with cultures is reliant on the cognition, first-hand perceptions, and willingness to learn. The theory is essential to the analysis of diversity and inclusivity and leadership because it generates an understanding of how various leadership practices influence the leadership success. Kormanik (2009) identify that that a lack of awareness is a significant cognitive element that interferes with the incorporation of diversity and inclusivity into an organization. This is a good example of the main arguments presented by the cognitive diversity hypothesis theory that correlates diversity and inclusivity to the thinking of the employees. According to Manoharan et al. (2021) understanding the internal organizational structure is essential for fostering diversity and inclusivity at work because it enables leaders to recognize disparities that can be reconciled. This makes cognitive hypothesis theory essential to understanding how leadership is influenced by the cognitive practices and traditions practiced to support diversity and inclusivity.
Symbolic Interactionism Idea is a theory relevant to the research on the influence of diversity and inclusivity on leadership. According to this theory, people form opinions and assign significance to their surroundings based on their interactions with those environments, which help them feel bonded and driven there (Wang et al., 2019). The theory argues that the environment and interactions between employees and the leaders will influence their performance through building on elements such as intrinsic motivation. Because intrinsic motivation fosters a sense of positivity, belonging, and commitment to the business, it makes it possible for diversity and inclusivity to flourish in a setting with stable leadership (Cardinal et al., 2022). The theory will be essential in identifying a correlation between how the direct interactions among employees can be molded to support a leader’s intent for introducing diversity and inclusivity.
Organizational theory also relates to the research by outlining how existing structures in a company determine the relationship between diversity and inclusivity and leadership. A commitment to equality in the workplace is a first step toward understanding the value of diversity and inclusivity at work because it creates a need to balance the organizational structures, including social, emotional, and psychological components that are determined by the organizational theory (Sharma, 2016; Capper, 2019). Organizational theory encompasses these elements by highlighting how employees fashion their behavior and performance based on the culture generated by the organization. The theory also brings to light the challenge of change in organizations because companies tend to organize themselves into rigidity. Companies are wary about integrating diversity because they believe that doing so could lead to employees being labeled negatively (Tasheva & Hillman, 2019). The theory identifies how openness or rigidity in a company determines the success of diversity and inclusivity in the organization.
The behaviorist theory will also be applied to identify how employee behavior must be approached from a delicate stance. In accordance with the behaviorist theory, a person’s personality also influences whether diversity and inclusivity are appropriate for a given organization. Inclusive leadership is a source of leadership by example that encourages workers to respect one another’s personalities (Chen et al., 2019). The theory identifies that introducing diversity and inclusivity should be guided by the need to incorporate a long-term change in behavior, which can only be achieved if a permanent perception of the intended behavior is instilled in the employees. The theory also introduces the concept of personality as determinants of the successful integration of diversity and inclusivity. Employee personalities can be used to gauge their attitudes, perceptions, and level of support for a diverse and inclusive workplace, enabling leadership to match these with the relevant theories designed to meet the required diversity goals (Anglim et al., 2019). The behaviorist theory identifies that the development of challenges in leadership when diversity and inclusivity is introduced can be minimalized through approaching the behavior of the employees with sensitivity.
Constructs and Variables
The leadership style practiced by leaders will be a dominant construct in the research. Transformational leadership will be vital to the research because it is the leadership style recommended for fostering the growth of devoted teamwork (Brown et al., 2019). The original leadership style used in an organization has a big impact on how diversity affects leadership. Diversity thrives in a setting where the leadership is capable of managing various teams through effective communication and conflict resolution (Prieto et al., 2016). The leadership style will also highlight various constructs that relate to the introduction of diversity and inclusivity, including workplace obstacles to managing diversity. This is a construct amplified by additional research that affirms that poor change management systems in a corporation have a negative impact on diversity in the workplace (Van den Brink, 2020). Also, leadership style will be a construct that will give rise to the variable of biases and stereotypes in an organization. Because biases and prejudices are challenging to dispel, they represent another key obstacle to the adoption of inclusivity, which means that a leadership style must develop practices that influence the thinking, cognitive approaches, and behavior of employees (Spector et al., 2019). The construct of leadership styles bring to light the different ways that leaders incorporate diversity and inclusivity to ensure a deductible mode of implementation that embraces growth and productivity.
Intrinsic motivation will be a vital construct in the research that will identify the correlation between diversity and inclusivity with the capacity of a leader to successfully control the workforce and enhance performance. Higher productivity is a result of intrinsic drive, which also encourages variety and healthy leadership. Intrinsic motivation in a team must balance with the variety of cognitive perspectives held by the team members for stable leadership to be created in an organization, which leads to increased productivity (Kim et al., 2020). Employees are more likely to perform better when their employers recognize and value their distinctive qualities at work. This fosters intrinsic drive and gives workers a sense of belonging, which is supported by Maslow’s hierarchy of needs that states that fostering trust and a sense of safety will help create an environment where intrinsic motivation may flourish (Acevedo , 2018; Mansaray, 2019; Grant & Hill, 2020). The construct introduces the understanding that intrinsic motivation is vital to the management of a work environment.
Other studies identify that the leader’s perception towards diversity and inclusivity significantly influences the success rate of the concepts in the organization. Madera et al. (2013) identify that the leader’s definition of diversity and inclusivity significantly determines the perceptions introduced to the task force because wrong beliefs damaging the work environment. Research highlights that this issue with the leader’s perception is rooted in the existence of a knowledge gap among companies on the use of diversity and inclusivity has impaired the successful integration of diversity and inclusivity into leadership. Moore et al. (2020) outline that existing literature focuses on supporting the need for diversity and inclusivity but fails to provide concrete definitions of the concepts, which guided the researcher’s recommendation of a conceptual model to guide the definition of diversity and inclusivity. The research was guided by the purpose of identifying how the Society for Epidemiologic Research can adjust to the increasing need for diversity and inclusivity across organizations in a strategic and guided manner, making the research significantly relevant to the quest to identify the relationship between leadership and the concepts. Additional support to the knowledge gap on the definition of diversity and inclusivity that is preventing companies from effectively applying the concepts is evidenced by the study conducted by Bernstein et al. (2019) that sought to provide a theoretical framework that eliminates the failure of companies and their leaders to achieve diversity and inclusivity, which was founded on the analysis of various companies that revealed the existence of exclusionary dynamics founded on unconscious bias. The research identified that most leaders that define diversity as merely hiring individuals from different backgrounds face vast consequences, especially financial challenges. Bernstein et al. (2019) raise attention to the failure of leaders to apply both diversity and inclusivity collectively because of failed definitions of the concepts of hiring people and failing to practice generative inclusion and merging of the differences and similarities to support a positive work environment. Additional studies also link these findings to the importance of trust when introducing diversity and inclusivity into leadership. Trust helps teams perform better overall by promoting teamwork and lowering conflict in teams by enabling employees to believe in each other (Inegbedion et al., 2020). These are vital elements to leadership that are amplified by the introduction of diversity and inclusivity.
Anticipated Themes and Discovered Themes
The theme of enhanced financial performance will also be recurrent in the research on the influence of diversity and inclusivity on leadership. Team innovation is a significant element that reflects the influence of diversity and inclusivity because the concepts result in positive associations with the work environment, boosting emotional connection, dedication, and mood towards work (Mitchell et al., 2021). For instance, a study by McKinsey & Company examined the connection between company financial performance and the level of diversity. The study defined diversity as a higher share of women, and a more mixed ethnic or racial composition in large companies’ leadership, which was research achieved using data from 336 organizations in the United Kingdom, Canada, Latin America, and the United States (Hunt, Layton, & Prince, 2015). Gender diverse organizations were 15% more likely to have financial returns above their national industry median (Hunt, Layton, & Prince, 2015). In terms of financial returns, businesses in the worst quartile for both gender and ethnicity/race lagged below the norm. The study proves reliable because it diversifies the understanding of the concepts by basing its analysis on different countries, which advances its generalizability.
Increased job satisfaction will be a major theme in research on the relationship between leadership and diversity and inclusivity. Hauret et al. (2020) identify that an improvement in job satisfaction is projected as a result of inclusivity and diversity initiatives because teamwork and free workspaces foster a favorable perception of one’s environment. Beraki et al. (2022) assert the correlation between diversity and inclusivity and leadership through a study of 249 organizations listed on the New York Stock Exchange, which correlated a high financial performance in diverse organizations to the added advantage of attracting a wider talent pool that ensured employees remained motivated to work and enhance their input to their firms. Additional studies focusing on assessing leadership boards with more women, revealed that such companies experienced improved financial performance because they introduced practices such as better corporate oversight and making less risky bids (Wilson & Altanlar, 2009). These factors indicate that having diverse and inclusive leaders allows a company to have leadership guided by the incorporated management of employees and improved decision-making.
A major anticipated theme is the correlation between an increase in performance and the intrinsic motivation that increases from the incorporation of diversity and inclusivity. Lorenzo et al. (2018) conducted a study involving companies with roughly 50, 000 employees and 15,000 management leaders that had varying levels of diversity in their leadership teams, which revealed that companies with higher diversity and inclusivity had a 46% score innovation compared to the 26% score in companies with lower diversity. The reliability of the study is evidenced by the nature of the research that involved a comparison of leadership before and after diversity and inclusivity, which provided evidence of changes in the task force. The study affirms that diverse and inclusive leadership practices result in a task force willing to apply their differences and similarities to advance the decisions and thinking in a company. Such leadership develops a culture of innovation among employees that can offer goods and services that appeal to broader and more varied groups as guided by the information deduced from the diverse task force, resulting in better judgment and a wider client base (Noe et al., 2021). Companies benefit from hiring individuals with varied perspectives and diverse backgrounds, boosting creativity and innovation inside the organization.
The emergence of conflict can challenge the intention to develop a leadership founded on diversity and inclusivity, which is a theme discovered from the analysis of existing literature. Kenter et al. (2019) identify that there is a susceptibility to conflict among companies where leaders fail to effectively follow diversity with inclusivity, which the researchers analyzed using the UK marine field. Kenter et al. (2019) identify that the presence of diversity and inclusivity in organizations can result in conflict because most individuals hold different values that are developed through two dominant processes, socialization and internalization, which can be molded through the introduction of governing power. Additional research by Homan (2019) conducts additional research into the challenge of conflicts through a systematic review that identified a vulnerability to conflict in work environments that did not establish diversity and inclusivity through trust among team members. The research found trust to be a vital determinant of the success of leadership guided by diversity and inclusivity because it determined the serenity of the work environment. The analysis highlights crucial practices that can help eliminate the challenge of having diverse and inclusive leadership, which should generate trust among employees to encourage respect for differences and values.
An additional discovered theme from the research is that struggles with decision-making are an additional challenge incurred because of having a leadership that practices diversity and inclusivity. Homan (2019) uses the decision-making perspective to outline the challenge of delayed decision-making in cases where leaders practice diversity and inclusivity because of the need to embrace each employee’s values and differences to make each form of diversity feel included. This is a major challenge to diversity and inclusivity because it indicates that leaders may take longer to make decisions. A study conducted on 55 leaders from over thirty institutions in the US revealed the prevalence of the challenge of delayed decision-making among diverse and inclusive organizations because it revealed that the need to maintain accuracy, reasonability and transparency had often forced the leaders to delay their decisions to allow time to gather more information (Liu et al., 2022). The research indicates that diversity and inclusivity introduce additional stakeholders to an organization that relies on the leadership to ensure that their individual and collective needs are met.
The analysis of the influence of diversity and inclusivity on leadership reveals that leaders have a significant opportunity to advance their workplace management through adopting diversity and inclusivity. A thorough analysis of the literature reveals that leadership strongly benefits from adopting diversity and inclusivity because the concepts influence a leader’s thinking and management practices. The literature identifies that leadership practices are developed through the development of a different approach toward taskforce management to include a focus on embracing employees’ similarities and differences. However, the literature reveals that this understanding is challenged by the knowledge gap on the accurate definitions of diversity and inclusivity, seeing that most companies think that they classify as being diverse simply by employing individuals of different races, religions, and gender, among other factors. Research indicates that the knowledge gap affects the application of diversity and inclusivity because it leads to a challenging workplace as unconscious bias and discrimination develops from leader failing to incorporate inclusivity that would create an appreciative culture toward employees. Additional gaps in the measurability of diversity and inclusivity in an organization challenge the efficiency of the concepts of leadership across companies because leaders are unable to assess the level of and success rates of diversity and inclusivity. The analysis of existing research reveals a need for leaders to first seek an understanding of diversity and inclusivity as concepts, which will make leaders efficient in molding the concepts to serve the needs of their organizations to achieve the identified benefits, including increased employee motivation and financial performance.
Summary of Section 1
The chosen topic may appear significantly general but the existing literature and research indicate that it is a deep topic in need of thorough analysis. The focus on leaders in organizations will help narrow the topic to facilitate a thorough analysis of how each leader is affected by the presence or lack of diversity and inclusivity in their leadership structure. The study understands that measuring the leadership of individual leaders, demands the use of additional factors to assess the influence of diversity and inclusivity on leadership. The study assesses factors such as job satisfaction, employee intrinsic motivation, teamwork, and collaboration. These are factors that the study can effectively analyze to determine how the use of diversity and inclusivity among leaders influences the type of leadership portrayed to employees. The expectation is that the study will uncover a positive correlation between the inclusion of diversity and inclusivity in one’s leadership style and the performance of the leader’s employees. Section 1 is vital to the study because it provides a thorough depiction of the study’s relevance by developing a clear picture of what the study is expected to deliver and how the study will serve existing leaders and organizations. The Section also supports the relevance of the study to existing literature through a thorough description of the problem and relevance of the study.
Section 1 is an effective analysis of the study’s structure and elements that have been strategically selected to help assess the topic of the influence of diversity and inclusivity on leadership. Section 1 offers the background of the study and the research questions. The study will focus on understanding the influence of diversity and inclusivity through a comprehensive research framework that allows the identification of vital data on the topic. Section 1 has elements such as the research paradigm and a detailed and well-organized diagram indicating all the concepts, theories, and constructs used to develop the design of the study. These factors take into account the distinct factors of the topic with a distinct focus on the existing data and the emergent data gathered from the study. The section also offered the opportunity to understand the repeated terms in the study using a definition of terms segment that effectively summarized the meaning of each major phrase in the research. The terms were further supported by a section that detailed the significance of the study, which was backed by various research articles from professionals who showed an equal curiosity towards the topic of diversity and inclusivity. The study specifically applied peer-reviewed articles for the review of the literature. The section also includes the assumptions, limitations, and delimitations within the study, which are elements that will offer insight into the researcher’s guidelines during the study. The assumptions will include the data believed to be automatically correct, the limitations will include barriers to the study’s efficiency, success, and generalizability, while the delimitations will indicate the approaches used by the research to eliminate the limitations. Additional elements within the appendices and references, which are meant to offer readers an effective line-up of the relevant research applied in the study to make advanced research to be conducted by the reader on personal initiative easy.
Transition to Section 2
The Second section within the study will be a continuation of the processes included in Section 1. Section 2 will provide additional support to elements such as the importance of the study indicated in the first section. Section 2 will include segments such as role of the researcher and methodology, which will work to indicate the detailed steps that the researcher will take to develop the elements included in Section 1. The role of the researcher will be a part of Section 2, which will detail the different responsibilities that the researcher will have towards the topic, the participants, and the study methods selected for the research. Section 2 also includes a research methodology that details the different approaches that the researcher has selected for data collection, analysis, and presentation. The section is vital to the portrayal of the significance of the study because it will support the aforementioned sections such as research questions and problems statement. The methodology sections will be where the answers to the research questions will be gathered and analyzed for a summative assessment of the influence of diversity and inclusivity on leadership. The methodology section will identify the approach used to organize the data collected, which will indicate the integrity of the study based on the presented relevance and importance of the research. The approach used with the participants within the study will also be outlined in the methodology section, which will be essential in supporting the relevance of the study. This attention to the participants within the study will assert the direction of the study by providing a clear image of whether the researcher is on the right track towards answering the research questions identified in Section 1. Also, Section 2 will include the research proposal for the project, which will be a vital piece in the study that will indicate the support and affiliations attributed to the case study. This will be a part of the study that offers a summary of the complexity of the study by summarizing the relevance of the research and the desired outcomes of the research. Seeing that the topic demands an extensive approach, the research proposal section will thoroughly defend the requirements of the study to provide a clear image of the reliability of the study to the topic being investigated.
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ACC 2010 Intermediate Accounting I Completing the QuickBooks® Comprehensive Problem Assignment This
WRITING ASSIGNMENT 1: Choose ONE of the following to answer in approximately 1250 words (about Essay History Assignment Help ACC 2010 Intermediate Accounting I
Completing the QuickBooks® Comprehensive Problem Assignment
This assignment has 3 components:
An engagement letter;
Completed reports; and (I am working on this)
A compilation report.
The engagement letter and compilation report should be prepared in accordance with the guidelines contained in SSARS #21 AR-C Section 80 Compilation Engagements.
The reports should be prepared in accordance with the instructions in the Owen text for Comprehensive Problem #1 found in Appendix 2. (Note: this is an extension of the Case #1 that has been assigned throughout the course. To complete this problem, you must have successfully completed all of the Case #1 assignments, beginning in Chapter 3 through Chapter 10.)
Ratio Analysis Project Norris D. Howard University of Maryland Global Campus FINC
Ratio Analysis Project
Norris D. Howard
University of Maryland Global Campus
FINC 421 6380 Financial Analysis
Professor Bruce Ferber
September 25, 2022
This consultation of Equifax Inc. (EFX) will deliver a comprehensive financial ratio analysis. The report will include an overview of Equifax’s profitability, solvency, financial activity, market capitalization, and market ratios. Also, industry competitor data will be utilized to complete a strength and weakness analysis by comparing ratios throughout the industry. In final, the report will conclude with a summarization of the discovered financial ratio and other relevant information.
Equifax Inc.’s was incorporated in the state of Georgia in year 1913 however, its predecessors company dates to 1899. The company is comprised of four different international operating segments, Asia Pacific, Europe, Latin America, and North America/Canada. Equifax also conducts joint ventures in Russia, Cambodia, Malaysia, Singapore and Brazil. The firm’s vision is to be “a trusted global leader in data, advanced analytics and technology that creates innovative solutions and insights for our customers” (All SEC filings, 2022). Internationally, the firm delivers to its shareholders through products and services from its U.S. Information Solutions (USIS) segment. Additionally, Equifax offers technology services and information services that support debt collections and recovery management (All SEC filings, 2022). To better understand the financial health of Equifax Inc., a ratio analysis must be conducted and compared to competitors within the industry.
Following the research of Equifax’s profitability ratios from (2017 – 2021) and the most recent quarter (MRQ), a deterioration of most ratios was identified. Return on Assets (ROA) during from 2017-2019 was rather sporadic, with 8.45%, 4.17%, -5.3%, 5.94%, and 7.21% respectively (Morningstar, n.d.). The change in ratios from first to recent year equated to a deteriorated performance of -14.67%. Return of equity (ROE) accounted for a performance improvement of 9.54% for the same timeframe. The annual ROE from past to present years was 20.12%, 9.54%, -14.02%, 18.1%, and 22.04% respectively (Morningstar, n.d.). To analysis the profitability efficiency of Equifax Inc., an analysis and comparison of the firms most recent quarters (MRQ) net income per employee and EBITDA margin will be included. Equifax has a current net income per employee of USD 67,313 but remain above the firm’s average, resulting in Equifax ranking in the 110th place within the financial sector. The firm has experienced a contraction in EBITDA by -7.15% to USD 1,317 million and revenue by -3.41%. This resulted in EBITDA margin falling to 34.05% in the MRQ (Equifax Inc. EBITDA margin, n.d.).
Table 1. EFX EBITDA Margin
(Equifax Inc’s EBITDA margin by quarter. CSIMarket. (n.d.). Retrieved September 25, 2022, from https://csimarket.com/stocks/singleProfitabilityRatios.php?code=EFX&ebit
Now a review of Equifax’s profitability ratios was presented, next the solvency of the firm will be highlighted. According to the metrics recovered from 2017 – 2021 and the most recent quarter (MRQ), a deterioration of ratios was identified. Quick ratio during from 2017-2019 was rather sporadic with the worst ratio in the most current year. The ratio values consisted of 0.47, 0.84, 0.69, 0.93, and 0.42 respectively (Morningstar, n.d.). The current ratio the firm accounted for from the past to present years consisted of 0.6, 1.09, 0.89, 1, and .49 respectively (Morningstar, n.d.).
When comparing Equifax’s debt-to-equity, Equifax came in with a 0.42 quick ratio. Equifax Inc. has the lowest current quick ratio in comparison to TransUnion and Experian (Bhatia, n.d.). This ratio implies that Equifax Inc. could not meet current liabilities obligations with employment of current assets. However, Equifax Inc. was leading competitors in the industry with a debt-to-equity ratio of 1.26 and a financial leverage of 3.06 (Bhatia, n.d.). Nevertheless, was still trailing in the receivables turnover category compared to the competition. Equifax, Inc. is showing signs of too much debt, much of this is because of recent acquisitions (Bhatia, n.d.).
Table 2. Liquidity/Financial Health
(Bhatia, R. (n.d.). Morningstar, inc.. Morningstar. Retrieved September 4, 2022, from https://www.morningstar.com/stocks/xnys/efx/quote)
For Equifax’s financial activity ratios, from 2017 – 2021, a deterioration of ratios was identified. The total asset turnover was 0.48, 0.47, 0.47, 0.47, and 0.48 respectively. While the receivables turnover was 7.66, 7.47, 7.01, 7.1, and 7.25 respectively. Total asset turnover is showing stagnation, though receivables turnover has deteriorated by -5.35% (Morningstar, n.d.). When reviewing most recent quarter, Equifax’s asset turnover is 0.46 which better than the current industry asset turnover ratio of 0.22 (Equifax efficiency, n.d.). The beforementioned is all true when comparing Equifax’s receivable turnover ratio of 6.5 to the industry average of 0.69 (Equifax efficiency, n.d.). However, it is important to note that the above comparison is with the financial industry; the industry has a large variety of companies that might not all be the ideal comparable.
The top metric to analyze before committing to a deep dive into a firm’s financials is market capitalization. When looking at Equifax’s most recent quarter, it was identified that firm has a market capitalization of USD 21.409 billion (Equifax market cap, n.d.). Most similar Industry competitors, TransUnion and Experian have market capitalization values of USD 12.160 billion, (TransUnion market cap, n.d.) and USD 26.276 billion (Experian market cap, n.d.) respectively. This ranks Equifax Inc. directly in the middle and shortly away from taking the leading position amongst the three similar companies.
The last areas necessary to analyze is Equifax’s market valuation ratios. Disclosure, this area of concern is majorly affected by the constant swings within the worldwide economic cycles and Federal reserve interest rates. Equifax’s cash flow per share from 2017 to 2021 ranges from -3.63 to 4.97 with a most recent ratio of 2.77 (Equifax financial, n.d.). The firms book value per share ranged from 26.96 to 29.49 for the same time-period (Equifax financial, n.d.). Competitors TransUnion and Experian had a 2021 cash flow per share of 3.37 (TransUnion financial, n.d.) and 1.15 (Morningstar, n.d.) respectively. The competitors book value per share for 2021 is 7.89 (TransUnion financial, n.d.) and 13.87 (Morningstar, n.d.). In all, Equifax places second of the three firms when it comes to cash flow per share and last in the book value per share categories. Equifax’s market ratios were unstable, while Experian had the most consistent year-over-year market ratios.
Strengths and Weaknesses
Equifax Inc. has a wealth of weaknesses but there still some strengths to highlight. As stated above, Equifax’s recent acquisitions, abnormal drop in profit margins and debt ratios are some of the weaknesses of the firm. Though, some of the weaknesses such as the debt-to-equity ratio could be a short-term issue if the newly acquired acquisitions perform as planned. Additionally, the drop in profit following the 2017 cybersecurity attack could be an issue of the past and just add to Equifax’s proof of concept. Lastly, after Equifax’s loads of acquisitions in 2021, the firm maintained its position as one of the leaders within the industry when it comes to financial leverage. Equifax’s biggest strength is its tailwinds; much of the drawdowns to the accounting of Equifax is in the past.
Equifax not the leader within the financial industry, however, it is not the worst company. Equifax has been around since 1899 and has a proof of concept with loyal consumers. Although, the analysis of 2017-2021 captures the firm’s cybersecurity crisis that totally change Equifax’s trajectory. The consultant team truly believes that the sporadic ratios throughout this ratio analysis is a result of the negative affects of the cybersecurity crisis. In summary, the firms EBITDA experienced a recent contraction, current is operating with a lot of debt, currently controls a large portion of market capitalization, and has unstable market ratios. It is recommended to place Equifax on an observation list and continue to analyze this firms values until more consistent financials come into play.
All SEC filings. Equifax Inc. (2022, February 24). Retrieved September 4, 2022, from https://investor.equifax.com/sec-filings/all-sec-filings?page=3##document-3316-0000033185-22-000014-1
Bhatia, R. (n.d.). Morningstar, inc.. Morningstar. Retrieved September 4, 2022, from https://www.morningstar.com/stocks/xnys/efx/quote
Equifax financial ratios for analysis 2009-2022: EFX. Macrotrends. (n.d.). Retrieved September 25, 2022, from https://www.macrotrends.net/stocks/charts/EFX/equifax/financial-ratios
Equifax Inc’s EBITDA margin by quarter. CSIMarket. (n.d.). Retrieved September 25, 2022, from https://csimarket.com/stocks/singleProfitabilityRatios.php?code=EFX&ebit
Equifax Inc Efficiency Comparisons. Equifax Inc (EFX) Efficiency Comparisons to Industry Sector and S&P. (n.d.). Retrieved September 25, 2022, from https://csimarket.com/stocks/EFX-Efficiency-Comparisons.html
Equifax market Cap 2010-2022: EFX. Macrotrends. (n.d.). Retrieved September 25, 2022, from https://www.macrotrends.net/stocks/charts/EFX/equifax/market-cap
Experian market cap 2011-2022: EXPGY. Macrotrends. (n.d.). Retrieved September 25, 2022, from https://www.macrotrends.net/stocks/charts/EXPGY/experian/market-cap
Morningstar, inc.. Morningstar. (n.d.). Retrieved September 25, 2022, from https://www.morningstar.com/stocks/xnys/efx/valuation
Morningstar, inc.. Morningstar. (n.d.). Retrieved September 25, 2022, from https://www.morningstar.com/stocks/pinx/expgf/valuation
TransUnion financial ratios for analysis 2010-2022: TRU. Macrotrends. (n.d.). Retrieved September 25, 2022, from https://www.macrotrends.net/stocks/charts/TRU/transunion/financial-ratios
Transunion market cap 2011-2022: TRU. Macrotrends. (n.d.). Retrieved September 25, 2022, from https://www.macrotrends.net/stocks/charts/TRU/transunion/market-cap
Economic Analysis of Business Decisions – Economics 5314 Problem Set 2 Worth
Economic Analysis of Business Decisions – Economics 5314
Problem Set 2
Worth 100 points
29 Sept. 2022
Due: 6 Oct. 2022
You must provide a complete explanation of how you got your answers.
Brookfield Properties leases 1.5 million square feet of space to 172 retailers of the Parks Mall in south Arlington.
Would you expect the rental rate per square foot to be the same near the food court and atrium as near mall exits?
During the pandemic demand for in-person shopping fell 25%. Would you expect retailing losses to be concentrated among retailers or their landlords?
Would you expect stores to carry the same level of in-store inventories of merchandise during the pandemic?
Consider a fourth down punting situation in football. The offense can kick the ball away or fake a punt. The defense can setup for a return or can guard against a fake. The payoffs are the likelihood of winning the game as a result and are:
Let p be the probability the offense chooses to punt, and r be the probability the defense chooses to setup for a return. What are the best responses of the teams?
What is the Nash Equilibrium of this fourth down game?
Suppose it is late in the game and the offense is trailing. The payoffs to punting are now (0.4, 0.6) if the defense returns and (0.6, 0.4) if it guards. How does the change in payoffs affect strategies?
Fishing fleets send out boats to catch fish and sell them at market. But if there are more boats, b, each boat has a smaller haul. Suppose the value of a boat’s catch is V = 180 – b. There are no costs marginal costs to sending more boats.
If there is only one fleet operator, how many boats will he choose? What are profits?
If there are two fleet operators, what is the profit function for each operator?
What is the FOC for each operator?
What is the best response function for each operator?
At the Nash equilibrium of the game, how many boats are chosen and what are industry profits?
If there are three operators, how many boats are chosen and what are industry profits?
Suppose you are in sales and your utility function is U(I) = I1/2.
If you meet your sales goal for the month, you earn $4,900 and $3,600 if not. What is your expected utility if you reach your sales goal 50% of the time?
Suppose the sales goal was lowered so that you meet it 60% of the time. Now, what is your expected utility?
Instead of lowering the goal, suppose the compensation from meeting the goal was increased by $250. Would you prefer the lower goal or the higher payment?
Instead of lowering the goal, suppose the compensation from failing to meet the goal was increased by $250. Would you prefer the lower goal or the higher payment?
The used cars vary in their quality. There are 101 sellers each with a car that they value at $1,000, $1,010, $1,020, … $2,000. Sellers know the quality exactly, but buyers only know the distribution. If buyers did know the quality, they would value each car by $300 more than sellers value the car.
At a price of, say, $1,400, how much would buyers value the average car offered for sale? Would buyers be willing to pay $1,400?
At a price of, say, $1,800, how much would buyers value the average car offered for sale? Would buyers be willing to pay $1,800?
At what price is the buyer’s expected value just equal to the price?
What fraction of the available gains from trade are realized?
Suppose a used car dealer can perfectly determine a car’s value and offers a money back guarantee to buyers. However, this used car dealer intermediation costs $100 per car. Now would a car worth $2,000 to the seller get sold?
Would the seller who values her car at, say, $1,400 prefer to sell to the buyer directly or through the used car dealer?