Building an Inclusive Diversity Culture: Principles, Processes and Practice

Abstract

In management theory and business practice, the dealing with diversity, especially a diverse workforce, has played a prominent role in recent years. In a globalizing economy companies recognized potential benefits of a multicultural workforce and tried to create more inclusive work environments. However, "many organizations have been disappointed with the results they have achieved in their efforts to meet the diversity challenge" [Cox: 2001, Creating the Multicultural Organization (Jossey-Bass, San Francisco)].

Building an Inclusive DiversityCulture: Principles, Processes andPracticeNicola M. PlessThomas MaakABSTRACT. In management theory and businesspractice, the dealing with diversity, especially a diverseworkforce, has played a prominent role in recent years. Ina globalizing economy companies recognized potentialbenefits of a multicultural workforce and tried to createmore inclusive work environments. However, manyorganizations have been disappointed with the results theyhave achieved in their efforts to meet the diversity challenge [Cox: 2001, Creating the Multicultural Organization(Jossey-Bass, San Francisco)]. We see the reason for this inthe fact that while much attention has been paid to thestrategic dimension of diversity policies, systems, andprocesses, much less thought has been given to the normative dimension, the norms and values involved. Giventhe fact that diversity is essentially about cultural normsand values, appropriate reflection work becomes a fundamental task to create a truly inclusive work environment where people from diverse backgrounds feelrespected and recognized.Therefore, we focus in this article on the challenge ofbuilding an inclusive diversity culture showing that such aculture of inclusion has to be built on solid moralgrounds. We present a conceptual framework of inclusionbased on a moral theory of recognition and introduce the

founding principles of reciprocal understanding, standpoint plurality and mutual enabling, trust and integrity.After revealing barriers that hinder a culture of inclusionfrom emerging we shed light on the process of developingsuch a culture which involves four essential transformational stages: The first phase focuses on raising awareness,building understanding and encouraging reflection. Thesecond phase deals with the development of a vision ofinclusion as an important step to define the changedirection. In a third phase key management concepts andprinciples should be re-thought. This leads to the fourth,action-oriented phase, that focuses on an integrated Human Relations Management (HRM)1 system that helpsimplement change by doing both, translating the founding principles via competencies into observable andmeasurable behavior and fostering the development,reinforcement and recognition of inclusive behavior.KEY WORDS: business principles, change management,corporate culture, diversity management, discourse ethics,ethics of recognition, business ethics, integrated personnelmanagement system, HRMIntroductionOne of the major ethical challenges in todaysincreasingly diverse work environment is the searchfor sound principles to frame business activities andguide actors, corporations and individuals. Whilediversity has been a much debated topic in management theory and practice in recent years, it wereinitially legal aspects, notably the avoidance of lawsuits, as well as changes in the labor market demographics (e.g. increased participation of women andminorities) that made it a subject of paramountimportance for corporations. There is growingawareness today, however, that diversity management should go much further than just complyingDr. Nicola Pless is Senior Researcher and Lecturer at theUniversity of St. Gallen as well as Visiting Senior ResearchFellow at INSEAD, France. She worked for several years indifferent international HR and management developmentfunctions for global financial services firms as well as theWorld Bank Group. Her research focuses on organizationaltheory, leadership/leadership development, diversity management, corporate responsibility.Dr. Thomas Maak is Research Director at the Institute forBusiness Ethics and Lecturer in Management and Philosophyat the University of St. Gallen, Switzerland as well asVisiting Senior Research Fellow at INSEAD, France. Heconducts research in the areas of corporate citizenship, integritymanagement, global business ethics, leadership ethics, moraland political philosophy.Journal of Business Ethics 54: 129147, 2004.

2004 Kluwer Academic Publishers. Printed in the Netherlands.130 Nicola M. Pless and Thomas Maakwith existing rules or reacting to a shift in labormarket resources. Indeed, in management literatureit is argued that the challenges within competitive,dynamic, and increasingly global markets (demanding innovation, creativity as well as flexibility) arebest met by a broadened pool of experience andknowledge found in an effectively managed diverseworkforce (see Cox and Blake, 1991; Milliken andMartins, 1996; Nemeth, 1985; Nemeth and Wachtler, 1983; Shaw and Barrett-Power, 1998; Wrightet al., 1995). Obviously, the innovative and creativepotential inherent to a diverse workforce (in terms ofethnic origin, nationality, cultural back-ground,religion, gender, age, education, lifestyle, workingstyle, way of thinking, etc.) can be used to bridgecultural boundaries and search for original problemsolutions, innovative product ideas and targetedmarketing initiatives. This diversity can become acompetitive advantage.However, while many organizations already havediversity policies and/or initiatives such as trainingprograms in place,2 they often do not show thedesired results like, for example, the reduction ofturn-over among talented people of color (Thomasand Gabarro 1999), the translation into changes inemployees quality of work life, or the creation of anatmosphere of inclusion (Gilbert and Invancevich,2000). Hence, they cannot achieve the abovementioned benefits of diversity, let alone build aculture that embraces diversity and fosters humanity.We see the reason for this in the selective approachto managing diversity: assimilation, that is, as opposed to integration and inclusion. The assimilationapproach simply ignores differences, and thus, nointegrational efforts are made. Instead, women,expatriates and minorities are more or less expectedto assimilate into a pre-defined and dominant corporate culture (Thomas and Gabarro, 1999). Thiscan create enormous tension for people within thesegroups. Apart from intrapersonal conflicts andexperiences of not being heard, recognized or valued, their specific knowledge and experience is notleveraged, they cannot perform to their highestpotential and they experience barriers in advancingwithin the organization. Such an environment neither fosters the realization of the above-mentionedpotential for diversity nor the retention of talentedpeople with diverse backgrounds. It is thereforeimportant to realize that doing requires being:

diversity management has to be built on solid normative grounds, on founding principles, understoodas pillars of a culture of inclusion. Following an inclusionary approach, differences are recognized, valuedand engaged. Different voices are understood asbeing legitimate and as opening up new vistas; theyare heard and integrated in decision making andproblem solving processes; they have an active rolein shaping culture and fostering creativity andinnovation; and eventually in adding value to thecompanys performance.We argue, therefore, that in order to unleash thepotential of workforce diversity, a culture of inclusion needs to be established; a culture that fostersenhanced workforce integration and brings to lifelatent diversity potentials; a culture that is build onclarified normative grounds and honors the differences as well as the similarities of the individual selfand others. Every self is a human being but as aunique person she is always also different fromothers. Diversity is about balancing this naturaltension in different organizational and cultural settings.Diversity is, first and foremost, a cultural questionand thus a question of norms, values, beliefs andexpectations. As such, it is an ethical question anddetermined by some very essential founding principles of human coexistence. Not before this is takeninto consideration, acknowledged and institutionalized, can diversity management be successful.However diversity may have started out in a corporation as a response to legislative mandates, as areaction to the shortage in qualified personnel or tobecome more attractive for young talents, e.g. it isimportant to realize that diversity management willnot unleash any potential benefits unless diversity isculturally valued.A culture of inclusion and the principle ofrecognitionWhen we talk about a culture of inclusion we thinkabout an organizational environment that allowspeople with multiple backgrounds, mindsets andways of thinking to work effectively together and toperform to their highest potential in order to achieveorganizational objectives based on sound principles.In such an environment different voices arePrinciples, Processes and Practice 131respected and heard, diverse viewpoints, perspectivesand approaches are valued and everyone is encouraged to make a unique and meaningful contribution.In order to bring such a vision of inclusion to lifecertain preconditions need to be established.In the following we introduce some foundingprinciples which constitute the minimal requirements for the formation of a discourse that aims atintegrating multiple voices and at creating a cultureof inclusion. Figure 1 visualizes these principles andby that how a house of inclusion may be built.Principle of recognitionThe moral point of view, or the meta-principle,upon which those founding principles are based iswhat we would like to call the principle of recognition.We, as human beings, know from experience that wedepend upon mutual recognition: We want ourloved ones to love us, our friends and colleagues torecognize us for what we are and what we do, ouremployer to honor our achievements and our governments and fellow citizens to respect us and ourrights as free and equal citizens. What we, as independent selves and dependent others, owe each otherin terms of mutual recognition is, in fact, the mostimportant principle of coexistent being. It providesus, philosophically, with an excellent platform for asimultaneously universal but nevertheless sufficientlyparticular moral point of view. Therefore, balancingthe needs for individual recognition as a uniqueperson on the one hand and culturally transcendent

recognition as a human being with corresponding,very essential needs, on the other hand.Coping with diversity on a normative level meansexactly this: recognizing difference while looking for thecommon bond. The more conscious the treatment ofthe ethical underpinnings is, the better are thechances that the essential moral needs of those involved are met and, at the same time, inclusiveness isenhanced to a degree where the many advantagesbecome visible and livable; in a culture of inclusion,that is. What are the elements that form the metaprinciple of recognition?Following Honneth (1994) and Maak (1999) wewould like to distinguish mutual recognition interms of emotional recognition, solidarity and legal andpolitical recognition. These three basic forms of recognition create and enable our being. Their meaningdiffers insofar as it depends on the actual situation ofa person, but also on the battles for recognitionfought in a certain society at a certain time; e.g., thestate of rights and democracy in that particularsociety. In addition, the full meaning is revealed onlyif a need for recognition is violated. Thus, whatrecognition positively means is derived from negative experiences, e.g. the violation of human rightsand the physical and psychical abuse of a concreteperson, the violation of employee or civic rights, ornon-recognition of individual achievements anddevaluation of a person through humiliation.Emotional recognition as the most basic form ofaffirmation of a person is literally the most fundamental one. It takes place in close relationships suchas mother/parents-child relations or those betweenpartners, friends, but also between colleagues. Nonrecognition here means emotional damage throughverbal, psychological and/or physical assault, rangingfrom any kind of harassment to extreme cases such asrape or torture. The absence of emotional recognition can hinder a person to develop self-esteem andultimately to create healthy and sustainable relationships with people. Thus, there is a fundamentalneed for emotional recognition in the relationshipswe grow up in, live in and work in. Positive emotional affirmation in this sense touches the core ofour self-relationship, self-esteem as well as relationship building with other human beings. It is thegrounding that we need to develop both ourselvestowards mutually recognized, free and equal beings(legal/political recognition) and to build emotionallyBuilding relationshipsreciprocal understandingmutual enablingstandpoint plurality andtrustintegrityRECOGNITIONFigure 1. Building an inclusive diversity culture thefounding principles.132 Nicola M. Pless and Thomas Maakhealthy (non-abusive) relationships with others.What does this mean for the organizational context?It means, first and foremost, that we need to recognize and pay attention to our mutually sharedneed for emotional recognition by fostering a cultural climate that allows for it to happen, throughwords, gestures and relational commitment. One ofthe core challenges in realizing this is the art ofbalancing emotional expressions because i.e., onepersons gesture can be perceived by another personas inappropriate or even harassing. This illustrates thenecessity for taking nothing for granted, reflectingown assumptions and behavior, adapting behavior,talking about differences and ultimately creating amutually agreed sphere of emotional expression.Again, a culture of inclusion is about recognizingdifference, on various levels, while looking for thecommon bond.It is often assumed that a competitive environment hinders or even does not allow for emotionalrecognition (or is equated with destructive emotional expression such as anger, shouting, stress, etc.).However, it is not the competitive environment assuch that determines the quality of relations; it ispeople who create relations under certain assumptions, e.g.: in order to survive under fierce competition we need to be the winner, and as suchaggressive, aim at taking it all (otherwise the competition does), compete heavily internally (becausethat enhances individual performance), assessemployees against short-term results, motivate people predominantly by bonus payments, and weaccept that relations are only a means to an end(because time is money). Yet, a competitive environment does not necessarily have to be a dog-eatdog-competition (in order to ensure businessresults) and thus be a disrespectful and icy environment. One could argue that under competitivepressure basic mutual recognition becomes evenmore important because it fosters self-esteem as thebasis for delivering high performance contributionsunder pressure, it helps people to build healthy andsustainable relationships, which is the heart ofworking effectively in diverse teams and to serveclients. How important emotions at the workplaceare, both positive and negative, is also intenselydiscussed in the growing body of literature onemotions in the work environment (Goleman, 1995;Weisinger, 1998). Even if emotions are not accessible in terms of general moral assessments, they arenevertheless fundamentally important for soundmoral development and a healthy self-relationship. Afact, that is especially important with respect tobuilding a culture that fosters inclusion and recognizes difference at the same time.Now, what are the implications of solidarity andlegal and political recognition for the organizationalcontext? Putting things into moral perspective showsthat diversity management has to begin, first andforemost, with reflection work. It has to make surethat the basic requirements for recognition are met.It means, in terms of legal and political recognition,thinking about the state of equality in an organization and creating equality where necessary. Beingequal in terms of human, civil and labor rights meansbeing recognized as an equally free organization citizen.Valuing diversity starts with guaranteeing the samerights for everyone and by encouraging people to begood organization citizens. Thus, to speak up andactively engage in creating a culture of inclusion. Itis, in essence, about recognizing the individual self asa unique person and as a different other.People who feel recognized as different but equal,who know that they can be their true selves, notonly in private but also at the workplace, are at easewith their personality, can play a confident role andare motivated to give their best. Provided that theyalso experience solidarity in relation to othermembers of the organization. While legal andpolitical recognition are moral essentials for theindividual state of mind, it is practiced solidarity, theactual face-to-face recognition among equal butdifferent people, that provides affirmation andmotivation and ultimately unleashes any given potential. This is one reason why diversity programswhich solely focus on legal aspects will not succeed.Solidarity grows in an environment where peoplefeel confident; where they like to work together andtrust each other; where they acknowledge eachothers individual achievements as well as those inteams. As obvious as this may sound, business realityknows numerous cases of humiliation; and fiercecompetition or a winner-take-all culture leavespractically no room for practiced solidarity. It isimportant to stress that diversity, in this respect, isessentially about finding the right balance betweenindividualism and community and thus about creating recognition space.Principles, Processes and Practice 133Culture is always a common achievement(Smircich, 1983; Schein, 1985); and a culture ofinclusion depends on the level of mutual recognition. For an inclusive diversity culture this alsomeans that respect is paid to the plurality of subcultures inside the corporation; that none is excludedfrom the ongoing moral discourse and that eachsubculture has the opportunity to take part inshaping the cultural reality in the organization, itsvalues, norms, policies, etc. As indicated earlier,further founding principles can be derived from thenormative perspective of recognition.Reciprocal understandingIn order to create an inclusive organizational culturein which people from different backgrounds respectand understand each other and successfully worktogether to reach common goals, it becomes crucialto foster relationships and stimulate discursive processes between the diverse cultures in a way thathitherto marginalized voices are not only toleratedbut actively invited, supported and empowered tostate their viewpoints, ideas and opinions. This requires the openness to get involved with people withdifferent perspectives, and the willingness to activelylisten to other viewpoints, in order to learn moreabout them and understand their basic assumptionsto a point where one is able to commonly assessthem, based on reciprocal understanding. The pointhere is to recognize each other as open and able to communicate and thus as a communicative being andmember of a speech community. It is in this sensethat the ethics of recognition comes to live ascommunicative or discourse ethics.3Standpoint plurality and mutual enablingInclusiveness requires openness to different standpoints; this seems easy to agree upon. However, inpractice it can become difficult to ensure thisopenness if intellectual traditions induce people tofind the one right way, the one and true answer. Infact, there might be no right solution at all. Andyet, this can easily lead into a situation where adominant voice is generalized and all the othervoices are marginalized. Such situations of inequality

and domination often arise in the workplace, whenthere are conflicting standpoints coupled with anunequal distribution of power among parties,meaning that one or more parties possess the power(due to position, resources or other means) to pushthrough their interests against the will of others.While both, the extent to which power is exercised and the extent to which unequal power distribution is accepted (by the less powerful membersof institutions) can vary with respect to the degree ofpower distance in an organization and/or country,4there is no doubt that whatever the context there areand will always be imbalances in the distribution ofpower. The objective is thus to raise awareness forthe power aspect in relations and the necessity tocreate an inclusive discursive environment.5In order to be able to deal with the above addressed situation which frequently arises in diverseand multicultural work environments, it becomesnecessary to enable a dialogue and dismiss somehindering assumptions such as the belief that there isone objective and true knowledge claim that provesall the others wrong. What is considered right orwrong, in the end, should be a shared insight basedon the common deliberations over the issues involved. Thus, it is essential to create an open andparticipative dialogue, integrate different voices intothat dialogue, enable other voices to speak up,discuss and weigh different arguments and find acommon approach to a topic or issue. As a consequence, what is considered morally right and legitimate, results from an ongoing moral discourse, adiscursive process in which only one thing counts:the power of the better reasoned argument. Habermas, accordingly, emphasizes the following general discourse requirements: inclusiveness, equality,sincereness and absence of force (Habermas, 1996,p. 62). This means for the organizational contextthat diverse groups with different local realitiesneed to be enabled to come together and createtheir organizational story and shared cultural identity in an ongoing process of common discursiveaction, built on mutual recognition. Throughoutthis process it becomes necessary to actively integrate the divergent and, in particular, heretoforemarginalized voices (mutual enabling). This requiresthat their voices are heard, that they are encouragedto share their ideas, thoughts and perspectives andthat they are enabled to participate in an ongoing134 Nicola M. Pless and Thomas Maaktheir actions on principles and act in a reliable andcoherent manner. They show wholeness (this iswhat integrity stands for) and demonstrate, in a moralsense, character. This wholeness of a person isessentially determined by the quality of relationshipsa person has; to herself as well as to other people or toorganizations. (Solomon, 1999, p. 38)As a culture of inclusion implies wholeness anddevelops around these relationships in an organization the meaning of integrity strongly supports thenotion that only a wholehearted commitment torecognizing each others sameness and difference willbe successful. Because diversity is essentially aboutmutual recognition and the core values people sharein an organization, no half-hearted approach to thissubject will do. In fact, structures and processes, too,should be designed to support moral self-governanceby creating a system of organizational integrity.(Sharp Paine, 1997b; Moorthy et al., 1998; ThorneLeclair et al., 1998)An intercultural moral point of viewOur aim is to demonstrate the importance of a diverse culture of inclusion. Since diversity meansdiversity in terms of cultural background, religion,beliefs, gender and value systems, etc., the foundingprinciples have to transcend any possible boundariesimposed on by any of those aspects. They have to beuniversal and so fundamental in their nature thatthey can override any particular obstacles to thedevelopment of a culture of inclusion. In pointingout the basic principles upon which this cultureshould be based, we believe to have outlined anintercultural moral point of view6: the principle ofrecognition reflects the basic human experience thatwe, as vulnerable human beings, are mutuallydependent on each others recognition emotionally, legally/politically, and in terms of solidarity.The actual level of mutual recognition that a particular group, organisation, community or society hasachieved at a certain time is historically inscribed.Nevertheless, the principle of recognition as such is notbound to a certain cultural background. Whatever ourbeliefs are, whatever our cultural background is, ourreligion, gender, lifestyle or profession; we all sharethe need for recognition. It is part of the humancondition.process of forming common cultural realities. Such acontext allows standpoint plurality, free expressionand the supporting of different opinions and standpoints as well as touching on topics with whichothers do not agree without running the risk ofbeing sanctioned and/or cut off. Again, what countswith respect to consensual validation of claims is thepower of the better reason, not that of a function orposition.TrustGetting people from different cultural backgroundsto work co-operatively together and to comfortablyshare their knowledge, experiences and viewpointspresupposes a basis of trust. Reciprocal recognition isan important foundation on which mutual trust canbe developed through ongoing relationship work(Calton and Kurland, 1996). It is apparent that thereare relational frameworks in which trust may developmore easily than in others. It is less likely that trustwill develop in relations that are shaped by delimitation and distance, legalism and bargaining, dogeat-dog or winner-take-all competition and shortterm means-to-an-end thinking: what counts insuch settings are one dominant person or player, thewinner, and short-term results. If, by contrast, therelational framework is built on closeness, cooperation, and reciprocal recognition, mutual trust is morelikely to develop. While building trust is a lengthyprocess, it can be quickly lost; therefore, trust requires continual nurturing if it is to be maintained. Itis, after all, the relationships that create trust and uponwhich trust is based, where authentic trust can befound (Solomon and Flores, 2001).IntegrityFor a culture of inclusion to develop, moral reliabilityand coherence is as essential as mutual trust. By thatwe mean the integrity of people and processes in anorganization. Integrity can be described as the qualityof moral self-governance, i.e. that a person subscribesto a set of principles and commitments and upholdsthese, especially when facing a challenge, for whatshe takes to be the right reasons (Sharp Paine, 1997a;McFall, 1992). People who act with integrity, basePrinciples, Processes and Practice 135As for the founding principles we made explicit,following the moral point of view of mutual recognition,reciprocal understanding, standpoint plurality andmutual enabling, trust and integrity are not culturallybound either. They reflect, however, a certain levelof democratic culture, empathy and moral awarenessthat will vary across cultures and thus the globe.This, of course, should be no excuse not to searchfor the highest possible level in and beyond diverseorganizations.There is much agreement today, that a soundand lasting common ethical ground for internationalbusiness is vital for humankind as we are movingtowards an increasingly interconnected world(Enderle, 1999, p. 4). Against this background, thequest for a culture of inclusion and its founding andsupporting principles can be considered a microexperiment in the search for a sound ethical groundin cross-cultural business. While further empiricalevidence is needed, as to whether the before outlined principles are sufficient, they provide us with athorough starting point. Interesting, on the organizational level, are the far-reaching experiences thatMotorola gained by introducing its cross-culturalattempt to set up a culture of uncompromisingintegrity (Moorthy et al., 1998).Thus, given the fact that few truly diverse organizations are already in place and that even fewer arebuild on solid ethical ground, sound diversitymanagement requires a culture change. This is afinding that is strongly supported by recent researchin the field (Allen and Montgomery, 2001; Gilbertet al., 1999). However, there are assumptions andmindsets that hinder a diverse culture from emergingand thus need to be addressed for a change to besuccessful.Challenging assumptions and mindsetsOne needs to be aware that the creation of aninclusive organizational environment is a real challenge that implies profound transformation and thatmight be far from easy to realize. Sure, in theory theabove introduced principles seem easy to agree on.In practice, however, a culture change requires thewillingness and desire to reassess existing value systems, mindsets and habits, to change ingrained waysof thinking, behaving and interacting, to probe and

rethink seldom-questioned basic assumptions and tofollow new paths. Therefore we will give an ideaabout what it can mean to question existing thinkingstyles, to uncover prevailing but counterproductivemanagement conceptions and to dismantle underlying assumptions.Question dominant thinking stylesDespite the talk about post-modernity, the worldof markets is still deeply rooted in modernitys scientific-technical thinking style: the Cartesian subject-object separation and the polarity of westernthought (good/bad, true/false, win/loose). Thatmeans, if one knowledge claim is held to be true allthe others have to be false (win/loose situation) andwill be considered as irrelevant. The resulting tendency is to favor and generalize only one dominantapproach, viewpoint, logic and way of thinking.Voices which differ from the dominant logic(Prahalad and Bettis, 1986) are measured against thisstandard. Through these lenses they are rarely heard,let alone understood, and as a result marginalized,silenced or ignored (Pless, 1998).Market liberalism and economic individualismstand in this tradition and form such a dominantlogic; maybe the most dominant of our time. Itdominates the way we are supposed to think aboutbusiness matters and it is the reason why it is sodifficult to integrate social, moral or other noneconomic factors in a sustainable manner. It isbased on the underlying assumption of the unengaged and unencumbered self (Sandel, 1982); thenomadic, competitive individualist who enters intorelationships only, and insofar, as they are useful; theautonomous agent who typically engages in shortterm exchange-based relations.Any quasi-dogmatic logic such as market individualism inevitably excludes other perspectives.The subjugation of other voices and viewpoints,however, obviously contradicts a fruitful diversityapproach and communication process where variousvoices can collectively contribute to innovation andcreativity potentials and, in the end, share commoncultural grounds. It is therefore essential for anorganization to break this logic up, to identify itsshortcomings and create space for the other(standpoint plurality and mutual enabling).136 Nicola M. Pless and Thomas MaakChallenge hierarchical leadership conceptionsA second conception that hinders inclusiveness is ahierarchical, individualized leadership approach.Despite the efforts to flatten hierarchies, this kind ofleadership conception is still in place in manyorganizations. The main problem here is that in acorporate culture that defines superiors as thinkingsubjects and employees as executing objectsemployee thought and action potential is consequently stunted. Employees are expected to adaptthemselves to the way of thinking and behavior oftheir superiors (Dachler and Hosking, 1995). Indeed, very little room is granted employees to become independently creative and contributeinnovative ideas. Besides the fact that they are usually not encouraged to speak up, open and frankly,such independent thought and behavior appears tobe threatening (undermining the superior) and thusis unwanted. Open and motivating communicationis hindered. Consequently, the creative and innovative potential inherent in a diverse workforcecannot be activated. More importantly, though,employees are not fully recognized as equal moralbeings.Reveal teamwork barriersTrue and cooperative teamwork, which is, as wewill see below, an important element in culturalchange processes, is virtually impossible in corporatestructures that are based on hierarchy and dominance. For one, the usual vertical career focus withits implicit survival of the fittest-imperativecounteracts genuine teamwork. Another symptom isthe impossibility to discuss and work on equal terms,because the voice and word of a privileged ordomineering person (i.e. the team leader) prevails.Against this background it becomes more than unlikely to realize the problem-solving potential of adiverse workforce as, e.g., described by Cox andBlake (1991). Problem-solving and idea-generatingefforts will be measured against given imperatives;they are trapped in a devaluation discourse. Thiscertainly strays a long way from any constructivedialogue based on broadened background experience and generating new and innovative problemsolutions.For creating an inclusive working environmentwhich fosters humanity and the realization of creativity and innovation potentials of a diverse workforce reflection work is crucial because it can shed lighton existing diversity barriers and help remove thoseassumptions that prove problematic to an inclusivediversity approach.Building a diverse culture of inclusionThe introduction of founding principles and thereflection on barriers to diversity leads us to thequestions how organizations could accommodate andnurture a culture of inclusion and which steps can betaken to translate the founding principles into management practice. To answer this question we aregoing to address necessary transformation steps andshow how exemplary management concepts andpersonnel processes can be adapted in order toaccommodate an inclusive diversity culture. Inspiredby the work of Cox and Beale (1997), who discuss theprocess of learning to effectively deal with diversityand Kotters model of leading change (1996)7 we liketo focus on four essential transformation stages forbuilding a culture of inclusion (see Figure 2).Phase 1: Raising awareness, creating understanding andencouraging reflectionAs Gilbert and Ivancevich point out, to createinclusion, alternative ways of perceiving reality mustPhase 2:Phase 1:Raising awareness,

creating understanding,

encouraging reflectionRethinking key

management concepts

and principlesand processesFigure 2. Transformation stages for building a culture ofinclusion.Principles, Processes and Practice 137be available (2000, p. 101). This permits change inreality construction and allows the creation of otherpossible realities like an inclusive diversity culture. Anecessary first step is to start an ongoing discursivelearning process, which aims at raising awareness forthe fact that different people perceive reality differently; building understanding and respect for thesedifferent realities through ongoing discourse andencouraging reflection; and last but not least,bringing the fundamental principles to life, whichconstitute the basis for a culture of inclusion.Such a discursive process to form a commoncultural understanding should consist of two majorsteps: The first step is about becoming aware ofstandpoint plurality and what it means to integratediverse voices in a discourse; that people with different backgrounds have different perceptions ofreality due to their disparate background of experiences rooted in social, ethnic, cultural, gender, etc.differences, and that there is no such thing as a givenobjective and true reality; that some of the voices areprivileged and others marginalized and that it becomes necessary to integrate and enable the marginalized ones in order to create an inclusiveenvironment. The second step is about creating acommon basis of understanding by identifying thecommon moral grounds as well as reflecting thedifferent underlying assumptions on which specificthought and behavior patterns are based. It isessentially about creating an organizational discourse,and thus bringing to life discourse ethics, as a relational process in which the basic assumptions about adiverse culture of inclusion are worked out throughthe conscious, reciprocal reference to the text andcontext of ones own and all other cultures integrated in the discourse. Based on awareness for andunderstanding of other positions, a cultural transformation process is triggered and alternative ways ofcreating organizational reality can be pursued.Good corporate ethics is unthinkable without thatkind of reflection work. In fact, as already mentioned,the critical scrutiny and the continuing developmentof corporate values and norms, the practical reasoning and discursive deliberation for the legitimation of moral claims, within a corporation as well as apart of a stakeholder dialogue, should be at the coreof corporate ethics (Ulrich and Maak, 2000). Itgenerates orienting knowledge of reasonable purposes,principles and preconditions for business and lays out

the groundwork for legitimate corporate success. Acrucial part of managing diversity is about valuingand validating diverse moral claims. This process,however, can only succeed if everyone is heard,included in rather than excluded from the moralrealms of an organization.Phase 2: Developing a vision of inclusionA clearly defined vision is an important starting pointin forming a culture of inclusion. It clarifies thegeneral direction for change, provides a commonmental frame, draws a picture of the future and makesclear where the company wants to be (Gouillart andKelly, 1995; Kotter, 1996). Having a vision becomesparticularly important in a situation of change wherevalues, assumptions, belief systems and mental mapsthat used to be seen as effective and functional are nolonger desirable and must be changed.To create a multicultural and inclusive organizational culture the vision needs to address andincorporate the following aspects: Creating a work environment that is free from

any kind of harassment and is based upon respect for all individuals (inside and outside thecorporation) regardless of sex, gender, race,class, social or cultural origin, religion, disability, lifestyle, organizational level, circumstances, etc. (a basic requirement of mutualrecognition); Building and nourishing a culture of communication where inclusion and trust are thenorms by integrating different perspectives todecision-making and problem-solving processes, by listening to and trying to understanddifferent opinions, by valuing contrary opinionsand arguing positions fairly, and by looking forthe better argument among the validationclaims; Providing equal rights and opportunity for each

employee as a citizen of the organization toachieve her fullest potential and to speak up andopen (and thus, legal and political recognition); Appreciating the contributions each employee

can make by bringing their own perspectives,viewpoints and ideas, and demonstrating solidarity; and138 Nicola M. Pless and Thomas Maak Showing sensitivity to workloads and fostering

(and recognizing the need for) an appropriatebalance between work and personal life.These are only aspects of a diversity vision that needto be addressed; they do not absolve companies ofthe need to find and define their own tailor-madevisions and articulating the desired outcomes in theirown language. It is also important to note that suchvisions should be part of a larger corporate vision,where a corporation defines, among other visionaryissues, its status as a corporate citizen.Creating an effective vision that helps build aculture of inclusion is an important process thatshould include a multitude of stakeholder voices(employees, customers, stockholders, suppliers,communities) to develop a consensual vision thataddresses all relevant concerns. Higher levels of trust,credibility and legitimacy inside and outside thecorporation can be attained, resistance from withinthe organization can be reduced and commitmentfor the long and arduous way to create a diverseculture of inclusion can be mobilized. A similar lineof argumentation is made by Kotter (1996). Oncethe vision is created, it needs to be spreadthroughout the organization and fed back to thepeople involved inside and outside the corporationin order to ensure their buy-in and commitment. Itis essential that CEO and the leaders of the organization widely broadcast their sponsorship of both thevision and the ensuing course of action (Champy,1997; Gouillart and Kelly, 1995; Leach et al., 1995).Phase 3: Rethinking key management concepts andprinciplesAn essential element of the change process is thereflection on and the rethinking of key managementconcepts in the organization, as well as the principlesthey are a based on.Business principlesThe diversity vision has to be translated into guidingbusiness principles. In fact, a fundamental changeprocess will ultimately lead to rethinking andredefining of business principles and codes of conduct in an organization. It is a necessary andimportant process of adjustment that has to reflect

the organizational discourse and thus, the sharedassumptions, values and beliefs. As the essential reference point, a thoroughly considered set of principles based on mutual recognition offers guidanceabout what a corporation stands for, thus documenting the commitment to form and sustain aculture of inclusion.Integrative leadershipWithin an inclusive environment, leadership becomes a question of coordinated social processes inwhich an appointed leader is one voice amongmany. [Leaders] share responsibility with others forthe construction of a particular understanding ofrelationships and their enactment. (Dachler andHosking, 1995, p. 15) Instead of defining a solitaryrole, leadership becomes a relational, interactive taskaimed at involving all people within the company,all members of teams, departments and areas in theongoing processes of initiating, defining and realizing projects and the companys objectives. In therelational role as mentor, coach, moderator, facilitator and cultivator, the leader is no longer the soleauthor of a particular reality but rather becomes aco-author, and to some extent a lead-author, in acommunity of equal employees (Dachler, 1992;Dachler and Dyllick, 1988). The role of mentor andcoach involves supporting employees in theirdevelopment, thus, giving them advice, opening upnew developmental perspectives and opportunities aswell as discussing and weighing alternatives. Theleader as cultivator tries to secure a working climatein which diversity flourishes and creativity is harvested. In a teams, setting this role would imply thatthe leader acts as a moderator and facilitator, aimingat integrating the diverse voices, including them inorder to open up new vistas, getting them involvedin the dialogue and providing the possibility forpartnership, creativity and innovation (Pless, 1998).Participatory decision-making and stakeholder dialogueThis leads us to the question of decision-making andcorporate dialogue. In traditional, hierarchically organized corporations, important and long-termdecisions are usually made by a small group of topmanagement strategists. Routine decisions, in contrast, are for the most part delegated downwards.Yet, in an inclusive culture, this traditional, decision-making logic is quasi-reversed, criticalPrinciples, Processes and Practice 139decisions reserved for the many and routine decisions delegated horizontally to the few. (Iannello,1992, p. 121) By means of including multiple voices,it becomes possible to considerably broaden theknowledge base for decision alternatives and to increase the number of possible paths leading toproblem solutions (Nemeth, 1986; Nemeth andWachtler, 1983; Shaw and Barrett-Power, 1998).Furthermore, by coordinating with the externalenvironment and stakeholders of the corporationand including representatives from different groupsin a stakeholder dialogue, it becomes possible toachieve higher levels of trust, credibility and legitimacy in the critical public. In fact, most of todayscorporations are stakeholder corporations (Phillips, 2003; Post et al., 2002; Svendsen, 1998;Wheeler and Sillanpaa, 1997; Zadek, 2001), i.e.

they exist and operate in an environment wherevarious demands have to be taken into consideration(shareholder, employees, clients, equity holders,government, nature, local and global society, etc.).In this respect, building a culture of inclusion consequently means to engage in an ongoing stakeholder dialogue aiming at respecting all legitimateclaims. Legitimate are those stakeholder claims thatare supported by good reasons. Thus, what counts inthe end is not the power-based influence that aparticular stakeholder (group) might exercise, butthe mere strength of the better reasoned argument.8In general, when deliberating critical businessdecisions that question the status quo (i.e. mergersand acquisitions, new vision or principles), thesearch for consensual decisions with a multitude ofparties is important. Even if the decision-makingprocess takes longer, the translation into action willbe more efficient and successful since motivation andcommitment of those participating are higher andresistance and micro-political barriers smaller. Iannello (1992) and Srivastva and Cooperrider (1986)have demonstrated with case studies of egalitarianorganizations that participatory decision-making isalso connected with long-term top performance andeconomic success.Work-life balanceAn important part of a principle-based culture ofinclusion is to help people balance work and personal life so that they can be productive while havingvarious lifestyles and personal responsibilities.Essentially, this reflects the recognition of everyperson, employee or manager, as having both a workand a personal life, and thus, as a human being ratherthan a human resource. Proven instruments to dothis are providing flex-time, job-sharing, telecommuting, on-site child care, extended leave, and renewal breaks between major assignments, etc. Inorder to create a sustainable balance between workand personal life Friedman et al. (1998) suggest acollaborative approach between managers andemployees to achieve work and personal objectivesto everyones benefit. It is likely that this approachflourishes in a culture of inclusion that is based onrecognition, trust and understanding. On the otherhand, this approach also reinforces a culture ofinclusion by enabling people to respect, understandand trust each other by making employees feel respected as people with different work lifes and diverse personal lifes. It also fosters a strongercommitment to the organization, thus making iteasier to retain people from diverse backgrounds. Itis, after all, the individual notion of a good lifethat most people are working for.Phase 4: Adapting systems and processesIn the following we like to present one possible wayto translate the reflective work that has been done sofar into management processes. Once awareness andunderstanding have been built (and thereby amotivation to change and a general knowledge basehave been established), once a vision has beendeveloped which clarifies the general direction forchange, and key management concepts have beennewly defined, individuals or organizations arepositioned to take action to actually change behaviorand culture.Competencies of inclusionIn order to be able to change and create a culture ofinclusion people need to have certain qualities andtraits, which we call competencies of inclusion, thatenable them to effectively respond to challenges andopportunities in a diverse and inclusionary workenvironment. These competencies play an importantrole in creating a diverse culture of inclusion due totheir catalytic function between values and norms on140 Nicola M. Pless and Thomas MaakFounding PrinciplesPrincipal of mutual

recognitionReciprocal understandingStandpoint plurality &

mutual enablingTrustIntegrityIntercultural moral point

of viewCompetencies of

InclusionShowing respect &

recognition for othersShowing appreciation for

different voicesEncouraging open &

frank communicationCultivating participative

decision making &

problem solving

processesShowing integrity &

advanced moral

reasoningUsing cooperative

leadership styleDevelopmentSuccession planningTraining programsMentoringTeam developmentOn-going workshops on

awareness, understanding &

reflectionRecruitmentPerformanceEvaluationReward & CompensationSalaryBonusFigure 3. An integrated Human Relations Management system to foster a culture of inclusion.the one hand and actual behavior on the other hand.Lets explain that in more detail: competencies canbe derived from the founding principles (see Figure 3) which they translate into observable andmeasurable behaviors, such as: Showing respect and empathy; Recognizing the other as different but equal; Showing appreciation for different voices, e.g.

by listening actively to them; trying to understand disparate viewpointsand opinions; integrating different voices into theongoing cultural discourse. Practising and encouraging open and frank

communication in all interactions; Cultivating participative decision making and

problem solving processes and team capabilities; Showing integrity and advanced moral reasoning, especially when dealing with ethicaldilemmas; Using a cooperative/consultative leadership

style.These competencies play a crucial role in sensitizingemployees, managers and leaders to behaviors thatare critically important to a culture of inclusion.9

They indicate clearly which behavior is valued.However, as the following example shows thesecompetencies wont have any longterm impact onthe organization unless they are embedded in anintegrated management system. Take for instancethe manager who gets trained to use a participativedecision making approach and a cooperative leadership style: She knows that this behavior is seen asdesirable within the organization and understandsthat it is in line with the diversity vision andbeneficial for the corporate culture. However, ifher performance evaluation as well as pay and bonus still solely depend on quarterly results, not onactual inclusive behavior, there is simply no needfor her to change her leadership style. Especially, ifone takes into account that it will take her moretime to integrate people into decision makingprocesses and will take more personal effort tochange familiar leadership behavior. Therefore, it ismore than likely that she will continue to demonstrate an authoritarian style that, in the past, allowed her to meet her revenue goals andguaranteed her bonus.This example underscores the importance ofembedding competencies of inclusion into an integrated Human Relations Management system inorder to unleash their behavioral potential and fosterchange (see also Gilbert and Ivancevich, 2000; CoxPrinciples, Processes and Practice 141and Beale, 1997). In the following we show howsuch an integrated approach can look like:As discussed above, the founding principles haveto be translated into observable and measurablecompetencies. These competencies form the basisfor different personnel processes like recruitment,performance evaluation, training and development,reward and compensation. In the following, we liketo take a closer look at these processes because theyare fundamental in helping to build and cultivate aculture of inclusion by steering and supportinginclusive behavior.RecruitingLooking at processes, the selection and hiring ofpeople with diverse backgrounds (women, minorities, different nationalities) is an important approachto enhance diversity within the corporation. However, in order to create a culture of inclusion it is notenough to simply recruit people from differentbackgrounds into the organization.10 It becomesnecessary to select those candidates who share thedesired values in terms of diversity and show competencies and behavior favorable to an inclusive anddiverse work culture. A culture of inclusion can onlybe brought to life with the help of people who buyinto this idea, who feel comfortable working in adiverse work environment and are committed tobringing the vision to life. People are the mostimportant capital for any value-based organization. Therefore, it is crucial to identify the rightpeople and have a selection process and instrumentsin place that support this endeavor. Consequently,tools for personnel selection such as interviews andassessment centers (AC) have to be adapted to theidea of diversity and inclusiveness. The selectiontools have to be revised in accordance with theethical and strategic requirements of the diversityvision and re-designed based on the competencies ofinclusion. In order to ensure a fair process all candidates are tested and observed by trained assessorsand interviewers in different assessment exercises(i.e. role plays) and/or interviews and assessed againstthe same set of pre-defined competencies (competency-based selection).Performance evaluationFor both purposes, creating and cultivating a cultureof inclusion, performance evaluation can be a valuable tool because (if applied responsibly) it can be ameans to stimulate the dialogue between employeesand their supervisors to foster lifelong learning, andto encourage and motivate people to show inclusivebehavior. However, this presupposes that performance is not simply evaluated based on pure output(what people achieve), but in equal terms on theevaluation of their behavior (how people achieveresults).In such evaluations, which are a crucial element indiversity and performance management (Cox,1991), behavior and outcome are monitored andmeasured. Employees and supervisors agree at thebeginning of the performance management cycle(usually once a year) on a set of objectives which arelinked to the competency model. The performanceis then assessed with respect to the defined objectives. In a dialogue employee and supervisor discussand agree upon the evaluation, identify areas ofstrengths and weaknesses, and define developmentalareas and measures. We agree with Williams (1998)that it is important to review performance regularlyand provide feedback to the employee on anongoing basis during the performance cycle, so thatbehavioral adaptations can be made spontaneously,and coaching be given when needed.Due to the following reasons, which are notexclusive, we see performance evaluations (PE) asa means to live and practice the founding principles: PE fosters integrity by motivating people to

base their action on principles and acting in areliable and coherent manner. PE stimulates an ongoing dialogue which is

crucial to develop trusting relationships. PE encourages supervisors to observe employees behavior on a regular basis and to givefeedback. While positive feedback is a means toexpress appreciation and to provide affirmation,constructive negative feedback can helpemployees to develop and change behavior aswell as unleash hidden potential. This can, onthe other hand, motivate the supervisor to findout and understand the causes of i.e. poorperformance as well as to find a commonsolution to improve performance together withthe employee.142 Nicola M. Pless and Thomas Maak PE provides a chance to subordinates to express

needs and to articulate developmental aspirations.DevelopmentThe development field is a vast area which providesinstruments, methods and processes at different levels(the organizational, the team and the individual level) to support the creation of a culture of inclusion.For example, training programs (with follow-upmodules) based on competencies of inclusion can bedesigned to train intercultural effectiveness andstrengthen inclusive behavior while raising moralawareness on an individual level; succession planningprograms can be introduced to ensure that eachindividual (independent from gender, race, nationalorigin, age, etc.) can grow into positions at allmanagement levels of an organization according totheir talents and potential.11 For the purpose of ourpaper we want to focus only on some selecteddevelopmental aspects to illustrate how they can beused to build a culture of inclusion.Individual development mentoring: Mentoring isseen as a useful development instrument and animportant factor for career development (Thomasand Gabarro, 1999). Mentoring is a learning partnership between a senior person (a mentor) and a lessexperienced staff member (mentee). The benefits forthe mentee are manyfold: mentoring aims atincreasing the mentees knowledge base as well asthe understanding of institutional operations andculture, developing greater confidence and self-esteem, and enhancing communication and networking skills. On the other hand, mentors canbenefit simultaneously by enhancing their ability tolisten, expanding their coaching and counseling skillsas well as developing their emotional intelligence.Mentoring seems to be helpful in the endeavor tobuild an inclusive work environment since it fostersrelationship building beyond ranks and hierarchies,creates trust, and encourages mutual learning andenabling between mentors and mentees. In essence,for those involved, a mentoring relationship can be acrucial part of actual mutual recognition.Team development developing inclusive teams: AsRosabeth Moss Kanter points out, team building hasto be emphasized to help a diverse workforceappreciate and utilize fully each others skills.

(1997, p. 149) In order to realize the potentialattributed to a diverse workforce an enabling teamenvironment has to be developed in which peopleunderstand one anothers differences. The discursivelearning process introduced above (see phase 1 of thetransformation process) is essential to raise awarenessfor diversity, understand why people are differentand to use this understanding to support the development of a team environment that fosters bothpersonal growth as well as business success. The realchallenge in a diverse team is to cope with thesedifferences in everyday business life and find solutions for arising conflicts. Sheridan (1994) offers anexample from an Exxon Chemical plant in Baytown,Texas, of how teams can cope with conflicts arisingfrom differences in everyday business life by makingthe team environment more inclusive and enabling:In this case a highly skilled and very intelligentengineer who happened to be an Asian womenfound herself trapped in a cumbersome culture clasharising from her cultural up-bringing: On the onehand, she had been taught by her family that respected women in her culture wait until no oneelse is speaking before they speak, and that a []

woman rolls her words seven times on her tonguebefore speaking to be certain that what she says isnot offensive. Her cultural belief about the way thata [respected] woman communicates leads to behavior that is very, very polite. On the other hand,the culture at the Baytown plant dictated anaggressive communication style at meetings. Consequently, being a very polite woman who waitedfor silence before speaking, she seldom got thechance to contribute to team discussions. Recognizing her dilemma, the team members eventuallydeveloped a different communication style, accommodating her needs for pausing before arguing.What this short example illustrates is that aninclusive approach requires relational work(Dachler, 1999), in the sense of a concerted effort torecognize a team members dilemma, to understandthe team processes, and to be willing to change usualways of communicating and interacting in order tobring mutual recognition in everyday discourse settings to life and eventually leverage the contributioneach member can make in a diverse team. To benefitfrom the wealth of experiences in a diverse workforce, it is necessary to create and nurture a cultureof cooperation, respect and trust. As mentionedPrinciples, Processes and Practice 143earlier, it is only in a context of trust without fearof exclusion, hurt feelings and knowledge abuse that people from diverse backgrounds are willing toshare their authentic and culturally specific experience with their working teams; especially since allthose with such experience leave behind a little ofthemselves. In contrast to the current managementtrend of constantly changing team compositions(Sennett, 1998), an inclusive team culture requiresconstancy in team composition so that a workabletrusting relationship can be established.Organizational development: An important developmental instrument for culture building wasintroduced in Phase 1 of the change process. Sincechange itself is an ongoing process that does nothappen easily (Kotter, 1996) we like to stress againthat organizational discourse is the backbone ofcultural development, and, therefore, reflection andawareness workshops have to be scheduled regularlyfor all staff to raise awareness, build understandingand foster reflection (i.e., reflecting, challengingpredominant assumptions, confronting them, andgoing through their implications) on an ongoingbasis. This process is to be accompanied by discourse-trained professionals, whose task it is topropose a communication framework (includingbasic speech rules) that follows the above-mentionedprinciples of inclusion, to facilitate an inclusionarydiscourse among diverse voices within the organization, and to ensure the ongoing process of learningand education.The translation of the founding principles intocompetencies of inclusion, the adaptation of systemsand processes, which lead to behavioral changes, canreinforce the other phases of the change process,bringing new awareness, triggering further reflectionand motivating a rethinking of dominant thinkingstyles, systems and processes. Thus, change becomesan ongoing organizational learning process.Reward and compensationIn an integrated personnel system not only developmental measures are derived from performanceevaluations but also reward systems such as salary,bonus, etc. Reward systems can be used as anadditional method to implement the principle ofrecognition and to reinforce integrity and inclusivebehavior. A possible approach is to make a certainpercentage of each employees compensation (salary

and bonus) dependent on inclusive and diversitysupporting behavior. However, a prerequisite forreward systems is their structural integrity, ensuringequality and guaranteeing the same rights foreveryone, e.g. equal pay for equal jobs. Thismeans that salary disparities among people who dothe same job and deliver the same performancestandard have to be abolished. Gilbert and Ivancevich, e.g., describe a multicultural company where[p]ay of all employees is analysed yearly to ensurethat no disparity exists among peers, or among thoseranked at the same level in terms of hierarchy, yearsof service, and education. (2000, p. 96) If a disparity exists and there is no underlying performanceissue, pay is adjusted upward for the underpaid party.Based on such a fair and equal process diversitydriven and inclusive behavior can be rewarded andindividual and team contribution acknowledged.Fair and equal processes are an important prequisitefor trust to be built within an organization and anexpression of material recognition.Summary and conclusionIn this article, we have shown that the realization ofany potential benefit inherent in a diverse workforcerequires an integrative approach to diversity startingwith the definition of a framework of inclusion builtupon principles of recognition, mutual understanding, standpoint plurality and mutual enabling, trustand integrity, that allows for the integration of different and multiple voices into the organizationaldiscourse. An important part of the process is a reexamination of underlying and rarely questionedassumptions which interfere with inclusiveness.Against this backdrop, leadership, decision-makingand teamwork need to be redefined in order tofoster enhanced employee integration. Managementand personnel within an organization play a crucialrole in setting the stage for change by recognisingthe importance and value of a culture of inclusion,by facilitating the process of defining a vision ofinclusion and putting it into action by buildingawareness, educating and developing people, reformulating existing and introducing new personnelprocesses and instruments, and, last but not least,ensuring an integrated human relations-approach tomanagement that allows to foster and reward144 Nicola M. Pless and Thomas Maakinclusive behavior systematically at all organizationallevels.While this article has provided a conceptualframework for building a culture of inclusion,additional work needs to be done to examine thecontingency between the different cultural pillars(founding principles) and the organizational culture;and to develop a method to survey cultural inclusiveness within an organization. Other key areas forresearch would be the further exploration of theproposed discourse processes based on discourseethics, aiming at the identification of criteriaregarding a good discourse under the conditionsof diversity, and thus the challenges given by amultitude of beliefs, ideas and opinions of peoplefrom different backgrounds (cultural, etc.). Additional research is required to elaborate how powercan be understood in the context of an inclusivediversity culture (see Gergen, 1995, Pless, 1998).Furthermore, it would be necessary to explore thepossibilities, challenges and barriers in buildinginclusive stakeholder relations and in facilitating aninclusive stakeholder dialogue in the face of conflictsof interest and inequality of power relations.Building an inclusive diversity culture is a difficulttask that requires long-term commitment, as allcultural work in organizations does. It can be,however, a unique opportunity, as business globalises and the world gets more and more connected,to create a truly diverse organizational culture thatincorporates basic human principles and fosters human diversity.Notes1 We use the term Human Relations Management(HRM) as a substitute for the term Human ResourceManagement as well as for the more recent term HumanCapital Management, because we do not agree with theunderlying Menschenbild of both terms, which reducethe employee to an object either to a material resourceor a financial resource (= capital). In our understandingHRM or personnel management is about creating andsustaining a working context via rules, regulations andcontracts as well as systems, processes and instruments(based on reflected values and norms) to first andforemost, support and enable the building of effectiveand healthy working conditions and relations (for example between the organization as an entity and theemployee, between leader and followers, between members of a work team, etc.) as a basis to achieveorganizational objectives. In this sense we prefer to usethe term Human Relations Management.2 A study conducted by A.T. Kearney Executive Searchindicated that in 1995 already 70% of the 50 largest U.S.companies had diversity programs in place (Fortune,1999).3 For a good account of discourse ethics, focusing on thewritings of Jurgen Habermas, see William Rehg (1994).See also Maak (1999), pp. 127143.4 This definition of power distance goes back toHofstede and Bond (1984). According to Hofstedesempirical work (1991), people in countries with a smallpower distance culture (like Austria, Denkmark or NewZealand) tend to value equal power distribution, equalrelations and rights, while people in countries with largepower distance cultures (such as Malaysia, Mexico, Arabcountries) tend to accept more easily unequal distributions of power, asymmetrical role relations and hierarchical rights. With respect to the work context this meansthat in a work environment with small power distance(which one finds more likely in flat organizationalstructures and network organizations) there is a tendencyfor small relational distance and to emphasize informality,to assign authority based on contribution, and to baserewards and punishments on performance; in contrast,large power distance work environments (rather to befound in bureaucratic structures) tend to stress relationaldistance often through formality, to assign individualauthority as well as rewards and punishments based onseniority (age, rank, title, etc.) (See also Ting-Toomey,1999).5 It would far exceed the scope of this article to furtherdiscuss the challenges of power relations and conflicts inthe context of building an inclusive diversity culture.However, it is an important question, where furtherresearch needs to be undertaken, which can for exampledraw on the work of Gergen (1995), Helgesen (1990),Kanter (1977), Pfeffer (1981) and Morgan (1997).6 We use the term intercultural moral point of viewobviously in a moral sense to illustrate the need for sharedbasic moral principles across and beyond cultural boundaries (set by religion, gender, language, nation, race, etc.)when it comes to a diversity setting (Ulrich and Maak,2000). While the same rationale could be used insearching for principles in a cross-cultural managementcontext (as management across national borders andcultures), we want to focus here on the intra-organizational challenges of building a culture of inclusion. Thus,we ask what principles are common and sound enough toserve as moral grounding across diverse backgrounds in anorganizational setting.Principles, Processes and Practice 1457 Cox and Beale (1997) describe a three-phase learningprocess (awareness, understanding, action) for dealingeffectively with social-cultural diversity. In his influentialbook Leading Change Kotter (1996) has introduced amodel of creating major change consisting of eight stages:Establishing a sense of urgency, Creating the guidingcoalition, Developing a vision and strategy, Communicating the change vision, Empowering broad-basedaction, Generating short-term wins, Consolidating gainsand producing more change, Anchoring new approachesin the culture.8 In this article, we essentially deal with questions oforganizational culture and respectively with principles,processes and practice within organizations and withrespect to internal stakeholders (such as employees).However, it is important to stress in this context therelevance of an inclusive approach towards externalstakeholders and an open stakeholder dialogue (see Pless,1998) and encourage further research.9 Regarding the proposed set of competencies we like tostress firstly that they serve only as an example. Eachorganization has to define their own set of competencies,which has to be adjusted to the organizations vision, itscontext, the organizations culture as well as its character.Secondly, this list does not suggest that there cannot befurther competencies be included that may also be criticalfor an organization and its current and future success, likefor instance functional and technical competencies such asproduct and process knowledge, economic competenciessuch as leveraging resources and managing risk, or clientfocus. Those competencies can and should be also part ofan organizations competency model (= catalogue ofbehavioral traits). For the purpose of this article, however,we focus only on competencies of inclusion.10 As decades of experience in Corporate Americashow, it would be an oversimplification to assume thatthe recruitment of employees with multiple backgroundsalready leads to equality among employees and thecreation of a diverse and inclusive workforce. 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