Why MBA Diversity Matters | TopMBA.com

Why MBA Diversity Matters

By QS Contributor

Updated September 26, 2014 Updated September 26, 2014

You've probably read a lot of articles on MBA websites (such as this one), which discuss how MBA admissions officers are looking to create diverse classes. But, what do they mean by diversity? And, how does diversity benefit MBA students?

What Diversity Means to MBA Admissions Officers

Peter Aranda is the Executive Director and CEO of the Consortium for Graduate Study in Management, an organization which promotes diversity and inclusion in business by awarding merit-based, full-tuition MBA scholarships to African American, Hispanic American and Native American MBA students. Aranda is very familiar with what the types of diversity schools are looking for since he spends a lot of time with working with the Consortium's 17 member schools including NYU Stern, Michigan Ross, Kenan-Flagler, and UCLA Anderson. He says that admissions officers have two different levels of thought on diversity.

The first, and the most general, level of diversity the MBA admissions officers are looking for focuses on bringing in students from a wide range of backgrounds and places. According to Aranda, "When they’re thinking about recruiting for a particular class, they are looking for diversity of thought, diversity of ethnicity, diversity of age, culture, country of origin, citizenship, athletes versus artists versus anything else you can think of." Schools look to create a diverse class, because the classroom experience is enhanced by a diversity of thought which is generated by bringing together people from different backgrounds.

The second level of thought seeks to bring in qualified candidates from the three of the most underrepresented communities in MBA programs: African Americans, Hispanic Americans, and, Native Americans. Including students from these three groups help enhance the MBA classroom experience. For US students in particular, classroom collaboration with African American, Hispanic American, and Native American students helps give them a better idea of what culture looks like in the United States. It also helps create opportunities for members of underrepresented communities, and therefore, a more diverse corporate workforce.

Diversity in the Classroom

Diversity helps create a classroom environment where spirited debate and differing opinions and viewpoints can be used to foster innovation. Regardless of where the innovation is being applied, whether it's product or management style, it comes about more easily when you have a group of people who each think about the problem differently. If everyone comes from the same background and thinks the same, they tend to come up with the same conclusion.

When a group is made up of people who come from different backgrounds and think differently, it's more likely that a debate will occur and Aranda states feels that debates are a great tool for sparking innovation. "We find that in spirited debate, innovation often results. Better ideas come out because there was some debate, because someone was thinking from an extremely different area, different frame of reference, and it causes light bulbs to go up. People just say, 'Hey, that’s interesting. How can we apply that here?'"

Diversity also helps create an MBA classroom with demographics that more closely resemble the rest of the United States. Aranda points out that the United States is a country made up of varied demographics: "It’s not just black and white; we’re black and white and Hispanic. You know, it’s much more complicated than that. And as these various communities continue to grow, market opportunities come into existence to develop products and to market products or services into these various communities."

Lack of knowledge and sensitivity to other cultures can result in failed product launches. Aranda cites the famous example of the Chevy Nova. In Spanish "no va" means "does not go", but Chevy decided to market a car with the name Nova in Latin America. Needless to say, the car did not sell very well. Another example Aranda gives is a factory he worked at in San Francisco which used plastic owls to control the pigeon population. The factory was located in an Asian neighborhood and certain community members came from a culture where an owl facing a neighbor is considered a way of putting a curse on that neighbor. So, the people running that factory were faced with a community of people wondering why that particular company wanted to put a curse on them. Understanding cultural nuances can prevent these sort of incidents from happening.

Diversity in the classroom can help MBA students survive in the global economy as well. We no longer live in the century of America, where US companies were the best in most categories. Most companies are now international or global. Aranda says that's why "the ability to work in multicultural environments is really, really critical, and so students begin to understand that in order to be successful in an international environment, we need to be able to be successful in a multicultural environment in our own country. And if we can’t figure out how to do that, we’re going to be poorly prepared to succeed globally."

Diversity and Inclusion

To Aranda, diversity is ultimately about inclusion. One of the most positive trends he has seen in MBA programs lately is the increased amount of diversity groups that include people from varying backgrounds. Business schools now have clubs where different types of underrepresented minorities interact, as well as diversity groups where people of all races were included. Back when Aranda attended business school in the 80s, diversity groups that only included people from one race were much more prevalent.

That's not to say that there's no room for improvement. One area where Aranda feels that business schools can improve is through the research they do about diversity and inclusion in the workplace. He points out that there has never been a research agenda for diversity and inclusion, which makes it more difficult to teach students about these topics. Having a body of knowledge about diversity and inclusion will give professors the tools to they need to prepare students to deal with diversity-related issues in the corporate workforce.

So, what can MBA students do to better educate themselves about diversity and inclusion? One thing they can do is become more aware of how they think in certain situations. When people surround themselves by people who think the same way that they do, they become prone to "majority thinking". Majority thinking is the assumption that everyone thinks the same way that you do. Aranda suggests that MBA students adopt a way of thinking that is the opposite of majority thinking.

For example, when most people network at a cocktail party, they look for people with whom they have things in common, such as the college they went to or places where they've lived. That's why they usually ask questions that are designed to find these commonalities. Instead, Aranda encourages students to assume that everyone is different and celebrate both the differences and similarities. He goes on to state that, "It will be a lot easier than if you go in thinking that everyone’s the same and you keep hitting the wall when you realize that they’re different."

This article was originally published in August 2012 . It was last updated in September 2014

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