Achieving Business Sustainability through Diversity Management and Effective HRM

Abstract

Diversity management and business sustainability are increasingly becoming essential drivers for business growth and development across the globe. It is because businesses in varying forms and sizes are the engine of the supply of goods, employment creation and innovation and contribute to the economic growth of different economies in the global sphere. Most modern businesses and organizations comprise a diverse workforce whereby managing employee expectations and maintaining an actively engaged labour force is challenging for management. Business globalization, workplace relations and varying organizational demographics necessitate diversity management for businesses. Despite the contribution of businesses to the development of labour market economies, diversity is overlooked, and achieving sustainable businesses is still a challenge in the world. Numerous business scholars have addressed the issues underlying the business sector by identifying causes and analyzing business failure rates but failed to provide answers as to what businesses can do to achieve diversity and become sustainable. This chapter highlights the importance of diversity management as a strategy to enhance sustainable businesses in the global economy. The chapter focuses on managing diversity, business sustainability and human resource management to achieve its objectives.

1. Introduction

The world of work is constantly developing because of changes in the economic, political and technological environment. Today, globalization poses significant differences in all spheres of varying economies at the national and international levels. Guillen [1] states that globalization brings diversity to everyday life. Diversity is massively permeating all areas of the business environment, so business managers are forced to employ diversity management policies to achieve social responsibility, diverse working backgrounds and sustainable businesses. Diversity management and sustainable businesses are increasingly becoming significant aspects of business growth and development worldwide [2]. Businesses are essential for supplying goods and services, combating unemployment rates, enhancing innovation, and fostering economic growth in the global sphere. Fajcikova et al. [3] describe diversity as a social phenomenon closely related to globalization and considers demographic changes involving human qualities such as race, gender, age and ethnic groups.

On the other hand, human resource is an invertible concept where business is involved and plays a vital and most valuable role in any organization, whether small, medium or large. This chapter defines human resource management as the management of people as a collective by focusing on the functions, objectives and outcomes of HRM. That is, enabling and developing the workforce to achieve fulfilling employment relationships for employees and managers. It is further stated that employee diversity and human resource management contribute to creative and innovative dynamic work environments. While diversity influences labour markets, human resource management is a prerequisite for achieving diverse, sustainable businesses. The foundation for a competitive advantage in the business world is diversity, which is why diversity management is increasingly becoming a practical approach in human resource management [4, 5]—globalization is a result of the industrial revolution, where diversity management and human resource management are interrelated. Issues related to the sustainability of businesses are of paramount concern in this chapter as they highlight domineering dimensions meticulously linked to the working class and the future of business and can only be dealt with holistically. This chapter, therefore, focuses on managing diversity in the global economy and integrates human resource management tools toward achieving sustainable businesses. Conclusively, diversity management and business sustainability as areas of research interest for this chapter have recently gained attention from research scholars. However, specific research questions remain unexplored, which this chapter aims to address through the following objectives:

1. Objective 1: To conceptualize diversity management and business sustainability based on existing literature.

2. Objective 2: To identify emerging research issues of diversity management and contextualize factors to propose strategies to achieve business sustainability.

3. Objective 3: To make recommendations for future research and practice.

2. Literature review

This section presents the concept of diversity management in the corporate world and conceptualizes the business case of diversity and human resource management. In addition, strategies to achieve business sustainability are highlighted, as indicated by numerous authors in different contexts.

3. Research methodology

A literature review on diversity management and business sustainability was conducted using relevant keywords. Bryman [6] defines a literature review as a piece of academic writing demonstrating a researcher’s knowledge and understanding of existing academic literature about a topic of research interest. Specific words such as diversity, human resource, management, business, and sustainability were searched based on an inclusive criterion. The criteria used to search for articles are based on the language and relevance of articles. Therefore, the search criteria for this chapter include English articles retrieved in peer-reviewed journals from the past decade. Business sustainability and diversity management have been prominent in research over the past decade. Using recent articles ensures the quality and relevance of studies that indicate the extent of available information on the current subject. The theoretical framework of diversity management and business sustainability in this chapter is conceived from numerous textbooks and content on electronic databases, including EBSCOhost, Research Gate, Sabinet, JStor, Google Scholar, ProQuest and conference papers. In addition, the author used news articles and internet resources, including social media, to trace government publications, public debates and reactions to diversity management and business sustainability.

The chapter mainly incorporates literature evidence which presents a synopsis of different factors. A study by Yadav and Lenka [5] explored dimensions, contextual variables, consequences, and emerging research trends in diversity management. The study highlights that diversity is more prominent in laboratory studies, and not much research has been done among group members in workplaces. This chapter adds to the literature by highlighting significant studies by Udin et al. [7] which investigated ways to manage workplace diversity to sustain organizational competitive advantage. The study shows that managing diversity can enhance creativity and organizational growth. Fajcikova et al. [3] examined whether diversity management can be used as a tool toward the sustainability of competitive advantage. The findings revealed that effective diversity practices could elevate the representation of women and minorities within organizations in senior management. Another study by Seliverstova [8] on workforce diversity management also reveals that diversity management contributes to organizational performance.

4. Diversity management in the world of work

Diversity is an inevitable social reality in a modern society whereby teamwork, demographics and business globalization necessitate diversity management in any organization. Guillen [1] asserts that diversity encompasses four dimensions, namely, external, internal, organizational and personality. Employee openness, conscientiousness, agreeableness, and level of introversion and extroversion form a person’s personality. Internal dimensions focus on race, gender, sexual orientation, physical ability and ethnicity. In contrast, external dimensions refer to geographic location, personal habits, educational background, work experience, marital and parental status, religion, income and appearance. Organizational dimensions include management status, union affiliation, seniority, functional level or unit, work content and location.

Gupta [4] affirms that diversity results in a pool of wisdom, knowledge, talent and exposure to various cultures. Diversity management in the workplace creates an inclusive working environment where management embraces individual differences such as traditions, style, heritage and background [9]. Most modern businesses and organizations comprise a diverse workforce whereby managing employee expectations and maintaining an actively engaged labour force is challenging for management. Managing diversity in organizations is gradually becoming a complex and unique issue in human resource management [10]. Therefore, diversity management is prominently acknowledged for its ability to sustain organizations. Although diversity management is a challenging area for the human resource department, its implementation within organizations dependents on a few factors, both within and outside organizations. Research evidence on diversity and inclusion issues is very limited in emerging economies. There is a pool of studies investigating diversity management in western countries. Still, very few focus on how diversity management forms an integral part of human resource management, especially in developing countries.

Existing studies identified six areas in HRM that are easily affected by diversity management: training and developing diverse staff, linking HRM strategy to diversity, recruitment for diversity, selection for diversity, monitoring diversity and equality management, and providing work-life flexibility. Meena and Vanka [11] identified several diversity-orientated HRM practices. These include proper oriented selection and performance evaluation practices, team and control-oriented practices, fair oriented compensation and training practices and identity-free practices. Approaches to diversity management include affirmative action plans, legal compliance, the ad hoc approach, social justice approach and strategic diversity management. In South Africa, for example, affirmative action plans focus on gender equality and establishing ethnicity ratios, while social justice approaches are dedicated to corporate social responsibility. Literature reveals several positive outcomes that often result from diversity management. Amongst many other benefits of diversity management, researchers identified the following effects [1, 3, 12]:

• Increased representativeness of minority groups in workplaces;

• Stronger relationships between manager accountability;

• Higher organizational performance and competitiveness;

• Stronger relationships between corporate citizenship and diversity management;

• An inclusive organizational culture;

• Organizational citizenship and affective commitment;

• Employee perceptions of fair HRM practices increase organizational commitment and HRM productivity;

Figure 1 presents factors that influence the implementation of diversity and elements that do not influence diversity management in the workplace.

Figure 1.

Source: author’s conceptualization based on Mazur and Walczyna [13].

The implementation of diversity management in organizations is renowned for its numerous benefits and include the following:

• Prestigious organizations

• Talented workforce

• Creativity and innovation

• Entry into new market segments

• Company culture and climate improves

• Competitive advantage

• Employee retention

• Increased employee performance

• Motivated workforce

Many organizations practice diversity management in pursuit of internal and external possibilities. Internal possibilities may include the quest for higher productivity, innovativeness within the organization, consistent personnel, or an inspiring work atmosphere [14]. External possibilities, for example, could be an organization’s search for new customer segments, maintaining a good reputation and a prestigious level of social responsibility. Possible internal problems that an organization might want to overcome are conflict, maintaining work standards and staff turnovers, while external problems, on the other hand, relate to customer loss, recruitment issues and tight competition. To bring about a competitive advantage in a company through diversity management is not an easy task. Marketing, resource acquisition, creativity, costs, organizational flexibility and problem-solving are some factors that companies need to consider to sustain their business operations [14, 15].

Managing and valuing diversity management is vital for influential people management, improves workplace productivity, and significantly contributes to strategic human resource management objectives. Diversity is used strategically to boost an organization’s competitive advantage through cultural diversity, differentiating factors such as efficient work practices and procedures, client consumer-related services, and technological and product services-related innovation [2]. Diversity management emerges due to the quest for businesses to recognize and develop optimal human resource value from existing inherent varying employees manifesting in different dimensions. Diversity management as an intrinsic approach to human resource management is a fundamental aspect that acknowledges and respects individual contributions within organizations and integrates their contribution to the overall mission and vision of companies. In addition, individual employees’ personal and social development is of great importance. Diversity is, therefore, generally driven by sustained business growth, which depends on an organization’s level of productivity, innovation, creativity, agility, and safety. Achieving sustained business growth requires organizations to commit to ensuring a sufficiently diverse workforce, actively building workplace culture, teamwork, market knowledge, workforce skills and creating inclusive workplaces through dignity and respect [16].

4.1 HRM as an element of business sustainability

Human resource is also an invertible concept where business is involved and plays a vital and most valuable role in any organization or business, whether small, medium or large. Human resource management is defined from a macro perspective as the management of people as a collective by focusing on the objectives and outcomes of the HRM functions. That is, enabling and developing the workforce to achieve fulfilling employment relationships for employees and managers [17]. The transformation of human resource practices over the past years has been influenced by various factors, including globalization and diversity initiatives. Global competition, for example, is in pursuit of talented workers to achieve sustained competitive advantage. An organization’s environmental, social and financial objectives are achievable through sustainable HRM practices and contribute to developing influential organizations that prioritize sustainable competitive advantage, flexible working environments, organizational culture, job security, work-life balance and participative leadership. While HR influences the success of businesses, HRM is a procedural concept which supports organizational activities to achieve the organization’s predetermined goals. The contributions of HRM towards business sustainability include organizational change, professional development, organizational training, work-life balance and employee participation. Therefore, the process of HRM sustainability evolves through the development of employee skills maintenance of active and healthy working environments. Therefore, successful implementation of HRM sustainability considers factors that affect organizational and environmental sustainability, as presented in Figure 2 below [14].

Figure 2.

Source: author’s elaboration on the base of Mazur and Walczyna [13].

Sustainability at the business level refers to creating sustainable business models from a social, financial and ecological point of view and focuses on identifying strategies and practices that contribute to a more sustainable world and simultaneously maintain shareholder value. Therefore, sustainable human resource management uses HR tools to aid organizations in embedding sustainable strategies and creating HRM systems that add value to a firm’s sustainable performance [18]. Through sustainable human resource management, organizations can achieve a triple bottom line and simultaneously provide long-term health and sustainability for the organization’s internal and external stakeholders. The triple bottom line is the performance measurement of an organization’s pursuit of a sustainable strategy [19]. Consequently, the results of sustainable HRM can ensure policies that prioritize equity in the workplace, the development and well-being of the workforce, and concentrate on supporting friendly environmental practices. King and Cohen [15] confers that sustainable businesses depend highly on a company’s leadership which embodies the organization’s values, culture and communication channels. Sustainability of human resources, therefore, requires the integration of values, skills and trust to prevent harmful environmental effects that businesses can avert by adopting justice, welfare and development. Therefore, human resource management is an indispensable feature of management practices that focuses on matching relevant talents with specific jobs to increase firm performance.

Sustainability is rapidly becoming a primary focus for numerous organizations globally as societal demands, climate change, regulatory pressures and the need for greater environmental and social responsibility escalates. While organizations are held accountable for their impact on society and the environment, the HR function is critical to achieving the success of sustainable-driven organizations. HR professionals’ primary focus and skills are mainly on changing management and organizational process, which requires HR managers to take on the leading role in developing and implementing sustainable business strategies.

4.2 HRM as a business case for business sustainability

Literature portrays HRM as an introspective function focusing on using the workforce to achieve short-term financial results effectively and efficiently. An appropriate approach to achieving sustainable HRM can contribute toward developing competent managers with the necessary attributes and abilities to deal with and handle present and future challenges that may hinder the sustainability of organizations. HRM is a critical contributor to corporate sustainability leadership. Business leaders, therefore, need to focus on including HR managers in business practices directed towards sustainable HRM through collaboration, consultation and accountability. Simultaneously, HR professionals are encouraged to modify HRM approaches from transactional and transformational to sustainable HRM. Therefore, performing HRM sustainably and supporting business sustainability are the prominent HRM roles necessary for implementing sustainability strategy in any organization.

Performing HRM sustainability focuses on professional HRM processes and tools that are integral to HRM contributions and execution of essential functions based on sustainability principles. These principles include the following:

• Respect and support for human rights are proclaimed internationally;

• Elimination and prevention of discrimination within organizations;

• Promoting the freedom of association;

• Elimination of human rights abuses;

• Elimination of forced labour in all forms;

• Anticorruption practices, including bribery and extortion;

• Diffusion and development of environmental technologies;

• Promotion of greater environmental responsibility;

• Recognition of the right to collective bargaining;

HR managers are therefore expected to fulfil the following responsibilities when performing HRM sustainability in order of importance (Table 1).

Economic; Delivering acceptable shareholder returns

Legal; Business operation to align with law regulations

Ethical; Social and environmental impact of business operations and duty to care

Discretion; Seek opportunities proactively and positively contribute beyond business ethics, compliance and profitability in society; understand stakeholder needs, and address societal issues through business practice.

Table 1.

Principles of business sustainability.

Source: Author’s description on the base of Cohen et al. [14] and King and Cohen [15].

Embedding sustainability through HRM requires employee attraction, employee skills and knowledge, attainment of employee sustainability goals, sustainable work climate, and sustainable employee behaviours and attitudes. Firstly, organizations are encouraged to utilize their commitment to sustainability when recruiting because it can attract applicants who align with an organization’s sustainability goals [12]. Secondly, commitment to sustainability within organizations is believed to affect employee commitment and job satisfaction positively. Sustainability behaviours in employees can increase if companies commit supervisory and organizational support to the workforce. Fourth, an organization’s sustainability strategy should align with a company’s organizational climate for sustainability strategies to be successful. Training and developing essential knowledge and critical skills are also necessary to achieve sustainability. Lastly, the evaluation and compensation system can include sustainability targets to increase attention and achieve sustainability goals.

HRM sustainability can be approached from different angles, resulting in varying outcomes and objectives. But, sustainability development integrates similar elements across sectors and types of organizations which are appropriate for forming sustainable strategies and programs. As a result, sustainable HRM features are most common across all HRM functions, irrespective of the organization’s size, leadership style or geographic area. Sustainable HRM depends highly on an organization’s leadership and strategy. Most corporate sustainable leadership strategies are carried out by an executive management team that deals mainly with implementing sustainability. The management team is therefore responsible for sustainability implementation through the following steps (Figure 3).

Figure 3.

Source: Author’s elaboration adopted from Cohen et al. [14], King and Cohen [15] and Parry et al. [18].

Working towards sustainable HRM is a journey that depends on three major components: compliance, corporate governance and business ethics. Compliance with, for example, national, federal, regional and local laws and labour regulations is the first step towards sustainable HRM. Business ethics includes behavioural guidelines through which employees, managers, and directors are expected to behave and present acceptable moral and ethical business standards. On the other hand, corporate governance refers to systems by which companies are directed and controlled. While the board of directors in an organization are responsible for ensuring corporate integrity and providing direction for organizational strategies for sustainability, HRM practices can be enhanced by the board’s directive through legitimate and empowering frameworks. These frameworks include (Table 2):

Framework	Explanation
SA8000	It focuses on human rights and business labour standards and prescribes process and performance criteria for sustainability. It also focuses on management systems necessary to ensure proper outcomes.
Global Reporting Initiative Framework	Its mission is to develop a disclosure mainstream for environmental, social and governance performance.
International Standard ISO 26000	Provides guidelines on social responsibility and is intended for use by organizations across the globe and of all sizes, but targets mainly small and medium-sized enterprises.
Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises	They are intended to govern large organizations and ensure harmonious relationships between organizations and government policies. This framework provides guidelines for developing HR policies and practices.
United Nations Global Combat	Requests businesses or organizations to observe ten universal principles around responsible business practices. These principles deal with, for example, labour standards, human rights, anticorruption and environmental stewardship.

Table 2.

Frameworks towards business sustainability.

Source: author’s description based on Cohen et al. [14].

Several factors have been identified that might affect the future of HR practices negatively or positively. In the ever-changing global economy, organizations are encouraged to consider reviewing labour policies, education, benefits packages and compensation, which are essential to human resource management. These factors contribute to the development of better organizational infrastructure. Therefore, the future of human resource management will force HR managers to only recruit competent staff and leaders who will develop strategic decisions that will enable organizations to compete with foreign companies. The HR focus in future includes workforce diversity to enhance leadership behaviours and incentives to motivate the workforce [12].

But most importantly, HR managers ought to pay attention to the impact of globalization for organizations to retain a competitive advantage in the global market and experience a long-lived experience. Aust et al. [20] postulate that globalization, diversity, compensation and benefits packages form an integral part of future-orientated organizations, which must ensure that business strategies align with organizational goals and objectives and that organizations compete effectively in the global market. Therefore, maintaining effective performance-based systems, adapting to new technological innovations, investing in workplace diversity and maintaining competitive pay systems and technical competencies are prerequisites for HR sustainability and business success.

In pursuing sustainable HRM, human resource managers need to understand and carefully implement critical tenets of sustainability practices and HRM capabilities. These include, amongst many others:

• Understanding both local and global sustainability issues affecting business performance;

• Understanding principles of sustainability in business;

• Ability to link issues of diversity, inclusion and organizational climate conditions that support improved performance;

• Ability to develop a process for using stakeholder feedback and external awareness to identify HRM aspects related to policies and practices with broader societal impact instead of focusing only on internal effects.

Sustainable HRM, in essence, plays a significant and positive role in achieving business outcomes and exerts a positive impact on employees and external stakeholders [20]. Ehnert et al. [9] assert that HRM sustainability practices increase the maximization of profits within organizations and simultaneously reduce negative detrimental influences on employees and societies. Positive consequences of sustainable HRM include the overall growth value of an organization’s worthwhile boosting national and international competitiveness. Improved employee engagement, increased employee satisfaction, HR quality boost, employee development, enhanced work efficiency, increased motivation and higher organizational loyalty are some of the benefits that sustainable HRM has for organizations. It can be concluded that socially responsible human management presents itself in the treatment of employees as primary stakeholders in an organization [21]. Therefore, diversity management is consequently considered a social aspect of sustainable HRM in this chapter.

While human resource management incorporates planning, integration and action plan to manage employees effectively, diversity can also be included within the practice of human management, thus, creating an alignment between human resource strategies and diversity management goals. Based on the ecological perspectives, the concept of “greener organizations” is explained by Bangal and Tiwari [22] as HRM practices developed and implemented to promote employee behaviour to enhance the ecological efficiency of a company. It means that green HRM can be stimulated by employees, employers, regulatory stakeholders and customers [23]. Strategies to promote "green conduct include mobilizing employees to implement sustainable basic operations at all stages and different business levels. It also works towards holding employees accountable for applying sustainable practices in their daily work life and encouraging the workforce to further the practices in pay incentives. Lastly, using tools to equip employees and train them to develop or improve further. As a result, HR strategy and planning, talent management, building a strategy, organizational effectiveness, and leadership development are the critical knowledge areas for all HR practitioners.

The sustainability of HRM is distinguishable through three approaches: sustainable resource management, sustainable HRM and sustainable work systems. Work systems identify the core social aspects of sustainability and are intended to expand the perception of mechanisms involved in implementing and improving human resources [24, 25]. On the other hand, sustainable resource management prioritizes the clarification of organization and environmental association and further proposes approaches to combat resource scarcity. Sustainable HRM results in a shared advantage for stakeholders, eventually leading to enduring economic sustainability [13].

In a globalized, liberalized and industrialized world of work, all organizations work towards sustaining competitive business environments. Mohanty and Nayak [26] and Bangal and Tiwari [22] postulate that every organization is responsible for implementing eco-friendly businesses that create healthy working environments and long-term sustainability. As a result, Green HRM is an emerging concept that significantly influences the future of HRM and diversity management. Green HRM focuses on rules, regulations, recruitment, selection, performance, training, welfare and employee counselling. Green HRM, therefore, encompasses integrating HR practices and managing the environment in which businesses operate. Figure 4 below presents the components of Green HRM as identified by Mohanty and Nayak [26].

Figure 4.

Source: author’s elaboration based on Mohanty and Nayak [26].

Although the implementation of Green HRM has been criticized for its complexity, green HRM practices have been admired for their numerous benefits. They include, amongst many others, the ability to reduce overall costs, increase employee morality, motivate innovation and growth, develop knowledge for green HRM, increase a company’s image, and improve stakeholder, customer, supplier and employee relationships. It is postulated by Margaretha and Saragih that Green HRM in the future focuses on enhancing HR practices to sustain businesses [27]. The main goal of Green HRM is to reduce the wastage of resources and ultimately preserve the environment. The components of Green HRM, as highlighted in Figure 4 above, are powerful and practical tools to increase employee engagement and better productivity, make employees eco-friendlier, and achieve business sustainability [23].

The pursuit of business sustainability, in essence, depends on an organization’s capacity to adapt to an organizational culture where diversity is concerned. The following recommendations are provided for HR managers to practice for successful diversity management and business sustainability.

• Educational courses for human resource managers and specialists to improve the competency level of managers in executing and implementing diversity management;

• Evaluating the effectiveness of diversity management approaches, programs, and cooperation and adjusting it to that of management;

• Accommodating vulnerable employees by continuously providing training and development activities related to education and language courses to break, for example, language barriers and deepen employees’ technical skills;

• Adapting and adjusting the selection of employees with the needs of organizations to build the employer’s brand through appropriate HR processes.

Concisely, cultural and personal diversity forms an integral part of diversity management as a strategy to improve individual and team performance and the organization.

4.3 Integration of diversity management and HRM towards business sustainability

Despite the contribution of businesses to the development of labour market economies, diversity is overlooked, and achieving sustainable firms is still a challenge in the world. Numerous business scholars have addressed the issue underlying the business sector by identifying causes and analyzing business failure rates but failed to provide answers as to what businesses can do to achieve diversity and become sustainable. Business sustainability is rooted in numerous elements, but diversity, good governance, compliance and ethical conduct are fundamental features. Diversity initiatives are increasingly gaining attention and increasing in the job market due to globalization. It is stated that the impact of globalization on human resource practices in future will be dire as a result of the rapid growth of global markets due to the foreign competition, which will force small and medium businesses to improve their workforce for competitive advantage. Many organizations in the modern day are heavily invested in managing diversity to enhance firm performance through diversity initiatives such as workplace benefits and programs. These programs incorporate organizational features such as flexible work environments, which scholars within the field believe will transform the role of human resource managers and concert it into diverse areas focused on transferring knowledge, workers’ expertise and skills. Researchers solicit that the initiatives mentioned above will significantly contribute toward developing harmonious skills, talents, leadership styles and behaviours, enabling businesses to achieve organizational goals and objectives [3, 19, 20, 28]. Although organizations will have a diversified workforce, achieving business sustainability and success in global markets will be very challenging for human resources.

In a study conducted by Mutku [28], it is highlighted that human resource managers may struggle to understand differences in global corporate cultures related to organizational policies, staffing, training, legal frameworks and recruitment and selection. In addition, it is proposed that human resource managers face challenges in recruiting and training employees for diverse workplaces where they will no longer be responsible for recruitment and selection but for employee training. As the diversity widens and employers pursue various workspaces, inequality and discrimination might escalate. Labour departments might also struggle to balance employment security for their workforce and adapt to changes within labour markets. For example, the determination of minimum wages for workers will become extremely challenging as technology is already making it difficult for job seekers to secure low-skilled jobs [26].

Diversity management as a component of HR practices significantly impacts HRM sustainability. HRM sustainability, for example, is achieved by developing employee skills and maintaining an active, healthy workforce. While HRM measures are believed to trigger employees’ performance, training an organization’s human resources is vital for sustainable development [20]. Aspects such as networking, succession planning, hands-on learning, self-development and coaching can enhance talent and ultimately lead to HRM sustainability at the organizational level. The social components of HRM sustainability for organizations should consider stakeholders’ insights and behavioural patterns, setting objectives and strategies, taking accountability by observing the set goals and developing organizational involvement [17]. Social justice is, therefore, a significant factor and should also be kept in organizations because it influences employees to accept organizational structures, respect the code of conduct, make sacrifices for the best interest of business, and protect organizational resources [29]. Psychological components of HRM sustainability focus on freedom from work-related pressures as an essential part of sustainability because it aims to extend the sustainability paradigm by shifting it from the environmental sphere to the psychological and social contexts. It influences and increases employees’ ability to work as a team and communicate effectively and constructively. Therefore, employees’ psychological needs such as human qualities, self-esteem, self-awareness, organizational beliefs and self-reconstructions and a sense of belonging need to be met to provide employees with a basis for survival in the workplace, including well-being and workplace advancement in a work environment that matches individual abilities and capabilities [30].

Where business is involved, diversity should not be seen as just a “moral issue” but also as a business concept. As organizations increasingly become global, diversity automatically transforms into a competitive advantage for many companies that embrace it [2]. Therefore, HR’s role is to create and empower diverse cultures that are inclusive and offer employees opportunities to grow, learn and contribute to their organizations. Diversity management is also renowned for its ability to aid managers in identifying new trends, which hones factors that motivate staff, increase productivity, boost the workforce at all levels and create an inclusive work climate. Diversity management, therefore, contributes to the changing nature of HRM and has rapidly transformed the role of HR in the past two years [28]. The future of HRM due to diversity management will consist of more agile working environments that are consistently innovative and require the workforce to share resources. That is, the growing gig economy will eventually transform into a sharing economy and become one that revolves around sharing physical, technological and human resources [31]. Sharing resources will contribute to a competitive advantage by attracting future talent, changing work styles, enabling HR managers to forecast future work economic trends, and matching the demand and supply from person to person. Furthermore, it is believed that working environments will be mostly micro-innovative in the next decade. The workforce will consist of product-centric teams, which will create policies around digitalization at work [28].

5. Contribution of the role of diversity management and HRM in business sustainability to People Management-Highlighting Futures

This chapter contributes to literature or knowledge by growing understanding of diversity management and its significant role in business sustainability. Diversity as a principle for competitive advantage is poorly understood and limited by the availability of academic research data. Diversity management is an under-researched concept, and achieving business sustainability remains a complex area in the global market. Therefore, diversity management and business sustainability as areas of research interest require a new balance between organizational strategies and business models, diverse working environments and sustainable business operations. This chapter, therefore, contributes to a unique, multidisciplinary framework, diversity management, which integrates a holistic approach to investigating its role in achieving business sustainability.

The approach to understanding people management in diverse working environments focuses on individual and collective performance in workplaces and the role of management at all organizational levels to gain competitive advantage. It recognizes that the business environment is often conceived as a workplace where employers, managers and employees encounter differences and imbalances. As a result, such experiences can result in transformational shifts which impact overall business performance. Therefore, the chapter contributes to a growing understanding of how diversity management improves business performance and sustainable business practices.

6. Conclusions

This chapter outlined an overview of diversity management and human resource management. Research studies prove that diversity is inevitable in modern society and that HR managers must prioritize diversity management in workplaces as it is influenced by numerous factors such as demographics. It is evident that diversity management is a crucial area for strategic management and allows organizations to identify employee differences to obtain and maintain a diverse, skilled workforce. Diversity management has many benefits for organizations, including HRM productivity and inclusive organizational culture. The implementation of diversity management, although a rigorous process, is recommended for its ability to motivate employees, attract a talented workforce and retain employees. Human resource management is also discussed as an invertible concept in the business world, which plays a vital and most valuable role in any organization. Therefore, the chapter discussed several factors affecting human resource sustainability. Economic and political factors affect the environmental sustainability of businesses, while HR, organizational branding, and psychological and social factors contribute to organizational sustainability. The business case of HRM and sustainable businesses highlights aspects such as the recognition of the right to collective bargaining, promotion of freedom of association and greater environmental responsibility as principles of sustainability. A guideline for implementing sustainability goals was also highlighted, as well as sustainability frameworks. Lastly, diversity and human resource management are inseparable aspects. Thus, this work addressed diversity management’s contribution to human resource management and sustainable businesses. Diversity management’s contribution is linked to the future of HRM, which highlights the importance and impact of Green HRM as a powerful tool for managing diversity and achieving business sustainability.

Acknowledgments

My sincere appreciation goes to IntechOpen for acknowledging my interests in the field and inviting me to contribute to the book.

Conflict of interest

The authors declare no conflict of interest.

Thanks

Thanks to IntechOpen for the invitation to contribute to the book entitled “People Management-Highlighting Futures.” It is an honour to be given such an opportunity to showcase our skills and talents on such prestigious platforms.

Other declarations

I, Lidith Moropane, declare that this chapter, “Managing Diversity and Achieving Business Sustainability,” is my work. Furthermore, I declare that the text and biography reflect my consulted sources. Therefore, all sources used in this chapter are indicated and acknowledged using direct and indirect references. Sections with no source referrals are my ideas, arguments and conclusions. Lastly, this work has not been submitted to any institution or published on any platform.