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What must happen for an organization to turn employee diversity into a competitive advantage?
AThe union must agree to a diversity clause in the contract
BThe firm must outsource its hiring to a specialist provider
CTop management must commit fully to hiring and developing
DThe firm must pay above the going rate in its own region
Answer & Solution
Correct answer: C. Top management must commit fully to hiring and developing
1. A diverse workforce is not by itself a competitive advantage, because the advantage lies in how the firm uses it.
2. Turning it into one requires top management to be fully committed.
3. The commitment has to cover hiring women and minority individuals in the first place.
4. It has to cover developing them once they are inside the firm, since hiring alone leaves talent unused.
5. Commitment at the top matters because diversity programs cut across every department and no single function can drive them.
6. Paying above the going rate raises costs without changing the composition of the workforce, so option D would not deliver the advantage.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 8 "Managing Human Resources and Labor Relations", section Employee Diversity and Competitive Advantage_
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