Master Paper
Watch the video lecture ( https://www.youtube.com/watch?v=NXNH_JB-2Qg&feature=emb_logo ) and read the attached two readings then answer the following question:
Explain how the pandemic affects one type of demographic or economic inequality in organisations and enrich your argumentation along practical examples (max. 400 words).
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Inequality and business.
Chapter July 2015
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INEQUALITY AND ORGANIZATIONS
Hari Bapuji1
Asper School of Business
University of Manitoba
Winnipeg, MB Canada R3T 5V4
Phone: 204-474-8432
E-mail: [emailprotected]
Sandeep Mishra
Faculty of Business Administration
University of Regina
Regina, SK Canada S4S 0A2
Phone: 306-585-4783
Email: [emailprotected]
Forthcoming in:
Mir, R., Willmott, H., & Greenwood, M. (Eds.), 2015. Companion to Philosophy in Organization
Studies. Routledge.
1 Both authors contributed equally to this chapter.
INEQUALITY AND ORGANIZATIONS
Over the course of human history, philosophical thought on inequality has
shifted from a predominantly hierarchical understanding of human ability and output
to a much more egalitarian understanding. This progress has been reflected in the
rich modern social science literature documenting the far-reaching societal ills of
inequality. Organizational research has, however, remained relatively unmoved by
the wider discourse on inequality. Through this chapter, we seek to highlight the
growing importance of examining inequality in the context of organizations.
Specifically, we discuss inequality research by examining it from the perspective of
distributive justice. We then outline the adverse consequences of inequality to
societies and organizations. We conclude by discussing the need to critically
examine inequality and to study why it is maintained in organizations and societies,
despite its adverse effects.
Keywords: Economic inequality, income inequality, distributive justice
A (Brief) History of the Philosophy of Inequality
Inequality, broadly conceived, describes the degree to which people are considered or
treated unequally, or experience unequal outcomes. Inequality can be considered in several
domains: moral (are all people equal in worth or value?), legal (are all people governed by the
same laws?), political (do all people have the same voice in the political process?), and social (do
all people have equal access to opportunity and resources?). Philosophers have been debating the
nature of inequality for centuries. A comprehensive review of the various philosophical
approaches to understanding inequality would require many volumes; however, it is possible to
briefly follow patterns of philosophical thought on inequality over time.
Plato argued that a utopian society could be established by placing people into four tiered
socioeconomic classes: gold, silver, bronze, and iron. Those with the power of
command were argued to have been made of gold by God, auxiliaries made of silver, and
husbandmen and craftsmen made of bronze and iron. Although rigidly hierarchical, Platos
concept of societal hierarchies was one of the first to not include an ultimate aristocratic class.
Rather, he argued that gold citizens were philosopher kings who valued wisdom and reason
above all else (Jowett, 1888)2. The Enlightenment brought further philosophical considerations
of inequality. Rousseau considered moral inequality to be of great importance (as opposed to
natural/physical inequality). He argued that moral inequality is a defining characteristic of civil
society and is strongly associated with downstream differences in power and wealth. Rousseau
concluded that civil society distorts the natural human state of isolation, which allows individuals
to satisfy their own needs (and desires) without the interference of others. He further argued that
civil society allows the powerful to control the weak and maintain their political and social
power and wealth (an argument still made by some contemporary philosophers and economists).
Rousseau argued in one of his later writings, one of the most important tasks of government
[is] to prevent extreme inequality of fortunesby shielding citizens from becoming poor
(Gourevitch, 2003, p. 19).
2 Interestingly, a very similar social structure exists in the form of the Indian caste system, with the argument being
that God created people of four types from His own body: Brahmins (philosophers) from his mouth, Kshatriyas
(warriors) from his arms, Vaisyas (traders) from his thighs, and Sudras (craftsmen) from his feet. In modern India,
the caste system holds significant influence (even though it is formally outlawed), where ones family history (i.e.,
last name in most cases) dictates social and economic roles, as well as hierarchical status.
In the modern era, John Rawls (1971) advocated for a societal structure based on the
assumption of a veil of ignorancethat we should try to create the society each of us would
want if we didnt know in advance who wed be (Krugman, 2011). Rawls put forth two
principles to support this approach. First, a society should guarantee equal basic liberties for all.
Second, a society should ensure (a) social and economic inequality only manifests as a
consequence of positions that can be obtained through fair and equal competition, and (b)
inequality should be used to most greatly benefit the least-advantaged members of society. Most
liberal democracies have used (and continue to use) Rawlsian principles to structure their
societies (e.g., utilizing a progressive income tax to provide a social safety net). Amartya Sen
(1992) further expanded on Rawls ideas by arguing that a well-structured society must mitigate
any forms of discrimination that limits human functions, which include both basic needs (e.g.,
good health and shelter) and social needs (e.g., self-respect and dignity; Sen, 1992).
The Modern Issue of Inequality
Recent rising levels of economic inequality in the world have demanded considerable
public attention. The rapidly increasing concentration of wealth in the hands of a few has been
documented by researchers (e.g., Piketty, 2014), government agencies (e.g., the United States
Congressional Budget Office; CBO, 2014), non-government agencies (e.g., Oxfam International;
Oxfam, 2014), international economic organizations (e.g., Organization for Economic Co-
operation and Development; OECD, 2011), pollsters (e.g., Newport, 2011), industry bodies (e.g.,
Conference Board of Canada; CBOC, 2013), and the popular press (Beddoes, 2012), among
others. The existence of inequality is neither new nor unknown; indeed, differences in wealth and
status have been characteristic of most civil societies for all of documented history. However,
current attention has been particularly focused on identifying the negative consequences of
inequality in modern western industrialized nations. This attention has included growing
discussion on interventions that might mitigate the enormous negative consequences of a
growing disparity between haves and have-nots. This effort is particularly salient given that
modern western industrial societies supposedly embody the ideals of meritocracy and equal
opportunity for all. That inequality continues to rise, unchecked, raises questions about the
effectiveness of economic development to create fair and just societies.
Scholars in a number of disciplines, including economics, epidemiology, sociology, and
psychology, have devoted much attention over the years to understanding the causes and
consequences of growing inequality to societies (reviewed in Neckerman & Torche, 2007).
Much of this research has led to public policy prescriptions designed to reduce inequality (e.g.,
introducing progressive taxation; universal health care; accessible education). However,
academic discourse (and resultant policy) has rarely involved organizational research or practice,
even though organizations play a fundamental role in creating and maintaining societal
inequality.
Philosophical understandings of inequality over time (briefly reviewed above) have
shifted from earlier characterizations of people being rigidly hierarchically structured (usually
due to some innate reasons) to a more egalitarian understanding of all people being granted
ample opportunity to fulfill their potential. Although a large body of research has examined the
effect of inequality on societies and individuals, little work has been conducted in the field of
organization studies. This chapter aims to draw attention of organizational scholars to this issue.
We begin by briefly discussing the concept of inequality and its treatment in management
research and practice. We then outline some consequences of inequality to societies and
organizations. We conclude with a discussion of potential future research that would allow for a
better understanding of the causes and consequences of organizational inequality.
Inequality in Organizational Research and Practice
What is Organizational Inequality?
Within organizational research and practice, two broad types of inequality can be found:
demographic and economic. Demographic inequality describes disparities in experiences or
outcomes that have a basis in demographic characteristics (e.g., gender; race; age). Broadly,
economic inequality describes disparity that is a consequence of the monetary value attached to
the possessions and contributions of individuals in organizations and societies.
Gender inequality refers to unequal treatment (i.e., experiences and outcomes) of women
in society as well as in organizations. Gender inequality research has not only highlighted the
different outcomes and experiences women face in their everyday social lives (compared to
men), but has also identified significantly lower representation of women in various fields
(ranging from science to politics), the disparities in incomes between women and men for
comparable work, and the glass ceiling that prevents women from rising to higher-level
positions.
Along similar lines, racial inequality reflects unequal treatment of people based on race,
with resultant disparities in social and health outcomes (e.g., housing, education, health) as well
as economic and organizational outcomes (e.g., income, employment, career growth). More
recently, acknowledgement of systematic biases against sexual minorities has sparked public
discourse, with (in more progressive jurisdictions) resultant policy prescriptions for equal
treatment. A number of organizations have also adopted policies to this effect, while those who
opposed equal treatment of sexual minorities have (largely) faced the wrath of the broader
community. Yet another fast emerging topic of debate is unequal economic opportunities for
younger members of society (i.e., the much-maligned millenial generation), especially in
comparison to older generations (i.e., the more economically privileged baby boomer
generation).
Past research has used economic inequality to refer to disparity in the distribution of
economic assets among individuals or households in a society, which includes both income and
wealth inequality. The former refers to the disparities in money received on a regular basis in the
form of salaries, rents, royalties, dividends, and other sources of regular income. The latter refers
to uneven distribution of wealth (i.e., mobile assets such as stocks and bonds, and immobile
assets such as houses and land). That is, wealth describes the stock of assets held at a given
point, while income describes the flow of money on a regular basis. It should be noted that
economic inequality is different from poverty, which refers to the lack of economic means to
fulfill basic human needs or to achieve a defined level of material possessions. In other words,
poverty is about meeting basic needs, whereas economic inequality places in focus the
unevenness in the distribution of income and wealth, irrespective of the presence and absence of
poverty.
Inequality and Distributive Justice
Before we address the issue of inequality in organizations more explicitly, it is necessary
to situate inequality in the broader context of distributive justice. Distributive justice describes
norms concerning the distribution of resources to group members. These norms take three
primary forms: need, equity, and equality (Deutsch, 1975). Need norms involve the allocation of
resources to those who have high levels of need. For example, that new parents receive paternity
or maternity leave whereas non-parents do not receive an equivalent form of leave reflects a need
norm. Equity norms are centered on the comparison of individuals inputs (e.g., education,
experience, skills, hard work) to outputs (e.g., pay, status, time off) relative to appropriate others
(e.g., other organization members, others in the same position at other organizations). For
example, most people see it as fair that doctors are paid generously compared to most other
occupations because doctors hold difficult positions requiring substantial training, expertise, and
personal sacrifice. In other words, doctors provide greater inputs and thus receive more outputs
as a consequence. In contrast to need and equity, equality focuses on the degree to which
outcomes experienced are equal, regardless of inputs or need. For example, all employees at a
worker co-operative may be paid equally regardless of their role in the organization. This
distribution norm is based on the assumption that individuals, given their skills and opportunities
available to them, contribute uniquely to an organization and such unique contributions cannot
be accurately compared and definitively assigned a monetary value. Further, the equality norm is
also rooted in the perspective that all human beings are equal and deserve similar rights and
entitlements.
The three distributive justice normsneed, equity, and equalitywere theorized by
Deutsch (1975) to be evoked by different (but not necessarily independent) organizational goals.
Economic productivity should be most associated with equity norms, individual development
with need norms, and social relationship building with equality norms (Deutsch, 1975). Because
modern organizations typically emphasize economic productivity above all other goals, research
on organizational distributive justice has focused almost exclusively on equity issues (e.g.,
Colquitt, Conlon, Wesson, Porter, & Ng, 2001; Deutsch, 1975). Furthermore, the dominant
distributive justice literature has focused almost exclusively on the distribution of economic
resources and outcomes, namely, pay, promotions, and bonuses. However, other workplace
resources and outcomessuch as status, power, influence, and respectare also key
components of peoples workplace experiences, and the distribution of these resources should
have broad effects on organizational outcomes.
Another key issue with canonical research on distributive justice is its focus on the effect
of (primarily economic) outcome distributions determined by group membership and social
identity. Research examining the effects of gender, ethnic, and class inequalities has been quite
common, and a large body of evidence suggests that inequality across group identity has clear
and serious negative effects. Essentially every individual-level workplace experience or outcome
is worse, on average, for women and ethnic minorities. These outcomes include lower pay,
poorer mental and physical health, lower well-being, lesser feelings of empowerment and
autonomy, lack of organizational mobility, and lower organizational attachment (e.g., Greenhaus,
Parasuraman, & Wormley, 1990; Tsui, Egan, & OReilly, 1991). These effects are particularly
ironic given that greater racial and gender disparity in organizations is associated with increased
sales revenue, greater profits, more customers, and increased market share (Herring, 2009).
One important caveat is that inequality in organizations may reflect pre-existing
inequality outside of organizations, and may not itself be a product of organizational policy or
management decisions. Consider ethnic differences in educational attainment. In the United
States, African-Americans and Latinos are less likely to have completed high school, and as a
consequence, less likely to have completed any post-secondary education (or even had the
opportunity to attend a post-secondary institution at all). In Canada, aboriginal people experience
the same lack of opportunity. These educational inequalities lead to a lack of hiring into positions
that might allow for upward mobility, with the consequence that marginalized groups are less
able to gain important workplace experience. As such, certain groups necessarily have fewer
inputs to offer an organization (through no fault of members of these groups), and may suffer
the many consequences of inequality as a result. Later in this chapter, we describe some research
on the consequences of societal inequality.
In sum, the study of inequality in organizations has predominantly focused on group
membership and social identity at the expense of the more general phenomena of skewed
distributions of outcomes and resources. That inequality manifests and has negative effects
across easily identifiable group memberships is not particularly surprising. However, those who
are victims of inequality suffer negative effects in the workplace regardless of their group
membership or social identity. A broader focus on the root causes and consequences of
inequality may lead to new insights for organizational research and practice above and beyond
the group identity based research done to date.
Consequences of Inequality
Societal Consequences of Inequality
A large body of evidence demonstrates that high levels of income inequality at the
societal level facilitate a wide array of negative social, health, and well-being outcomes. In the
social domain, inequality has been strongly linked with higher rates of teenage pregnancy, lower
social capital, community support, and trust, as well as increased violent and property crime,
including homicide (reviewed in Wilkinson & Pickett, 2006, 2007, 2009). Societal inequality has
also been strongly linked to diverse health and well-being outcomes. Specific physical ailments
such as obesity and cardiovascular illness (among others) are associated with inequality, as are
more downstream outcomes such as greater general mortality and lower life expectancy. In the
mental health domain, inequality has been linked with depression, stress, and a variety of other
psychopathology (reviewed in Wilkinson & Pickett, 2006, 2007, 2009).
Importantly, these negative effects of inequality have been demonstrated independent of
individual-level socioeconomic status and aggregate economic measures (e.g., gross domestic
product; Kennedy, Kawachi, Glass, & Prothrow-Stith, 1998; reviewed in Wilkinson & Pickett,
2009). These results suggest that what is key is relative standing, not absolute standing. This is
an important point to emphasize: inequality appears to affect outcomes for all individuals, not
just those who are the bottom of a hierarchy (e.g., Weich, Lewis, & Jenkins, 2001; reviewed in
Wilkinson & Pickett, 2009). Everyone in a society is subject to relative comparisons, and
knowing that there is great disparity among others is damaging, regardless of whether one is at
the top or the bottom. For example, it is better to be poor in more egalitarian Scandinavian
countries than rich in less egalitarian countries with regard to a wide array of social, health, and
well-being outcomes. Together, these findings suggest that there is something important about
inequality above and beyond absolute individual-level outcomes. It is clear that inequality at the
societal level has substantial and robust social, health, and well-being effects on individuals.
It is important to recognize that almost all research at the societal level on inequality has
focused on examining the effects of income inequality manifesting at the household level. This is
likely because income inequality is relatively easy to identify and quantify using such measures
as the Gini coefficient, which is a measure of the distribution of wealth among households in a
population. However, as described earlier, inequality manifests not only in terms of financial
currency, but also in terms of other resources and opportunities that are of general importance to
people (e.g., social status, prestige, power, and/or influence). We therefore suggest that
inequality writ largethat is, inequality in resources, status, reputation, and influenceshould
have impacts at the societal, organizational, and individual levels. The mechanisms that link
inequality to various outcomes should be conserved regardless of what domain inequality
manifests in. Some preliminary research suggests that disparities in different domains (i.e., not
just income) affect relevant outcomes at the organizational level. We briefly review this evidence
below.
Organizational Consequences of Inequality
Organizations are in effect mini societies, in that they involve collections of people
who interact in a structured community with shared institutions, relationships, and a common
culture (Macionis, 2014; Schaefer & Moos, 1993). Just like larger societies, organizations
involve varied social structures, policies, and norms, with consequent status, power, income, and
resource disparities. These disparitiesmanifestations of inequalityshould have workplace
consequences for workers, just as societal-level inequality has consequences for individuals in
higher-level communities. Remarkably little research, however, has directly examined the effect
of inequality on organizational outcomes, although some research is suggestive.
In the workplace, inequality can manifest as a consequence of objective disparities in
outcomes (e.g., pay dispersion, hierarchical complexity; e.g., Carillo & Kopelman, 1991; McCall
& Kenworthy, 2009) or as a consequence of perceived or subjective interpretations of disparities
in outcomes (e.g., perceptions of equality-related distributive justice/fairness; e.g., Bartunek &
Keys, 1982; Spreitzer, 1995). Components of both objective disparity and subjective perceptions
of disparity have been associated with negative outcomes in the workplace, (e.g., organizational
fairness and justice, participative climate, and empowerment). More specifically, these
components of inequality have been associated with diverse negative organizational outcomes:
reduced social capital, including less cooperation, trust, and mutual support (e.g., Tyler and
Blader, 2003), lower commitment (e.g., Meyer, Stanley, Herscovitch, & Topolnytsky, 2002),
lower psychological empowerment (e.g., Spreitzer, 1996), poorer well-being and health (e.g.,
Christie & Barling, 2010; Danna & Griffin, 1999), and lower performance (e.g., Christie &
Barling, 2010).
Together, these findings are highly suggestive of a link between organizational inequality
and workplace outcomes, although it is important to note again that very little research has
directly examined the influence of inequality (either objective or perceptual) on relevant
workplace outcomes (but see Son Hing, Mishra, Yip, & Garcia, working paper). It is likely that
other organizational analogues of societal-level outcomesfor example, counterproductive work
behavior (a form of antisocial and risk-taking behavior more generally) and organizational
citizenship behavior (a consequence of trust and social capital) are likely affected by inequality
as well.
Outcomes that have been linked with organizational inequalitylower social capital,
poorer health and well-being, lower commitment, and lower empowermentare in turn linked
with higher rates of absenteeism and turnover, and lower motivation and performance (reviewed
in Johns & Saks, 2014). All of these downstream outcomes have enormous economic
implications for organizations. Not surprisingly, it has been argued that economic inequality
affects organizational performance by influencing the attitudes and behaviours of individuals,
workplace interactions they engage in, and the institutional environment that shapes
organizational actions (Bapuji, 2015). Therefore, addressing issues of inequality can be
considered not only an issue of justice, but also an issue of financial and economic relevance to
organizations (and to society more generally).
In sum, research in disciplines ranging from economics to epidemiology has shown that
inequality has deleterious consequences for individuals and societies. By extension, these
consequences are also likely to affect organizations, a point borne out by some suggestive
evidence within organizational research. However, substantial additional research is required to
better understand the effect of inequality on organizations; we suggest some potentially fruitful
future directions below.
Inequality and Organizations: Future Directions
Very little research has examined the effect of inequality on and within organizations.
Accordingly, a number of questions are ripe for research, ranging from how inequality affects
organizations to how organizations affect inequality, and what various stakeholders can do to
address inequality. In this section, we focus on two promising areas of inquiry. The first is aimed
at better understanding inequality and its workplace consequences; the second is focused on
understanding maintenance of inequality in organizations.
Understanding Inequality and the Bias Against Equality
Past organizational research has shown that women and ethnic minorities experience
worse workplace outcomes. The most common explanation for such inequality is systematic
prejudice and discrimination stemming from in-group/out-group comparisons (i.e., social identity
comparisons; Tajfel & Turner, 1979). However, inequality based on group membership and/or
identity necessarily involves inequality in the distribution of resources in the workplace: pay,
promotions, status, power, influence, and respect, among others. It is therefore possible that the
key variable that explains poorer organizational outcomes for women and minorities is inequality
in resource allocation, not necessarily group identity. Put another way, it is possible that if
inequality in resources in the workplace were ameliorated, we would not observe systemic group
or social identity effects. Following this line of thinking, it is likely that those who are at bottom
of an inequality hierarchyregardless of social or group identitysuffer worse outcomes. As a
consequence, we suggest that organizational scholars would benefit from more deeply exploring
whether inequality in resources independent of group membership or social identity has
important social, health, and productivity consequences in organizations. Of course, inequality of
resources necessarily interacts with (and is in large part a cause of) group-based inequality,
which makes its study even more important.
The above distinction highlights that inequality has been examined as an outcome
experienced by some organizational members. The issue of distribution of resources, or unequal
access to opportunities, however, has largely escaped the attention of organizational scholars.
Without consideration of inequality in opportunity, no amount of research focused on
inequalities in outcomes can fully explicate inequality experienced by disadvantaged groups.
Much of the research that has been conducted to date examining inequalities in rewards along
demographic lines has served to describe and highlight the problem. However, this research has
not (and cannot) address underlying causes that perpetuate inequalities (e.g., social structures or
ideologies). Productive advances can be made by understanding inequality derived from both
access to opportunities (e.g., skill development, education, health) and rewards for production
(e.g., pay, status, career progression).
The discussion above brings to the fore the contentious issue of accepting equality as a
guiding norm of fairness in organizations. The vast majority of organizational research on
inequality has been centered on understanding the equity norm. Under this view, pay and status
disparities as a consequence of gender or race are clearly unacceptable as long as individuals
possess similar skills, education, experience, and/or capabilities. In contrast, the equality norm
assumes that all people are equal and bring equal value to the production process, independent of
the type of skill, experience, capabilities, or education contributed. Accepting this norm runs
firmly counter to the predominant business paradigm of rewarding members based on the
economic value of their inputs (i.e., as a consequence of supply and demand, or credentialing). A
shift from a focus on equity to equality thus calls for a fundamental shift in thinking. At the very
least, this shift calls for reflecting on the value
