Inequality has emerged as one of the grand challenges for societies. It is often explained in terms of the intrinsic dynamics of capitalism or government policy. A new paper co-authored at Cambridge Judge Business School argues that the role of organisations in ensuring the persistence of inequality is just as crucial.
The issue of inequality is often linked to free
market capitalism and government policy in such areas as tax, wages and
educational opportunities. In contrast, there is little discussion of the role that
organisations play in fostering and perpetuating inequality.
A just-published review puts the spotlight on
organisations as places “where inequality is produced and amplified”
– owing to hiring and other practices that go unquestioned thanks to three “highly
institutionalised myths” that pervade organisational life. These are the
myths of efficiency, meritocracy and positive globalisation.
“Organisations, far from being neutral
entities, constitute bounded, rationalised and formalised spaces in which
economic opportunities intersect with structures of exclusion and disadvantage,”
says the paper published in Academy of Management Annals by academics
based in the UK and Germany.
Organisational textbooks often misrepresent how
people are hired, promoted and paid in organisations. Similarly, they hardly
ever mention the numerous race, gender and class-based barriers to upward
mobility that pervade organisations. A more honest appreciation of these
dynamics is critical to understanding how inequality is produced and
perpetuated, says the paper, which draws its insights from more than 400
articles, books and reports by government agencies and think tanks.
“The issue of who suffers from inequality has been well understood, but there has been little attention paid to the organisational mechanisms that allow inequality to persist,” says study co-author Dr Kamal Munir, Reader in Strategy & Policy at Cambridge Judge Business School, and Race & Inclusion Champion at the University of Cambridge.
“Our paper finds that inequality is
fostered by organisational practices, and it is allowed to escape scrutiny
thanks to three myths that are deeply entrenched in the organisational world and
conceptualised in textbooks written about organisations and taught in business
The article focuses at length on the role
played by these myths – defined as “widely shared cultural ideals and
rationalised beliefs about how organisations ought to operate”. The paper suggests
the three myths of efficiency, meritocracy and the positive nature of
globalisation have become “pervasive in their influence” in allowing
the enactment of practices and “taken-for-granted ways of operating” that
reproduce inequality in organisations.
For example, the vast difference in pay between
chief executive officers and ordinary workers is often justified by the
existence of a neutral and efficient labour market which rewards the best
performers. The cultural and social networks that marginalise non-whites, women
and the poor are not taken into account in judging these disparities.
Likewise, the widespread belief that
organisations are basically meritocratic wasn’t borne out by the study’s
review, which found that entry, advancement and reward in organisations “often
remains systematically non-meritocratic” and fails to reflect social and
cultural factors. However, the myth of meritocracy is internalised not only by
those who rise to the top, but equally by those who do not; the latter end up
blaming themselves, suffering from low self-esteem and lowering their
aspirations, cumulatively making the organisation less dynamic.
As for the institutionalised belief that
globalisation is a positive and progressive force, a tide that lifts all boats,
the review found that recruitment, promotion and compensation practices within multinational
corporations engender new inequalities while strengthening existing ones. Far
from being progressive, they reinforce local hierarchies and class-based social
systems, taking advantage of workers, while offering attractive opportunities
to the educated elite.
The authors conclude by saying that inequality
has not received anywhere near the same attention at business schools as ethics
and climate change. Highly sanitised pictures of organisations are painted in
textbooks omitting the visible and invisible barriers that characterise organisational
life for non-whites, women and the poor.
paper – entitled “The
organizational reproduction of inequality” – is co-authored by Dr John
M. Amis of the University of Edinburgh; Professor Johanna Mair of the Hertie
School of Governance in Berlin and co-director of the Global Innovation for
Impact Lab at the Stanford University Center on Philanthropy and Civil Society;
and Dr Kamal A. Munir, Reader in Strategy & Policy at Cambridge Judge