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The Effects of Culture and Bureaucracy on the
Hiring Practices of Sysco Foodservice of San Antonio
Introduction
The changing demographics in the labor force make it imperative for major corporations to change their hiring practices to incorporate diversity. One such corporation is Sysco Foodservice San Antonio. Two major issues affecting Syscos hiring practices, among other practices, are its bureaucratic organizational structure and its lack of valuing and utilizing diversity. Both of these issues play a key role in the success and or lack of success of the Hispanic employees within the company. Furthermore, these issues affect the success and/or lack of success of the Laredo sales people in doing business with their Hispanic customers. To describe how cultural diversity, changing demographics, and a bureaucratic structure affect hiring practices, a discussion of each is necessary. It is the purpose of this paper first to discuss Syscos organizational structure, diversity and how it affects an organization, the dysfunction of the bureaucratic structure of organizations, and then how all of these affect Syscos hiring practices. Finally, recommendations will be made as to how Sysco can incorporate these ideas into their hiring practices.
Sysco Foodservice Organizational Structure
Sysco Foodservice is a Fortune 500 grocery distribution company with its national corporate headquarters located in Houston, Texas. Sales for 1996 were over $13 billion which was an eleven percent increase over the last years sales. Sysco has seventy distribution centers (division branches) with over 31,000 employees located throughout the United States. Each year twenty percent growth in sales dollars as well as profit dollars is expected from each division branch. These seventy branch distribution centers are run as separate entities with each branch employing its own purchasing, marketing, sales, credit , transportation, and human resource personnel.
Sysco San Antonio is one of the branch distribution centers. The distribution center, warehouses, and the offices for all upper management, purchasing, marketing, credit, transportation, and human resources are located in San Antonio. Additionally, there are four sales districts (groups of sales people) working out of the San Antonio office. Sysco San Antonio also includes four outlying sales districts with offices located in Eagle Pass, Corpus Christi, Weslaco, and Laredo, Texas. Each of the outlying district offices employs a District Sales Manager (DSM), sales people, and a secretary/telemarketer. The chain of command is hierarchical -- sales people report to DSM; DSM reports to Regional Managers who in turn report to the Vice-President of Sales. The VP of Sales reports to the Senior VP of Sales. The Senior VP reports directly to the Branch President. All upper management personnel (Regional Managers and higher) are white; there are no minorities in upper management.
Rules and regulations are dictated from upper management and are standardized with each outlying office required to follow the same procedures as those followed in San Antonio. Workers are assigned specific duties and are not allowed to function in any other capacity. Hiring practices are an example of this. Resumes are submitted to the VP of Human Resources for screening. Resumes are next sent to a secretary who does a telephone screening. If they pass the phone screening, then the applicant is given an application, a Salesmen Probability Quotient Test (SPQ), a drug test, and a background check. If all of this is successful, then the Director of Training sets up a Targeted Selection Interview (pre-arranged questions) by a panel made up of upper management personnel. This panel makes recommendations to the Branch President for final selection. The new employee,after completing a training program, is assigned to one of the districts.One of the districts to which employees are assigned is the Sysco Laredo office, located 150 miles south of San Antonio on the border with Mexico. This district is comprised of one DSM, six salesmen, and one secretary/telemarketer. All of the Laredo employees are Hispanic except for one salesman (who lives in and services the Hebbronville area). Salesmen call on restaurant customers and turn in orders to San Antonio through laptop computers. The warehouse personnel in San Antonio load the groceries on the Sysco trucks which arrive in Laredo the next day for delivery of merchandise.
The Laredo customer base is 97% Hispanic. Local politics and customs lean more toward the Mexican tradition than that of the United States. Culture, language, and customs play a very important role in business. Furthermore, the Laredo economy depends heavily on the Mexican economy. The last peso devaluation in 1994 caused some devastating effects in Laredo as a great number of people from Mexico no longer had the money to shop and /or invest in the Laredo market. Many businesses were forced to close, create new markets, or to find innovative ways to continue doing business. Even though the Laredo market is culturally different from most of the other Sysco districts, diversity and culture are not taken into account for hiring practices.
Diversity and Organizations
Demographics and Diversity In Organizations
In 1995, a Federal Commission completed a three-year study and found that minorities are consistently underrepresented at the highest levels of corporate America. They found that 97 percent of upper management of Fortune 1000 industrial and Fortune 500 companies are white. The Commission noted that it is against the best interests of business to exclude those Americans who constitute two thirds of the total population, two thirds of the consumer markets, and more than half of the workforce (Department of Labor, 1995, p.11 as cited in Hermon, 1996).
Population trends and changing demographics underscore the need to deal with issues of diversity in the business world. Statistics reflect that between 1989 and 2000, 42.8 million people will join the work force in the United States. Of these, 68 percent will be made up of minorities including American born women, African
Americans, Hispanics, Asians, Native Americans, and others. It is predicted that during the 1990s only 58 percent of the new entrants into the labor force will come from the traditional white majority. Between 1988 and 2000, it has been projected that as a percentage of the overall work force, the African American component will increase from 11-12 percent, Hispanics from 7-19 percent, and Asians from 3-4 percent. Hispanics, therefore, are projected to experience the largest percentage of growth in the work force. The number of Hispanics in the labor force increased by 34 percent between 1980 and 1988 and is expected to increase by an additional 11 percent by 2000 (Epting, Glover, & Boyd, 1994). In addition, the actual number of individuals in the labor force is growing at a declining rate. This slowing rate of growth will make it necessary for organizations to incorporate people from all walks of life.
Utilizing Diversity In Organizations
In order for organizations to utilize this labor force, they will have to recognize the diversity of their employees and take advantage of these differences. These cultural changes in the work force will result in several management issues that must be considered. To capitalize on the benefits and minimize the costs of worker
diversity, organizations must be quite different from the typical organization of the past. Potential benefits of this diversity include better decision making, higher creativity and innovation, greater success in marketing to foreign and ethnic minority communities, and a better distribution of economic opportunity. But, increased cultural differences also bring potential costs in high turnover, interpersonal conflict, and communication breakdowns (Cox, 1991; Epting, Glover, & Boyd 1994).
Based on these potential benefits as well as potential costs, informed organizational leaders view diversity as a business imperative. Van Eron (1995) suggests the following advantages of addressing adversity:
* Develop greater understanding of diverse customer needs to better serve diverse markets;
* Gain advantage by being a leader among competitors who are not capitalizing on the benefits of diversity;
* Attract and retain the best talent in the labor pool;
* Effectively use the talent of diverse associates for increased innovation and productivity by enhancing teamwork and reducing interpersonal conflicts;
* Increase employee satisfaction, morale and commitment to organizational goals;
* Enhance communication and coordination; and
* Eliminate or reduce lawsuits and penalties related to discrimination.
In order to take advantage of diversity, leaders are being challenged to create multicultural organizations. Multicultural refers to the degree to which an organization values cultural diversity and is willing to utilize and encourage it (Cox, 1991). Cox characterizes organizations in terms of stages of development on cultural diversity. He discusses three types of organizations: the monolithic organization, the plural organization, and the multicultural organization. A discussion of the three follows.
Monolithic Organization
A monolithic organization has minimal structural integration and is highly homogeneous. In the United States, this commonly represents an organization characterized by substantial white male majorities in the overall employee population with few women and minority men in management jobs. Most of thediverse work force is concentrated in low-status jobs such as secretary and maintenance. This diverse work force, in order to survive, must adopt the existing organizational norms framed by the white male majority. The severe limitations on career opportunities for minority-culture members creates alienation and low identification with the organizations. Discrimination and prejudice is prevalent. This model under-utilizes human resources and lacks social equality; therefore, it should not be a realistic option for most large employers in the 1990s. Many large
U.S. organizations moved away from this model in the 60s and 70s, creating a more plural organization (Cox, 1991).
Plural Organization
The plural organization has a more heterogeneous membership and tries to be more inclusive of persons from other cultural backgrounds. Hiring and promoting policies are often based upon affirmative action policies. However, the representation of non-whites in management averages less than twelve percent. This model offers greater structural integration, substantial reductions in discrimination, and some moderation of prejudicial attitudes which in turn can create greater identification with the organization. This is a marked improvement over the monolithic organization and has been prevalent since the late 1960s. Italso, in Coxs opinion, represents the typical large firm in the 1990s. Even though this model achieves some structural integration, it continues to require minority members to assimilate into the dominant culture of the organization. The failure to address cultural aspects of integration is a major shortcoming of the plural organization and distinguishes it from the multicultural organization.
Multicultural Organization
The multicultural organization values diversity. The distinction between containing diversity and valuing it follows from an understanding of the shortcomings of the plural organization. A multicultural organization is characterized by: pluralism, full structural integration, full integration of the informal networks, an absence of prejudice and discrimination, no gap in organizational identification based on cultural identity group, and low levels of intergroup conflict. Cox adds that few, if any, organizations have achieved these features. Furthermore, he feels that it should be the model for the 1990s and beyond.
Moving Towards A Multicultural Organization
Philosophical viewpoints on managing diversity vary; however, few senior managers defend the monolithic model. They recognize that the under-utilization
of human resources and failure to capitalize on opportunities of workforce diversity represent unaffordable economic costs. What these managers want to know is how to transform an organization into the multicultural organization. This transformation requires training in how to manage and value culture diversity. This training usually consists of a combination of awareness and skill-building. Awareness training generally includes information on workforce demograhpics, the meaning of diversity, and exercises to raise self-awareness. Skill-building training provides more specific information on cultural norms of different groups and their impact on work behavior. Additionally, transformation techniques often include language training (for Anglos as well as minorities), ensuring diversity on committees, emphasizing the importance of diversity through mission statements, providing specially composed minority advisory groups direct access to senior executives, develop highly tolerant climates that encourage diverse approaches to problems among all employees, education programs, develop minority talent for senior management positions, and revamp reward systems (Cox, 1991). Training and transformation techniques focus on making people aware of differences, understand these differences, and build skills to work in a diverse organization.
An example of a company moving towards becoming multicultural is that of Exxon Chemical Co. in Baytown, Texas. In 1988, they launched a human-diversity effort aimed at making a heterogeneous workforce perform as a homogeneous work team (Sheridan, 1994, p. 49). According to Raymond Floyd, site manager, the real challenge is not to ignore differences, but to understand why
people are different--and to use that understanding to foster a climate that enhances the prospects for personal growth as well as business success. Floyd detailed five components of the Baytown diversity effort:
* awareness and understanding--to understand differences and to think about behavior through cultural lenses (example: White male believes time is scarce and business is impersonal while Hispanic male believes that time is plentiful and relationships are crucial to business. White male wants to fly in, make a deal, and fly out while Hispanic wants to establish a relationship. So, at a business lunch White male pulls out his papers while Hispanic male pulls out
pictures of his children. Both are pursuing the same transaction -- and both are wondering why the other isnt doing the right thing (Sheridan, 1994, p.50);
* provide support for people undergoing change-- emotional reactions are a barrier to real progress and most people dont want to change;
* make diversity real in the workplace -- change policies and practices (example: An employee who applies for a supervisory opening must be kept informed about the status of the selection process, and if candidate fails to advance an explanation must be given.);
* demonstrating that management is serious --strong harassment policies where employees know the consequences; and
* celebrating shared success--recognize accomplishments.
Creating a multicultural organization and managing diversity implies an on-going system-wide process that will tap the potential of all employees. It implies growth and development on the part of the organization and its people. Furthermore, it implies changing corporate cultures in order to develop an environment that works for all people. Transforming into a multicultural organization requires that an organization : values, encourages, and affirms diversity; creates an environment in which no one cultural perspective is presumed to be more valid than other perspectives; and empowers all cultural voices to participate fully in setting goals and making decisions.
Bureaucratic (Mechanistic) vs. Organic (Participative) Organizational Structures
Transforming an organization into a multicultural organization requires change. According to McLagan and Nel (1995), no change today can be successful if the governance structure of the organization doesnt change. They recognize that the
nature of work is dramatically different today than it was thirty years ago. Computers, faxes, email, Internet, shifting alliances and networks, diversity of the population, work and customers distributed globally are but a few examples. Business leaders have been aware for fifteen years that the nature of organizations must change. Bureaucracy plan-organize-control-methods, deep hierarchies and functional silos, secrecy, and autocracy just dont work well in fast-moving, customer-driven times (McLagan & Nel, 1995, p. 10). This old style governance is fragmented, focused on vertical and functional issues, subject to many levels of
approval, stresses superior-subordinate relationships, and restricts information flow and access. In other words, McLagan and Nel agree with Gouldners arguments about the dysfunctions of a bureaucracy.
Gouldner provides us with a dysfunction for each of Webers five characteristics of a bureaucracy. He contends that: (1) a fixed division of labor creates boredom and decreases creativity; (2) rules and regulations create rigidity and goal displacement as workers focus on rules as end results not on goals; (3) hierarchy of authority induces blocked communication, filtered communication, and miscommunication; (4) impersonal orientation creates a sterile atmosphere and poor morale; and (5) career orientation which is supposed to create loyalty and job security are not as
applicable today. Weber would argue that a bureaucracy maximizes administrative efficiency, allows experts to make rational decisions, provides for efficiency of actions, and a predictable structure (Scott, 1992).
According to Burns and Stalker, this mechanistic bureaucracy works best under stable conditions while a more organic structure works better under conditions of rapid change. An organic organizational structure is characterized by a low division of labor, wide sharing of responsibilities, low centralization of power, informal communication, and a commitment to organizational goals (Scott, 1992). An organic structure is implied in McLagans and Nels description of new style governance. This new style is participative and includes: people doing whole tasks, working as part of a horizontal process flow out to the customer, approvals existing only when they add value, relationships as interdependent with leadership shifting to optimize expertise and resources, and information available to all(McLagan & Nel, 1995).
Whether it is called transforming from the old style of governance to the new style of governance or shifting from a mechanistic structure to an organic structure, companies are aware that change is inevitable in order to address changing customer needs in an effective, efficient, and globally competitive manner.
How This Applies to Sysco
Sysco San Antonio exhibits many of the characteristics of a monolithic organization. Management is comprised of mostly white males while minority men and women occupy low-status jobs (truck drivers, maintenance, secretaries, and salesmen in outlying offices). Although discrimination and prejudice are not overt, they do exist. Diversity and differences are not valued while adherence to rules set forth by the white male majority is valued. The Laredo employees are a Hispanic subgroup encompassed by an almost totally Hispanic community. They are charged with doing business, increasing sales, and increasing profits within the confines of rules that dont incorporate their culture or customs.
Laredo employees are also negatively impacted by the bureaucratic organizational structure of Sysco. The District Sales Manager and sales people are isolated from upper management because of the hierarchical organizational structure as well as the distance from San Antonio. Communication is blocked and/or filtered as the only access to higher management is through two regional managers. Furthermore, having two regional managers creates confusion. Innovative and creative ideas are squelched and doing business as per the custom is against the rules.
Syscos bureaucratic organizational structure and its lack of valuing of diversity have a drastic impact on the hiring practice -- which ultimately affects the success of the Laredo office. Employees are hired (through the bureaucratic process) in San Antonio and assigned to the Laredo office without any concern for culture and/or a fit into the Laredo market. Since this is a commission only job, it is imperative for sales people to build a good rapport with their customers. Over the past two years, four employees were hired and sent to the Laredo district. These sales people remained with the company from four weeks to six months and then either quit or had to be terminated.
These sales people were unable to establish a rapport with customers in Laredo because they did not understand the language nor the culture of the customers. The generic training provided in San Antonio did not prepare them for the way business is done in Laredo. Additionally, they did not work well with the Laredo office sales team.
It is highly unlikely that someone in the Human Resource Department of Sysco San Antonio located 150 miles from Laredo, who is unfamiliar with Laredo and its people, and who has never visited the Laredo office will hire someone that will be successful in this district. The Human Resource people are not interested in sales
and profit growth, they are interested in hiring enough trainees to fill a training session (another example of a bureaucratic division of labor).
Recommendations
Syscos Laredo office would function better, utilize its personnel better, and serve the customer base more efficiently if it could be structured in a less bureaucratic manner and if culture was taken into consideration. Sysco needs to change -- to transform from a monolithic organization into a multicultural organization which values diversity. In order to facilitate this change, Sysco also needs to move from a mechanistic to an organic organization. Such dramatic change would take time and require the revamping of the entire organization. In the meantime, a few small scale changes would make a significant difference in the Laredo office. Suggestions include:
* allow District Sales Manager to do an initial screening of applicants, not a secretary in San Antonio, and be involved in the interviewing process
* allow District Sales Manager final approval in accepting a new employee into his district
* allow outlying offices to work cooperatively with upper management to arrive at agreed upon rules and procedures that would take into account culture, customs, the environment, and the unique needs of the office;
* develop minority talent for senior management positions -- and actually promote them;
* provide access to senior executives through advisory groups;
* allow more decisions to be made at the local level; and
* structure reward systems to incorporate cultural preferences.
Conclusion
By capitalizing on diversity and promoting change through a participative, organic structure, Sysco would maximize their benefits, produce better decision making, and achieve greater success with its customers. Specifically, allowing local district sales managers to have input into the hiring of their sales people would produce better results. Sales people would be more likely to fit into the local market as well as the culture of the district office.
In order for the Sysco Laredo District to be more successful, Sysco San Antonio must understand that culture plays a vital role in the success and/or failure of the sales people. Sysco San Antonio upper management must learn to value and
utilize diversity and must be willing to allow more participation from local district sales managers. For Sysco, learning to value diversity would require a dramatic change in the structure of the company. The present bureaucratic structure is more effective in a stable situation, and therefore, would not be an effective organizational structure for undertaking this change. Thus, the entire organizational structure needs to transform from a bureaucratic, mechanistic one to a more participative structure. A good start would be to implement the recommendations already mentioned.
References
Cox, Taylor. ( 1991, May). The multicultural organization. Academy of Management Executive, 5 (2), pp. 34-47.
Epting, Laurie Ashmore, Glover, Saundra H., and Boyd, Suzan D. ( 1994, June). Managing diversity. Health Care Supervisor, 12 (4), pp. 73-83.
Hermon, Mary Vielhaber. (1996, October). Building a shared understanding and commitment to managing diversity. Journal of Business Communication, 33 (4), pp. 427-442.
McLagan, Pat and Nel, Christo. (1995, March). The drawing of a new age in the workplace. Journal for Quality & Participation, 18 (2), pp. 10-15.
Scott, W. Richard. (1992). Organizations Rational, natural, and open systems 3rd edition. Englewood Cliffs, New Jersey: Prentice Hall.
Sheridan, John H. ( 1994, September 19). Dividends from diversity. Industry Week, 243 (17), pp. 23-26.
Van Eron, Ann M. ( 1995, August). Ways to assess diversity success. HR Magazine, 40 (8), pp. 51-52.