Diversity in the Upper Management of Leading Texas Contractors

Today’s society encourages diversification in all aspects of life, including diversity in the workplace.  In order to obtain a clear picture of the characteristics of the Texas construction industry’s upper management, 264 surveys were emailed and mailed to a group of upper managers representing the top contractors in Texas.  The data was analyzed using inferential statistics; the chi-square test was used to test distributions of various subgroups.  The majority of upper managers are white and male.  It was found that the Ethnic make up of upper management is not representative of the Ethnic make up of the Texas or national construction workforces, while the Gender make up of upper management is representative of the Gender make up of the Texas and national construction workforces.  The data presented characterizes upper management for Texas constructors and enlightens the industry as to its level of diversification.

Key Words:  Management, Diversity, Construction Industry.

Introduction 

The backbone of a construction company is its upper management.  The Presidents and Vice Presidents are the individuals who set the guidelines that govern the day-to-day function for the remainder of the company.  Many people entering the construction industry seek to someday hold a position in upper management.  For people entering the industry it is important for them to understand how others arrived in upper management positions.  Approximately 33% of the Texas construction workforce is made up of minorities and 9.2% is made up of women (Texas State Data Center, 2003).  For those women and minorities entering the industry it is important for them to know if they are represented at the highest levels of management.  If they can see that someone else from their background has made it to upper management, they too will feel they can achieve this level.  Diversity in upper management will help motivate minority employees to strive to advance to leadership positions. 

The makeup of top management in a company is important; demographics can make a bold statement to employees and to the public.  This demonstrates the company's stance on diversity.  Ethnic and gender contribution is one of six characteristics of successful CEOs and managers (Work, 1993).  Diversity warrants a high leadership profile; it is an idea that should be encouraged and acknowledged by top management.  "A truly diverse company means that minorities, women, and the disabled have positions at every staffing level, and on the board of directors" (Martino, 1999). 

Review of Literature 

Diversity in a company is important for many reasons.  "Diversity breeds innovation, but only when there are conditions present that allow innovation and creativity to flourish," says Donna Callejon, senior Vice President of Fannie Mae (Martino, 1999).  The U.S. is currently experiencing a rapid demographic change.  While the overall percentage of whites in the workforce is decreasing, the number of women in the workforce, the average employee age, and religious diversity of workers are all increasing (Bucher, 2000).  Taking this information into account, it is very clear that diversity is definitely not just a trend; diversity is here to stay.  Achieving diversity within a company is not an easy task.  It requires some people to change the way they act and their way of thinking.  Bucher (2000) suggests "six barriers to success" in attempting to diversify one's company: limited perceptions, ethnocentrism, stereotypes, prejudice, prejudice plus power, and discrimination.  It is upper management's responsibility to ensure that their company is diversified.  "CEOs must be proactive [in] initiating and taking on the challenges inherent in managing a diverse workforce” (Work, 1993). 

The United Nations has developed a definition of diversity that seems to encompass the many aspects involved: “Diversity takes many forms.  It is usually thought of in terms of obvious attributes – age differences, race, gender, physical ability, sexual orientation, religion, and language.  Diversity in terms of background professional experience, skills and specialization, values and culture, as well as social class, is a prevailing pattern (U.N., 2000)” (Clements & Jones, 2002).  The latter part of this definition goes beyond color and sex, and acknowledges a deeper kind of diversity – personal experience.  It asks one to look at their organization and see what is lacking in backgrounds, styles, and values.  The diversity of personal experience is rarely spoken of; society is mainly concerned with racial, gender, religious, physical ability, and sexual orientation issues.   

Diversity is something that should be managed; effective management involves self-analysis as well as training.  Managers are the creators of the office environment.  Clements and Jones (2002) suggest a five-part method to successfully managing diversity: “1. recruitment targets at all levels of the organization; 2. awareness training for all staff; 3. non-discriminatory recruitment, promotion and reward systems; 4. flexible working arrangements; 5. constant and effective monitoring and evaluation of their management of diversity.”  Training alone does not guarantee good diversity management; these five steps are necessary to ensure success.  All forward-looking, smart organizations recognize that workforce demographics are changing, and the common goal continues to be to recruit the best staff possible.  Effective management can combine these two ideas to obtain a thriving workforce within the office. 

Statement of the Problem, Objective, and Hypotheses 

The purpose of this study is to determine the characteristics of the upper management of top contractors in Texas and to examine and analyze these characteristics.  “Upper management” is herein defined as: the Presidents and Vice Presidents of a contracting company, or equivalent positions.   

This study has the following objectives and hypotheses: 

Objective: To analyze and examine the characteristics, as defined herein, of the construction upper managers, and compare these characteristics with those of the construction industry as a whole.

Hypothesis One: the distribution of Whites, Blacks, and those of Hispanic origin in upper management of construction companies will equal the distribution of Whites, Blacks, and those of Hispanic origin in the Texas and national construction industries. 

Hypothesis Two: The distribution of men and women in upper management of construction companies will equal the distributions of women in the Texas and national construction industries. 

Methodology 

To collect the data, 264 surveys were emailed and mailed to upper management with 72 companies.  The list of companies was composed of contractors named on Engineering News-Record’s (ENR) Top 400 Contractors list (2002) who had an office in Texas and of companies serving on the Department of Construction Science’s Construction Industry Advisory Council at Texas A&M University.   

The participants were emailed and/or mailed the consent letter and the survey.  132 of 264 surveys were returned, providing an overall response rate for the study of exactly 50%.  Eight of these surveys were discarded for several reasons: incompletion, the stated current position was not what the study defines as “upper management,” or the survey was received past the requested due date.  Therefore, 124 surveys (47% of those surveyed) were used to perform the analysis of the data.  Once all of the data was obtained, the statistical analyses were performed on the data.   

For Hypotheses One and Two, inferential statistics were performed.  Here, the chi-square test was used in order to compare the distributions among two or more groups of data.  The chi-square test was performed to compare the distribution of Whites, Blacks, Hispanics, and Others in upper management (obtained from the sample data) to the Texas and the national distribution of Whites, Blacks, Hispanics, and Others in the construction industry.  The chi-square test was also used to compare the percentage of males and the percentage of females in upper management (obtained from the sample data) to the Texas and the national percentages of males and females in the construction industry. 

The most recent data available on the ethnic breakdown for the Texas construction industry is only available for the U.S. Census year 1990.  The percentages for the 1990 Texas construction industry are: 67.07% White, 6.77% Black, 24.53% Hispanic, and 1.63% for the group “Other” (Texas Workforce Commission, 2003).  Realizing that the Texas data may be outdated and inaccurate, the national data from the 2000 U.S. Census has also been used.  These percentages are: 75.6% White, 7.0% Black, and 17.4% Hispanic (U.S. Dept. of Labor, 2002). 

The percentages for the 2000 Texas construction industry are: 90.76% male and 9.24% female (Texas State Data Center, 2003).  The 2000 U.S. Census has also been used in order to have more consistent comparisons within the study (the 2000 national data was also used in the ethnicity comparison), as well as to simply understand how the study group compares to the national data.  The national construction industry percentages are: 9.6% female and 90.4% male (U.S. Dept. of Labor, 2002). 

Results 

The data that was collected and analyzed gives great insight to the composition of this group of upper managers.  The inferential statistics were applied to determine how the make up of upper management relates to the make up of the construction industry itself. 

Hypothesis One 

The distribution of Whites, Blacks, and those of Hispanic origin in upper management of construction companies will equal the distribution of Whites, Blacks, and those of Hispanic origin in the Texas and national construction industries.   

 With one survey having left the Ethnicity category blank, there were 123 responses for this analysis on Ethnicities.  93.5% of upper management was White, followed by 4.9% Hispanic and 1.6% Other.  There were no Blacks.  The Ethnicity distribution of upper management (found from the collected data) was compared to both the 1990 Texas construction industry data (TWC) (Table 1) and 2000 national construction industry data (U.S. Dept. of Labor) (Table 2) using the chi-square test.  A chi-square value of 40.49 was calculated for the Texas construction data, therefore we reject the null hypothesis that distributions of Whites, Blacks, and those of Hispanic origin in upper management and the Texas construction industry are equal (p<0.001).  A chi-square value of 24.88 was calculated for the national construction data, therefore we reject the null hypothesis that distributions of Whites, Blacks, and those of Hispanic origin in upper management and the national construction industry are equal (p<0.001). 

Hypothesis two 

The distributions of women in upper level of construction companies will equal the percentage of women in the Texas and national construction industries. 

 It was found that 92.7% of upper management was Male.  For the 7.3% that were Female upper managers, many were involved with human resources and financial-based positions.  The Gender distributions for upper management were compared with the Texas and national construction industry Gender data using the chi-square test.  A chi-square value of 0.58 was calculated for the Texas construction data, therefore we fail to reject the null hypothesis that distributions of males and females in upper management and the Texas construction industry are equal (p>0.1).  A chi-square value of 0.79 was calculated for the national construction data, therefore we fail to reject the null hypothesis that distributions of males and females in upper management and the national construction industry are equal (p>0.1). 

 It was found that upper management and the industry as a whole was relatively equal when it comes to Gender distributions. 

Conclusions 

The data obtained and presented in this study describes the upper management of Texas contractors.  It was concluded that that the Ethnic make up of the upper management of Texas contractors is not representative of the state or the national construction workforces.  It was determined, however, that the Gender make up of the Texas contractor upper management is representative of the state and national construction workforces.  These conclusions were made based on the results of the chi-square tests. 

The information found on Ethnic and Gender diversity is a snapshot of the makeup of the construction industry’s upper management.  It can be used to make positive changes that can help the industry grow in both the economic sense and in public regard.  The fact that nearly 25% of the Texas construction workforce is Hispanic and only 4.9% of upper management is Hispanic demonstrates that there are serious issues with ethnic diversity in the leadership of the Texas construction industry.  While it was found that the gender makeup of upper management was not significantly different from that of the general workforce, the actual number of women in both sectors could possibly be improved. The industry can also compare themselves to other industries to better understand where it stands in relation to the global market.  Many other industries have already implemented diversification initiatives.   

Companies can use the knowledge gained here to better diversify their management teams, and it can be used by future constructors to better prepare themselves for the industry they are about to enter.  It would be interesting to have this study performed again in another ten to fifteen years, in order to identify any trends in upper management characteristics.  Both subparts of the study say something different about the whole; one subpart shows that construction’s upper management is just as diverse as its industry, while the other indicates an area that needs improvement.  The data presented in this study on Ethnicities and Gender combine to portray the level of diversity in the upper management of Texas’s leading contractors.   

References 

Bucher, R. D. (2000).  Diversity consciousness: Opening our minds to people, cultures, and opportunities.  Upper Saddle River, NJ: Prentice Hall. 

Clements, P., & Jones, J. (2000).  The diversity training handbook:  A practical guide to understanding and changing attitudes.  London: Kogan Page. 

Debo, H. V., & Diamant, L. (1988).  Construction superintendent’s job guide (2^nd ed.).  New York: John Wiley & Sons. 

Martino, J. (1999).  Diversity: An imperative for business success.  New York: The Conference Board. 

Texas State Data Center and Office of the State Demographer (2003, February 10).  Texas summary file 3 profiles.  [WWW document].  URL http://txsdc.tamu.edu. 

Texas Workforce Commission (2003, February 10).  Statistics Search Page.  [WWW document].  URL http://www.twc.state.tx.us. 

The top 400 contractors: Taking the bite out of recession.  (2002, May 20).  Engineering News Record.  New York: McGraw-Hill. 

U.S. Census Bureau (2002, September 19).  U.S. Census Bureau.  [WWW document].  URL http://www.census.gov. 

U.S. Department of Labor (2002, February 23).  Bureau of Labor Statistics.  [WWW document].  URL http://www.bls.gov. 

Work, J. W. (1993).  What every CEO already knows about managing diversity.  Highland City, FL: Rainbow Books.