Law, Diversity, and Business Management Implications

Introduction

As much as the US is one of the most progressive economies in the world, it has had an unfortunate history of racial and gender based discriminatory practices. The country’s society is slowly make headways in embracing diversity as a means to foster greater innovations, ethical integrity and greater socio-economic developments[1] (Taranto). A good example of discriminatory practices hindering rapid economic developments in the past is San Francisco’s Public Contracting Act (Morris, Thanasombat, Sumner, Pierre and Borja 5). This Act was however voted as discriminatory in a California state referendum leading to the approval of the now famous Proposition 209 in 1996. The Public Contracting Act was perceived as discriminatory as it was designed to accord preferential treatment to American men of European descent over minorities and women. This paper seeks to critically discuss how business managers can carry out bidding procedures that do not employ past discriminatory practices. This paper will use the arguments put forward by the court in the case of Coral Construction, Inc. vs. San Francisco as the basis for this essay.

Fostering Greater Opportunity and Higher Participation for Public Contracts

The past business landscape in the US was highly discriminative not only to people from different ethnic backgrounds but to women as well. The Civil Rights Movements of the 1960’s played an important role in making the playing ground a little bit more even. However, businesses in San Francisco had to wait until 1996 to have the retrogressive by laws with far reaching economic impacts challenged[2] (Morris et al. 7). As much as the US is widely regarded as the country of the just and free, the laws instituted prior to the Civil Rights Movement have stained this image and more so, created barriers to greater economic development.

Proposition 209, also referred to as the California Civil Rights Initiative aimed at enabling business people of color as well as women have a fair share in public contracting as well as hiring. The businesses owned by women and people of color were referred to as Minority Business Enterprises (MBE) by the public institutions and as such were treated unjustly in the awarding of public contracts[3] (Morris et al. 8) The MBE’s were later incorporated into the Disadvantaged Business Enterprises initiatives (DBE). As the available literature provides, the impact of Proposition 209 was to limit the success of DBE’s.

For instance, Kamisugi provides that up to 820 million dollars are lost annually in the California as a result of contracts awarded to DBE’s[4]. More so, this author also provides that 200 million dollars are lost annually as a result of the Coral Construction, Inc. vs. San Francisco case. It is important to note that this particular case brought an end to the prevalence of race oriented procurement programs. The perception that the court’s decision has led to massive losses for the California State Government sound quite erroneous. The aim of Proposition 209 was to essentially eliminate the negative impacts associated with such discriminations[5] (Americans for a Fair Chance).

In Coral Construction, Inc. vs. San Francisco, the US Supreme Court suiting in California discarded San Francisco’s attempts to challenge Proposition 209 by mentioning the political structure doctrine[6] (Parent and Whitmore). This was perceived as an incorrect interpretation of the federal government’s Equal Protection Clause. The city aimed at having Proposition 209 challenged on the basis that it would lead to losses in federal funding.

The court’s decision discarded the case presented by the city’s official as it sought to discriminate against minority based businesses which could in essence have limited the benefits associated with diversity[7] (Parent and Whitmore). Businesses today are now embracing the benefits of diversity. Diversity in businesses has resulted to greater innovation which has not only ensured businesses continue operating as a going concern but also fostered greater customer satisfaction and loyalty. As such, this court case played a very important role towards championing for greater diversity in the workplace. Given that most American businesses are looking to international markets to increase shareholder wealth creation, diversity has grown to become a defining factor that not only enables for innovative business practices but also accords such business a competitive advantage in international markets.

As such, it is upon managers in businesses to incorporate ethical attributes towards greater workplace diversity. This not only breaks down the cultural and social barriers which lead to limitation in economic growth but also allows for greater justice, equality and fairness in employment opportunities regardless of gender or race[8] (Parent and Whitmore). This also opens up business opportunities towards organizational goals that are flexible as well as dependent on workable time frames. Organizations such as Microsoft and Google have realized a competitive advantage over other industry players in the global markets as a result of embracing cultural diversity. It has also led to a reduction of the wage gap among US citizens translating to a multiplier effect that has led to greater economic growth.

Conclusion

The most successful organization is one which is able to employ innovative business practices towards the development of innovative gods and services with a greater appeal to a wider cross section of the present consumer base. As such, one can term the Coral Construction, Inc. vs. San Francisco case as being a milestone case which has championed for greater emphasis by business managers towards greater work place diversity. As this paper has provided, the past discriminatory practices only led to limited economic growth. Incorporating equality in awarding of public contracts will enable greater prosperity for businesses, federal and state governments as well as the general US society.

Works Cited

Americans for a Fair Chance. Opportunity through Affirmative Action. Americans for a Fair Chance. N.d. Web. 2 Oct. 2015. < http://www.civilrights.org/equal-opportunity/fact-sheets/fact_sheet_packet.pdf>.

Kamisugi, Keith. Impact of Prop. 209 on Calif. MWBEs. Equal Justice Society. 24 Feb. 2015. Web. 2 Oct. 2015. < http://equaljusticesociety.org/2015/02/24/one-billion-in-potential-contract-dollars-lost-annually-by-businesses-owned-by-women-and-people-of-color-due-to-proposition-209/>.

Morris, Monique W., Thanasombat, Sirithon, Sumner, Michael D., Pierre, Sara and Borja, Jessica Z. Free to Compete? Discrimination Research Center. 2006. Web. 2 Oct. 2015. < https://www.law.berkeley.edu/files/thcsj/Free_to_Compete.pdf >.

Parent, Randy, O. and Whitmore, Liebert Cassidy. Case Study: Coral Construction V. San Francisco. Law 360. 19 Aug. 2012. Web. 2 Oct. 2015. <http://www.law360.com/articles/186927/case-study-coral-construction-v-san-francisco>.

Taranto, James. ‘Stop Being So Anglo’. The Wall Street Journal. 7 Dec. 2012. Web.2 Oct. 2015. < http://www.wsj.com/articles/SB10001424127887324001104578165391284860034>.