Why inclusion is a business imperative

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Why inclusion is a business imperative

Published: 13 Mar. 2025, 00:02

Audio report: written by reporters, read by AI

Lee Eun-hyung

The author is a professor of business administration at Kookmin University.

This year, International Women’s Day passed by more quietly than ever — almost as if it had never happened. According to a recent report by UN Women, one in four governments worldwide faced backlash against efforts to advance women’s rights last year. This resistance has become a near-global trend. In the United States, President Donald Trump took it a step further, signing an executive order shortly after taking office to dismantle federal diversity, equity, and inclusion (DEI) policies, calling them “radical and wasteful.”

On March 7, the day before International Women's Day, representatives from the Korea Women's Hotline distribute roses to students in front of Dongduk Women's University in Seongbuk District, Seoul. [YONHAP]

Trump’s executive order raises questions about the future of DEI policies. The corporate response offers some insight. While companies are universally assessing legal risks, their actual course of action varies. Some have swiftly scaled back their DEI initiatives. Disney announced it would abandon its content strategy emphasizing diversity and minority representation, while Pepsi removed DEI-related language from its website. Tech giants like Google, Amazon, and Meta have downsized their DEI departments and eliminated race- and gender-conscious hiring practices. Although some companies claim they will continue to promote diversity and inclusion internally without public declarations, there is no denying that many are retreating from previous commitments.

At the same time, a significant number of companies are taking a different approach. Those that have strategically embraced DEI and seen substantial success are standing firm. Satya Nadella, CEO of Microsoft, credited with revitalizing the company and achieving record-breaking financial performance through an inclusive corporate culture, has made it clear that he has no intention of reversing DEI policies. Tim Cook, CEO of Apple, who has consistently championed DEI values while more than tenfold increasing Apple’s market value, has taken the same stance. Jamie Dimon, CEO of JPMorgan Chase and one of Wall Street’s most influential figures, also reaffirmed his commitment to DEI.

Despite presidential directives, these leaders are holding their ground for a simple reason: DEI has proven beneficial to business performance. Apple reiterated its belief that “diversity and inclusion drive innovation and business success.” Cisco emphasized that “scientific evidence shows diverse teams achieve better outcomes.” P&G CEO Jon Moeller issued a statement declaring, “Equality and inclusion benefit our business, and that will not change.” Companies with strong DEI cultures — such as Costco, Salesforce, Nike, Delta Air Lines, and Pinterest — view these policies as strategic assets and are committed to preserving them.

Observing this divergence in corporate responses, one cannot help but feel that this moment is separating the wheat from the chaff. Companies that adopted DEI policies merely to follow trends are now readily abandoning them in response to shifting political and social climates. However, organizations that pursued DEI with a long-term strategic vision — integrating it into their corporate culture — find themselves unable to turn back, as doing so would jeopardize their success. Consumers, too, will make their judgments.

The current DEI backlash brings to mind the work of Harvard professor Robin Ely. For more than two decades, Ely conducted research on the widely accepted notion that diversity improves corporate performance, yet her findings were inconsistent. Puzzled by this, she eventually discovered a crucial link: diversity alone does not enhance performance — only within an inclusive corporate culture does diversity yield positive results.

There is nothing inherently flawed about DEI policies. Rather, their effectiveness is hindered when organizations lack inclusive cultures or when societies are resistant to diversity. When corporate leaders fully grasp the true purpose of DEI and implement it correctly, the impact on performance is positive. This is not just a gender issue. Given that younger generations increasingly seek recognition of their individuality, fostering an inclusive corporate culture is no longer just an option — it is a core competency.

President Donald Trump tosses pens used to sign executive orders into the crowd during the Presidential Inauguration parade in Washington on Jan. 20. On the same day, he signed an executive order dismantling federal diversity, equity, and inclusion (DEI) policies, calling them “radical and wasteful.” [AP/YONHAP]

Reflecting on this year’s near-invisible International Women’s Day is disappointing. Unlike the United States or the European Union, Korea has not even had the opportunity to widely implement DEI policies. Nor have we seen companies like Disney pushing boundaries and sparking public debate. Yet, we seem to be dismissing DEI as if we, too, were part of the backlash. In reality, Korea remains at the bottom of the OECD in terms of gender wage equality and female labor force participation, while setting records for the world’s lowest birthrate. For us, DEI is not just a passing trend — it is still an urgent and unresolved challenge.

Translated using generative AI and edited by Korea JoongAng Daily staff.