Diversity management is the strategy of using best practices to find and create a diverse and effective workplace. Diversity being more than just a multicultural issue stems from a wide range of factors including gender, ethnicity, personality, cultural beliefs, social and marital status attached with different types of people, who stand for different things and represent different cultures, generations, ideas, and thinking.This diversity necessitates adopting appropriate strategies for its management. Successful strategies aim at linking diversity progress directly to business results .Strategies for managing such diversity in organizations are discussed here. The challenges and opportunities posed by an increasingly diverse culture as well as how a manager can respond to such diversity are presented. In light of this, the paper attempts to throw light on how a more diverse work environment impact the way a workplace functions. The primary data was gathered by administering a prearranged questionnaire with employees from different firms in a number of industries in India. It uses this as a guide to investigate how the diversity concept is operationalized in several leading business organizations across different ownership forms in India. The study evidenced that diversity has a positive influence on performance outcomes at three levels i.e. individual, group and organizational level. Results reveal that if skillfully managed, diversity can bring a competitive advantage to an organization. The paper concludes that it is imperative for employers and managers to understand changing workforce demographics and the impact of increasing diversity on human behavior in the workplace.