This is an interesting development for HR and Diversity professionals on a number of levels, but I think its most interesting element is what it demonstrates about the importance of diversity to business as a cultural element. First, the transgender community is such a small percentage of society that it is unlikely that Harvard Business School thinks this is going to result in a large increase of transgender applicants that they've been losing out on for years. Not only is the transgender population vanishingly small (although there are some who calculate it as high as 3% of the general population), a minority of those who could be classified as "transgender" actually identify themselves as such. Most transgender people identify as "male" or "female."
It may be part of an ideological commitment by Harvard to empowering transgender applicants, because the Harvard undergraduate application has been changed to include an optional "gender" field, as have a number of other schools. But even there, Harvard has not gone so far as to include "transgender" on its application. A few other schools have also changed their applications to include a blank for gender, but only one that I know of, I suspect there is something else at work at HBS, and it has something to do with the nature of business education today.
I think it represents another acknowledgement of the increasing importance of diversity leadership in elite business corporations today, by an institution that provides executives to top business corporations worldwide. I assume that those who run Harvard Business School think this is appropriate because it represents a realm of understanding important to future business leaders. It also gives HBS a cachet for potential applicants in the increasingly minority (but overall shrinking) market of the college-educated.
Personally, I have reservations about adding "transgender" to forms. I myself do not primarily identify as transgender, but as female, though I do sometimes use the term in reference to myself when I need a quick-and-dirty group identification. Nonetheless, I must admit that when I was on a college diversity committee last year, I condoned the use of "transgender" in a campus climate survey. I covered over the conceptual dissonance by adding the following disclaimer in a footnote:
"Self-identification as "transgender"does not preclude identification as male or female, nor do all those who might fit the definition self-identify as transgender. Here, those who chose to self-identify as transgender have been separately reported in order to reveal the presence of arelatively new campus identity that might otherwise have been overlooked."Moreover, when I filled out the survey as a private individual, I identified as "transgender" for the reasons I stated in the last paragraph. So call me inconsistent, but I go with Emerson on this one. ("A foolish consistency is the hobgoblin of little minds.")
Nonetheless, there are calls for inclusion of "transgender" on application forms. The National Consortium of Directors of GLBT Resources in Higher Education suggests that "the addition of 'transgender' would make the form much more inclusive."
For those who are interested in reading more on the subject, there is an online monograph on the subject of forms, though I think the reasoning needs a bit of work, and there is an an article suggesting it is inappropriate to include "intersex" on forms, with which I heartily agree. And of course there is Kate Bornstein's "My Gender Workbook," which claims "If you don't think you are transgendered when you sit down to read this book, you will be by the time you finish it!"