Examining the Link Between Diversity and Firm Performance: The Effects of Diversity Reputation and Leader Racial Diversity
Roberson, Quinetta M.; Park, Hyeon Jeong
Given the scarcity of empirical research on the impact of diversity on organizational performance, we used longitudinal data for 100 firms to test hypotheses related to the effects of diversity reputation and leader racial diversity on firm financial outcomes. The results showed a positive relationship between diversity reputation and book-to-market equity, and a curvilinear U-shaped relationship between leader diversity and revenues, net income and book-to-market equity. Our analyses suggest that economic benefits generated from diversity reputation may primarily derive from capital rather than product markets. Further, firm performance declines with increases in the representation of racial minorities in leadership up to a point, beyond which further increases in diversity are associated with increases in performance.
CAHRS; ILR; center; human resource; studies; advanced; link; diversity; firm performance; racial diversity; market; performance; demography; top management teams; reputation
Showing items related by title, author, creator and subject.
Balter, Roscoe; Chow, Joy; Jin, Yin (2014-04-01)In recent years organizations have been implementing diversity initiatives that go far beyond affirmative action and compliance standards. An increasingly global economy and multicultural workforce has allowed for business ...
Berkoff, Rachael; Fredrich, Brian (2017-10-01)[Excerpt] Despite their best efforts, many corporations are unsuccessful in their attempts to create more inclusive environments that allow for progression and growth of women and minorities. More than 75% of CEOs include ...
How Can Organizations Promote Inclusion to Ensure That High Potential Diverse Talent Brings Engagement to Work? McCabe, Joe; Roy, Sudip (2019-11-01)[Excerpt] This report explores strategies for organizations to build an enterprise-wide culture of inclusion, and specifically, support inclusion among diverse senior leaders.