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STRIDE: Benefits of Diversity
This guide provides resources and readings that inform the STRIDE Committee and workshop presentations.
Eve Fine & Jo Hendelsman, 2010
This booklet summarizes research on the benefits and challenges of diversity and provides suggestions for realizing the benefits. Its goal is to help create a climate in which all individuals feel included, valued, respected treated fairly.
It is produced by The Women in Science & Engineering Leadership Institute (WISELI), a research center at the University of Wisconsin-Madison. WISELI was formed in 2002 with funding from the National Science Foundation’s ADVANCE: Institutional Transformation program.
Niclas L Erhardt, James D Werbel, & Charles B Shrader, 2003
This study examines the relationship between demographic diversity on boards of directors with firm financial performance. This relationship is examined using 1993 and 1998 financial performance data (return on asset and investment) and the percentage of women and minorities on boards of directors for 127 large US companies. Correlation and regression analyses indicate board diversity is positively associated with these financial indicators of firm performance. Implications for both strategic human resource management and future research are discussed.
Erhardt, N. L., Werbel, J. D., & Shrader, C. B. (2003). Board of Director Diversity and Firm Financial Performance. Corporate Governance : an International Review, 11(2), 102–111. https://doi.org/10.1111/1467-8683.00011
Richard B Freeman, & Wei Huang, 2015
By examining the ethnic identity of authors in over 2.5 million scientific papers written by US-based authors from 1985 to 2008, we find that persons of similar ethnicity coauthor together more frequently than predicted by their proportion among authors. The greater homophily is associated with publication in lower-impact journals and with fewer citations. Meanwhile, papers with authors in more locations and with longer reference lists get published in higher-impact journals and receive more citations. These findings suggest that diversity in inputs by author ethnicity, location, and references leads to greater contributions to science as measured by impact factors and citations.
Credit Suisse Research Institute, 2014
The Gender 3000 report series, published by the Credit Suisse Research Institute, provides unique and comprehensive information on gender diversity within the governance and executive leadership teams of over 3,000 companies.
Cristian L. Dezsö & David Gaddis Ross, 2012
We argue that female representation in top management brings informational and social diversity benefits to the top management team, enriches the behaviors exhibited by managers throughout the firm, and motivates women in middle management. The result should be improved managerial task performance and thus better firm performance. We test our theory using 15 years of panel data on the top management teams of the S&P 1,500 firms. We find that female representation in top management improves firm performance but only to the extent that a firm's strategy is focused on innovation, in which context the informational and social benefits of gender diversity and the behaviors associated with women in management are likely to be especially important for managerial task performance.
Dezsö, C. L., & Ross, D. G. (2012). Does female representation in top management improve firm performance? A panel data investigation. Strategic Management Journal, 33(9), 1072–1089. https://doi.org/10.1002/smj.1955
Pierpaolo Parrotta, Dario Pozzoli, & Mariola Pytlikova, 2014
Using a matched employer-employee data-set, we analyze how workforce diversity in terms of cultural background, education and demographic characteristics affects the productivity of firms in Denmark. Implementing a structural estimation of the firms' production function (Ackerberg et al. 2006), we find that labor diversity in education significantly enhances a firm's value added. Conversely, diversity in ethnicity and demographics induces negative effects on firm productivity. Therefore, the negative effects, which are derived from the communication and integration costs associated with a more culturally and demographically diverse workforce, seem to outweigh the positive effects of creativity and knowledge spillovers.
Anthony Lising Antonio, Mitchell J Chang, Kenji Hakuta, David A Kenny, Shana Levin, & Jeffrey F Milem, 2004
An experiment varying the racial (Black, White) and opinion composition in small-group discussions was conducted with college students (N = 357) at three universities to test for effects on the perceived novelty of group members' contributions to discussion and on participants' integrative complexity. Results showed that racial and opinion minorities were both perceived as contributing to novelty. Generally positive effects on integrative complexity were found when the groups had racial- and opinion-minority members and when members reported having racially diverse friends and classmates. The findings are discussed in the context of social psychological theories of minority influence and social policy implications for affirmative action. The research supports claims about the educational significance of race in higher education, as well as the complexity of the interaction of racial diversity with contextual and individual factors.
Antonio, A. L., Chang, M. J., Hakuta, K., Kenny, D. A., Levin, S., & Milem, J. F. (2004). Effects of Racial Diversity on Complex Thinking in College Students. Psychological Science, 15(8), 507–510. https://doi.org/10.1111/j.0956-7976.2004.00710.x
Orlando Richard, Amy McMillan, Ken Chadwick, & Sean Dwyer, 2003
This study explored racial diversity’s influence on firm performance. A national sample of 177 banks was used to first test competing hypotheses supported by the resource-based view of the firm and social identity theory that posited positive and negative direct effects, respectively, of racial diversity on organizational performance. No support was found for either prediction. However, a contingency theory-based hypothesis was supported. A moderation effect indicated that racial diversity’s association with performance was contingent on firms’ level of innovation. Specifically, racial diversity enhanced performance for banks pursuing an innovation strategy, whereas for banks low in innovation, performance declined. The results suggest that a racially diverse workforce in conjunction with an innovation-focused business strategy may provide firms a competitive advantage. This study thus supports a contingency/resource-based perspective that states that racial diversity, as a knowledge-based resource, needs to be set in an appropriate context to fully realize its potential benefits.
Sangeeta Badal, & James K Harter, 2014
This study investigates the relationship between gender diversity and financial performance at the business-unit level and whether employee engagement moderates this relationship. Using more than 800 business units from two companies belonging to two different industries, we found that employee engagement and gender diversity independently predict financial performance at the business-unit level. One implication is that making diversity an organizational priority and creating an engaged culture for the workforce may result in cumulative financial benefits.
Sean Dwyer, Orlando C Richard, & Ken Chadwick, 2003
This study examines the influence of gender diversity in management on firm performance. The management group examined was composed of all firm members considered to be managers and officials, a broader level of analysis than past management-level diversity research that has primarily focused on groups composed of top management team (TMT) members. Adopting contingency and configurational approaches, gender diversity's interactions with two key organizational variables—organizational culture and growth orientation—were evaluated against organizational-level performance measures. Supporting contingency theory and configurational theory, the results suggest that gender diversity's effects at the management level is conditional on, that is, moderated by, the firm's strategic orientation, the organizational culture in which it resides, and/or the multivariate interaction among these variables. These findings help reconcile conflicting results of past diversity–performance research by suggesting that an appropriately configured and supportive organizational environment may need to be in place before the beneficial aspects of gender diversity can be fully realized.
Dwyer, S., Richard, O. C., & Chadwick, K. (2003). Gender diversity in management and firm performance: the influence of growth orientation and organizational culture. Journal of Business Research, 56(12), 1009–1019. https://doi.org/10.1016/S0148-2963(01)00329-0
Katherine W. Phillips , 2014
The article discusses the benefits of diversity in organizations. The author notes that research has shown social diversity in a group can cause discomfort, a lack of trust, and lower communication, adding that research has also shown that socially diverse groups are more innovative than homogeneous groups. Topics include the concept of informational diversity, the impact of racial diversity on small decision-making groups, and how diversity promotes hard work, diligence, and creativity.
Patrick, F McKay, Derek R Avery, & Mark A Morris, 2008
Using data from a sample of 6,130 workers employed in 743 stores of a large, U.S. retail organization, this study assessed whether diversity climate moderated mean racial‐ethnic differences in employee sales performance. Findings indicated Whites exhibited significantly higher sales performance than Hispanics but not Blacks, as moderated by diversity climate. As hypothesized, racial‐ethnic disparities disfavoring Blacks and Hispanics were largest in stores with less supportive diversity climates and smallest in stores with highly pro‐diversity climates. Financial analysis of these interactions revealed sizable increments in sales per hour in response to effective diversity management, with strong organizational bottom‐line implications. Limitations of the study and future research needs are noted.
McKAY, P. F., AVERY, D. R., & MORRIS, M. A. (2008). MEAN RACIAL-ETHNIC DIFFERENCES IN EMPLOYEE SALES PERFORMANCE: THE MODERATING ROLE OF DIVERSITY CLIMATE. Personnel Psychology, 61(2), 349–374. https://doi.org/10.1111/j.1744-6570.2008.00116.x
Samuel R Sommers, 2006
This research examines the multiple effects of racial diversity on group decision making. Participants deliberated on the trial of a Black defendant as members of racially homogeneous or heterogeneous mock juries. Half of the groups were exposed to pretrial jury selection questions about racism and half were not. Deliberation analyses supported the prediction that diverse groups would exchange a wider range of information than all-White groups. This finding was not wholly attributable to the performance of Black participants, as Whites cited more case facts, made fewer errors, and were more amenable to discussion of racism when in diverse versus all-White groups. Even before discussion, Whites in diverse groups were more lenient toward the Black defendant, demonstrating that the effects of diversity do not occur solely through information exchange. The influence of jury selection questions extended previous findings that blatant racial issues at trial increase leniency toward a Black defendant.
Sommers, S. R. (2006). On Racial Diversity and Group Decision Making: Identifying Multiple Effects of Racial Composition on Jury Deliberations. Journal of Personality and Social Psychology, 90(4), 597–612. https://doi.org/10.1037/0022-3522.214.171.1247
O. C. Richard, 2000
Although "valuing diversity" has become a watchword, field research on the impact of a culturally diverse workforce on organizational performance has not been forthcoming. Invoking a resource-based framework, in this study I examined the relationships among cultural (racial) diversity, business strategy, and firm performance in the banking industry. Racial diversity interacted with business strategy in determining firm performance measured in three different ways, as productivity, return on equity, and market performance. The results demonstrate that cultural diversity does in fact add value and, within the proper context, contributes to firm competitive advantage.
Goce Andrevski, Orlando C Richard, Jason D Shaw, & Walter J Ferrier, 2014
The authors examine the mediating role of competitive intensity in the relationship between managerial racial diversity and firm performance (i.e., market share gain and average stock return). Racial diversity relates to firm performance via firms’ capacity to compete intensively (i.e., to introduce new competitive actions frequently). An analysis reveals that environmental munificence moderates competitive intensity’s mediating effect: Racially diverse management groups compete more intensively and perform better when they compete in munificent environments. The authors also find support for a moderated mediation model that simultaneously tests all components of their framework.
Andrevski, G., Richard, O. C., Shaw, J. D., & Ferrier, W. J. (2014). Racial Diversity and Firm Performance: The Mediating Role of Competitive Intensity. Journal of Management, 40(3), 820–844. https://doi.org/10.1177/0149206311424318
Denise Lewin Loyd, Cynthia S Wang, Katherine W Phillips, & Robert B Lount, 2013
A purported downside of social category diversity is decreased relationship focus (i.e., one’s focus on establishing a positive social bond with a coworker). However, we argue that this lack of relationship focus serves as a central mechanism that improves information processing even prior to interaction and, ultimately, decision-making performance in diverse settings. We introduce the construct of premeeting elaboration (i.e., the extent to which individuals consider their own and others’ perspectives in the anticipation of an interaction) and explore its link with social category diversity and relationship focus. Experiments 1 and 2 demonstrate that when disagreement occurs, social category diversity increases premeeting elaboration, with relationship focus as a central causal mechanism. Experiment 3 shows that premeeting elaboration has important implications for performance: disagreeing dyads with social category diversity elaborate more prior to meeting and, as a result, perform better on a decision-making task than those with social category homogeneity. We discuss the value of studying early-stage interaction and propose a reconsideration of the “downside” of social category diversity.
Loyd, D. L., Wang, C. S., Phillips, K. W., & Lount, R. B. (2013). Social Category Diversity Promotes Premeeting Elaboration: The Role of Relationship Focus. Organization Science (Providence, R.I.), 24(3), 757–772. https://doi.org/10.1287/orsc.1120.0761
Katherine W Phillips, Gregory B Northcraft, & Margaret A Neale, 2006
We examined how surface-level diversity (based on race) and deep-level similarities influenced three-person decision-making groups on a hidden-profile task. Surface-level homogeneous groups perceived their information to be less unique and spent less time on the task than surface-level diverse groups. When the groups were given the opportunity to learn about their deep-level similarities prior to the task, group members felt more similar to one another and reported greater perceived attraction, but this was more true for surface-level homogeneous than surface-level diverse groups. Surface-level homogeneous groups performed slightly better after discovering deep-level similarities, but discovering deep-level similarities was not helpful for surface-level diverse groups, who otherwise outperformed surface-level homogeneous groups. We discuss the implications of this research for managing diversity in the workplace.
Phillips, K. W., Northcraft, G. B., & Neale, M. A. (2006). Surface-Level Diversity and Decision-Making in Groups: When Does Deep-Level Similarity Help? Group Processes & Intergroup Relations, 9(4), 467–482. https://doi.org/10.1177/1368430206067557