Article

The Political Economy of Diversity: Diversity Programs in Fortune 500 Companies

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

Using data from a 1998 SHRM survey, this study examines the prevalence and nature of diversity initiatives in Fortune 500 companies. The rhetoric of diversity in industry suggests that a diverse workforce is good for business. Diversity is typically defined in terms of such demographic factors as race, age, gender, ethnic background, and, to a lessor extent, sexual orientation. Our analysis shows that most Fortune 500 companies have some diversity initiatives, but that these initiatives are disproportionately aimed at certain minority groups. Thus, there appears to be a political economy of diversity in which some categories of diversity are valued over others. We place this analysis within the larger context of a changing economic, occupational and political factors affecting the diversity movement.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Inclusion involves managing the dichotomy between affirming individual identities and integrating different groups (Dobusch, 2014). Efforts to manage a diverse workforce often build on popular stereotypes, thereby leading to detrimental outcomes (Heilman, 2012;Ryan et al., 2002). Managers working on integrating minority groups are also known to disregard the majority groups, often resulting in their alienation (Leslie et al., 2014;Ryan et al., 2002). ...
... Efforts to manage a diverse workforce often build on popular stereotypes, thereby leading to detrimental outcomes (Heilman, 2012;Ryan et al., 2002). Managers working on integrating minority groups are also known to disregard the majority groups, often resulting in their alienation (Leslie et al., 2014;Ryan et al., 2002). Concurrently, assimilation of all groups or emphasizing on "sameness" may lead to undesirable outcomes, quite contrary to the objectives of inclusion (Mahadevan, 2012). ...
Article
Full-text available
Purpose The study focuses on the inclusion practices and processes of five large organizations across diverse sectors where women are underrepresented. The purpose of this paper is to examine how organizations facilitate changes in behavior and mindset through formal and informal practices. Design/methodology/approach In-depth interviews of CEOs, HR team members, and diversity and inclusion leaders in the five organizations were used as data in this study. Coding was done over several rounds via content analysis for the development of themes around how organizations work toward women’s inclusion. Findings The findings indicate that in their inclusion practices, all five organizations took into consideration societal biases that often render women at a disadvantage. Some of the cultural biases regarding family role expectations and safety-related norms were recognized and incorporated in their practices, while other gender-based stereotypes impeding inclusivity were addressed with zero tolerance of prejudicial behaviors. Organizations achieved this balance through various communicative practices including lateral and informal communication, generalized and particularized conversations, and creation of alternate spaces for dialogue. Practical implications By examining women’s inclusivity initiatives of five large organizations working in India, this study helps create an understanding of how organizations can bring about such change, keeping in mind the societal and cultural context, for a more nuanced and achievable inclusion. This study also demonstrates how informal narratives enable deep-rooted organizational change such as inclusion. Such narratives facilitate in enhancing employee’s readiness to change, thereby laying foundations for a sustained impact. Originality/value Very few studies that focus on women’s inclusion practices also take into consideration both the demands of the organization as well as the societal expectations placed upon women. This study highlights how organizations try to manage this tension and refrain from “homogenizing” or fitting women into existing practices and routines.
... Academia also demonstrates that reporting these aspects has a positive impact on corporate financial performance Florida and Gates, 2001;Ryan et al., 2002;Taliento et al., 2019). ...
Chapter
Human capital (HC) plays an important role in organizations, serving as a primary source of innovation and competitiveness. Assessment and disclosure of how HC is managed and enhanced are fundamental elements of every sustainability report. However, companies and consultants might not be prepared for HC disclosure. Accounting practitioners did not learn about sustainability and HC reporting during their university career, nor are they familiar with procedures to draw up and audit ESG reports. Hence, this chapter aims to enhance education in sustainability and HC reporting through an engaging and active teaching approach, called game-based learning, designed to improve learners' performance by boosting both engagement and motivation. The authors propose a team-based board game incorporating serious game elements, which blends innovative contents on the role of HC (D&I included) in value creation and sustainability disclosure. The game was tested and applied with international university students.
... John Ryan, James Hawdon, and Allison Branick believe that a diverse workforce is beneficial to business by studying the initiatives and nature of the prevalence of diversity in Fortune 500 companies [10]. In modern society, employee diversity has become a common trend. ...
Article
Full-text available
At present, more and more companies realize that the leadership-building strategy has an important impact on the company’s development, and begin to focus on how to reasonably build leadership in the company. This article studies the status quo and construction strategies of leadership in listed companies, hoping to summarize and analyze the successful experience and shortcomings of listed companies in leadership construction strategies and give suggestions and methods for improvement. It will help more companies gain more experience in leadership building. This article adopts the case analysis method and analyzes the status of leadership building in the listed society and the problems and causes in the current leadership strategy building of listed companies by analyzing the cases of different listed companies. At the same time, this paper gives solutions to the following problems in listed companies: strategic planning and leadership development, employee diversification, and brain drain. Finally, this article summarizes the experience of many companies that want to build leadership. It also provides solutions and strategies for currently listed companies to improve their leadership-building strategies and status quo.
... As court cases regarding gender and racial bias continued, employers were urged to develop programs to effectively "manage" racial diversity in the workplace, and organizations began focusing on repurposing affirmative action programs as diversity management to improve job satisfaction (Kellough & Naff, 2004). By 1998, 75% of Fortune 500 companies reported having a diversity program in place, thus creating a movement for diversity management in organizations across the country (Ryan, Hawdon, & Branick, 2002). ...
... A different research hypothesis on the relationship between shareholder gender and earnings management practices is suggested by all the studies that have investigated the relationship between the degree of gender diversity in groups and the outcomes of such groups. Although these studies refer to very different aspects and contexts from those considered in this study, Herring (2009) has revealed that some studies show that a higher degree of gender diversity in groups has a positive impact on the outcomes of said groups (e.g., Cox & Beale, 1997;Cox, 1993;Cox, 2001;Florida & Gates, 2001Gurin, Nagda, & Lopez, 2004;Hubbard, 2004;Richard, 2000;Ryan, Hawdon, & Branick, 2002;Smedley, Butler, & Bristow, 2004;Williams & O'Reilly, 1998); he has also stated that other studies, in contrast, have yielded just the opposite: a higher degree of diversity in groups has negative impacts on the outcomes of said groups (Jehn, Northcraft, & Neale, 1999;Pelled, 1996;Pelled, Eisenhardt, & Xin, 1999;Rothman, Lipset, & Nevitte, 2003a, 2003bSkerry, 2002;Tsui, Egan, & O'Reilly, 1992;Whitaker, 1996). Although the results of the above studies relate to very different aspects and contexts compared to those considered in this study and they have come to different conclusions, they suggest that it would be worthwhile to verify whether and how the degree of gender diversity in ownership structure has an impact on earnings management practices undertaken by companies. ...
Article
Full-text available
Although the relationship between the type and characteristics of shareholders and earnings management practices is a topic that has been extensively investigated in the literature, the specific relationship between shareholder gender and earnings management practices has been overlooked by scholars. To contribute to filling this knowledge gap, this study investigates whether and how shareholder gender is related to the magnitude of abnormal (or discretionary) accruals in private Italian companies. It shows that the relationship between female ownership and the magnitude of abnormal accruals is not linear (and negative), but quadratic. This means that the practice of manipulating accruals is not contrasted by the presence of female ownership but by the presence of gender heterogeneity in the ownership structure.
... Given the multiple benefits of having an integrated, well-run and diverse workplace, employers should be flocking towards enhancing their diversity (Williams and O'Reilly, 1998;and Florida and Gates, 2001;2002). It appears to be common knowledge within mainstream businesses that increasing diversity is good for the overall profitability of companies (Ryan, Hawdon, and Branick, 2002). Still, companies must figure out ways to effectively manage diversity inasmuch as research continues to support the notion that racial and ethnic diversity are associated with higher rates of conflict between employees, greater reports of employee absenteeism, and reduced group functioning (Skerry, 2002, Tsui, Edan, and O'Reilly 1992, Williams and O'Reilly 1998. ...
Article
Interventions backfire for many reasons, one being that the dynamics governing a system are not well-understood. To better explain organizational phenomena, and to intervene in ways that yield desired consequences, an appreciation of the core insights from dynamics may be necessary to include into a researcher's toolkit. Although substantial buzz surrounds the term dynamics in organizational science, conceptual missteps are present in the literature, ultimately limiting its application. We provide a coherent description of what dynamics encompasses by (1) advancing a definition and of dynamics and comparing it to other longitudinal concepts, (2) proposing theoretical principles to help researchers apply dynamics concepts to their own research, and (3) demonstrating how dynamics may refine our ability to explain organizational phenomena and devise practical implications. Organizational researchers and practitioners are faced with many complex issues and understanding how they unfold over time is difficult. Those difficulties often lead to unexpected results when we try to address those issues. Viewing organizations from a more dynamic lens can shed light on how phenomena evolve over time as governed by the iterative application of mathematical rules. Illumination of dynamics can assist with better targeting interventions and understanding their potential effects. A dynamics lens also emphasizes continuing needs to improve research methods, such as collecting longitudinal data and engaging in computational modeling. To illustrate these points, we discuss how diversity interventions in organizations may be better understood once dynamics are applied. For example, organizations wishing to improve the diversity of their work forces must focus both on why underrepresented groups enter the organization and why they might leave. Focus on only one or the other is unlikely to generate the desired effect. Once identifying the drivers of both entering and leaving and how those factors might reinforce each other, interventions to improve diversity might be better targeted.
Article
Research on workplace inequality focuses largely on gender and racial disparities at work and contributing factors, while those who study diversity interventions tend to ask how these might be remedied. This article takes a different tack, asking the following: What ideals and cultural assumptions about social progress undergird workplace diversity programs, and with what consequences? Drawing from neoinstitutionalism and workplace ethnography, I examine diversity management in a multinational company based on a year of field research. At this company, diversity programs are for high-status women and people of color. Findings advance the study of workplace inequality and, more generally, the relational study of meaning making in real-life institutional contexts. They show that diversity management programs attempt to minimize gender and racial boundaries by codifying egalitarian ideals in organizational structures, and those definitions can reify class-based hierarchies. The findings also push social scientists to conceptualize inequality and equality as cultural constructs and to consider the biases of scientific measurements of inequality.
Article
“Critical diversity” is the equal inclusion of people from varied backgrounds on a parity basis throughout all ranks and divisions of an organization. The critical diversity perspective argues that as organizations become more diverse, they benefit relative to their competitors. This is in contrast to other accounts that view diversity as either inconsequential to success or actually detrimental. Using data from the 2011 National Academy of Sciences (NAS) Rankings of U.S. Research Universities, this paper examines whether racial and gender diversity “pay” in terms of the rankings of academic programs at research universities. The NAS data set consists of several indicators relating to research productivity, student support and outcomes, and program diversity from over 5000 doctoral programs at US research universities. The results show that net of factors such as publication rates, grants, scholarly awards, program size, region, and whether the institution is public or private, racial and gender diversity among faculty and students at research universities are positively associated with departmental rankings. The paper discusses the implications of these findings for diversity in higher education.
Article
This article takes a novel approach to exploring the business case for diversity (BCD) as it has been adopted in the British National Health Service (NHS), principally in terms of ‘race’ and ethnicity for the sake of clarity and manageability. It draws on realist perspectives that consider issues of context, mechanism and outcome. It concludes that transferring policies from other countries and sectors is problematic, and consequently that the application of the BCD to the NHS must be treated with extreme caution.
Article
Purpose – The purpose of this paper is to examine the business case for ethnic diversity in the British National Health Service (NHS). It seeks to contextualise issues around diversity within the current political environment, and identify the barriers to diversity in the NHS. The business case has been very strongly argued as justification for introducing both managing diversity and equal opportunity initiatives – here the paper examines the inconsistencies of using that argument, and maintains that the only justification worth presenting is that based on (deontological) moral arguments. Design/methodology/approach – The paper is conceptual in nature exploring the respective cases for diversity using a broad range of the available literature brought together as part of a rapid evidence assessment. It does so in order to make some far‐reaching claims about the future justifications for active diversification of senior management in key public sector institutions. Findings – The distinctions between the business and moral cases are false, in that both have ethical reference points. However, the business case is not only difficult to translate to public sector institutions; there are also evidential problems with its adoption. In light of this the conclusion here is that the moral (deontological) case is the only one that has any long term value for proponents of diversity. Originality/value – The value of this paper is that it examines the confusion that surrounds different cases for advancing diversity as a policy aim and presents a clear delineation of them. It also draws out some of the – perhaps deliberate – blurring of the cases and underlines the huge problems with this all too common approach. Ultimately, it suggests that morality (deontological) arguments have most purchase in public sector organisations.
Article
The value-in-diversity perspective argues that a diverse workforce, relative to a homogeneous one, is generally beneficial for business, including but not limited to corporate profits and earnings. This is in contrast to other accounts that view diversity as either nonconsequential to business success or actually detrimental by creating conflict, undermining cohesion, and thus decreasing productivity. Using data from the 1996 to 1997 National Organizations Survey, a national sample of for-profit business organizations, this article tests eight hypotheses derived from the value-in-diversity thesis. The results support seven of these hypotheses: racial diversity is associated with increased sales revenue, more customers, greater market share, and greater relative profits. Gender diversity is associated with increased sales revenue, more customers, and greater relative profits. I discuss the implications of these findings relative to alternative views of diversity in the workplace.
Article
Full-text available
Purpose – Evidence suggests that the notion of diversity in employment has failed to meet expectations of increased inclusion and organizational competitiveness in an ever‐changing and globalizing economic context. This paper aims to consider the use of language of diversity in an organizational context. Design/methodology/approach – Using discourse analysis, the paper examines data obtained from semi‐structured interviews conducted with human resources managers and personnel managers. Participants' descriptions of diversity in relation to one particular group of (potential) employees, namely older jobseekers, are analysed for their function and effects in relation to organizational knowledge and practices. Findings – Diversity in employment provides organizational managers with a resource that can more usefully be viewed as linguistic than as knowledge based. Its use offers organizations a means of accounting for existing practices and should not be taken to signal commitment to organizational change. Originality/value – Work that has treated discourse of diversity as evidence of efforts to promote inclusion and competitiveness has failed to consider fully the effects of language use. A focus on language as action in its own right shows how diversity in employment as used accomplished outcomes that are totally divergent from the usually assumed benefits of diversity.
Article
Affirmative action (AA) addresses individuals' exclusion from oppor-tunities based on group membership by taking into account race, sex, ethnicity, and other characteristics. This chapter reviews sociological, economic, historical, and le-gal scholarship on AA. We first consider the emergence of group-based remedies, how protected groups are defined, and proportional representation as a standard for inclusion. We then summarize the research on AA in education (including busing) and in employment. The concluding section reviews societal responses to AA, including attitudes, challenges, and political responses. As public and judicial support for AA has waned, employers and educators have increasingly turned toward diversity as a rationale for including underrepresented groups. Despite this change, many employers and educators continue to take positive steps to include minorities and women.
Article
Full-text available
Laws that regulate the employment relation tend to set forth broad and often ambiguous principles that give organizations wide latitude to construct the meaning of compliance in a way that responds to both environmental demands and managerial interests. Organizations respond initially by elaborating their formal structures to create visible symbols of compliance. As organizations construct and institutionalize forms of compliance with laws, they mediate the impact of those laws on society. The author uses data from a nationwide survey of 346 organizations to develop models of the creation and institutionalization of organizationally constructed symbols of compliance following the 1964 Civil Rights Act.
Article
Full-text available
Drawing on the resource-based view of the firm, we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship, with the returns to environmental performance higher in high-growth industries. We tested these hypotheses with an analysis of 243 firms over two years, using independently developed environmental ratings. Results indicate that "it pays to be green" and that this relationship strengthens with industry growth. We conclude by highlighting the study's academic and managerial implications, making special reference to the social issues in management literature. We wish to express our appreciation to the Franklin Research and Development Corporation for allowing us to use their proprietary database and to Roger Chope and Steven Matsunaga for assistance with methodological issues. We also thank Thomas Dean, Neil Fargher, David Levy, John Mahon, Alan Meyer, Peter Mills, Richard Mowday, and the anonymous reviewers for helpful comments.
Article
Full-text available
How did corporate affirmative action programs become diversity programs? During the 1970s, active federal enforcement of equal employment opportunity (EEO) and affirmative action (AA) law, coupled with ambiguity about the terms of compliance, stimulated employers to hire antidiscrimination specialists to fashion EEO/AA programs. In the early 1980s, the Reagan administration curtailed enforcement, but as Philip Selznick's band of early institutionalists might have predicted, EEO/AA program practices had developed an organizational constituency in EEO/AA specialists and thus survived Reagan's enforcement cutbacks. As John Meyer's band of neoinstitutionalists might have predicted, that constituency collectively retheorized antidiscrimination practices through professional returns in terms of efficiency, using the rhetoric of diversity management..
Article
This article investigates employment inequality between 25–59-year-old white and black men in U.S. metropolitan areas in 1980. Greater inequality in employment is observed in the Northeast and Midwest than in the South and West. Regression analysis shows that area variation in employment inequality is closely associated with variation in unionization strength, presence of large firms, and labor demand and that it is moderately associated with variation in race differences in age structure and education and the presence of traditionally black occupations. Regional patterns indicate that the substantially lower employment inequality in the South and West can be attributed to the more robust economies, smaller average firm size, and lower levels of unionization in the metropolitan areas in these regions. These regional differences are large and serve to offset the impact of large racial gaps in educational attainment in the South that often contribute to inequality in employment.
Article
The relationship between rhetoric and policy in developing countries is examined using a case study drawn from the administration of Michael Manley in Jamaica in the 1970s. Particular attention is paid to problem definition, policy formulation, and implementation processes. The policy relating to community councils was based on socialistic political and economic arguments. Despite minor successes, most of the objectives associated with the community councils policy were not realized This failure was due, we suggest, to the Manley government's inability to transcend electoral and economic (national and international) realities and to convince a majority of the public and opposition of the validity of its rhetorical constructions. Parallels to three other developing countries are briefly explored
Article
The authors report the first large-scale empirical investigation of within-job wage differences between men and women in the same occupation and establishment, using data first on blue-collar and clerical employees from 16 US industries in 1974-83 and second on employees in 10 professional and administrative occupations. The authors report three findings. First, wage differences at the occupation-establishment level were small even without controls for individual-level characteristics. Hence, within-job wage discrimination wsas much less important than occupation-establishment segregation for observed wage differences. Second, establishment segregation was an important cause, although not as important as occupational segregation, of wage differences. Third, establishment segregation was extensive, as was occupational segregation. -Authors
Article
We propose a new approach to analyzing gender differences in wages. This approach identifies several alternative explanatory mechanisms to account for the sorting of women and men into different types of jobs that offer different levels of reward. Because labor market rewards derive from labor market positions, we study matching processes operating at the micro level that sort workers into existing slots in a given macro-level structure of jobs and associated wages. We focus on the explanation of gender differences in wages at career entry. Analyzing data from the National Longitudinal Survey of Youth collected between 1979 and 1991, we find that at career entry women earn 84 cents for every dollar men earn. Gender differences in worker characteristics account for only about 30 percent of this wage gap: Gender differences in occupational aspirations have the most important effect, accounting for 16 percent of the wage gap, and gender differences in job-related skills and credentials account for about 14 percent of the wage gap, Gender differences in adult family roles have little direct effect. Our analysis further suggests that the external influences of employing organizations and network processes on gender differences in occupational and industrial placement at career entry account for another 42 percent of the wage gap.
Article
In this paper we present an integrative model of the relationships among diversity, conflict, and performance, and we test that model with a sample of 45 teams. Findings show that diversity shapes conflict and that conflict, in turn, shapes performance, but these linkages have subtleties. Functional background diversity drives task conflict, but multiple types of diversity drive emotional conflict. Race and tenure diversity are positively associated with emotional conflict, while age diversity is negatively associated with such conflict. Task routineness and group longevity moderate these relationships. Results further show that task conflict has more favorable effects on cognitive task performance than does emotional conflict. Overall, these patterns suggest a complex link between work group diversity and work group functioning.
On the Evolution of Political Issues
  • Carminesedward Stimsonjames
A Business Case for Diversity
  • Gandzjeffrey
ADiversity in the workplace: a business imperative
  • Lewis Campbell
Age bias: is your corporate culture in need of an overhaul? HR Magazine
  • Steinhausersheldon