Demographic Diversity in the Boardroom: Mediators of the Board Diversity–Firm Performance Relationship

Whereas the majority of research on board diversity explores the direct relationship between racial and gender diversity and firm performance, this paper investigates mediators that explain how board diversity is related to firm performance. Grounded in signalling theory and the behavioural theory of the firm, we suggest that this relationship operates through two mediators: firm reputation and innovation. In a sample of Fortune 500 firms, we find a positive relationship between board racial diversity and both firm reputation and innovation. We find that reputation and innovation both partially mediate the relationship between board racial diversity and firm performance. In addition, we find a positive relationship between board gender diversity and innovation.     

The impact of racial and gender diversity in management on financial performance: how participative strategy making features can unleash a diversity advantage

How does racial and gender diversity in the management ranks affect the bottom line? Our findings indicate that participative strategy making (PSM) positively moderates the relationship between both racial and gender diversity in management and firm performance measured as return on assets. Specifically, PSM strengthens the positive relationship that exists between racial diversity in management and firm performance. Although no main effect is observed for gender diversity in management, our results reveal that gender diversity in management is positively related to performance when PSM is high. However, we find that gender diversity in management is negatively related to performance when PSM is low, while gender homogeneous management experience superior performance. We offer implications for diversity research to embrace and consider the role of PSM and ‘inclusiveness’.     

The Link Between Diversity and Equality Management Practice Bundles and Racial Diversity in the Managerial Ranks: Does Firm Size Matter?

Invoking strategic human resource management (SHRM) theory and tenets of the resource‐based view of the firm, we explore how two bundles of diversity and equality management (DEM) practices influence racial diversity in the managerial ranks. By considering the conceptualization of DEM practices and the moderating role of firm size, our study disentangles subtle nuances in the DEM practices–racial diversity in managerial ranks relationship. Based on a sample of 137 Fortune 1,000 firms over a two‐year period, our results suggest that minority opportunity‐based DEM practices and manager accountability DEM practices positively relate to racial diversity in managerial ranks, and these relationships are stronger in smaller companies than large ones. Theoretical and practical implications for a strategic perspective on future diversity management research are elaborated.     

Racial Fractionalization and School Performance

The literature on racial “peer effects” suggests that diversity improves at least some students' school performance. However, a literature in economic development posits that diversity may negatively affect school performance by undermining the efficient provision of education. This article empirically tests this claim, which we call the “public goods channel,” by examining the relationship between racial diversity and student performance in Ohio's school districts. We find that moving from a completely homogenous school district to one in which two racial groups have equal population shares is associated with a 7–17.5 percentage point decline in the passage rate on the state math exam, holding per pupil spending across districts constant. These results suggest that racial diversity is negatively associated with school performance but that the public goods channel is not responsible for this relationship.     

Affective diversity and emotional intelligence in cross-functional sourcing teams

In cross-functional sourcing teams, differences in goals and personality traits can lead to tensions and reduced effectiveness. Diversity in teams can be conceptualized as surface-level diversity (e.g., gender, nationality) or as deep-level diversity (e.g., personality, attitudes). This study investigates the potentially negative effects of one category of deep-level diversity – namely, affective trait diversity – on sourcing team performance and how such negative effects might be mitigated through team members' emotional intelligence. The study analyzes a sample of 88 sourcing teams (234 team members) using moderated regression analyses. Sourcing team cohesion is found to fully mediate the relationship between affective diversity and team performance, while the collective emotional intelligence of the sourcing team positively moderates the diversity-cohesion relationship (moderated mediation). Thus, this study provides insights into both the mechanics of team diversity and the critical role of collective emotional intelligence in sourcing teams and thereby enables supply managers to better understand cross-functional team setups and effectiveness.     

A global perspective on diversity and inclusion in work organisations

This Academy of Management, Human Resources Division, Ambassadors' Programme special issue presents a collection of empirical papers examining workplace diversity and inclusion in a global context. We introduce this topic raising three overarching challenges: to develop more context-specific definitions of diversity and inclusion; to include dimensions pertinent to a global context in the definition of diversity and inclusion; and to consider the impact of diversity and inclusion practices on performance outcomes across countries as well as within multinational corporations. We explore these challenges through three diversity and inclusion lenses – gender, age and nationality – exploring global perspectives at the national, organisational and team levels of analysis. In conclusion, we present an agenda for future research.     

The Impact of Work–Family Programs on the Relationship between Gender Diversity and Performance

Work–family programs signal an employer's perspective on gender diversity to employees, and can influence whether the effects of diversity on performance are positive or negative. This article tests the interactive effects of nonmanagement gender diversity and work–family programs on productivity, and management gender diversity and work–family programs on financial performance. The predictions were tested in 198 Australian publicly listed organizations using primary (survey) and secondary (publicly available) data based on a two‐year time lag between diversity and performance. The findings indicate that nonmanagement gender diversity leads to higher productivity in organizations with many work–family programs, and management gender diversity leads to lower financial performance in organizations with few work–family programs. The results suggest different business cases at nonmanagement and management levels for the adoption of work–family programs in gender‐diverse organizations. © 2014 Wiley Periodicals, Inc.     

Board gender diversity and environmental performance: An industries perspective

This study investigates whether gender diversity on the board of directors in the United States is associated with firms' environmental performance. Under the theoretical framework of resource dependence theory, we argue that gender diversity brings a greater variety of skills to the board. Diversity allows for a healthy mix of knowledge and experience to improve the decision‐making process of the board. Using propensity score matching and controlling for endogeneity, this study uses a more rigorous statistical model than previous work. It also uses content analysis of directors' biographies to provide evidence of the role that gender diversity plays. We find gender diversity is positively associated with firms' environmental performance scores primarily in the more environmentally impacting industries. Therefore, our research provides valuable direction for those firms working to improve both their boards' gender diversity and their environmental performance. Our findings also offer insight into the mixed results of previous studies.     

Gender pay equity: Exploring the impact of formal,consistent and transparent human resource management practices and information

This article explores the extent to which formalised HR practices can reduce gender bias in pay setting or whether, following Acker (2006), gender bias may still be embedded within formalised HR practices. Detailed investigation of a critical case study of a Chilean finance organisation with a strong commitment to formalised, consistent and transparent pay practices based on individuated information, revealed only a small negative gender effect on pay and no identifiable gender effects in starting salaries, merit pay or promotion. These findings provide some support for the proposition that HR practices focused on job‐related performance (Reskin, 2000) and limiting managerial discretion may facilitate gender pay equity. However, the case also reveals the limits of these policies. Women scored equally well on performance but formalised scores on future potential were higher for men and mattered more. A significant gender effect emerged in promotion to more senior posts. These mixed outcomes suggest that Acker's (2006) proposition still holds.     

When is Effort Contagious in New Venture Management Teams? Understanding the Contingencies of Social Motivation Theory

Consistent with social motivation theory, prior research on managerial motivation suggests that effort is contagious across management team members. In this study, we draw on belongingness theory to develop a model on important boundary conditions to social motivation theory in the management team context. The model predicts that new venture managers react to their teammates’ higher effort levels by investing higher effort levels themselves primarily when they are confronted with a threat – namely, low venture performance and high environmental hostility – but that effort is less contagious when managers face little threat. We test our model with a sample of 103 new venture managers nested in 51 management teams in a longitudinal setting capturing managerial effort over 26 weeks. While we do not find a direct relationship between teammates’ effort and a new venture manager’s subsequent effort, we find support for the crucial role of threat in triggering the contagion of managerial effort. We discuss the contributions of our study for research on management teams, performance feedback, and entrepreneurial effort in new ventures.     

The role of attitude in learning economics: Race and gender differences

This study identifies and analyzes factors that affect a learner's knowledge, comprehension, and application of economics by racial and gender grouping. A decomposition model is used to evaluate the impact of attitudinal effects and other exogenous variables on economic cognition. Preliminary findings suggest that the attitude of black students towards economics instruction differs from their white cohorts while no gender differences are found.     

Flow Signals: Evidence from Patent and Alliance Portfolios in the US Biopharmaceutical Industry

Integrating signalling theory and the portfolio diversity literature, we theorize that diversity in a firm's patent and alliance portfolios sends contrasting flow signals impacting its market value in a nuanced way. Diversity in an alliance portfolio mediates the patent portfolio diversity – market value relationship by suppressing the negative effect of patent portfolio diversity creating an overall positive effect. We test our mediation model on a longitudinal set of 225 US biopharmaceutical firms that were awarded 17,078 patents and participated in 37,744 alliances between 1990 and 2006. Our theory and findings contribute three novel insights. First, we demonstrate the value of a temporal lens in explaining why diversity in a firm's patent and alliance portfolios send flow signals that establish expectations among market observers and have performance implications. Second, establishing that patent and alliance portfolio diversity are temporally sequenced provides compelling evidence for the value of studying multiple types of portfolios, their temporal relationships and effects on firm outcomes. Third, since diversity in a firm's portfolios can send contrasting flow signals conditioned on the cognitive demands and proximity involved in interpreting the signals, firms that do not maintain a ‘signalling fit’ with market observers increase the probability of unintentional negative signalling effects.     

Between a rock and a hard place: managing diversity in a shareholder society

This study examines whether the appointment of racial/ethnic minorities into top management positions has a different impact on share price than the appointment of Caucasians into equivalent positions. Our dependent variable is the degree of change in share price following the announcement of racial/ethnic minority and Caucasian men into senior management positions. Market reaction to the naming of racial/ethnic minorities into corporate leadership positions is significant and negative, while the market's reaction to the naming of Caucasians is significant and positive. However, the negative market reaction to the appointment of racial/ethnic minorities into top management positions is mitigated in those firms that have explicitly incorporated diversity into their strategic growth plan. Our findings suggest that to successfully introduce diversity into upper management, firm decision makers must first signal the importance of diversity to market actors.     

The impact of government financial support on the performance of new firms: the role of competitive advantage as an intermediate outcome

This research examines the influence of government financial support on new firms' performance. Extant empirical research on the topic has found mixed results, which warrants an exploration of the theoretical basis for the impact of support policies on new firms' performance. Grounding the theoretical model in the resource-based view and institutional theories, this study contends that performance outcomes – e.g. revenues or profits – should not be the first outcomes of public policies to be examined. Instead, competitive advantage formation is suggested as a link between support policies and new firms' performance. Using new firms from the USA, we examine the impact of government financial support measures – government loans, guarantees and government equity – on firms' overall competitive advantage and more specific types of competitive advantage based on innovation, licensing-in, marketing and human capital. Controlling for family funding, bank financing, equity of business angels and venture capitalists, industry, size as well as entrepreneur's characteristics, the results reveal that government guarantees and government equity have a direct effect on new firms' competitive advantage and only an indirect impact on performance. Our results suggest to policy-makers to focus on helping new firms build the necessary capabilities to compete successfully in the marketplace.     

Individualization and Marketization of Responsibility for Gender Equality: The Case of Female Managers in China

This article investigates the question of where the responsibility for promoting gender equality resides in the Chinese employment context. Utilizing Acker's (2006) inequality regimes framework, the study explores women's underrepresentation in management roles in China and explains the persistence of gender inequalities in managerial echelons of Chinese organizations. Based on 30 interviews with female managers, the findings demonstrate the marketization and individualization of gender equality in organizational activity. The existing gender inequality, and the lack of responsibility for tackling it, has been either legitimized by eluding to the commercial‐only focus of organizations or rendered invisible through a belief in individual choice as the determining factor of career progression for women. Gender inequality in management is also maintained through the compliance of female managers themselves with the presumed legitimacy of gender‐based differential access to managerial roles. References to culture and tradition, market forces, competitive pressures, and individual choices by female managers are often made in explaining the unequal career paths and outcomes for men and women in their organizations. Our findings contribute to the human resource management (HRM) literature by framing macrosocietal context as a dynamic and endogenous aspect of management of human resources in organizations and provide novel insights into the interplay between HRM and societal context. © 2016 Wiley Periodicals, Inc.     

Are generational differences in work values fact or fiction? Multi-country evidence and implications

Few would disagree that human resource initiatives aimed at enhancing employees' quality of life have universal appeal, but the definition of ‘quality of life’ varies by generation. Workplaces are becoming increasingly age diverse and the likelihood that an older employee will report to a younger manager is increasing. Burke's study for the Society for Human Resource Management found that in organizations with 500 or more employees, 58% of human resource management (HRM) professionals reported conflict between younger and older workers, largely due to their different perceptions of work ethics and work–life balance requirements. While cultural and gender diversity have received significant attention in the literature, little attention has been paid to the impact of age diversity on HRM practices. This study attempts to bridge this gap by examining the work values of four generational cohorts – Traditionalists, Baby Boomers, Generation X, and Generation Y – across five countries. Generational differences were found when the effects of culture and life stage were controlled for. Significant differences were observed with Generation Y in particular, presenting creative challenges in accommodating the needs of this cohort while still watching the bottom line. This study establishes the legitimacy of intergenerational differences as an important social categorization variable.     

Matchmaking: community and business unit racial/ethnic diversity and business unit performance

Past studies examining how the match between organization and community racial/ethnic proportions influences performance have relied on the social categorization perspective on diversity, but have not offered strong significant results. However, the information and decision-making perspective on diversity suggests that organizational diversity fit based on variety, rather than a match of demographic proportions, leads to greater performance. This study considered both perspectives to test how both racial/ethnic proportions matching and diversity fit influence business unit financial performance. This was tested on a sample of 51 business units of a restaurant chain in the USA. The results show that business unit diversity was associated with higher performance in diverse communities but not in homogeneous communities. This suggests that racial/ethnic diversity is a valuable human resource conducive to greater performance but this is contingent upon community diversity. Implications for organizational diversity research and human resource management are discussed.     

A multi-level examination of quality-focused human resource practices and firm performance: evidence from the US healthcare industry

In today's business world, the role of quality has become ever more significant for organizations to compete in a global marketplace. Based on the quality management theory, this study empirically examines the relationship between quality-focused human resource practices (QHRP) and organizational performance outcomes. Data from 69 healthcare organizations indicate a strong support for this relationship. A Human Resource (HR) system focused on quality management was directly related to multiple dimensions of organizational performance outcomes (i.e., intangible – employee satisfaction and customer satisfaction – and tangible – profit). Specifically, two measures of QHRP, knowledge management and strategic management, were found to be positively related to the financial performance of firms implementing quality management. Process management is found to be negatively related to employee satisfaction. General Human Resources were positively related to both employee and customer satisfaction. Employee focus of the firms is also positively related to employee satisfaction. In addition, employee satisfaction is also related to both customer satisfaction and financial performance while customer satisfaction is found to be positively related to employee satisfaction. The findings indicate a generally strong positive relationship with the organizational performance outcomes. The results of this study are particularly important in showing HR's contribution to the organization's bottom line.     

Gender difference and job replacement for mutual fund

This paper develops parametric shared-frailty models to analyze the likelihood of the spell time of job replacement. This empirical study identifies the importance of window dressing, herding behavior, and fund manager’s characteristics from the viewpoints of gender and performance differences. Finally, it considers how gender difference contributes to managerial turnover, while it finds that performance difference is not quite different among fund managers in Taiwan.     

The linkage of HRM and knowledge-related performance in China's technology-intensive industries

This study examines the commitment-based and knowledge-based HR types to fully understand the role of HRM in China's technology-intensive industries. The relationships between the knowledge-based HR and commitment-based HR on firm performance were examined by using 156 firms in China's high technology industry in the Pearl River Delta area. The effects of innovation capability and workforce retention between HR and performance were also explored. The firm's innovation capability has been found to be an important determinant of firm performance. Retention has no significant impact on performance outcomes. HR plays a more important role in the growth stage of organizational life cycle. Implications for research and managerial practices are provided.