Business Management

Workforce Diversity and Organisational Performance

by C. W. Von Bergen, John Massey Professor of Management, John Massey School of Business, Southeastern Oklahoma State University, P.O. Box 4103, Durant, OK 74701-0609, Barlow Soper, Louisiana Tech University, P.O. Box 10048 TS, Ruston, LA 71272 and John A. Parnell, William Henry Belk Distinguished Professor of Management, School of Business, University of North Carolina at Pembroke, P.O. Box 1510, Pembroke, NC 28372 Abstract Many managers and scholars agree that diversity is a positive factor that leads to competitive economic advantage for organisations. However, this assertion remains largely untested. To examine the implied relationship between firm performance and diversity, performance at minority-friendly organisations was compared to that at other organisations within the same industry. Results indicated that minority friendly firms significantly outperformed the market, indicating that diversity in organisations may be related to economic success. This finding has significant strategic implications. ________________________ American organisations operate in an increasingly diverse environment. Minorities born in the United States are filling more skilled and professional positions than ever before. In addition, there were over one million immigrants to the United States from over 48 countries in 2002, representing a four-fold increase during the past forty years. Today, an estimated 10 percent of Americans speak a language other than English at home (United States Census Bureau, 2000; United States Citizenship and Immigration Services, 2003). In response to these changes, most large organisations have embraced the notion of diversity, but to varying degrees (Frase-Blunt, 2003). Although there is a broad assumption that diversity generally has positive effects on organisations and society, the notion of an economic imperative for diversity remains largely untested. In other words, does increased diversity...