Our research tidbits this week consider how diversity in all aspects can affect a firm’s performance, on a financial or sustainable level.
Studies were carried out in a number of countries: Jordan, Spain, South Africa and Indonesia.

CEO beliefs, moral values and implementing diversity in the workplace
Although CEO commitment is recognised as being crucial to organisational diversity efforts, we know little about how CEOs signal their priorities and mobilise key organisational actors to implement diversity management.

The authors tested an integrative model in which CEO beliefs about diversity were theorised to predict the implementation of organisational diversity practices through two consecutive mediating steps—via greater CEO engagement in pro-diversity behaviour, and in turn, higher perceived CEO commitment by their HR manager. In this model, the authors also proposed a moderating effect such that when CEOs have less positive beliefs about diversity, CEOs espousing higher moral values will display greater pro-diversity behaviour. Results supported the proposed model.

Taken together, the findings indicate that a CEO’s words and actions alone are not sufficient for the implementation of diversity management practices. HR managers must view their CEOs as being committed to workplace diversity in order for diversity management practices to be implemented.

Eddy S. Ng & Greg J. Sears. 2020. Walking the Talk on Diversity: CEO Beliefs, Moral Values, and the Implementation of Workplace Diversity Practices..

Journal of Business Ethics, 164(3), 437–450.

Implications of religion, culture, and legislation for gender equality at work in Jordan
With a view to consolidating the existing theory development and stimulating new conceptual thinking, this paper explores the implications of culture, religion (Islam), and the legal framework on women’s employment and their limited advancement in the hospitality industry, one of the important elements of the economy in Jordan.

A related aim is to contrast the egalitarian Islamic approach to gender equality with gender discriminatory tribal traditions that restrict women’s employment and progression. Guided by religion, culture, and gender literature, this study uses a qualitative, content-based analysis. Drawing on open-ended questionnaires distributed to a diverse workforce across four tourist locations in Jordan, the results portray how tribalism and Bedouin customs embedded in the participants’ interpretation and practices of their religion (along with the existing legal framework) are maintaining gender gaps in employment and positions of power.

The results also reveal that despite the Islamic guidelines towards fairness and justice (haqq and adl) in employment, the tribal and Bedouin traditions restrict women’s employment through patriarchal interpretations of Islam. Thus, the salient novelty and significance of this study were achieved through contributing to the theory development of the interrelations between religion, culture, and gender equality.

Tamer Koburtay, Jawad Syed & Radi Haloub. 2020. Implications of Religion, Culture, and Legislation for Gender Equality at Work: Qualitative Insights from Jordan.

Journal of Business Ethics, 164(3), 421–436.

Gender and ethnicity in South Africa: Board diversity and company performance
A board of directors forms one of the pillars of a robust corporate governance framework. Board diversity can offer both challenges and opportunities for a company. In this article the authors investigate whether diversity of a board influences company performance as well as the change in company performance for the Top 100 South African companies listed on the Johannesburg Securities Exchange in 2013–2015.

Tobin’s Q and Return on Assets are used as performance measures. The findings show that the proportion of women on a board, the number of directors with a business qualification and board size are significantly positively related with the performance of South African companies, whereas the ethnic diversity of a board is significantly negatively related with the performance of South African companies.

Henriette Scholtz & Suzanne Kieviet. 2018. The Influence Of Board Diversity On Company Performance Of South African Companies.

Journal of African Business, 19(1), 105-123.

Gender policies on board of directors and sustainable development in Spain
Gender policies concerning the composition of board of directors are included in the legislation of many countries, especially promoted by the European Commission to reach gender equality in the processes of decision making.

On the other hand, in the last decades, sustainable development problems caused by economic progress have enhanced the interest in environmental policies. Using the data from top Spanish listed companies, from 2003 to 2017, the authors test if the higher number of women on their board influences corporate social responsibility (CSR), through the disclosure of reports following the Global Reporting Initiative guidelines and the inclusion in the Dow Jones Sustainability Index.

By using probit models and instrumental variable estimation to address endogeneity and reverse causality problems, the authors find that the female presence in management positions is positively linked to a voluntary disclosure of CSR reports and the inclusion in a sustainability index, which supports gender legislation.

María del Carmen Valls Martínez, Salvador Cruz Rambaud & Isabel María Parra Oller. 2019. Gender policies on board of directors and sustainable development.

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Corporate Social Responsibility and Environmental Management, 26(6), 1539-1553.

Does board diversity influence financial performance in Indonesia?
This study extends the empirical evidence on the diversity on board and its impact to the financial performance in the Indonesian context. Board diversity, as the independent variable uses three indicator variable of gender diversity, nationality diversity, and educational diversity.

Aside from traditional proportion measurement, Blau Index also used to measure the heterogeneity degree of each proxy of diversity in this study. This research is focused on manufacturing companies since the manufacturing industry is the largest contributor to the Indonesian GDP. The observation in this research including 525 firm-years from 105 listed manufacturing companies.

The result of the study reveals that the heterogeneity in terms of nationality is beneficial for the company as it gives a positive impact to the financial performance measures, while gender and education heterogeneity is proven otherwise.

Josua Tarigan, Christoforus Hervindra & Saarce Elsye Hatane. 2018. Does Board Diversity Influence Financial Performance?

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International Research Journal of Business Studies, 11(3), 195-215.

Diversity in top management teams and performance in IBEX 35 companies
This study contributes to the dissemination of the theoretical and empirical knowledge on the Upper Echelons Theory, considering training and demographic diversity in Top Management Teams (TMTs) as a unique feature of companies, in this case, the IBEX 35 companies.

Based on the results, the authors can confirm that the inclusion of women in management teams positively influences the sales of a company and contributes to increasing financial results. Age and knowledge of two or more languages are important factors in achieving an increase in financial performance. From the point of view of business practice, the results obtained are useful for increasing knowledge of which TMT characteristics are valid, which allows for better results and the establishment of responsible organisational policies that promote the inclusion of gender diversity in TMTs.

In addition, the results of this study indicate that the incorporation of members of other non-Spanish nationalities would constitute a distinctive feature of a company and would enrich it not only financially, but also culturally.

Mercedes Rodríguez-Fernández, Ana I. Gaspar-González and Eva M. Sánchez-Teba. 2020. Does diversity in top management teams contribute to organisational performance? The response of the IBEX 35 companies.

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Social Science, 9(4), 36

Intrapersonal and interpersonal cultural diversity and firm performance
How does cultural heterogeneity in an organisation relate to its underlying capacity for execution and innovation? Cultural diversity is commonly thought to present a tradeoff between task coordination and creative problem solving, with diversity arising primarily through cultural differences between individuals.

In contrast, the authors propose that diversity can also exist within persons when individuals hold multiple cultural beliefs about the organisation. The authors refer to these different forms as interpersonal and intrapersonal cultural heterogeneity. The authors argue that the former tends to undermine coordination and portends worsening firm profitability, while the latter facilitates creativity and supports greater patenting success and more positive market valuations.

To evaluate these propositions, the authors use computational linguistics to identify cultural content in employee reviews of nearly 500 publicly traded firms on a leading company review website and then develop novel, time-varying measures of cultural heterogeneity.

The empirical results lend support for the two core propositions, suggesting the need to rethink the performance tradeoffs of cultural heterogeneity: it may be possible to reap the creativity benefits of higher intrapersonal heterogeneity and, at the same time, the efficiency benefits of lower interpersonal heterogeneity.

Matthew Corritore, Amir Goldberg & Sameer B. Srivastava. 2020. Duality in Diversity: How Intrapersonal and Interpersonal Cultural Heterogeneity Relate to Firm Performance.

Administrative Science Quarterly, 65(2), 359–394.