Workforce diversity and organisational performance

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.