Abstract
Many business ethicists, activists, analysts, and corporate leaders claim that businesses are obligated to promote diversity for the sake of justice. Many also say—good news!—that diversity promotes the bottom line. We do need not choose between social justice and profits. This paper splashes some cold water on the attempt to mate these two claims. On the contrary, I argue, there is philosophical tension between arguments which say diversity is a matter of justice and (empirically sound) arguments which say diversity promotes performance. Further, the kinds of interventions these distinct arguments suggest are different. Things get worse when we examine the theory and empirical evidence about how diversity affects group performance. The kind of diversity which promotes justice and the kind which promotes the bottom line are distinct—and the two can be at odds.
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Notes
See Brennan et al. ( 2021) for an overview.
McBrayer (2022).
McKinney (2022).
Democratic Party (2020).
Interestingly, few people complain about, say, black overrepresention and Jewish underrepresentation in professional sports. But this may simply show people are ideologically inconsistent.
See Griggs vs. Duke Power Co., 401 US 424 (1971). Adverse impact here means that there is a selection rate for a protected group that is 80% or lower than what would be expected from the applicant pool.
Statistica (2021).
I paint with broad strokes here because there are many different background philosophies which support variations on this conclusion for different reasons. For instance, Rawls (1971) defends a liberal philosophy which holds that all people of equal talent, regardless of their demographic backgrounds, should have an equal chance of getting any office or position. Critical race theorists also endorse justice-based grounds for promoting diversity but generally reject the liberal framework. These differences are important, but I gloss over them here because they are not the focus of this paper.
See Davis and Huttenback (1987) for empirical validation of Smith’s claims.
E.g., Van der Vossen and Brennan (2018).
Caplan (2007).
Hunt et al. (2018), p. 1.
Prichard (1912).
Even Freidman (1970) agrees.
Ely and Thomas (2020).
Farrell and Hersch (2005) find that adding women to boards does not increase corporate performance, but instead that women self-select to join better-performing boards.
Hunt et al. (2015).
Hunt et al. (2018).
Hunt et al. (2018), p. 2.
Hunt et al. (2015), p. 2.
E.g., Landemore (2012) argues that in democracy, more heads always outperform fewer, but the Hong-Page theorem does not support this claim. The Hong-Page theorem says adding more heads can help only under very specific circumstances.
The distinction Hong and Page have in mind between cognitive and demographic diversity is related, if not the same, to the what is often called surface- versus deep-level diversity. Surface-level diversity concerns “visible” distinctions, such as differences in race or sex. Deep-diversity concerns differences in attitudes, beliefs, values, or knowledge. https://opentextbc.ca/principlesofmanagementopenstax/chapter/an-introduction-to-workplace-diversity/.
Page (2007), p. 7.
Page (2007), p. 7.
Desmet et al. (2017).
As an illustration: Imagine a committee trying to hire the best finance professor. If the committee agrees publications count more than teaching, they might work together well. If they dispute entirely what counts as “the best,” they might not.
Hong and Page (2004).
Page (2007), p. 160.
Page (2007), p. 335.
Page (2007), p. 325.
Page (2007), p. 325.
Guest (2019), p. 53.
Richard (2000), p. 171.
Carter et al. (2010).
Morrone et al. (2022).
Gallego-Alvarez et al. (2010).
Fernandez-Temprano and Tejerina-Gaite (2021).
Pletzer et al. (2015).
Rose (2007).
Jackson et al. (2003), Miller and Triana (2009), Carter et al. (2010), Mahadeo et al. (2011), Pathan and Faff (2013), Chapple and Humphrey (2014), Strøm et al. (2014), Terjesen et al. (2016), Jeong and Harrison (2017), Bennouri et al. (2018), Scholtz and Kieviet (2018), Buchwald and Hottenrott (2019).
Lindsay et al. (2018).
Williams and O’Reilly (1998), pp. 99–100.
Williams and O’Reilly (1998), p. 104.
Williams and O’Reilly (1998), p. 108.
Williams and O’Reilly (1998), p. 115.
Ely and Thomas (2020).
Ely and Thomas (2020).
Ely and Thomas (2020).
Ely and Thomas (2020).
Bantel and Jackson (1989).
Smith et al. (1994).
Yang et al. (2019) notes this point. In contrast, they use more sophisticated statistical techniques and find a negative result.
Blinder and John Morgan (2005), Kugler et al. (2012), Rockenbach et al. (2007), Milliken and Martins (1996), Pelled et al. (1999), Crossan and Apaydin (2010), van Knippenberg et al. (2004), Guzzo and Dickson (1996), Van Knippenberg and Schippers (2007), Ostrom (2009), Lakhani et al. (2007), Baranchuk and Dybvig (2009), van den Bergh and Jereon (2008).
Kasperson et al. (1992), p. 169.
Ortiz-Ospina and Roser (2016).
Alesina et al. (2001).
Covey and Conant (2016).
Dinesen et al. (2020), p. 441.
Dinesen et al. (2020), p. 461.
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Brennan, J. Diversity for Justice vs. Diversity for Performance: Philosophical and Empirical Tensions. J Bus Ethics 187, 433–447 (2023). https://doi.org/10.1007/s10551-022-05278-9
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DOI: https://doi.org/10.1007/s10551-022-05278-9