The Effects of Diversity on Business Performance: Report of the Diversity Research Network

Since 1996, a group of industry chief executives and human resource professionals have been working together under the auspices of a nonprofit organization called the Business Opportunities for Leadership Diversity (BOLD) Initiative to help American corporations learn how to leverage their cultural diversity for competitive advantage. These leaders espouse the now popular “business case” for diversity—the view that a more diverse workforce will increase organizational effectiveness. For them, providing more opportunities for women and minorities is a business imperative. Realizing, however, that they lacked clear evidence to support this view, either within their own organizations or more generally across American industry, these business leaders called for definitive research to assess the diversity-performance link. An initial study commissioned by BOLD found that no organizations were collecting the data needed to assess the effects of their diversity practices on firm performance (Corporate Leadership Council, 1997). Therefore, in 1997, the BOLD Initiative asked a group of researchers from a cross section of universities to design a large-scale field research project to examine the relationships between gender and racial diversity and business performance. This paper presents our conclusions from this five-year research effort. We believe THE EFFECTS OF DIVERSITY ON BUSINESS PERFORMANCE: REPORT OF THE DIVERSITY RESEARCH NETWORK