Diversity Crises: How Firms Manage Discrimination Lawsuits

Using a qualitative design, we develop a model of discrimination lawsuit resolution identifying type of discrimination, firms’ verbal and behavioral responses, and stakeholder mobilization as key. Data from media accounts of lawsuits reveal four paths to resolution, distinguishable largely by the type of discrimination they represent. Findings also highlight aspects of race discrimination and sexual harassment that invite different organizational responses than other forms of discrimination. In addition, analysis of the response paths suggests that external stakeholders with and without formal authority critically influence firms’ responses. We discuss findings in the context of organizational responses to threat, and institutional theory.