Diversity Communication Misfires: How Organization’s Talk about Diversity Shape Stakeholder Perceptions
James T. Carter (PhD student at Columbia Business School, USA)
Abstract. Over the last few decades organizations have increasingly strived to establish that they are “good” companies who value, and are committed to, more than their bottom line. The motivation for this stems largely from environmental pressures such as government regulation, societal expectations, and social movement organizations that push firms to take stances and make claims in support of, or opposition to, various social issues like diversity and inclusion. Despite the ubiquity of diversity value claims, and even intentions, it is quite clear that organizations are not acting in accordance with, or achieving the outcomes one would expect based on these claims. Thus, companies are being pressured to reveal to stakeholders how they are performing. Despite this push for transparency, two things remain unclear. The first is how having made diversity claims affects stakeholder perceptions and assessments of the organization and the second is how do organizational statements of support in the wake of racially traumatic events shape those actors’ perceptions of the organization? Across 4 studies I document how organizational communication around diversity shapes stakeholder perceptions.
In the first set of studies, we leverage archival field data (839 firm-year observations from US law firms) and experimental survey methods (784 American working adults), to show a positive relationship between firm consistency and intention to accept a fulltime job offer. Importantly, we find that this relationship is driven not by a boost from being consistent with actions and claims but instead that firms who appear to be inconsistent are penalized particularly harshly by stakeholders.
In the second set of studies, I use a linguistic analysis of statements released by Fortune 500 companies (348 statements) to show that organizations the extent to which organizational statements appear both costly and consistent shapes how ally-like Black observers perceive them to be, and that this relationship is mediated by perceived authenticity of those statements. In follow-up experiments (N ~ 800 American adults), we replicate this finding and provide causal evidence of these relationships.
This work has implications for how companies and organizations should (or should not) communicate their social claims and the psychological underpinnings of how stakeholders make sense of these communications.
The seminar will take place at the center, as well as in this virtual seminar room.