2018
DOI: 10.1177/0018726718812602
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Racial diversity and its asymmetry within and across hierarchical levels: The effects on financial performance

Abstract: The benefits and drawbacks of diversity inside organizations have been the focus of attention for researchers and practitioners for several decades. In our article, we investigate the business case for racial diversity across different hierarchical levels. More precisely, we ask: How does racial diversity within organizations and its asymmetry across hierarchical levels affect their financial performance? From a sample of 143 US law firms from 2008 to 2012, we provide strong support for the business case and s… Show more

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Cited by 108 publications
(78 citation statements)
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References 56 publications
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“…Transitions between life-cycle stages change in power configuration (Mintzberg, 1984), managerial centralization (Greiner, 1972), and stakeholder strategies (Jawahar & Mclaughlin, 2001) in the company. Considering the life-cycle stage's powerful effect on management and its structure, management's approach to financial reporting is also affected (Jensen & Meckling, 1976).…”
Section: Public Interest Statementmentioning
confidence: 99%
“…Transitions between life-cycle stages change in power configuration (Mintzberg, 1984), managerial centralization (Greiner, 1972), and stakeholder strategies (Jawahar & Mclaughlin, 2001) in the company. Considering the life-cycle stage's powerful effect on management and its structure, management's approach to financial reporting is also affected (Jensen & Meckling, 1976).…”
Section: Public Interest Statementmentioning
confidence: 99%
“…The management of the company is responsible for providing information to shareholders through the presentation of financial statements that have been audited by an independent auditor. Jensen & Meckling (1976) explain that agency theory is needed as a form of work contract to regulate the rights and obligations of both parties. The imbalance in the distribution of information received by agents and principals causes information asymmetry that can lead to agency problems (Rustiarini & Sugiarti, 2013).…”
Section: Literature Review and Hypothesis Development Agency Theorymentioning
confidence: 99%
“…Furthermore, a more gender-diverse workforce will result in a wider range of views and ideas [19]. These new ideas from diverse teams have been found to be related to positive organisational outcomes such as increase in stock price value [20], [21] innovation [22], [23] and better overall financial performance [24].…”
Section: Goal 8: Decent Work and Economic Growthmentioning
confidence: 99%