Business Case for Commitment to Diversity

Abstract

Does an organization's commitment to diversity--as reflected by CEO commitment, human capital, corporate communication (internal and external), and supplier diversity--result in competitive advantage and superior financial performance? Diversity can bring new voices and perspectives into the strategy dialogue, help managers understand and address the needs of a demographically diverse customer base, and stimulate a wider range of creative decision alternatives. however, the anticipated benefits or corporate diversity efforts may also be accompanied by costs that can affect shareholder wealth. We assess whether the benefits of having a diverse workforce outweigh the costs and have a positive effect on firm performance. We offer suggestions for how a firm can most effectively manage a diverse group of employees and suppliers.