Aneesh Rai, Operations, Information, and Decisions, The Wharton School
Abstract:We propose that an important hurdle preventing organizations from diversifying is their ability to accurately diagnose a lack of diversity in their ranks in the first place. Specifically, we theorize that people who belong to or create groups within organizations (organizational “insiders”) perceive those groups to be more diverse than outside observers (organizational “outsiders”). We posit that this may be due to insiders being influenced by (1) motivated reasoning concerns to construe their groups as diverse, and (2) informational asymmetry, leading insiders to define diversity more broadly when evaluating their groups. These distorted perceptions of the diversity of groups people belong to or form may lead organizations to become complacent with low levels of diversity. We find evidence for our theorizing in two pre-registered experiments: participants judged groups that they created (i.e., where they had insider status) to be more diverse and less in need of further diversification than outsider participants with no role in the group’s membership or creation (i.e., where they had outsider status). Our findings provide new evidence to help explain why some organizations may do less than is necessary to increase the diversity of their ranks.