Insider vs. Outsider Judgments of Diversity in Organizations

Aneesh Rai, Operations, Information, and Decisions, The Wharton School

Abstract: We theorize that people who belong to or create groups within organizations (organizational “insiders”) perceive their groups to be more diverse than outside observers (organizational “outsiders”). In other words, we argue that people have distorted perceptions of the diversity of groups they belong to or form, which may lead organizations to become complacent with low levels of diversity. Past work has established that perceptions of diversity are highly subjective (Unzueta, Knowles, & Ho, 2012; Unzueta & Binning, 2012), and research on motivated reasoning has shown that biased assessments often help people arrive at their desired conclusion (Kunda, 1990). To the extent that diversity is seen as desirable and a lack of diversity undesirable (Ely & Thomas, 2001; Kochan et al., 2003), organizational insiders should be motivated to perceive groups they belong to or create as diverse. By contrast, organizational outsiders will be unlikely to exhibit similar motivated reasoning when judging a group’s diversity. In the proposed project, we will explore the following questions: (1) When evaluating a group’s diversity, will people who belong to or created the group (“insiders”) view it as more diverse than outside observers (“outsiders”)? (2) Are “insiders” less likely to recommend diversifying their groups than “outsiders”?