Race at the top: Organizational response to institutional pressures and the racial composition of the corporate elite
Boards of directors and the senior management teams of large American companies continue to have few racial minorities as members, and African-Americans hold the substantial majority of non-white "seats." This manuscript examines, at the organizational level, the persistence of racial homogeneity among the most senior leadership groups of these firms. Neo-institutional and resource dependence theories provide that organizations structure themselves to comply with the pressures and norms of their environment. To test hypotheses based on these theories of organizational behavior, new firm-level quantitative data were collected; two sets of longitudinal data and two sets that are cross-sectional. In-depth interviews were also conducted with a racially diverse group of business leaders. Event history and other statistical analyses show that the racial composition of the boards of large companies is shaped in response to the institutional pressures and social norms surrounding race. The more sensitive a firm is to these pressures, then the more likely it is to have non-white directors. Companies also appear to allocate racial minorities to more symbolic and less operationally intensive leadership roles. Additional findings of interest are that less mature firms are less likely to have minority directors than are more mature ones, good financial performance offers firms some "immunization" from compliance, and there is evidence of a limit on the number of African-American directors at a given firm. Drawing on the work of social psychologists on the deleterious effects of race on work group performance, which may be especially acute at the most senior levels of business, companies appear to be managing a tension between compliance with social norms and operational efficiency. And the "business case" for the commercial value of racial diversity, which is a paradox in light of the observed racial distribution of directors and the results described above, can be understood as a rhetorical tool which managers use in their efforts to comply with social norms.
|Year of publication:||
|Authors:||Rose, Clayton S|
|Type of publication:||Other|
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