How Leaders Respond to Diversity: The Moderating Role of Organizational Culture on Performance Information Use

Two central governance challenges are directing leadership attention to performance data and the management of diversity. This article examines connections between the two, asking if the introduction of diversity, as a form of organizational change, is associated with greater leadership use of performance data. Diversity is theorized as a double-edged sword for organizations, generating greater innovation, creativity, and performance, but also conflict. We propose that leaders will be motivated to use performance data to understand, manage, and explain the effects of diversity. To study this question, we employ a randomized controlled field experiment where organizations are assigned new employees that bring role and educational diversity. We find that leaders are more responsive to these two types of functional diversity when they view their organization as lacking an innovative organizational culture.