How do consumers respond to the race of organizational leaders? Evidence from national and local market television viewership

Research suggests minority leaders face public perception and legitimacy issues. Grounded in Role Congruity Theory, we argue that consumers often categorize leadership roles through a prototypical lens, creating cognitive mismatch when minority individuals occupy strategic positions. While diversity is often celebrated in operational “execution” roles, we identify an Employee-Leader Paradox where this same diversity is penalized in high-level leadership. We advance this literature by exploiting the richness of television viewership data at the national level and from 27 of the largest media markets in the United States. Utilizing a high-transparency setting where both leadership identity and organizational performance are readily observable, we isolate the impact of leader race from the technical quality of the product. We find statistically significant and economically relevant evidence suggesting consumers respond negatively to non-White leaders both nationally and locally. For both product types, this result is robust to controlling for the interaction between leader race and organizational performance. Notably, these negative preferences are much stronger for consumers located in markets where the local organization is performing poorly and when the minority leader directs the organization located in the same geographical market as the consumer. These findings suggest that the Employee-Leader Paradox is consistent with deep-seated social cognitions that influence real-world consumption decisions.