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This article summarizes the results and conclusions reached in studies of the relationships between race and gender diversity and business performance carried out in four large firms by a research consortium known as the Diversity Research Network. These researchers were asked by the BOLD Initiative to conduct this research to test arguments regarding the "business case" for diversity. Few positive or negative direct effects of diversity on performance were observed. Instead a number of different aspects of the organizational context and some group processes moderated diversity-performance relationships. This suggests a more nuanced view of the "business case" for diversity may be appropriate. (C) 2003 Wiley Periodicals, Inc.
Introduction
Since 1996, a group of industry chief executives and human resource professionals have been working together under the auspices of a nonprofit organization called the Business Opportunities for Leadership Diversity (BOLD) Initiative to help American corporations learn how to leverage their cultural diversity for competitive advantage. These leaders espouse the now popular "business case" for diversity-the view that a more diverse workforce will increase organizational effectiveness. For them, providing more opportunities for women and minorities is a business imperative. Realizing, however, that they lacked clear evidence to support this view, either within their own organizations or more generally across American industry, these business leaders called for definitive research to assess the diversity-performance link. An initial study commissioned by BOLD found that no organizations were collecting the data needed to assess the effects of their diversity practices on firm performance (Corporate Leadership Council, 1997). Therefore, in 1997, the BOLD Initiative asked a group of researchers from a cross section of universities to design a large-scale field research project to examine the relationships between gender and racial diversity and business performance.
This paper presents our conclusions from this five-year research effort. We believe this to be the largest field-based research project on this topic undertaken to date. We summarize our results here and their implications for managers and human resource practitioners and describe the challenges we encountered along the way in the hopes of advancing the study and practice of diversity in organizations in the future.1 Our results suggest the need to move beyond the business-case argument for advancing the practice of diversity in industry and how to...