This inexperience and youthfulness, according to these researchers and theorists, led to an overall drop in stock prices for the firms affected by this law as investors became wary about the direction of the firm (Ahern & Dittmar, 2012). This research was specifically concerned with the perception of firm performance on the part of investors, however, and not with actual measures of firm performance from within the companies themselves, which means it does not actually provide useful information regarding the direct impact of board diversity on performance, though it does suggest a potential problem in maintaining confidence (Ahern & Dittmar, 2012).
More performance-oriented research conducted in the United States during the 1990s, however, found that firm diversity does appear to have a direct correlation with actual firm performance, at least when measured on a strictly financial basis (Erhardt et al., 2003). This research performed a strictly quantitative analysis on over one hundred firms in the United States with varying levels of diversity on their boards, and the results suggest a significant improvement in overall financial performance when boards are more diverse across different demographic measures (Erhardt et al., 2003). This research does not explain why this is the case, however.
For that, Miller and Triana (2009) provide some possible explanations, having conducted similar research yet from a very different (though not at all contradictory or conflicting) theoretical perspectives and coming to the conclusions that racial and gender diversity in firms definitely causes better performance through increasing innovation and firm reputation. Racial diversity in a firm's board was seen to directly correlate with higher levels of firm reputation and of...
Diversity management is one of the key issues facing corporate America today. Higher number of female workers along with influx of immigrants from various racial and ethnic backgrounds in the workforce has prompted a need for diversity management because lack of the same can cause serious legal and performance problems. Diversity management refers to the strategies that seek to create a positive and healthy environment for everyone at the workplace.
In contrast, within the firm, the entrepreneur directs production and coordinates without intervention of a price mechanism; but, if production is regulated by price movements, production could be carried on without any organization at all, well might we ask, why is there any organization?" (Coase, 1937, p. 387) In simpler words if markets are so efficient why do firms exist? Coase explains, "the operation of a market costs something
Diversity in the workplace is a common subject for management scholarship, because the issue can be very complex and challenging for managers. One of the lesser-known areas of diversity management is simply dealing with people who have very different personalities. This can be as challenging as managing people from different cultures. Milliken and Martins (1996), in a relatively early study about managing diversity, note that diversity in group composition affects a
Diversity at this level may help expand market share by making minorities more visible to customers and by enhancing the firm's collective understanding of the market. Perceived diversity at this level correlated to communication problems and negative impacted decision-making time and task completion time. As for the findings regarding the second hypothesis, the authors suggest that diversity at the middle management level might contribute to the perception of tokenism
Ethical Response to Diversity The rapid growth of business sectors has posed various challenges like workforce diversity: a natural phenomenon with both positive and negative impacts on employee performance depending on how effective it is managed. This has affected both for-profit and non-profit sectors. In this context, this paper will investigate the impacts of workforce diversity on employee performance. The paper will use descriptive research design. This study will reveal that
As a consequence, investors may suffer. Importance of the Study It is necessary and pertinent to discuss the importance of any study, and this particular study is important to many people across many countries. Not only does it have importance for people who are trusting people with their pension and hedge funds in Germany, but it also has importance for people who are considering a career working with these funds and
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now