The Impact of Diversity on Organizational Performance

Martha Farnsworth Riche, Cornell University

This paper offers an organizational perspective on the impact of levels and trends in demographic diversity. Empirical evidence from several disciplines has shown how diversity can affect organizational performance, especially at the work-group level. Specifically, unmanaged diversity can lead to costs in terms of conflict and decreased engagement, while well-managed diversity can increase creativity and innovation, in certain contexts. Demographic changes in the U.S. labor force mean that the nature of demographic diversity is changing in U.S. work places. The paper documents some of those changes in particular settings and reports findings regarding their potential impact on performance.