Is There A Right Or Left Way To Manage Diversity

This dissertation examines how values held by Chief Executive Officers (CEOs) influence decision making and strategy in organizations. By integrating research from management and political psychology, this research explores if firm level diversity outcomes such as firm commitment to diversity, top management team (TMT) pay disparity, and firm performance are in part explained by the political ideology of CEOs. The study used empirical analysis of archival data for 182 CEOs in 182 Standard & Poor (S&P) companies from 2010 to 2015. The present study finds empirical support for the direct relationship between political ideology of CEOs and their firm commitment to diversity and firm performance, but not the mediating role of firm commitment to diversity on the relationship. Firms led by conservative CEOs are less likely to signal their commitment to diversity and CEO political ideology is a powerful consideration that influences firm performance regardless of commitment to diversity. This research also finds that firms led by conservatives experience higher pay disparity on their top management teams. Liberal CEOs tend to decrease the variation of compensation among their executives. In addition, the study demonstrates that conservative CEOs have less diversity on their top management teams when compared to liberal CEOs. This work hopes to add to our understanding of diversity management decision-making and strategy by looking at the role of political ideology and continue to add to an emerging literature.