When it comes to issues of race, gender, and diversity in organizations, researchers have revealed the problems in ever more detail. We have found a lot less to say about what does work — what organizations can do to create the conditions in which stigmatized groups can reach their potential and succeed. That’s why my collaborators — Nicole Stephens at the Kellogg School of Management and Ray Reagans at MIT Sloan — and I decided to study what organizations can do to increase traditionally stigmatized groups’ performance and persistence, and curb the disproportionately high rates at which they leave jobs. Read More »
MIT Sloan Assistant Professor of Organizational Studies Evan Apfelbaum discusses how diversity changes the way we behave.
Apfelbaum says the key to social friction is understanding how to use it.
He and his fellow researchers examined how questions of race impacted adults and children, using a game similar to Guess Who? to gauge why people are more hesitant to talk about race as they get older.
The killing of Trayvon Martin, an unarmed African American teenager from Florida—and the jury’s subsequent acquittal of George Zimmerman, the white man who shot him. The fatal shooting of Michael Brown, an unarmed African American teenager from Ferguson, Missouri, by white policeman Darren Wilson—and the decision by a grand jury not to indict the officer. The massacre of nine African Americans by a white supremacist at a Charleston church in June 2015. These are just a sampling of violent racially charged incidents that have taken place over past three years.
These episodes have sparked rage, disillusionment, sorrow, resentment, and confusion. According to a New York Times/CBS News pollconducted last month, nearly six in 10 Americans, including majorities of both white and black people, think race relations in the US are generally bad, and nearly four in 10 say the situation is worsening.
Yet in spite of this awareness and introspection, our country is still incapable of a coherent, intelligent national conversation about race. Indeed, the subject of race is so sensitive and so volatile that most people are apt to avoid it altogether. Why is that?
We usually think of ethnic diversity as a matter of social policy, not a factor that could impede market bubbles. But new research by me and a team of colleagues suggests a surprising new reason to consider diversity as a hedge against speculative bubbles: in two studies, we find that markets comprised of ethnically diverse traders are more accurate in pricing assets than ethnically homogeneous ones. Our paper, which came out Nov. 17 in Proceedings of the National Academy of Sciences (PNAS), finds that ethnic diversity leads all traders, whether of majority or minority ethnicity, to price more accurately and thwart bubbles. The reason isn’t because minority traders had special information or differential skills; rather, their mere presence changed how everyone approached decision-making. Traders were more apt to carefully scrutinize others’ transactions and less likely to copy others’ errors in diverse markets, and this reduced the incidence of bubbles.
To conduct our research, we constructed experimental markets in the United States and Singapore in which participants traded stocks to earn real money. We randomly assigned participants to ethnically homogenous or diverse markets. We found that markets comprised of diverse traders did a 58 percent better job at pricing assets to their true value. Overpricing was higher in homogenous markets because traders are more likely to accept speculative prices, we found. Their pricing errors were more correlated than in diverse markets. And when bubbles burst, homogenous markets crashed more severely.
Companies promote diversity in the workplace as a moral imperative with “bottom line benefits.” But research on the value of diversity is mixed. Some studies have found diverse teams—meaning workgroups comprised of employees of different races, genders, and backgrounds—promote creativity, nurture critical thinking, and tend to make better, more thoughtful decisions because they consider a wider range of perspectives. Other studies indicate diverse teams fuel interpersonal conflicts, reduce cohesion, and slow the pace of learning.