The challenge of creating a multicultural, diverse organization is becoming an increasingly prominent concern for the chief executive officers (CEOs) of companies in the United States. Top executives such as IBM’s Lou Gerstner and his successor Sam Palmisano have expended considerable energy and company resources on achieving diversity (Thomas, 2004). Many of their competitors have followed suit, seeking to replicate what they perceive to be best practices in diversity management. By the end of the 1990s, three out of four Fortune 500 companies had launched diversity programs (Caudron, 1998). Today, a cottage industry of consulting firms specializing in diversity management...

An important topic in the diversity management literature is the rationale generated inside a firm for improving its diversity. The two most commonly mentioned reasons are that a diverse workforce improves a company’s bottom line and that it enhances the work environment.

The literature suggests that workforce diversity positively affects a company’s bottom line by increasing the skill base and range of talent among employees. In part, this may be because companies that recruit from a wider pool of candidates have access to and are able to hire a larger number of exceptional personnel (Hubbard, 2004). Morrison (1996) extends this...

Are the practices recommended in the literature more prevalent in some types of firms than in others? Specifically, are companies known for their diversity management capabilities saying and doing what the diversity literature suggests? And are companies without a reputation for diversity behaving in ways that run counter to theoretical tenets and practical advice regarding diversity?

We looked toFortunemagazine as the source of potential candidates for our comparative analysis.Fortunepublishes an annual list of the “50 Best Companies for Minorities”—firms recognized for successfully recruiting and managing an ethnically diverse workforce. The magazine approaches the Fortune 1,000,...

Our analysis of the diversity-related documentation of 14 companies indicates that the practices of best diversity firms match those commonly advocated in the diversity management literature. Moreover, the aggregation of these practices (if not the individual programs, organizations, and policies) distinguishes best diversity firms from best HR firms. But for a company that wants to build a more diverse workforce, is success simply a question of implementing the practices described in the diversity literature? Our answer is no.

While best practices may contribute significantly to achieving diversity, they are not a magic bullet. Not only does the literature itself have...

Our exploratory analysis of demographic diversity in large U.S. businesses resulted in two principal findings. First, a core set of motives and practices exists that distinguishes firms that are recognized for diversity. These include the following:

A conviction among senior managers that workforce diversity positively affects business performance.

A strong leadership commitment to diversity planning and implementation.

A range of diversity initiatives that encompasses more than standard minority recruiting, promotion, and retention programs.

Formal mechanisms for evaluating and holding company personnel accountable for diversity outcomes.¹

That said, we cannot demonstrate which best practices are essential or most important to diversity...