When Do Organizations Advance Workplace Diversity? Non-Business Case of Innovation Adoption

We explore when organizations significantly advance workplace gender and racial diversity. A considerable body of work has unveiled how workplace inequality is perpetuated through existing organizational processes and structures that are difficult to change. We argue that structural reconfiguration associated with a non-incremental innovation adoption—one that requires the development of new capabilities—may dismantle such inertia and create an opportunity to increase workplace diversity significantly. Using a sample of 2,991 retail establishments from 2004 to 2015, supported by qualitative research, we found that a retailer’s adoption of e-commerce is associated with a significant increase of female and minority managers. After the adoption, the proportions of Black and women managers increased by 22 percent and 17 percent, respectively. This effect is more substantial in retailers subject to affirmative action requirements and in geographic areas where diversity practices are more normatively accepted. Our study offers one distinct pathway through which organizations can bolster workplace gender and racial diversity and invites future research that examines how various opportunities to advance diversity are created and exploited (or not) in the organization.