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Racially marginalized faculty remain underrepresented in STEM, despite campus-wide diversity initiatives and resources. Because faculty hiring is decentralized, departments play a critical role in shaping diversity outcomes. However, few studies examining faculty diversity at the departmental level focus on STEM. This qualitative case study compares two STEM departments, Engineering and Biology, at a large public research university. Using theories of transformative change and racialized organizations to frame “transformative departmental change,” the study shows how departmental leadership, strategy, and culture are interconnected and either enable or constrain faculty diversity efforts. Engineering’s race-evasive merit frameworks and lack of clear direction led to stalled progress. Biology, by contrast, achieved transformative departmental change through intentional leadership and concrete strategies that supported faculty diversity.