Leadership Diversity and Organizational Survival in a Changing World

• In Event: Nonprofit Leadership and Management

Abstract

A growing body of studies on demographic diversity in leadership has explored how age, gender, race, and educational background affect organizational performance and survival. Greater diversity in various dimensions is found to be generally beneficial for organizations across sectors, based on value, legitimacy, resources, and practical grounds. However, the existing research mostly focused on a limited set of demographic diversity in leadership or on a single time period. The questions remain: Which type of mix is more beneficial for survival? When and why does “diversity” influence organizational survival differently? This paper builds on organizational theory and the institutional perspective to understand the influence of demographic diversity in leadership on organizational survival over a long timeframe. We used the census survey data from the U.S. National Study of Community Organizing Coalitions on the field of faith-based community organizations (FBCOs) in 1999 and 2011, and matched the FBCOs’ survival outcomes in 2011 and 2016 respectively. We test how gender, race, immigrant, and age diversity among the board members affects the likelihood of survival in five to ten years for organizations surveyed in both waves, controlling for the organizational age and size, and the size of the board. We find significant effects of gender and race, while the effects of immigrants and younger generation presence are only significant in the second study period (2011-2016). However, the results also reveal significant contrast on the role of gender diversity for survival between the two study periods. In addition, FBCOs located in a racially diverse county were less likely to survive. Overall, results suggest that the positive effects of gender and race diversity may stem from different driving mechanism, and that the outcome of leadership diversity decisions based on legitimacy concern rather than social value and resource concerns tend to be more persistent in a changing environment.

Authors

• Ruodan Zhang, Indiana University - Bloomington

• Brad Fulton, Indiana University