Rogerian Essay

Vol.:(0123456789)1 3

Journal of Business Ethics (2020) 164:437–450 https://doi.org/10.1007/s10551-018-4051-7

O R I G I N A L PA P E R

Walking the Talk on Diversity: CEO Beliefs, Moral Values, and the Implementation of Workplace Diversity Practices

Eddy S. Ng1 · Greg J. Sears2

Received: 21 May 2018 / Accepted: 22 October 2018 / Published online: 7 November 2018 © Springer Nature B.V. 2018

Abstract Although CEO commitment is recognized as being crucial to organizational diversity efforts, we know little about how CEOs signal their priorities and mobilize key organizational actors to implement diversity management. We tested an integrative model in which CEO beliefs about diversity were theorized to predict the implementation of organizational diversity prac- tices through two consecutive mediating steps—via greater CEO engagement in pro-diversity behavior, and in turn, higher perceived CEO commitment by their HR manager. In this model, we also proposed a moderating effect such that when CEOs have less positive beliefs about diversity, CEOs espousing higher moral values will display greater pro-diversity behavior. Results supported the proposed model. Taken together, our findings indicate that a CEO’s words and actions alone are not sufficient for the implementation of diversity management practices. HR managers must view their CEOs as being commit- ted to workplace diversity in order for diversity management practices to be implemented.

Keywords CEOs · HR managers · Sense-making · Moral values · Diversity management

Introduction

One of the major issues facing organizations is managing an increasingly diverse workforce. Although research shows that equal employment opportunity/affirmative action (EEO/ AA) laws promote organizational diversity practices (Holzer and Neumark 2000; Dobbin et al. 2011), comparatively little research has been undertaken to understand the role organi- zational actors play in advancing diversity management in organizations (Abramovic and Traavik 2017; Anderson and Billings-Harris 2010; Guillaume et al. 2014). CEOs publicly claim that they value diversity, but their words often do not translate into tangible diversity efforts or outcomes (Braga 2017; Christian 2014). Some CEOs say they are commit- ted to managing diversity, but their organizations are sim- ply complying with EEO/AA laws at best (cf. Ng 2005;

Hiranandani 2012). According to Professor David Thomas, people at the top are “saying all the right things relative to diversity, but their middle management, who really run the organization and create the experience of people who work there, don’t understand and don’t feel accountable for diversity and inclusion” (cf. Brescoll 2011). In an effort to shed light on how CEOs and managers contribute to work- place diversity management, this study explores the process through which CEO commitment to diversity translates into the implementation of diversity management practices. In this regard, we extend the work of Buttner et al. (2006, 2007) on how leader attitudes impact the implementation of diver- sity management. We also explore the moderating role of a CEO’s moral values in contributing to workplace diver- sity management. Specifically, we posit that when CEOs do not hold positive beliefs about the instrumental value of diversity (i.e., they do not believe in the business case for diversity), their moral values will exert a stronger influence on their display of pro-diversity behaviors and their com- mitment to diversity. In this respect, we seek to enhance our understanding of the influence of both CEO instrumental beliefs and moral values in predicting a CEO’s commit- ment to diversity and the enactment of workplace diversity practices.

* Eddy S. Ng [email protected]

Greg J. Sears [email protected]

1 Rowe School of Business, Dalhousie University, 6100 University Avenue, Halifax NS B3H 4R2, Canada

2 Sprott School of Business, Carleton University, 1125 Colonel By Drive, Ottawa ON K1S 5B6, Canada

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To guide our theoretical framework, we draw from the sense-making literature (e.g., Boxenbaum 2006; Roberson and Stevens 2006) to propose a sequential mediating process of how CEOs signal their beliefs and priorities about diver- sity and how managers interpret these signals to implement diversity management practices in an organization. Given the important role that both CEOs and managers play in con- tributing to diversity management in organizations, a better understanding of these perceptual mechanisms is needed to strengthen the implementation of workplace diversity prac- tices and enhance career outcomes for women and minority groups. In this paper, we will focus specifically on senior human resource managers (HR managers) since they are the ones tasked with implementing organizational diversity efforts.

CEO and HR Managers’ Roles and Priorities

CEOs tend to focus on the bottom line and addressing strate- gic issues integral to an organization’s overall performance. HR managers, on the other hand, must address a number of competing internal organizational demands and are often tasked with implementing various organizational policies, including directives to comply with EEO/AA laws (Dur- rani and Rajagopal 2016; Shen et al. 2009; Ulrich 1998). While both CEOs and HR managers play an important role in designing and implementing diversity management ini- tiatives, our understanding of how CEOs and HR manag- ers influence each other in this process is limited (May and Winter 2009; Schilit 1987; Wooldridge and Floyd 1990). Given that EEO/AA laws play a limited role in promot- ing workplace diversity, Dobbin and Kalev (2016) suggest engaging managers (as “diversity champions”) to help boost organizational diversity. This proposition is also echoed by Nishii et al. (2018) who call for a process approach to better understand how individual-level variables (e.g., manage- rial attitudes and beliefs) influence organizational diversity outcomes. In this respect, we contribute to the literature on workplace diversity by testing the influence of both CEO and HR managers’ beliefs and perceptions on the implementa- tion of diversity practices.

We focus our attention on CEOs because they make deci- sions, set the corporate agenda, and allocate resources that are required to promote diversity management (Cox and Blake 1991). CEOs also act as symbolic leaders by taking personal stands on the need for change, act as role models for the behaviors required for change and assist with the work of moving the organization forward (O’Reilly 1989; Pfeffer 1981). Thus, visible CEO support is essential in order for organizations to advance the corporate agenda on diversity management. Furthermore, diversity management requires a long-term commitment on the part of the organization, and CEO commitment and support are crucial to acquiring

and sustaining managerial attention and securing the finan- cial resources required to keep it on the corporate agenda (Robinson and Dechant 1997). According to Salancik (1977, p.  22), CEO commitment “makes us do what we do and continue doing, even if the payoffs are not obvious.” When CEO commitment to diversity is lacking, this may also have a ripple effect throughout the organization. For example, it may detract from the perceived credibility of managers in implementing diversity practices (Hitt and Keats 1984), thus hampering their enactment.

While CEOs play a lead role in initiating and support- ing change, HR managers play a critical role in effecting and implementing change (Gioia and Chittipeddi 1991). As key partners in organizational change, comparatively little attention has been cast on the role of HR managers in the implementation of diversity management initiatives, prompt- ing calls for more research on the role of middle-managers in diversity management implementation (Guillaume et al. 2014; Tatli and Özbilgin 2009; Tatli et al. 2015). Diver- sity management initiatives such as making EEO/AA hir- ing decisions can be politically and emotionally charged (Edelman et al. 1991; Roberson 2006), and managers who are tasked with their implementation often face significant resistance, including in some cases, very negative reactions from both employees and other managers (Zanoni and Jans- sens 2004). Thus, HR managers may take their cues from CEOs and exercise discretion in how they implement diver- sity management practices based on the perceptions of their CEO’s commitment to diversity. Accordingly, we draw from the sense-making literature to demonstrate how CEOs make sense of the environment to prioritize diversity management and signal their commitment to organization members (e.g., HR managers). HR managers, in turn, interpret their CEOs’ priorities and commitment to implement organizational diversity practices. Specifically, we test a model in which CEO beliefs about diversity influence the implementation of diversity management practices through the display of CEO behaviors that reflect a commitment to diversity, and in turn, HR managers’ perceptions that their CEO is committed to workplace diversity. By exploring the interface between CEO beliefs and behaviors related to diversity and HR man- agers’ perceptions of their CEO’s commitment to diversity, the present study helps us to better understand the perceptual and relational mechanisms through which CEOs and HR managers shape diversity management in organizations.

Conceptual Background

Sense‑Making and Organizational Change

Sense-making is a process that is helpful for explaining how managers arrive at decisions to initiate organizational

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change (Gioia and Chittipeddi 1991; Kezar 2013). It involves organizational members coordinating their sense of appro- priate meaning to achieve a shared understanding of required behaviors (Weick 1995). In this regard, diversity manage- ment, a form of organizational change, entails a shift in demographics (i.e., increasing the proportion of women and minorities) and climate (i.e., “the way things are around here”) (Kossek et al. 2003). According to Friday and Fri- day (2003, p. 864), implementing diversity management is intended to create a shared sense of collective effort where “…diversity is systematically acknowledged, valued, and effective managed.” Because change initiatives relating to diversity management are enacted at the organizational level, it is crucial to assess the degree to which organizational members make sense of their CEO’s signals and perceive their CEOs to be committed to diversity for organizational members to fully support and effect these changes (Kossek et al. 2003; Nishii et al. 2018).

As part of the organizational change process, sense-mak- ing involves extracting cues, labeling, communication, and action (Weick et al. 2005). First, CEOs interpret signals from the external and internal environments and develop a vision for change (see Buttner et al. 2006, 2007). This vision is then communicated to organizational members. Following this, organizational members assess the motives of the CEO (Nishii et al. 2018) and actions are then implemented. HR managers charged with implementing change must therefore interpret, communicate, and implement change (Lüscher and Lewis 2008). In turn, the interpretation of these change efforts by organizational members affects the continued suc- cess of change initiatives in the organization (Bartunek et al. 2006).

Linking CEO Beliefs About Diversity with Behaviors

CEOs are frequently confronted with far more stimuli than they can fully comprehend. Thus, CEOs must first interpret and “make sense” of stimuli through a cognitive process (i.e., “extracting cues”) to determine how new information will be noticed, interpreted, and acted upon (Hambrick and Mason 1984). Some of the stimuli confronting CEOs rep- resent possible strategic issues that can significantly impact organizational performance, and also influence their own attitudes and behaviors. CEOs may selectively attend to some of these emerging issues while ignoring others. Those selected are subsequently interpreted and infused with mean- ings and labels (Dutton and Jackson 1987; Thomas et al. 1993). Identifying and labeling strategic issues also help CEOs “make sense” and impose order on the environment.

Two of the most common labels applied to strategic issues are “opportunity” and “threat” (Jackson and Dutton 1988; Mintzberg et al. 1976). Dutton and Jackson (1987) argue that managers evaluate an issue in positive or negative

terms, and see it as representing a potential gain or loss for their organizations. Workforce diversity, as a strategic issue, can be perceived as having a positive or negative impact on group processes and organizational outcomes (Milliken and Martins 1996). Those who hold a resource-based view (e.g., Richard 2000; Yang and Konrad 2011) tend see workforce diversity as an opportunity that can enhance creativity and performance, while those who hold a social contact perspec- tive and selective incivility (such as stereotyping and overt/ covert discrimination) (e.g., Jehn et al. 1997; Kabat-Farr and Cortina 2012; Tsui et al. 1992) are inclined to see increas- ing diversity as a potential source of inter-group conflict and a threat to organizational effectiveness. Furthermore, CEOs who form positive beliefs about diversity (i.e., who believe in the business case for diversity) are more likely to exhibit behaviors that are consistent with those beliefs. These behaviors can range from communicating their per- sonal commitment to diversity to creating employee resource groups and setting diversity goals for their managers (Gil- bert and Ivancevich 2000). Indeed, Rynes and Rosen (1995) reported that CEO (positive) beliefs about diversity were associated with their support of workplace diversity training and the adoption of these practices. Consistent with Buttner et al. (2006, 2007) on leadership attitudes and diversity man- agement, we hypothesize the following as a starting point for our study:

Hypothesis 1a CEO workforce diversity beliefs are posi- tively related to their pro-diversity behaviors.

Although the business case is the predominant motiva- tion behind the implementation of workplace diversity initia- tives, some CEOs may hold less positive views of the value of workforce diversity and/or overt/covert discrimination (e.g., Barry and Bateman 1996; Pelled 1996; van Knippen- burg et al. 2004). This is particularly true when diversity initiatives are perceived as “hiring less qualified (or reject- ing qualified) candidates,” or deemed to: “produce reverse discrimination,” “operate as “quota” systems,” or “take a lot of time, effort, money and paperwork” (cf. Bell et al. 2000, p. 788). As CEOs are principally motivated by firm financial performance (i.e., profit maximization) (Boxen- baum 2006; Slater et al. 2008), the impetus for managing diversity will diminish when they do not view diversity as a strategic opportunity. Leaders may also, however, view diversity management from a moral or ethical standpoint (e.g., DiTomaso and Hooijberg 1996; Hood 2003; Ng and Sears 2012). CEOs adopting this perspective are concerned with corporate social responsibility and may choose “to do the right thing” even when it bears no financial return. Ely and Thomas (2001) referred to this as the “discrimination and fairness” perspective, in which diversity initiatives are put in place to ensure equal opportunity with no clear link

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to firm financial performance. Indeed, research suggests that CEOs can be committed to social causes out of a moral obligation that enhances one’s motivation to ensure fair treatment for everyone (Agle et al. 1999; Boekhorst 2015; Dodge and Rabiner 2004). Likewise, Ng and Wyrick (2011) posit that, in the absence of a business case, a CEO may be committed to diversity due to a belief that it is the “moral thing to do.” In this regard, one’s moral values are critical for framing diversity initiatives when the business case for diversity is weak (e.g., Pless and Maak 2004; van Dijk et al. 2012). Buttner et al. (2006, 2007) report that leader aware- ness concerning racial issues is related to their beliefs about diversity. We build on this work and propose that moral val- ues will moderate the relationship between diversity beliefs and behaviors. As outlined above, moral values should exert a minimal influence on pro-diversity behavior when CEO beliefs are positive; however, in cases where a CEO reports less positive views on diversity, higher moral values will be associated with greater pro-diversity behavior. We therefore hypothesize the following:

Hypothesis 1b CEOs’ moral values will moderate the rela- tionship between their workforce diversity beliefs and pro- diversity behaviors such that this relationship will be weaker when moral values are high. Specifically, CEOs with less positive diversity beliefs will exhibit more pro-diversity behaviors when they espouse higher moral values; however, moral values will not appreciably influence pro-diversity behaviors when CEOs possess positive diversity beliefs.

CEO Pro‑diversity Behaviors and Perceptions of a CEO’s Commitment to Diversity

When CEOs communicate their beliefs consistently and over time, organizational members begin to develop expectations about the strategic priorities of their CEOs (Bertsch and Wil- liams 1994; O’Reilly 1989; Van den Steen 2005). Organi- zational members who do not have complete information interpret a particular issue or its strategic importance based on cues from their CEOs (Connelly et al. 2011). Thus, after CEOs have labeled workforce diversity as a strategic issue and have chosen a course of action, they then actively engage in “sense-giving” to convey their messages through their words and actions to organizational members. In this regard, leaders transmit messages to cue organizational members on the importance and expectations surrounding the display of inclusive behaviors, and to gather support and influence organizational members about this commitment (Bertsch and Williams 1994; Kezar 2013). CEOs exhibit this com- mitment by actively demonstrating behaviors such as outlin- ing the benefits of workforce diversity in public speeches, media interviews, and press releases, endorsing the strategic hiring of minority candidates, initiating diversity councils

and encouraging diversity training, and holding managers accountable for diversity goals. These actions convey the magnitude of the CEO’s commitment to diversity and signal that diversity management is an important strategic priority to the CEO (Connelly et al. 2011). Managers, in turn, inter- pret their CEO’s level of commitment (“reciprocal sense- making”) and decide upon a course of action through these messages (Gioia and Chittipeddi 1991; Beelitz and Merkl- Davies 2012). Thus, we hypothesize that:

Hypothesis 2 CEO pro-diversity behaviors are positively related to the degree to which HR managers perceive their CEOs to be committed to diversity.

HR Managers as Agents of Change

As HR managers are often tasked with implementing organizational strategies, they are in a position to mobilize resources, design policies, and implement diversity manage- ment initiatives (Guillaume et al. 2014; Piderit and Ashford 2003). For example, HR managers can enact policies and practices relating to the hiring and promotion of women and minorities (D’Netto and Sohal 1999; Ng and Sears 2010) and that build a culture that values and develops workers from diverse backgrounds (Shen et al. 2009). HR manag- ers are also in a position to identify and assess which poli- cies and practices are most effective at building a climate of inclusion (Guillaume et al. 2013; Kalev et al. 2006). Kirton and Greene (2010) note that HR managers are more likely to buy into diversity initiatives and view them as an organiza- tional priority when they perceive positive signals from top management conveying their commitment. In this regard, the number and range of diversity practices that are put in place will depend on the degree to which HR managers perceive their CEOs to be committed to diversity management. Thus, we hypothesize that:

Hypothesis 3 The degree to which managers perceive their CEOs to be committed to diversity is positively associated with the implementation of diversity practices.

Finally, in an effort to open up the “black box” underly- ing CEO cognition and behaviors and the implementation of diversity management, we propose that CEO beliefs about diversity are positively and indirectly related to the imple- mentation of organizational diversity practices through the mediating influences of both CEO pro-diversity behavior and HR managers’ perceptions of their CEO’s commitment to diversity. As discussed above, CEO pro-diversity behav- ior conveys a strong signal to the HR manager that they will receive tangible (e.g., financial) and intangible (social) resources and support that will be needed in their efforts to implement diversity management practices. Thus, in the

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absence of CEO pro-diversity behavior and perceptions on the part of the HR manager that their CEO is committed to diversity, diversity practices will be much less likely to be implemented. In this respect, we propose a sequential mediation process in which the relationship between CEO positive beliefs about diversity on the implementation of diversity practices will be mediated by CEO pro-diversity behavior and the HR manager’s perceptions of their CEO’s commitment to diversity. We also submit, however, that the strength of this mediating effect will vary as a function of the moral values of the CEO. As discussed (Hypothesis 1b), higher moral values may compensate for less positive beliefs in diversity. Thus, we posit that the indirect effect of CEO positive beliefs about diversity through CEO pro- diversity behavior and perceptions of the CEO’s commit- ment to diversity will be moderated by the CEO’s moral values. When CEO beliefs in diversity are less positive, higher moral values will be associated with greater CEO pro-diversity behavior, ultimately leading to the implemen- tation of a wider range of diversity practices. We therefore propose the following hypotheses reflecting mediation and moderated mediation in our proposed model. Figure 1 pro- vides a graphical illustration of this model.

Hypothesis 4a CEO positive beliefs about diversity will indirectly positively relate to the implementation of organi- zational diversity practices through the mediating influence

of CEO pro-diversity behavior, and in turn, HR managers’ perceptions of their CEO’s commitment to diversity.

Hypothesis 4b CEO moral values will moderate the sequen- tial mediating influences of CEO pro-diversity behavior and HR managers’ perceptions of their CEO’s commitment to diversity on the implementation of organizational diversity practices.

Method

Sample and Procedure

The sampling frame for this study included 1283 organiza- tions drawn from the FP 500 (Financial Post 500) list of the largest firms in Canada and also firms having to com- ply with federal employment equity (EEO/AA) laws (list obtained from Labour Canada). Two separate surveys were mailed to each organization—one to the CEO and a sec- ond to the HR manager (i.e., the Vice-President or Director responsible for implementing diversity management). The first survey gathered information from the CEO including his/her demographic characteristics, beliefs about diversity, values, and diversity supportive behaviors. The second sur- vey, completed by HR managers, assessed the managers’ perceptions of their CEOs’ commitment to diversity and the

Hypothesized Model

Note: Solid lines represent the links in the hypothesized model. Dashed lines represent additional paths involved in sequential

mediation (Hayes, 2018; Taylor, MacKinnon, & Tein, 2008).

CEO Positive Beliefs about Diversity

CEO Pro-Diversity

Behavior

HR Managers’ Perceptions of their CEO’s

Commitment to Diversity

Organizational Diversity Practices

CEO Moral Values

Control Variables

CEO Gender, Age, Position Tenure, HR Manager Gender, Age,

Org. Size, EE vs. Non-EE Firm

Fig. 1 Theoretical model linking CEO positive beliefs about diversity and the implementation of organizational diversity practices

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extent to which their organization has implemented various diversity practices. CEOs and HR managers were informed of each others’ surveys; three reminders were sent over a period of 22 weeks to ensure the highest response rate possi- ble. A total of 286 organizations (matched pairs) completed both surveys, yielding a response rate of 22.3%. The CEO respondents were predominantly male (92%), Caucasian (98%), and possessed an undergraduate or graduate degree (90%). Their average age was 53 years old, and their aver- age tenure with the organization was 15 years. Fifty-four percent (54%) of the HR managers were female, 95% were Caucasian (95%), and their average age was 46 years old.

Measures

CEO Positive Beliefs About Diversity

CEO Positive Beliefs about Diversity were measured using 7 items obtained from Mor Barak, Cherin, and Berkman (1998). A sample item includes: “I believe diversity is a strategic business issue.” CEOs were asked to rate their level of agreement with each item on a 6-point scale (1 = strongly disagree to 6 = strongly agree). For each of our measures, scores on each item were summed to form the overall meas- ure. Cronbach’s alpha was 0.79.

CEO Moral Values

CEO Moral Values were assessed using 7 items from Rokeach’s (1973) values instrument, following Agle et al. (1999). Sample items include: “courageous,” “honest,” and “forgiving.” CEOs indicated the level of importance that they ascribe to each value on a 6-point response scale (1 = not at all important to 6 = very important). Cronbach’s alpha was 0.77.

CEO Pro‑Diversity Behavior

CEO Pro-Diversity Behavior was measured using 9 items adapted from Hambrick, Geletkanycz, and Fredrickson (1993). Using a 6-point scale (1 = strongly disagree to 6 = strongly agree), CEOs were asked to indicate the extent to which they engage in a number of behaviors that demon- strate their support for diversity. A sample item includes: “I frequently communicate about diversity with my employ- ees.” Cronbach’s alpha was 0.90.

Perceptions of CEO Commitment to Diversity

Perceptions of CEO Commitment to Diversity was measured using 3 items adapted from Konrad and Linnehan (1995). HR managers reported their perceptions of their CEOs’ commitment to diversity in accordance with a 5-point

scale. A sample item includes: “Overall, how would you rate your CEO in terms of their stance toward diversity” (1 = extremely resistant to 5 = extremely proactive). Cron- bach’s alpha was 0.80.

Implementation of Organizational Diversity Practices

Implementation of Organizational Diversity Practices was measured using Konrad and Linnehan’s (1995) identity conscious survey which measures the implementation of diversity practices in five areas: diversity policies, recruit- ment, training and development, compensation, and account- ability. HR managers were asked to rate the extent which 33 statements measuring practices in these areas applied to their organization. For the 10-item diversity policy section, respondents indicated whether their organization had for- mal policies or not (1 = no, 2 = yes); the items on each of the other sections were rated on a 3-point scale (1 = never, 2 = sometimes, 3 = always). Sample items include: “there is a specific position designated to handle diversity issues (diver- sity policies),” “managers are trained in their employment equity/diversity responsibilities (training),” and “managers’ compensation is linked to employment equity/diversity sta- tistics (accountability).” Consistent with past studies meas- uring HR practices (e.g., Delery 1998; Konrad and Linnehan 1995), scores on each item were aggregated to form an index of each organization’s diversity management practices.

Control Variables

We controlled for two key institutional variables that have been shown to be associated with the implementation of diversity management practices in a number of previous studies: (1) whether firms1 are covered by EEO/AA laws, and (2) the overall size of the firm (i.e., total number of employees; e.g., Fields et al. 2005; Ng and Burke 2010). We also controlled for the age and gender of both the CEO and HR manager, as well as the CEO’s position tenure, which have each been shown to be associated with individuals’ attitudes and beliefs relating to diversity (e.g., Ng and Burke 2010).

Data Analyses

Before testing our hypotheses, we examined the factorial structure of our measures using confirmatory factor analy- sis. As shown in Table 1, the proposed five-factor model, treating positive beliefs about diversity, pro-diversity

1 EEO/AA legislation only covers federally regulated industries (e.g., transportation, financial services, telecommunication) and the federal government.

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behavior, moral values, perceptions of CEO commitment, and implementation of organizational diversity practices as separate factors demonstrated an acceptable fit with the data (χ2 = 1860.10, df = 1379; CFI = 0.91; RMSEA = 0.03). Moreover, the five-factor model fits the data significantly better than several possible alternative models, including a one-factor model merging all items into one factor, a two- factor model separating CEO-reported from HR manager- reported items into separate factors, and a three-factor model similar to the two-factor model but partitioning perceptions of CEO commitment and the implementation of diversity practices into separate factors. To test our hypotheses, we conducted conditional process analysis using the PROCESS macro (version 3) by Hayes (2018). Using OLS regression, PROCESS enables direct testing of models that include moderation and/or mediation. Because the proposed model (Fig. 1) specifies serial mediation and a moderating effect at Stage 1 of the model, model specification 83 was employed (Hayes 2018). To analyze indirect effects, 95% confidence intervals (CIs) were calculated based on bias-corrected boot- strap analyses with 10,000 repetitions. Hayes (2015, 2018) index of moderated mediation was also computed to test the moderated mediation effect proposed in Hypothesis 4b.

Results

The means, standard deviations, and zero-order correlations for all study variables are reported in Table 2. As displayed in Table  2, positive beliefs about diversity significantly positively correlated with the implementation of organiza- tional diversity practices (r = 0.35, p < 0.001). Moreover, as expected, each of the focal variables in our model (Fig. 1) was significantly positively associated with each other (p < 0.001). Although some relationships between variables were moderate to moderately high (e.g., positive beliefs about diversity–pro-diversity behavior: r = 0.59), variance inflation indices (VIF) for the hypothesized predictors did not provide evidence of multicollinearity [VIF values ranged between 1.03 and 1.47, below the recommended cutoff of 10 (Hair et al. 1995)].

Table 3 presents the detailed results of our hypotheses tests using PROCESS; unstandardized coefficients are reported. As shown in the upper part of the table, the model for the first mediator (M1)—pro-diversity behavior—was

computed. In support of Hypothesis 1a, positive beliefs about diversity were significantly positively related to pro- diversity behavior (b = 1.11, p < 0.001), indicating that CEOs are more likely to take action in support of diversity when they have positive beliefs about diversity. Consistent with Hypothesis 1b, however, we also found that CEO moral values moderate this relationship (b = − 0.06, p < 0.05). To ascertain the nature of this interaction, we used procedures outlined by Aiken and West (1991) to examine the simple effects of CEO positive beliefs about diversity at high and low levels of CEO moral values (± 1 SD). As predicted, this analysis revealed that positive beliefs about diversity are more strongly positively associated with pro-diversity behavior when CEOs report low moral values (b = 1.38, p < 0.001) compared to when their moral values are high (b = 0.77, p < 0.01). As shown in Fig. 2, these slope differ- ences appear to be attributable to the stronger influence of higher moral values when CEOs report less positive (vs. more positive) beliefs about diversity. Overall, this pattern of results is consistent with Hypothesis 1b and suggests that CEO moral values may compensate for less positive views of diversity in predicting CEO pro-diversity behavior.

The model for the second mediator (M2)—perceived CEO commitment to diversity—was then computed in PROCESS. As shown in Table 3, pro-diversity behavior related positively to perceived CEO commitment to diver- sity (b = 0.06, p < 0.001). This finding provides support for Hypothesis 2 and suggests that HR managers are more likely to perceive their CEOs to be committed to diversity if they engage in behaviors that support diversity. Finally, the model for dependent variable—the implementation of organizational diversity practices—was calculated. In line with Hypothesis 3, perceived CEO commitment to diversity was positively related to the implementation of organiza- tional diversity practices (b = 2.34, p < 0.001), reinforcing that notion that HR managers will be more likely to success- fully implement diversity practices if they view their CEO as being committed to supporting diversity.

Results for the analyses of indirect effects are reported in the lower part of Table  3. In support of Hypothesis 4a, the sequential indirect effect of positive beliefs about diversity on the implementation of organizational diver- sity practices via both mediators (pro-diversity behavior and perceived CEO commitment to diversity) was signifi- cant [b = 0.150, 95% CI (0.050, 0.259)]. Furthermore, in

Table 1 Results from confirmatory factor analyses testing measurement model

Model χ2 df TLI CFI RMSEA SRMR AIC BIC

5-Factor (base) model 1860.10 1379 0.90 0.91 0.03 0.07 20764.12 21550.01 3-Factor model 2202.24 1386 0.80 0.81 0.05 0.09 21092.26 21852.68 2-Factor model 2319.32 1388 0.77 0.78 0.06 0.10 21205.34 21958.48 1-Factor model 2685.54 1389 0.68 0.70 0.07 0.13 21569.55 22319.06

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445Walking the Talk on Diversity: CEO Beliefs, Moral Values, and the Implementation of Workplace…

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line with Hypothesis 4b, the index of moderated media- tion was statistically significant [index = − 0.014, 95% CI (− 0.031, − 0.006)], indicating that the strength of these indirect effects is moderated by a CEO’s moral values. Fol- lowing the recommendation by Becker (2005), we tested our hypothesized model without any control variables to determine whether inclusion of these variables may have optimized fit. The pattern of results when testing the model without control variables remained essentially unchanged from the full hypothesized model [sequential indirect effect: b = 0.159, 95% CI (0.057, 0.282); index of moderated media- tion = − 0.015, 95% CI (− 0.032, − 0.008)].

Taken together, these results provide support for our hypothesized model and suggest that CEO positive beliefs about diversity influence the implementation of organiza- tions’ diversity practices through both enhanced CEO pro- diversity behavior, and in turn, more favorable perceptions of the CEO’s commitment to diversity from the perspective of their HR manager. The strength of this mediating chain, however, at least partly depends on the CEO’s moral values. CEO positive beliefs about diversity were found to exert a stronger influence on pro-diversity behavior, and ultimately

Table 3 Direct and indirect effects of ceo positive beliefs about diversity on the implementation of organizational diversity practices

Confidence intervals (CIs) of indirect effects based on 10,000 bias corrected bootstrap samples. Unstandardized coefficients are reported. N = 278 (listwise) a 0 = male, 1 = female b 0 = firm not covered under Employment Equity (EE) Act, 1 = firm covered under EE Act X independent variable, M1 first mediator, M2 second mediator, W moderator, Y dependent variable. PDB Pro-Diversity Behavior; PCC Per- ceived CEO Commitment to Diversity; ODB Organizational Diversity Practices *p < 0.05; **p < 0.01; ***p < 0.001

PDB (M1) R2 = 0.41***

PCC (M2) R2 = 0.22***

ODP (Y) R2 = 0.51***

b (SE) b (SE) b (SE)

Positive beliefs about diversity (X) 1.11*** (0.11) 0.11*** (0.03) 0.22 (0.14) Pro-diversity behavior (M1) – 0.06*** (0.02) 0.21*** (0.01) Perceived CEO commitment (M2) – – 2.34*** (0.26) CEO moral values (W) 0.01 (0.13) – – X ×  W − 0.06* (0.03) – – CEO gendera 0.16 (1.80) − 0.07 (0.44) − 8.97*** (1.84) CEO age 0.22** (0.06) − 0.06** (0.02) − 0.16 (0.07) CEO position tenure 0.09 (0.05) 0.00 (0.02) 0.00 (0.06) HR manager gendera − 1.66 (0.90) − 0.06 (0.22) − 1.59 (0.94) HR manager age 0.06 (0.05) 0.01 (0.01) 0.09 (0.05) Organization size 0.01 (0.01) 0.01 (0.01) 0.01 (0.01) Employment equity statusb 1.39 (0.95) − 0.20 (0.23) 6.09*** (0.99)

Probing indirect effects Point estimate (95% CI)

Pos. beliefs about diversity → pro-diversity behavior → org. diversity practices 0.230 (0.091, 0.390) Pos. beliefs about diversity → perceived CEO commit. → org. diversity practices 0.239 (0.092, 0.393) Pos. beliefs about diversity → pro-diversity behavior → perceived CEO commitment → org. diversity practices 0.150 (0.050, 0.259)

Fig. 2 CEO moral values as a moderator of the relationship between positive beliefs about diversity and pro-diversity behavior

446 E. S. Ng, G. J. Sears

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the implementation of diversity practices, when the CEO reports lower moral values. Consistent with the compensa- tory effect proposed at Stage 1 in our model, this pattern of moderated mediation appears to be owing to the stronger influence of CEO moral values on the display of CEO pro- diversity behavior when they possess less positive (vs. more positive) beliefs in diversity.

Discussion

Although CEO commitment has been touted as crucial to organizational diversity efforts, we know little about how CEOs signal their priorities and mobilize key organizational actors to implement diversity management. Drawing on organizational sense-making literature, we tested an integra- tive model in which CEO beliefs about diversity were theo- rized to predict the implementation of organizational diver- sity practices through two consecutive mediating steps—via greater CEO engagement in pro-diversity behavior, and through higher CEO commitment as perceived from their respective HR manager. This finding provides an important contribution to diversity management literature as it not only demonstrates that a CEO’s words and actions matter in set- ting the stage for the implementation of diversity initiatives, but their HR managers’ interpretation of these words and actions also plays an integral role in determining whether diversity management practices are in fact implemented.

Interestingly, we found that when CEOs have less posi- tive beliefs about diversity, higher moral values were asso- ciated with increased pro-diversity behaviors. Conversely, this amplifying effect of moral values was less evident when CEOs already report more positive beliefs about diversity. Although workforce diversity can potentially benefit the organization in economic terms, it does require a signifi- cant amount of resource investment (e.g., time and finan- cial commitment) before the benefits of workforce diversity materialize (Robinson and Dechant 1997). As a result, CEOs who hold less positive views of workforce diversity may not be motivated to implement diversity practices unless they view themselves as having a moral obligation to do so. Our finding also points to the pivotal role of moral values in driving CEO diversity beliefs when the organizations they lead lack economic motives or mandates (e.g., in the public or nonprofit sectors). Indeed, Ng and Wyrick (2011) sug- gest that in the absence of instrumental values, CEOs may draw from their moral values and continue to support social justice issues such as diversity management.

On the basis of our exploratory work, we suggest that future research should further examine the influence of moral values and related normative constructs (e.g., moral identity) in shaping managerial decision-making processes related to the diversity. Although some studies have explored

the influence of these variables on specific employee atti- tudes and behaviors (Aquino et al. 2009), few studies have investigated their effects on managerial decision-making processes and policy decisions. Likewise, additional research is needed to ascertain how different motives for diversity management (instrumental, normative, affective) may influ- ence the development and implementation of organizational diversity practices. The role of affective motives (e.g., Ng and Wyrick 2011) in particular has been understudied and should be explored in future research. For example, CEOs may be committed to diversity out of a desire to leave a posi- tive legacy or for ego purposes. Moreover, while results from this study suggest that moral values may provide a compen- satory effect for low instrumental motives (i.e., less positive beliefs in diversity), additional research is needed probing potential interactive effects of these motives.

Overall, our model suggests that for diversity practices to be implemented, CEOs first must make sense of the value of increasing diversity in the workplace and form positive beliefs about workforce diversity. Although many CEOs are supportive of diversity management, these beliefs often do not translate into tangible organizational policies and prac- tices because HR managers face multiple and competing organizational demands in addition to managing diversity. In this regard, our results suggest that through a sense-making process, CEOs must first convey their priorities and support for diversity management through visible behaviors (e.g., words and actions). Following these cues, managers will in turn develop expectations on what is important for the CEO and organization. If CEOs are perceived to be committed to diversity, HR managers will then take steps to initiate or expand the scope of diversity practices implemented in the organization. Taken together, these findings provide valuable insight into how CEOs and HR managers contribute to the implementation of diversity management practices and high- light that it is important to take a process-oriented perspec- tive to better understand how organizational actors shape the adoption and enactment of HR policies and practices.

Our results also underscore that both CEOs and HR man- agers play a pivotal role in contributing to the implementa- tion of organizational diversity practices. Although previous work has suggested that CEO commitment and support are important for effective diversity management (Gilbert and Ivancevich 2000; Rynes and Rosen 1995) few studies have empirically tested this proposition and, in particular, the mechanisms by which this occurs. Given the more opera- tional nature of their work role, a number of researchers (e.g., Abramovich and Traavik 2017; Guillaume et al. 2014; Tatli and Özbilgin 2009; Tatli et al. 2015) have called for a stronger emphasis on the role of HR and line managers in implementing diversity management practices. Our findings build on recent work indicating that despite CEO directives, HR managers exercise discretion over whether and how to

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implement diversity initiatives (e.g., Wangrow et al. 2014). Moreover, Guillaume et al. (2014) argue that managers rein- force the CEO’s message on the importance of diversity to the organization, facilitating “buy-in” from other organiza- tional members. This may partly explain why HR managers’ perceptions of their CEO’s commitment exerted a significant mediating influence in our model.

Implications for Management and Organizations

CEOs frequently make speeches about the need to manage diversity, however, in some cases, managers and organiza- tional members may perceive these messages as more of an exercise in good public relations (i.e., aimed at improv- ing a firm’s reputation with customers and investors) than being truly authentic. In order for managers to truly pri- oritize diversity management practices over other com- peting demands, they must perceive their CEO to be ear- nestly committed to diversity. Our findings show that while CEOs’ pronouncements about diversity (e.g., highlighting the importance of diversity in public speeches, communi- cating about diversity to employees) matter, CEO’s actual behaviors must reinforce statements delivered in public. In this respect, just as CEOs must make sense of the external environment to cue them on the need to manage diversity, HR managers must similarly interpret the CEO’s words and actions as supporting and prioritizing diversity management. Moreover, although CEO support is essential, it is insuffi- cient for organizations to truly embrace diversity. Managers, acting as change agents, must buy into the CEO’s vision and values for the organization to fully and effectively imple- ment diversity management. In this regard, HR managers play a critical role in the adoption and implementation of diversity management policies and practices. Taken together, our study demonstrates that both CEO and HR manager sup- port are crucial for organizations to successfully implement organizational change.

It is important to note that CEOs may not always form positive beliefs about diversity, especially when they per- ceive the costs associated with implementing diversity management programs to exceed their benefits. When this occurs, CEOs with less pro-diversity beliefs but who other- wise espouse higher moral beliefs (i.e., believe in fairness and social justice) may still exhibit pro-diversity behaviors. This finding is particularly noteworthy as it underlines that CEO pro-diversity behavior may derive from one’s beliefs and values, as well as contextual sources, and it is ultimately the CEO’s behavior that cues organizational members that their efforts to implement diversity practices will be sup- ported by the organization. Our study extends the work of Buttner et al. (2006, 2007) by demonstrating that although

CEO awareness and attitudes towards diversity are critical in diversity management efforts, moral values can significantly enhance a CEO’s commitment to diversity when they hold less positive beliefs about diversity. Moreover, our results indicate that CEOs must visibly demonstrate pro-diversity behaviors for organizational members to embrace these efforts and for diversity practices to be implemented.

Limitations and Directions for Future Research

A few limitations should be noted to put our research in context. First, although there is a strong theoretical basis for the model tested, the cross-sectional design of this study limits the extent to which causal inferences can be made. For example, it is possible that CEO beliefs (or behaviors) and the implementation of workplace diversity practices may be reciprocally related. Likewise, while our findings suggest that CEO behaviors (i.e., words and actions) may influence the actions of their managers, it is also possible that CEOs who are positive about diversity attract managers who share the same beliefs. Thus, CEOs may hire managers who share their own values and who are more likely to align them- selves with the CEO. We encourage future studies to adopt longitudinal designs to test this possible similarity bias and to enable more direct assessment of the causal direction of the relationships tested. A second limitation is that we only focused on HR managers and not line managers. Although HR managers play a critical role in both designing and implementing diversity practices, middle (line) managers are also instrumental in their implementation. Further research is needed exploring how line managers’ beliefs and values contribute to the implementation and effectiveness of work- place diversity practices. Third, our response rate for the study (22.3%) is somewhat low compared with other organ- izational studies. However, when the target sample (i.e., CEOs and HR managers) is considered, this response rate is comparable to other studies involving senior leaders (Baruch 1999; Hancott 2005). The standard deviation (SD = 10.25) for our focal dependent variable (implementation of diver- sity management practices) also indicates substantial vari- ation on this measure, signaling that non-response bias was likely not a significant concern in this study. Nevertheless, findings from this study should be interpreted with this response rate in mind. Finally, although our study was quite representative of the demographic profile of CEOs and HR managers in Canadian organizations, a large majority of the CEOs in our sample were white males. Future studies should examine whether demographic similarities (and differences) between CEOs and HR managers may influence the imple- mentation of diversity practices. Studies using diverse sam- ples conducted in different countries and cultural contexts

448 E. S. Ng, G. J. Sears

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will advance our understanding of the generalizability of these findings.

Compliance with Ethical Standards

Conflict of interest The first author gratefully acknowledges the sup- port of the F.C. Manning Chair in Economics and Business, Rowe School of Business, Dalhousie University, and SSHRC Insight Grant 435-2016-1227.

Ethical Approval All procedures performed in studies involving human participants were in accordance with the ethical standards of the insti- tutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.

Informed Consent Informed consent was obtained from all individual participants included in the study.

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