Adoption of LGBT‐friendly practices: The effect of institutional pressures and strategic choice

• DOI: http://doi.org/10.1111/1748-8583.12251
• Author: Dorothea Roumpi,Panagiotis Giannakis,John E. Delery
• Date: 01 November 2020
• Published date: 01 November 2020

SPECIAL ISSUE

Adoption of LGBT-friendly practices: The effect of

institutional pressures and strategic choice

Dorothea Roumpi

1

| Panagiotis Giannakis

2

| John E. Delery

3

1

School of Labor and Employment Relations,

Pennsylvania State University, Pennsylvania,

USA

2

Department of Geosciences, University of

Arkansas, Arkansas, USA

3

Department of Management, University of

Arkansas, Arkansas, USA

Correspondence

Dorothea Roumpi, Pennsylvania State

University, School of Labor and Employment

Relations, Keller Building 507C, University

Park, PA 16802, USA.

Email: dzr352@psu.edu

Abstract

This study explores contextual and organisational factors

that influence the likelihood of adopting lesbian, gay, bisex-

ual, and transgender (LGBT)-friendly practices. Drawing on

institutional theory, we hypothesise that state laws, state

conservativism, and localised LGBT-friendliness density will

have a direct effect on the adoption of LGBT-friendly prac-

tices. Given the observed variation in the adoption of these

practices, we also draw on strategic choice and the upper

echelons perspective and hypothesise that the effect of

institutional mechanisms is moderated by the beliefs and

values of powerful organisational agents (chief executive

officers and boards of directors). Our sample consists of

201 U.S.-based Fortune 1000 companies over a period of

seven years, and we test our hypotheses using a Cox pro-

portional hazards survival analysis. Our results offer support

for the role of state conservativism and localised LGBT-

friendliness density in the likelihood of LGBT-friendly

practices adoption, as well as for the moderating role of

chief executive officer and board of directors' political

orientation.

KEYWORDS

institutional theory, LGBT-friendly practices, strategic choice,

survival analysis

1|INTRODUCTION

Demographic trends indicate that the workforce landscape is changing worldwide. Researchers emphasise that the

workforce of the 21st century is more diverse than ever (e.g., in terms of various visible and invisible dimensions;

Received: 28 May 2018 Revised: 13 June 2019 Accepted: 24 June 2019

DOI: 10.1111/1748-8583.12251

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Bell, Özbilgin, Beauregard, & Sürgevil, 2011; Kossek, Lobel, & Brown, 2006; Shore et al., 2009), subsequently forcing

organisations to become more inclusive (Nishii & Rich, 2014) in terms of both employees and other key stakeholders.

For a long time, however, organisations have focused mostly on more “visible”minorities and excluded sexual-

orientation from their discussion of inclusion (Priola, Lasio, De Simone, & Serri, 2014; Ragins & Cornwell, 2001;

Stavrou & Ierodiakonou, 2018).

As a result of this lack of consideration, lesbian, gay, bisexual, and transgender (LGBT) individuals have often

been excluded from certain organisational diversity initiatives and, in some instances, continue to experience work-

place discrimination and harassment, or prefer to conceal their sexual orientation to avoid negative workplace expe-

riences (Colgan, Creegan, McKearney, & Wright, 2008; Croteau, 1996; Köllen, 2016; Ragins, Singh, & Cornwell,

2007; Rumens & Broomfield, 2012; Schmidt, Githens, Rocco, & Kormanik, 2012; Ward, 2007). Research indicates,

for instance, that gay men receive significantly less pay (up to 32 percent less) than heterosexual men occupying sim-

ilar positions and possessing equivalent qualifications (Badgett, Lau, Sears, & Ho, 2007). Moreover, even though

more than 80 percent of LGBT employees in the United States have a spouse or a partner (Leppel, 2009) and, as

such, they have similar partnering and, in some cases, parenting

1

realities as do non-LGBT employees (Gibbs, 1989;

Levy, 1992; Tully, 1989), until recently, they have often been ineligible for family-friendly practices and benefits

offered to heterosexual couples (Bell et al., 2011; Croteau, Anderson, & VanderWal, 2008; Kaplan, 2014; Ragins &

Cornwell, 2001; Schmidt et al., 2012).

On this basis, discrimination and unequal treatment of employees due to their sexual orientation can and should

be better managed by employers. As King and Cortina (2010) emphasised, organisations, as agents who contribute in

shaping our societies (Margolis & Walsh, 2003), have the social obligation to serve the interests of their LGBT

employees. The imperative for enhancing LGBT inclusivity in organisations is further emphasised by taking into con-

sideration the percentage of LGBT individuals in the workforce. Although it is hard to specify the exact number of

LGBT employees, various studies have offered estimations of the percentage of employees who self-identify as

LGBT. These estimations, though they are likely to be underestimations (Coffman, Coffman, & Ericson, 2016), indi-

cate the percentage of LGBT employees ranges between four and 17 percent, making LGBT individuals a substantial

subset of the contemporary United States and worldwide workforce (Gonsiorek, Sell, & Weinrich, 1995; Gonsiorek &

Weinrich, 1991; Powers, 1996; Van Den Bergh, 2004; Zuckerman & Simons, 1996).

Besides the social responsibility organisations bear for providing an inclusive work environment, several scholars

have emphasised the business case for diversity (e.g., Stavrou & Ierodiakonou, 2018). Extant research shows that dis-

crimination and heterosexism (e.g., a climate that allows anti-gay jokes; Bell et al., 2011) in the workplace are associ-

ated with a number of negative work-related attitudinal and behavioural outcomes, such as decreased job

satisfaction and organisational commitment (Button, 2001; Ragins & Cornwell, 2001). In addition, researchers have

offered some support for the relationship between LGBT-friendly human resource management practices and vari-

ous organisational outcomes, such as stock market performance and enhanced organisational attractiveness for

LGBT and non-LGBT employees (Badgett, Durso, Mallory, & Kastanis, 2013; Pichler, Blazovich, Cook, Huston, &

Strawser, 2018; Wang & Schwarz, 2010). In a recent conceptual paper, Stavrou and Ierodiakonou (2018) argued that

the effects of LGBT-friendly practices on organisational outcomes are expected to occur via behavioural and attitudi-

nal employee outcomes, such as reduced anxiety, higher job satisfaction and commitment, and increased

organisational citizenship behaviours (Griffith & Hebl, 2002; Tejeda, 2006).

Despite the social imperative and the business case for diversity, LGBT-friendly practices continue to be viewed

by some as “socially stigmatised practices that are contradictory to the underlying organising principles of prevailing

institutions”(Chuang, Church, & Ophir, 2011, p. 191). LGBT-friendly practices remain “contested”(Trau et al., 2018)

or considered “taboo”topics (Colgan, Creegan, McKearney, & Wright, 2007) and, as Colgan, Wright, Creegan, and

McKearney (2009) note, it is still a challenge to get organisational support and commitment in regards to sexual-

orientation issues in the workplace. This controversy over LGBT-friendly practices has been rather convoluted in the

United States due to the existence of federal- and state-level legislative bodies. At a federal level, during the last

decade, significant legislative changes, such as the recognition of the right for same-sex marriages in 2016

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