The Impact of Gender Diversity and Disparity on Organizational Performance: Evidence from Korean Local Government-Owned Enterprises

• Author: Sunmin An,Soo-Young Lee
• Published date: 01 September 2022
• Date: 01 September 2022
• DOI: http://doi.org/10.1177/0734371X21990718
• Subject Matter: Articles

https://doi.org/10.1177/0734371X21990718

Review of Public Personnel Administration

2022, Vol. 42(3) 395 –415

© The Author(s) 2021

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DOI: 10.1177/0734371X21990718

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Article

The Impact of Gender

Diversity and Disparity on

Organizational Performance:

Evidence from Korean

Local Government-Owned

Enterprises

Sunmin An1 and Soo-Young Lee2

Abstract

Previous studies have shown inconsistent results regarding the impact of diversity

on organizational performance. To address this issue, it is imperative to not only

discuss diversity with regard to numerical balance, but also hierarchical composition

of groups. We categorized diversity into variety and disparity. Variety refers to the

categorical composition of groups and disparity indicates the vertical distribution

of power or the power dynamics between groups. Focusing on gender diversity,

we conduct empirical research on the impact of diversity on organizational

performance. We find that variety as well as disparity, that is, the evenly distributed

power between groups, have positive impacts on organizational performance.

These results imply that diversity is practically beneficial to organizations with

multifaceted characteristics. We suggest that beyond considering the normative

view, social movements promoting gender-equal employment in overall levels and

managerial positions should emerge and be discussed as a strategy to enhance

organizational performance.

Keywords

diversity, gender and public personnel administration, international public personnel

administration, affirmative action and equal employment opportunity

1Korea Research Institute for Vocational Education & Training, Sejong-si, Korea

2Graduate School of Public Administration, Seoul National University, Gwanak-gu, Seoul, Korea

Corresponding Author:

Sunmin An, Korea Research Institute for Vocational Education & Training, 370, Sicheong-daero,

Sejong-si, Korea.

Email: sunmin.an@krivet.re.kr

990718ROPXXX10.1177/0734371X21990718Review of Public Personnel AdministrationAn and Lee

research-article2021

396 Review of Public Personnel Administration 42(3)

Introduction

As increasing diversity becomes a social issue, both public and private organiza-

tions are required to increase diversity in their ranks (Kelly & Dobbin, 1998; Pitts

& Wise, 2009). Research on diversity for the last 50 years has been interested in

the impacts that increasingly diverse workforces have on organizations, and this

issue has been fostered by New Public Management (Mathews, 1998; Thomas,

1990; Williams & O’Reilly, 1998). Recent diversity research ultimately accounts

for more than 10% of the major articles published on public administration

(Carrizales & Gaynor, 2013).

Diversity, referring to the factors distinguishing oneself and others, has mainly

discussed in terms of gender, race, and ethnicity (Williams & O’Reilly, 1998).

Gender diversity, the focus of this study, has become one of the traditional categories

of research since the Civil Rights Act of 1964 was enacted in the United States as a

reaction to Affirmative Action (Pitts & Wise, 2009; Wise & Tschirhart, 2000).

Unfortunately, a large amount of research identifying the impacts of diversity still

provides conflicting results (Cox, 2001). These results face criticisms that “diversity

research does not seem to have moved past affirmative action” (Sabharwal et al.,

2016, p. 12), and this field of research should move beyond understanding diversi-

ty’s impacts on organizational performance “relying largely on some combination of

common sense and good faith” (Ely & Thomas, 2001, p. 229). Regarding studies on

our research focus, some report gender diversity is positively related to firm finan-

cial performance (Campbell & Mínguez-Vera, 2008; Herring, 2009), perceived

organizational performance (Choi & Rainey, 2010), job satisfaction (Choi, 2008),

and health (Wegge et al., 2008). However, conflicting results are also shown, relat-

ing gender diversity to negative task performance (Schneid et al., 2015), decreased

employee job satisfaction (Choi, 2013), and increased turnover behavior (Moon,

2018b). Mixed impacts are also identified: gender diversity is found to play a posi-

tive role in organizational effectiveness only when joined with group cohesion (Lee

& Farh, 2004), supportive management structure (Opstrup & Villadsen, 2015), and

transformational leadership (Moon, 2016). Alternatively, no effect is shown on orga-

nizational social capital (Moon, 2018b).

One possible explanation of these mixed results is that these studies disregard the

hierarchical distribution of organizational members. Until recently, it was believed

that a mere numerical imbalance between groups was the primary cause of discrimina-

tion in organizations (Ely, 1995). This belief led to the optimistic view that balancing

the numbers would end workplace discrimination. However, a higher employment rate

of a particular group does not guarantee their increased authority. This optimistic

belief ultimately leads minority groups to be employed only at the entry level in orga-

nizations (Williams & Bauer, 1994) and leads to frequent discrimination, such as that

imposed by the glass ceiling and glass cliff (Ryan & Haslam, 2007; Sabharwal, 2013;

Smith, 2015). This irony, we assume, shows that a simple numerical balance between

groups does not ensure an environment where both genders are equal and indicates

that it would be wise to “rethink looking beyond numbers” (Yoder, 1991).