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

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.