Case | HBS Case Collection | December 2004 (Revised April 2006)

Managing Diversity at Cityside Financial Services

by Robin J. Ely and Ingrid Vargas

Abstract

Cityside Financial Services, a disguised consumer bank, serves both a largely African-American urban community and a more affluent, predominantly white clientele. To match the gender and racial makeup of its staff to that of its customers, Cityside's sales division implemented an aggressive affirmative action hiring program. The program succeeded in raising the numbers of women to 50% of all employees and of African-Americans to 53% of middle managers and 25% of executives. Cityside operated a profitable business with high customer satisfaction rates that were widely perceived as a successful model of the "business case for diversity." Therefore, the bank's leadership was mystified to discover growing resentment and demoralization among its African-American employees.

Keywords: Selection and Staffing; Situation or Environment; Race Characteristics; Employees; Gender Characteristics; Customer Satisfaction; Diversity Characteristics; Cross-Cultural and Cross-Border Issues; Banks and Banking; Banking Industry;

Citation:

Ely, Robin J., and Ingrid Vargas. "Managing Diversity at Cityside Financial Services." Harvard Business School Case 405-047, December 2004. (Revised April 2006.)