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  • 2020
  • Working Paper
  • HBS Working Paper Series

Shaking Things Up: Unintended Consequences of Firm Acquisitions on Racial and Gender Inequality

By: Letian Zhang
  • Format:Print
  • | Language:English
  • | Pages:68 
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Abstract

This paper develops a theory of how disruptive events shape organizational inequality. Despite various organizational efforts, racial and gender inequality in the workplace remains high. I theorize that because the persistence of such inequality is reinforced by organizational structures and practices, disruptive events that shake up old hierarchies and break down routines and culture should give racial minority and women workers more opportunities to advance. To examine this theory, I explore a critical but seldom analyzed organizational event in the inequality literature—mergers and acquisitions. I propose that post-acquisition restructuring could offer an opportunity for firms to advance diversity initiatives and to objectively re-evaluate workers. Using a difference-in-differences design on a nationally representative sample covering 37,343 acquisitions from 1971 to 2015, I find that although acquisitions lead to occupational reconfiguration that favors higher-skilled workers, they also reduce racial and gender inequality. In particular, I find improved managerial representation of racial minorities and women and reduced racial and gender segregation in the acquired workplace. This post-acquisition effect is stronger when (a) the acquiring firm values race and gender equality more and (b) the acquired workplace had higher racial and gender inequality. These findings suggest that disruptive events could produce an unintended consequence of increasing racial and gender equality in the workplace.

Keywords

Inequality; Diversity; Equality And Inequality; Mergers And Acquisitions

Citation

Zhang, Letian. "Shaking Things Up: Unintended Consequences of Firm Acquisitions on Racial and Gender Inequality." Harvard Business School Working Paper, No. 20-022, August 2019. (Revised January 2020.)
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About The Author

Letian Zhang

Organizational Behavior
→More Publications

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    • March–April 2020
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    An Institutional Approach to Gender Diversity and Firm Performance

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    • 2019
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    When Gender Diversity Makes Firms More Productive

    By: Stephen Turban, Dan Wu and Letian Zhang
    • January–February 2019
    • Organization Science

    Who Loses When a Team Wins? Better Performance Increases Racial Bias

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More from the Author
  • An Institutional Approach to Gender Diversity and Firm Performance By: Letian Zhang
  • When Gender Diversity Makes Firms More Productive By: Stephen Turban, Dan Wu and Letian Zhang
  • Who Loses When a Team Wins? Better Performance Increases Racial Bias By: Letian Zhang
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