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Behavioral Advantages of Diversity: Strategies to make Inclusivity work in the Age of Corporate Social Justice

Author

Listed:
  • Julia M. Puaschunder

    (Columbia University, Graduate School of Arts and Sciences)

Abstract

We live in the age of Corporate Social Justice. After decades of advancements in behavioral economics and finance leadership, the time has come to highlight behavioral advantages of diversity. When people make decisions behaviorally with biases and quick error-prone irrationality, diversity can grant implicit means to overcome decision-making anomalies from rational choice. In particular, the present bias can be averted in opting for diversity, which is one of the most future-oriented choices as inclusivity is an innovatively-vibrant field of societal advancement in the age of Corporate Social Justice. Diversity preference for something new curbs repetitive choices and sunk cost fallacies when opting for inclusiveness of the new. Similarity preference biases that lead to suboptimally-limited choice ranges and inflexible considerations of already-known preferences as well as long-term formation of stereotypes and discrimination can be avoided by choosing what is new and different from the given in diversity implementation. Diversity management can also lower harmful social and cultural influences that imply conformity groupthink errors and tunnel vision leading to suboptimal choices and harmful consequences. In order for diversity to work and to reap the multifaceted behavioral benefits of inclusivity, this article also draws attention to three implementation strategies to make diversity flourish and foster meaningful inclusivity: (1) Bundling extremely diverse groups within networks and enhancing constructive exchange between representatives of diverse groups to foster the benefits of cross-pollination and creative ideas generation, (2) Diversification of human capital to profit from complementary skills enhancement, (3) Qualitative and quantitative diversity quality checks to ensure the authenticity of diverse representations within corporations in order to contribute to meaningful and positive societal change that diversity and inclusiveness are – in the end – foremost about.

Suggested Citation

  • Julia M. Puaschunder, 2022. "Behavioral Advantages of Diversity: Strategies to make Inclusivity work in the Age of Corporate Social Justice," RAIS Conference Proceedings 2022-2024 0233, Research Association for Interdisciplinary Studies.
    • Handle: RePEc:smo:raiswp:0233
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    References listed on IDEAS

    as
    1. Julia Puaschunder, 2020. "Behavioral Economics and Finance Leadership," Springer Books, Springer, number 978-3-030-54330-3, April.
    2. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Authenticity; Behavioral Economics; Behavioral Ethics; Behavioral Insights; Behavioral Advantages; Corporate Social Justice;
    All these keywords.

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