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Purpose

The current research investigates the link between the presence of diversity and perceived ethicality of an organization.

Design/methodology/approach

Across two experiments with North American samples, we manipulate racial diversity in an organization. Study 1 tests the effect on perceived ethicality. Study 2 tests a moderated mediation model where diversity intention (i.e. whether diversity is due to internal culture or external compliance) has a moderated effect on perceived ethicality, with valuing diversity as the mediator.

Findings

We find that racially diverse organizations are associated with greater perceived ethicality because they are believed to value diversity more than racially homogeneous organizations. We also find an interaction such that diverse organizations are seen as valuing diversity more than homogeneous ones, with stronger effects when the diversity is an internal choice than when it is in compliance with an external mandate.

Research limitations/implications

Our research shows that with sufficient information perceivers attend not only to the presence of diversity but the underlying intentions when making ethical attributions.

Originality/value

We manipulate group composition to make causal claims about the effect of increased racial diversity on outside perceivers’ ethical attributions about an organization and investigate the role of diversity intentionality in this process.

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