The Effects of Corporate Mergers on Race and Gender Diversity in Management

Abstract

Although corporate mergers have become widespread and have changed employment conditions, little is known about their effects on workplace inequality. This study seeks to fill this gap by developing a theoretical framework to access not only whether mergers affect inequality but also how and why they do so. Results from the analyses of 45,598 establishments between 1983 and 2002 demonstrate that mergers reduce race and gender diversity in management position. Following mergers, the representation of white women, minority men, and minority women managers falls but that of white men rises. In addition, repeated merger experiences have negative effects on managerial diversity. It seems that mergers increase social inequality because women and minorities are more vulnerable to the restructuring process, and because organizational uncertainty created by mergers increases cognitive biases in employment.