Leeds Faculty Research Investigates the Impact of Race on Business and Business on Racial Equity
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Leeds School of Business faculty are involved in a wide range of research projects that are advancing our understanding of business, and leading to insights that will help companies become more resilient, inclusive and sustainable. Here are some of the incredible thought leaders with whom we at the Center for Ethics and Social Responsibility (CESR) have the privilege to work:
Stefanie K. Johnson is an associate professor of management at the Leeds School of Business and was just named to the 2020 Thinkers50 Radar list. She is the author of the bestselling new book Inclusify which helps managers build diverse and inclusive teams. Her Inclusify Leadership Matrix is an interactive tool that let’s users benchmark their own leadership approach to diversity. She writes “This book is for leaders who understand that diversity is a reality, but [who] just don’t know how to lead in a way that maximizes its benefits and gets the most out of their teams. My mission in life is to help leaders examine their own lives and behaviors through a stronger lens than the one most of us have used until now, so the path to Inclusifying becomes clear. Everyone has the desire to be themselves while being part of the team. In a competitive talent market where engagement drives retention and innovation is the key to continued success, leaders must find ways to transform diverse groups into Inclusifyed teams – or those leaders won’t survive.”
In this July 7, 2020 article in Marketwatch Stefanie turns her attention to the urgency of the current moment and looks at the gap between what companies are saying about their values to their customers, and what they are actually doing to support diversity within their organizations. She argues that a true commitment to inclusivity requires policies and procedures at every level of the company from recruiting, training and promotion practices, to transparency and accountability, to culture. Three years after the #Metoo movement, Stefanie asks what it was that successful companies did, and what lessons can be learned for companies ready to make a commitment to doing better on racial diversity and equity given today’s renewed focus on the #BLM protest movement.
In a new working paper titled Mortgage Amortization and Wealth Accumulation, Asaf Bernstein, assistant professor of finance at the Leeds School of Business, and co-author Peter Koudijs, Stanford Graduate School of Business, examine the role of home ownership (and how it is financed) in wealth accumulation. The common wisdom has been that owning a home is a path to financial security. Asaf and Peter argue that it is actually the mortgage, not just the house itself, which builds wealth. By forcing repayment, mortgages force savings. And because you have to wait to cash out those savings until you are older (mortgages are typically 15-30 years long) mortgages function similarly to a 401K. Access to a mortgage, they conclude, is therefore critical for wealth building.
Black Americans who have been discriminated against or who don't have the ability to buy a house for other reasons can struggle to build intergenerational wealth. Asaf explains, "our findings may help explain the black white-wealth gap. The existing literature attributes this gap, at least in part, to historical differences in homeownership driven by differential access to financing (ex. Charles and Hurst 2002; Appel and Nickerson 2016; Aaronson et al. 2017; Anders 2018; Krimmel 2018). Our results suggest that it is not just the ability to purchase a home, but also the differential access to mortgages, usually linked to a fixed amortizing schedule, that can explain wealth differences."
Sabrina Volpone, assistant professor organizational, leadership, and information analytics PhD Program Director at Leeds studies diversity in the workplace with a focus on how employees with marginalized identities manage those identities at work. Her paper (published in the Journal of Applied Psychology), Bargaining While Black: The Role of Race in Salary Negotiations, with co-authors Morela Hernandez, University of Virginia, Derek R. Avery, Wake Forest University and Cheryl R. Kaiser, University of Washington looks at how salary negotiations perpetuate race-based income inequality. The paper argues that “Black job seekers are expected to negotiate less than their White counterparts and are penalized in negotiations with lower salary outcomes when this expectation is violated; especially when they negotiate with an evaluator who is more racially biased (i.e., higher in social dominance orientation.).” In other words, their research suggests that White managers punish Black job seekers for self-advocacy in salary negotiations with lower wages.
You can hear Sabrina talk about the long lasting implications of companies’ responses to the pandemic for diversity in the workforce as part of an upcoming panel discussion Diversity, Equity and Inclusion During a Global Emergency. Join her, C. Parker McMullen-Bushman, VP of Community Engagement, Education and Inclusion, The Butterfly Pavilion and Tamarah Saif, VP of Human Resources at Charlotte's Web, HR, OD, Talent and Culture Leader, July 23 from 2-3pm for this conversation.