The impact of organizational statements of support for the black community in the wake of a racial mega‐threat on organizational attraction and revenue

Abstract

AbstractWhen race‐related injustices occur in society, organizations can respond by sending supportive signals to prospective and current employees. Using signaling theory (Spence, 1973), the current study examines the outcomes associated with organizations' public declarations of support for the Black community following race‐related mega‐threats (Leigh & Melwani, 2019). In Study 1, prospective employees evaluated a specific organization (Ben & Jerry's) that publicly supported the Black community following race‐related mega‐threats. Those who perceived higher levels of organizational support for diversity and inclusion (POSDI) reported higher organizational attraction (OA). Study 2 described a fictitious organization that responded to race‐related mega‐threats by messaging support for either Black Lives Matter (BLM), Blue Lives Matter, All Lives Matter, or no social movement. Prospective employees perceived higher levels of POSDI when the company issued a statement in support of BLM (relative to the other movements), which in turn was associated with higher OA. Study 3 focused on current employees and examined how POSDI influences financial outcomes in real Fortune 500 companies. Organizations that issued statements publicly supporting the Black community following a race‐related mega‐threat received higher POSDI ratings by employees, which predicted increased organizational revenue, even after controlling for revenue prior to making the statements. In sum, organizations that signal public support for the Black community in the wake of a race‐related mega‐threat not only increase prospective employees' POSDI, but may also boost OA and, ultimately, financial revenue.