Why do some homogeneous groups face backlash for lacking diversity, while others escape censure? We propose and show that a homogenous group’s size changes the way it is perceived and whether decision makers pursue greater diversity in its ranks. We theorize that people make different inferences about larger groups than smaller ones—with downstream consequences for diversity management—due to Bayesian reasoning. Because each member of a group represents the outcome of a hiring decision, larger homogeneous groups signal a diversity problem more strongly than smaller homogeneous groups. We test our theory across three pre-registered experiments (N=4,283), showing that decision-makers are more likely to diversify larger homogeneous groups than smaller ones, and that larger homogeneous groups are viewed as (i) more likely to have resulted from an unfair selection process; (ii) less diverse; (iii) more likely to face diversity-related impression management concerns; and (iv) less open to the influence of newly added underrepresented group members. Further, (i)-(iii) mediate the relationship between homogeneous group size and decisions to diversify a group. We extend our findings to the field with a study of S&P 1500 corporate boards, showing that larger homogeneous boards are more likely to add women or racial minorities as new directors. Larger all-male boards and all-White boards are also significantly rarer than expected, suggesting that decision-makers work especially hard to diversify larger homogeneous groups. Our findings highlight how group size shapes diversity-related perceptions and decisions and shed light on mechanisms that kickstart diversification efforts in homogeneous groups.
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