The diversity washing dilemma: When signaling diversity enhances image and credibility – And when it backfires

Abstract

This study examines how different presentations of diversity influence perceptions of a company and whether discrepancies between diversity self-presentation and actual diversity cause backfire effects. Additionally, it explores whether these effects occur only in corporate self-presentation or also in product advertising. Two online experiments were conducted. In Experiment 1, participants viewed a company presenting itself as highly, somewhat, or not diverse, with perceptions measured before and after revealing its actual lack of diversity. Experiment 2 tested whether diversity claims in self-presentation or product advertising influenced perceptions, again measuring responses before and after revealing the company’s true diversity. Results show that presenting a company as diverse enhances its image, credibility, and behavioral intentions, whether through self-presentation or product communication. However, once a lack of diversity is exposed, perceptions of image and credibility decline, along with application and purchase intentions. Interestingly, companies that misleadingly claimed diversity still received higher ratings than those that were honest about their lack of diversity, but their credibility suffered more when the truth was revealed.