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Asian-Americans Are Often Hired To Save Companies — Here's Why

Asian-Americans are underrepresented in corporate leadership, but a study found they're more likely to be hired at struggling companies.

By: Cat Sandoval

Posted at 8:58 PM, Sep 26, 2018

On its surface, it may sound good for diversity: A new study finds failing companies often to turn to Asian-American leaders when their businesses are in decline. But the American Psychological Association says that's probably due to the stereotype that Asians are self-sacrificing.

"This silver lining is not necessarily something that helps Asian-Americans as a group," said lead researcher Seval Gündemir.

In a study published in the Journal of Applied Psychology, Gündemir and her team looked at about 5,000 American CEOs over the last five decades. They focused their study on East and Southeast Asians. Researchers found that "despite high levels of education and income, Asian-Americans remain underrepresented" in leadership roles, except when a company is in decline. Asian-Americans were more than twice as likely to be appointed to leadership positions during troubling times. Gündemir says, This isn't really an opportunity.

"First of all, very few companies go through decline. In our study, only 12 percent of all companies were going through a decline, so that means that Asian-Americans are preferred in situations that are really infrequent to begin with. And secondly, we know that being appointed in times of decline is not necessarily something that helps individuals' careers, because it's really hard to actually make the company succeed again," said Gündemir.

Gündemir says it's important to understand that stereotypes, even ones that seem positive, hide underlying problems that perpetuate discrimination.

And this isn't just an Asian-American issue. A separate study found that women were often appointed as CEOs to lead failing companies, leaving their reputations at risk. Think of Marissa Mayer from Yahoo! It happens often enough the phenomenon has a name.

"It's what we call the glass cliff," Fortune Magazine's Jennifer Reingoldsays. "You sort of inch your way up there, and then you slide off of it, and it can harm other people."

And Asian-Americans and female CEOs often don't stay in their roles very long after they "save" a company. Some studies suggest they don't serve as long as their white male counterparts. This setup to fail further reinforces the stereotypes and that idea that white men are better leaders. Think of Ellen Pao, former "interim" CEO of Reddit, whose abrupt departure left others wondering if she did "plunge off a glass cliff."

And it's not just the business world. Utah State University researchers analyzed 30 years of NCAA men's basketball and found that minorities were promoted more than whites to head coach losing teams.

"We should be aware of these types of stereotypes," Gündemir said. "In times of decline when decision-makers are actually appointing leaders, they should be aware of these type of stereotypes that can be activated. ... We also think it's really important that these decision-makers also remain very cognizant of these sort of biases and manage their expectations."