Study: Asian-Americans more likely to be hired as CEO when a company is struggling

WASHINGTON — An international team of psychologists found evidence suggesting that Asian-Americans are more likely than other individuals to be hired to turn around troubled corporations — putting them in a position at much higher risk for failure.

The researchers point to racial stereotypes suggesting Asian-Americans — identified as those with roots from either China, South Korea, Japan, Vietnam and neighboring countries — are more self-sacrificing as a central reason behind the finding.

“It’s important to understand that some seemingly positive stereotypes about minorities may appear to be silver linings on the surface, but they often obscure underlying challenges that perpetuate discrimination,” says lead researcher Dr. Seval Gündemir, assistant professor of psychology at the University of Amsterdam, in a statement to the American Psychological Association.

For the study, Dr. Gundemir and his team collected the names of 4,951 CEOs from publicly traded companies in every major industry found in North American databases since 1967. They found only 41 Asian-American CEOs, despite the fact that Asian-Americans have been the fastest-growing minority group in the U.S. for a decade, accounting for 6 percent of the US population.

After examining a company’s financial track record and comparing it to when the CEO was hired, they found that Asian-Americans were hired 2.5 times as often during a company’s decline than when a company was successful. Conversely, whites, Hispanics, and African-Americans were not more likely to be brought in when a business was struggling.

The study also showed that Asian-Americans didn’t serve longer terms than white CEOs during a decline. When a company was successful, they were found to hold the position for only 2.8 years on average, compared to six years for white CEOs.

Researchers say that despite high education levels and income, Asian-Americans are still underrepresented in corporate leadership positions.

As for the stereotype that Asians are more self-sacrificing, a series of additional studies was conducted to confirm this theory.

The researchers had 101 random U.S. residents rate two fictitious CEO candidates: one Asian-American, and a white candidate. Participants consistently rated the Asian-American candidate as more self-sacrificing than the other candidate.

A similar study of 199 adults showed that Americans felt Asians were better candidates to take over a company if it was struggling.

Finally, in an experiment involving another 227 adults, half the group was shown a fake newspaper article about a successful company, while the other half read about a struggling company. Participants were asked to rate the importance of self-sacrificing behaviors by company brass, such as forgoing their bonus and working weekend shifts. After being shown two candidates to take over the company as CEO — Alex Wong and Anthony Smith — the study showed that people who read about the struggling company chose Alex Wong more often than those who read the story about the thriving company.

“It is our hope that this research can serve as a key first step to combat bias and inequality that affects Asian-Americans,” says Gündemir.

The study was published in Journal of Applied Psychology.

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