In recent years, diversity has become a priority for many organizations. However, historically marginalized groups such as women and racial minorities continue to be heavily underrepresented in various industries as well as in the higher echelons of many organizations. In this dissertation, I examine factors that contribute to a continued lack of diversity in organizations. In Chapter 1, I demonstrate that the size of a homogeneous group has important consequences for diversity management. I theorize that people make different Bayesian inferences about larger groups than smaller ones, such that they are more likely to diversify larger homogeneous groups than smaller ones. I find evidence for our theorizing in a series of pre-registered experiments as well as analyses of archival data on S&P 1500 corporate boards. In Chapter 2, I theorize that people who belong to or create groups within organizations (insiders) perceive those groups to be more diverse than outside observers (outsiders). This may be due to insiders being influenced by motivated reasoning concerns to construe their groups as diverse. Across four experiments, I find that participants judge groups that they created or belong to (i.e., where they had insider status) to be more diverse than participants with no role in the group’s membership or creation (i.e., where they had outsider status). Consistent with my theorizing, I find that this effect is mediated by motivated reasoning. In Chapter 3, I examine how job-seekers value explicit ideological cues (signals revealing one’s overall political ideology) as well as implicit ideological cues (signals suggesting one’s position on a particular issue without explicitly conveying overall political ideology). Relative to explicit ideological cues, implicit cues may be less risky for job-seekers by creating uncertainty about their political leanings, which could reduce the likelihood of facing ideological discrimination. I show in a pre-registered, incentivized economic game that job-seekers perceive less cost in sending implicit ideological cues to an ideologically misaligned employer, relative to explicit cues. Together, this dissertation provides potential explanations for the continued lack of diversity in organizations.