With the changing demographic composition of the workforce, managing diversity in organizations is an important organizational function. Organizations have employed varying approaches to diversity management (DM), resulting in varying organizational outcomes. Meanwhile, researchers have called for more theoretical development within the DM area. We present a framework rooted in social and cross-cultural psychological research, to foster theory development and empirical testing in the area of DM. We also derive several propositions to guide future research on DM and note some boundary conditions that suggest research opportunities of their own. Our framework contributes a theoretical conceptualization that enhances our understanding of organizations’ DM efforts, integrates current typologies, and suggests new directions of inquiry for management scholars as well as guidelines for practitioners in the area. Copyright © 2012 John Wiley & Sons, Ltd.