Diversity in leadership positions is an important theme within the organizational and international management contexts, especially in regards to research. The purpose of the study was to determine the links between employee retention and management's ethnic diversity within a Swedish organizational context. This was done based upon the foundational theory of social identity theory (Tajfel & Turner, 1986), and followed a qualitative study based around six different interviews. After these interviews were undertaken and analyzed, it was found that employees' loyalty and retention are indeed impacted by the ethnicity of their immediate supervisors. This was found to be especially true among those who were non-ethnically Swedish, or not of the ethnic majority in the country. By understanding and integrating ethnically diverse people into leadership, increases in loyalty and retention were found to be possible, along with many other benefits that have been highlighted in previous studies, such as McKinsey and Companies (2020). This thesis also concludes that meaningful representation and inclusive organizational practices are necessary when it comes to increasing and fostering employees'loyalty and retention in ethnically diverse workplaces and environments. For the Swedish contexts, this means organizations either continue to or start to adopt stronger approaches towards diversity and equitable leadership makeups