PurposeThe purpose of this paper is to use an institutional theory (IT) approach to analyse the institutional context for diversity management (DM) in Chile, El Salvador and Guatemala, the influence of such a context on the DM issues that organisations’ face, and the DM practices that firms implement.Design/methodology/approachFocus groups and a survey are used to assess managers and workers’ perceptions about DM in their countries, while an analysis of the content of firms’ web pages is used to assess the formal public information about DM provided by firms.FindingsResults suggest prevalence of perceptions, among both managers and employees, of discrimination at the workplace, facilitated by cultural forces that undervalue human diversity. Firms’ DM responses seem to be led by multinational companies, and focussed on fighting discrimination, facilitating inclusion and pursuing external legitimacy.Originality/valueThis study is among the first to analyse DM in Latin American organisations. Furthermore, three studies, with different methodologies, support several IT propositions that emphasise the role of institutional forces in explaining organisations’ implementation of DM practices. The relevance and challenges of developing DM programmes in Latin America are discussed.