Theories suggest that Diversity Management (DM) is a 'double edged sword', providing companies and their workforce with advantages, but also disadvantages. By way of a mixed methods approach, including interviews with Human Resource managers and ethnic minority employees, this study analyzed gaps and correspondences between theory and practice of DM in Austria, concentrating on ethnic diversity. The empirical findings indicate a strong correspondence with internationally accredited theory and practice of DM. However, some gaps could be identified, for example, that, migrant employees felt that the integration into the company workforce was partly inefficient. Recommendations are given as to bridge these gaps, by suggesting further DM initiatives ('mentoring up' programmes, intercultural trainings, the inclusion of ethnic minority members in key positions, 'cross-company' approaches, or making ethnic DM also an issue for trade union activities).