Recent work has suggested that diversity in the workplace may play a role in determining organizational performance (Choi and Rainey 2010; Pitts 2005). However, there was no consistent finding regarding the effect of diversity in the composition of organizational groups on performance. This indicates the impacts of organizational-level diversity on organizational outcomes are not still fully addressed with mixed finding in the literature. Previous studies have shown that while diversity promotes productivity and creativity, but it also drives task and emotional conflict. More specifically, task-related diversity (e.g., tenure, educational backgrounds) was found to have positive effects on organizational performance, whereas bio-demographic diversity was found to have negative, or no effects, on organizational performance (Choi and Rainey 2010; Pitts 2005; Webber and Donahue 2001).
The present study is intended to explore the moderating/mediating variable which reinforces, or connects, the effects of diversity in socio-demographic on organizational performance. Specifically, this study pays particular attention to the role of diversity management in moderating the relationship between diversity and cooperation. There are two competing theories pertinent to the discussion of diversity. According to social identity theory, individuals are more likely to cooperate when their social partners, or coworkers, are more closely related to the accomplishment of tasks. This corresponds to the existing finding on the negative effect of racial/ethnicity diversity on organizational, or team-level, performance. In contrast to, social exchange theory expects individuals are more likely to cooperate if there occurs reciprocity from their interactions and exchanges. In this context, the theoretical assumption of the role of diversity in improving organizational performance, through processes of promoting and enhancing the exchange of ideas is supported, has been acknowledged among scholars. However, those findings have been produced mainly from studies using diversity measures (e.g., heterogeneity, equity, etc.) as a situational condition, but less focused on managerial practices such as diversity management and diversity climate. Considering the role of management in preparing work environments for better diversity climate, the shift of lens on diversity from a given situation to manageable factor can provide a better understanding of the role of diversity. Additionally, the present study investigates the moderated mediating role of diversity management, in connecting the link of diversity to organizational performance, while controlling that different types of diversity (e.g., racial/ethnicity, age, tenure) have different effects on cooperation, and further organizational performance.
The hypothesized relationships between diversity, diversity management, cooperation, and organizational performance will be examined using data from drawing from Central Personnel Data File and the Federal Human Capital Survey (now, Employee Viewpoint Survey) from 2006-2013. By aggregating individual response to organizational-level data, this study established a set of panel data with 6 waves. The results will show that cooperation mediates the moderating effect of diversity management in deciding the impact of diversity on organizational performance. Overall, this study demonstrates a new way of assessing the impact of diversity management and a better understanding of diversity, cooperation, and organizational performance. Implications for theory and practice in public management studies are delineated.
