Diversity climate perceptions and its impact on multicultural team innovation and performance

• Published in: Measuring business excellence 2020-06, Vol.24 (3), p.301-318
• Main Authors: Kadam, Raavee, Rao, Srinivasa A, Kareem Abdul, Waheed, Jabeen, Shazi Shah
• Format: Article
• Language: English
• Subjects: Cognitive ability; Competitive advantage; Creativity; Employees; Globalization; Hypotheses; Multiculturalism & pluralism; Teams; Workforce; Workplace diversity
• ISSN: 1368-3047; 1758-8057
• DOI: 10.1108/MBE-04-2019-0037

Purpose This study aims to examine the influence of diversity climate perceptions (DCPs) on team member’s contribution to team innovation and team performance in a multicultural team (MCT). The authors also investigate the moderating effect of cultural intelligence on these relationships. Design/methodology/approach The authors draw upon the interactional model for cultural diversity to build their hypotheses. Data was gathered from 43 teams consisting of 217 members using a structured questionnaire. Ratings were obtained from both team members and supervisors. The data collected was analyzed using structural equation modeling. Findings Results indicated that when team members have positive DCPs, it had a positive impact on their innovation and performance in the team. Cultural intelligence was also found to have a direct impact on team member innovation but not on team member performance. Furthermore, cultural intelligence was found to positively moderate the DCPs – team member performance relationship but not the DCPs – team member innovation relationship. Practical implications Managing diversity is a key concern for organizations worldwide given the exponentially rising cultural diversity within the workforce. This study would enable practitioners to understand that developing positive DCPs and cultural intelligence of team members are critical to the success of MCTs. Originality/value Literature has documented mixed results pertaining to team diversity and its effect on performance, resulting in scholars urging the need to explore how the negative effects of team diversity can be mitigated. This research establishes that positive DCPs and cultural intelligence as two key factors contributing to the performance of MCTs.