Effects of Ethno-Cultural Diversity on Organization Performance: A Case of Kenya

Abstract

Due to globalization, today's cultural diversity has increased greatly. As a result, the cultural background of employees in the organization is also very diverse, which is recognized as a major variable that affects organizational performance. Particularly, organizations that are in ethno-culturally diverse regions have to put up more effort to accommodate each ones diversity and yielding positive results at the same time. This research sought to find out how ethno-cultural diversity would affect the organizational performance from a case of Kenya. Specifically, the research focused on how these diversities bring confusion in the working environment and have impact on the individual intension of cooperation and how they ultimately affect organizational performance. Through path analysis, the following results were obtained. First, religion diversity and language diversity were both found to positively affect uncertainty in working environment, while they did not have significant effect on individual intention of cooperation. Moreover, uncertainty in working environment was shown to have a negative effect on performance while individual intention of cooperation affected performance positively. In other words, diversity in the organization has increased uncertainty in the working environment of the organization, which can ultimately be seen as having a negative impact on organizational performance. The study also discussed theoretical and practical implications of the findings.