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This paper analyses the relationship between cultural diversity and workgroup outcomes (satisfaction with workgroup, and workgroup performance) in multicultural organizations, in the presence of moderating variables of intragroup conflicts (task, relationship and process conflicts). Literature review suggests that cultural diversity negatively affects workgroup outcomes and triggers conflicts. Analysis of empirical data collected from employees of multicultural organizations produces results in line with the literature and suggests that there is negative relationship between cultural diversity and workgroup outcomes, while intragroup conflicts have a strong moderating effect on the relationship between the two. Although the research implies that culturally homogenous groups have better outcomes, it is often impossible to assemble such groups in current corporate scenario. Therefore, targeted cross-cultural training programs may help individuals function well in culturally diverse groups by reducing conflicts and generating favorable group outcomes.
Organizations often rely on culturally diverse groups to coordinate operations across countries, decrease redundant functions, reduce product development time and bring together a diverse pool of expertise. Culturally diverse groups, however, may not live up to these expectations. Individual differences give rise to intra-group conflicts which hinder the group’s performance as well as the group members’ satisfaction with the group. The fact that homogenous groups hardly exist and heterogeneous workgroups are the need of today’s organizations, it is pertinent to analyze the element of conflict among members of a group and its effect on the group’s performance outcomes.
Pakistan, with its strategic geographical location and multicultural society, has been an interesting target for various international organizations that invest in this market and set up operations. These multinational organizations are bound to practice multicultural managements for effective operations (Islam, 2004). Local employees in such organizations are expected to work with people belonging to diverse nationalities who bring with them to the workplace, distinct cultures that effect outcomes of their workgroups. Another perspective of multiculturalism in Pakistani organizations is the presence of ethnic, gender based, religious, sectarian and geographical differences that affect relationships among people working in the same organization. It may be explained by the fact that women tend to face differential treatment at workplaces. People from different provinces in Pakistan generally differ in their attitudes and behaviors. Muslims tend to have a biased attitude towards non-Muslims, and sectarian differences cause major conflicts of interests (Zubair, 2006).
The current study tends to focus on such cross-cultural conflicts that affect workgroup outcomes at workplaces. The study is conducted in Pakistani setting upon national and international organizations.
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Significance of the Study
Almost no research has taken place in Pakistan to analyze the effects of cultural diversity at workplaces, despite of the fact that management of cross-cultural conflict is significant in achieving desired outcomes. Although multinational organizations do receive some attention as far as social research is concerned in various countries they operate in, the local Pakistani organizations do not consider themselves to be culturally rich, rather they tend to override the fact that ethnic and religious differences are silent destructors of workplace tranquility (Islam, 2004). The current study will significantly add to literary references based on multicultural issues in Pakistani organizations, and will serve as a preamble for future research on the subject.
The objectives of this research are two fold. Firstly, it investigates the relationship between cultural diversity and intra-group conflicts, and cultural diversity and workgroup outcomes, and the extent to which intra-group conflicts serve as mediator between cultural diversity and workgroup outcomes. Secondly, the findings of empirical analysis are applied to the Pakistani organizational context, where the nature of cultural diversity is not nation-based but ethnicity based, and is much more deep-rooted and invisible as compared to nation-based cross cultural differences.
Review of literature on the subject gives rise to the following research questions:
1. To what extent does cultural diversity in an organization affect the outcome of workgroups operating in that organization?
2. To what extent does intra-group conflict affect an employee’s satisfaction with and performance in a workgroup?
As more and more organizations cross national borders, there is a need to broaden their views on national behaviors. Organizations need to know more about the differences rather than concentrating on the similarities. Culture and subculture are probably the most important aspects in this change to global behaviors (Warner, Joynt, 2002). Culture, or cult, in Latin means a result of worship or inhibition on the mind. In the broadest sense, culture may be defined as “the result of human action” (Berthon, 1993). The definition that best fits the concept here is that culture is a “collective programming of the mind”, a social glue that holds people together.
The ways in which an individual responds to certain situations may be influenced by his cultural background. These are the ways he learned while growing up and watching those around him deal with situations. These ways are different for individuals brought up in different parts of the world, triggered by specific values, beliefs, norms, ethnicity, religion, interpersonal ways and behaviors. When individuals with such diverse mindsets come across, conflicts are bound to arise. Cultural differences cause conflict and, once conflict occurs, cultural backgrounds and experiences influence how individuals deal with conflict (Martin and Nakayama, 1999). Research has identified three significant approaches to understand conflict. One is the interpersonal approach which focuses on how cultural differences cause conflict and influence the management of conflict. The other two approaches, interpretive and critical, focus more on intergroup relationships and on cultural, historical, and structural elements as primary sources of conflict. A workgroup which contains culturally diversified individuals is prone to intra-group conflict, as each individual brings with him a distinct set of cultural practices which largely affect the ways in which he deals with work and interpersonal situations (Martin and Nakayama, 1999).
In the present day corporate scenario where organizations strive for competitiveness, the pursuit of success goes beyond economic or academic factors. An organizational climate which values cultural diversity, builds on it to tap creative resources for the purpose of innovation in problem-solving, and enhances each person’s potential which in turn, adds significant value to organizations (Canen and Canen, 2008). When organizations strive to create the most effective workgroups, they bring together individuals with relevant skills and capacities. The search for skilled employees may often result in the formation of culturally diverse workgroups. Despite the growing importance of cultural diversity in work groups, little research has been done about the relationship between cultural diversity and workgroup outcomes (Ayub and Jehn, 2006). This article builds upon the relationship between cultural diversity (Independent Variable) and workgroup outcomes (Dependent Variable), in the presence of intra-group conflicts (Moderating Variable).
The concept of culture has been defined in many different ways that variously emphasize its behavioral, symbolic, value-related, linguistic, historical, or geographical characteristics (Vodosek, 2007). Triandis (1996) proposed the concept of a cultural syndrome that may facilitate the understanding of culture and cultural differences. A cultural syndrome is defined as “a pattern of shared attitudes, beliefs, categorizations, self-definitions, norm, role definitions, and values that is organized around theme that can be identified among those who speak a particular language, during a specific period, and in a definable geographic region.”
Organizations often rely on culturally diverse groups to conduct operations across countries, decrease redundant functions, reduce product development time and bring together a diverse pool of expertise (Vodosek, 2007). Culturally diverse workgroups may not always serve all these purposes. Hofstede (1997) argues that culture is more frequently a source of conflict than of synergy and describes cultural differences as “a nuisance at best and often a disaster”. Culturally diverse groups are not only thought to be prone to conflict, researchers have also argued that culturally diverse groups experience more negative group outcomes than culturally homogenous groups because of in-group favoritism, prejudice against members of out-groups, errors in communication, and differing perceptions among group members (O’ Reilly, Williams and Barsade, 1998).
Research on diversity, in general, has found that diverse groups often prove ineffective at capitalizing on the potential benefits of their diversity for a variety of reasons (Ayub and Jehn, 2006). While diversity is generally found to have mixed effects on group outcomes, certain attributes like gender, age, race and nationality have been found to lead to negative workplace processes such as conflicts and performance outcomes (O’ Reilly, et.al. 1998). Cultural diversity management is an organizational answer to the need for competitiveness and to the increasing variety of the workforce. Seymen (2006) implies that the management of cultural diversity is a holistic focus in order to create an organizational environment that allows all the employees to reach their full potential in pursuing organizational goals. The essence of this concept is a whole, comprised of members of organizations possessing distinctive characteristics from each other, and these distinctions can contain plenty of visible or invisible factors.
Ayub and Jehn (2006) broadly define conflict as perceived interpersonal incompatibilities or discrepant views. While conflict is inevitable in groups and organizations due to the complexity and interdependence of organizational life, theorists have differed about whether it is harmful or beneficial to organizations (Jehn, 1995).
Researchers have identified three main types of conflict. The first type is relationship conflict, which is by definition, conflict about interpersonal incompatibilities among group members which typically includes tension, animosity, and annoyance among members within a group. The second type of conflict is task conflict which may develop in workgroups due to disagreements among group members about the content of the tasks being performed including differences in viewpoints, ideas, and opinions. The third type of conflict, process conflict, is defined as disagreements about logistical issues, such as the assignments of responsibilities or resources, or the setting of an agenda (Jehn, 1995; Passos and Caetano, 2005; Bono, Boles, Judge and Lauver, 2002; Moreno, Navaro, Zornoza, Ripoll, 2008).
A number of researchers suggest that culturally diverse groups may experience their group outcomes more negatively than culturally homogenous groups (Canen and Canen, 2008; Ayub and Jehn, 2006; Vodosek, 2007). The researchers argue that the discriminatory treatment of, prejudice against and unfavorable perceptions of dissimilar others, errors in communication and differing perceptions among group members, are more prevalent in culturally diverse groups than in culturally homogenous groups. Since such negative features are likely to harm a group’s processes, culturally diverse groups will experience more unfavorable workgroup outcomes than culturally homogenous groups. Combining the rationales of such findings, Vodosek (2007) anticipates cultural diversity to be negatively related to satisfaction with the group and perceived performance of the group. Satisfaction and performance have been identified as the two major indicators of group effectiveness and have been used frequently in the literature on intra-group conflict as outcome variables.
Cultural diversity and intra-group conflicts
Based on past diversity research, Ayub and Jehn (2006) propose that cultural diversity will lead to relationship conflict for three reasons: decreased relationship quality, decreased group integration, and increased categorization processes. The quality of interpersonal relationships is lowered as diversity increases in groups. Different nationalities in a workgroup can trigger intergroup discrimination just by the awareness that other nationalities are present since nationalities are often made stereotypically salient. For example, in a group composed of Americans working with Arabs or Chinese, cultural diversity will be associated with relationship conflict due to national category differences stimulated by members’ perception of national diversity (Canen and Canen, 2008). Group integration (the degree of connectedness or cohesion among group members) and member communication also suffer when diversity increases (O’ Reilly, et. al., 1998). This is also consistent with self-categorization theory (Turner, 1985) which states that dissimilarity hampers work unit friendships as a function of perceived differences among the members. The differences are likely to trigger categorization and stereotyping. Moreno, Navaro, Zornoza, Ripoll (2008) propose that relationship conflict reduces mutual understanding and goodwill, thus obstructing the completion of group tasks. It causes members to be negative, irritable, suspicious and resentful, which can have detrimental effects on the functioning of the group.
Cultural diversity can potentially be advantageous in task accomplishment. Hofstede (1997) observed that members with different perspectives in a group discussion enhance debates about task content. Individuals from different cultural, social and educational backgrounds bring with them a variety of information and ideas and are most likely to have different perspectives, skills, information, knowledge and talents. Being different in this sense can have a positive effect on group processes. National diversity can also be considered as social category difference that can bring diversity of ideas to the group since different national backgrounds bring in diverse sets of knowledge, expertise and wisdom (Canen and Canen, 2006). For example, a workgroup comprised of Arabs, Indians, and Germans will bring together a variety of task-relevant view points that are derived from their national traditions and different educational experiences. It is therefore, proposed that cultural diversity will lead to increased task conflict.
Culturally diverse workgroups experience process conflict as a result of having to deal with processes among dissimilar group members. O’ Reilly, et. al. (1998) indicated that diverse groups are more hindered by process difficulties than homogenous groups. Process conflict may arise for the following three reasons: (self) exclusion from procedural decision making, misunderstandings due to stereotypical biases, and misunderstandings due to language and communication issues. Dissimilarity is likely to be negatively related to workgroup involvement. Dissimilar members will be more inclined to withdraw from the group psychologically, perceive the group as less attractive, have less frequent communication with group members and thus contribute less to the task performance (Berthon, 1993). In culturally diverse workgroups, it may be difficult to bridge the differences in communication which will give rise to process conflict. Cross-national diversity is likely to increase miscommunication and potential conflict (Ayub and Jehn, 2006). Diversity based on national differences interferes with group processes to a much greater extent. This is because interaction with dissimilar others is often impregnated with misunderstandings and errors. This will lead to higher levels of process conflict in culturally diverse groups.
Cultural diversity and workgroup outcomes
A number of researches suggest that culturally diverse groups may experience their group outcomes more negatively than culturally homogenous groups (Hofstede, 1997; Warner & Joynt, 2002). Researchers argue that the discriminatory treatment of, prejudice against, and unfavorable perceptions of dissimilar others, as well as errors in communication and differing perceptions among group members, are most prevalent in culturally diverse groups. Individuals and groups that are diverse on demographic dimensions such as race, gender, age, education, tenure within an organization and functional background exhibit lower satisfaction, higher absenteeism and turnover (Martin & Nakayama, 1999). Satisfaction and performance have been identified as the two major indicators of group effectiveness and have been used in the literature on intra-group conflict as outcome variables (Vodosek, 2007).
Satisfaction has been explained in the literature as “a holistic, affective response to the success of behaviors that are selected based on expectations” (Park and Park, 2008). For group processes, satisfaction pertains to a socio-emotional experience and a sense of fulﬁllment about how well group members work together. Satisfaction with group processes can increase when group members have smooth interactions and minimize misunderstandings. Inequitable contributions or resource distribution among group members, and incompatibility among them, can negatively affect satisfaction in task-oriented groups. Given that perceived progress toward the group goal can affect member satisfaction regarding the group, unsuccessful or ineffective conﬂict management may negatively affect progress toward the group goal and interaction quality among members (Thomas, 1999).
A stream of research has treated the personnel composition of groups primarily in terms of the resulting process losses that prevent a group from reaching its performance potential. However, the effect of cultural diversity on work group performance is potentially much more complex than simply the study of cultural composition effects (Thomas, 1999). The workgroup potentially suffers from the differing perceptions, attributions, and communication patterns that vary by cultural backgrounds. Culturally heterogeneous groups are more likely to suffer from increased process losses and have lower group performance than would homogeneous groups (Park and Park, 2008). Alternatively, because of the different perspectives of group members, cultural heterogeneity may result in more creative and higher quality decisions (Moreno, et. al., 2008). Also, the expression of alternative views may raise the quality of group decision making and performance by increasing the attention of the group to the decision-making. Some evidence indicates that, over time, the process losses suffered by heterogeneous groups diminish (Chuang, Church and Zikic, 2004). This reduction in process loss results from the tendency of a group to try to reduce uncertainty by relying on customary ways of doing things and to become more homogeneous through shared socialization and group experiences. Thus, it may be said that effective management of cultural diversity in workgroups may lead to potential benefits and enhanced performance of the workgroup.
Intra-group conflict as mediator
Apart from the bivariate relationships between cultural diversity and conflict, and cultural diversity and workgroup outcomes, another aspect of the equation emerges which suggests that conflict may have a mediating effect on the relationship between cultural diversity and workgroup outcomes. Researchers have found that relational, task and process conflicts mediate the effects of demographic or national diversity, work value diversity and work goal diversity on satisfaction and performance outcomes (Moreno, et. al., 2008).
The current study, while substantiating literary contributions, wishes to identify the relationship between cultural diversity, intra-group conflicts and workgroup outcomes when intra-group conflicts act as mediators for workgroup outcomes.
The conceptual framework derived above gives rise to the following two hypotheses.
H1. Cultural diversity will be negatively related to both satisfaction with the group and perceived performance of the group.
H2. The relationships between cultural diversity and satisfaction with the group and between cultural diversity and perceived performance of the group will be mediated by relationship, task and process conflict.
Research setting and sample
Survey Questionnaire: A survey questionnaire is designed to collect empirical data on our independent dependent variables. Please see the Appendix A to view the questionnaire. The questionnaire is used to collect data on the basis of perceptions of the employees of multicultural organizations on our first predictor, Cultural Diversity, and on the 3 sub predictors of our mediator, Intra-group Conflicts. The response variable Workgroup Outcomes consists of two sub predictors i.e. satisfaction with the group, and perceived performance of the group.
The existence of Cultural Diversity in the organization will be measured by three items developed by the author for this particular study.
The Intra-group conflicts will be measured by 12 items, four each for Task, relationship and process conflicts. The items are developed by Jehn (1995).
The Workgroup outcomes will be measured by 11 items, five for Satisfaction with the group and six for Performance of the group. These items were designed by Ancora & Caldwell (1992).
Population frame: Following the method used by Vodosek (2007), the population frame for this study is multicultural organizations operating in Karachi and Islamabad, two major cities of Pakistan consisting of a multicultural population (Zubair, 2006). Special care is taken to ensure that there is cultural heterogeneity among the respondents so that the findings support our cause.
Sample: The sample for this empirical study is selected from two different kinds of organizations. First target is five multinational organizations with their work units in Pakistan, where local employees work with foreign nationals in peer, supervisory or subordinate roles. Second target is fifteen local or Pakistani organizations with functions spread over multiple cities in Pakistan, owned by Pakistani nationals where foreign nationals are not common, but employees come from different ethnic, religious and geographical backgrounds from across the country. The questionnaire was given to one point person identified earlier in each of the twenty target organizations, selection of which is done on convenience basis. The Point person was held responsible to get the data collected from a group of employees belonging to different departments and workgroups. A total of 131 useful responses were received which were subjected to analysis.
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