Investigating the effects of racioethnic diversity on organizational outcomes: The mediating role of social capital and the moderating role of diversity climate

This study examined the relationship between organizational-level racioethnic diversity and organizational outcomes by investigating the mediating role of social capital and the moderating role of diversity climate. Social capital, defined as the set of resources available to an organization through the structure and content of social relations among members (Brass, Galaskiewicz, Greve, & Tsai, 2004; Leana & Pil, 2006; Leana & Van Buren, 1999), was hypothesized to explain the proposed negative relationship between racioethnic diversity and organizational outcomes, such as organizational performance and attachment. Diversity climate refers to individuals' shared perception concerning the extent to which their organization values and is committed to diversity (Kossek, Markel, & McHugh, 2003). A positive diversity climate was hypothesized to attenuate the negative relationship between racioethnic diversity and organizational outcomes. The current study utilized a cross-sectional field study design, involving both questionnaires and archival data collection methods. The sample consisted of 285 U.S. colleges and universities. Hypotheses were tested using hierarchical linear multiple regression. Results indicated that: (1) racioethnic diversity negatively influenced organizational performance, (2) social capital partially mediated this negative relationship, (3) diversity climate did not moderate the nature of the racioethnic diversity- organizational performance relationship, but: (4) diversity climate positively influenced organizational performance, regardless of an organization's racioethnic composition. Practical implications of these findings, as well as areas for future research are discussed.