Twentieth International Conference on Knowledge, Culture, and Change in Organizations

Abstract

Globalization has offered more opportunities to work with a diverse group of people, allowing for exchanges and interactions with others of different ethnicity, races, or nationalities. However, this opportunity is also coupled with challenges such as conflict and miscommunication. Thus, consideration of cultural factors and nuances then becomes a salient and pressing issue for organizations in order to remain competitive and effective. The current study explored the influence of cultural diversity and social group identification on leader-member exchanges among multi-cultural leader-subordinate dyads. The study hypothesized that identification with a particular social group would predict leader-member exchange, and that cultural diversity would moderate the relationship between identification with a social group and leader-member exchange. Results showed that these hypotheses were partially supported. Identification with one’s nationality had a significant negative effect on LMX but only true for the leaders. On the other hand, identification with one’s organization has a positive influence on LMX but only for subordinates. Cultural diversity negatively moderated the relationship between identification with one’s organization and LMX. What do these results ultimately mean for cultural diversity management practices in the industry? One of the implications is that it would be beneficial for organizations to engage in activities that encourage their employees’ sense of belonging to their organizations and promote a culture that encourages group membership.