Putting Differences in Context: Incorporating the Role of Status and Cooperation into Work Unit Ethnic Composition Research

Abstract

Due to increasing diversity within organizations, understanding the impact of ethnic differences in work units has become a strategic imperative. Although the topic of much research, findings regarding the effect of work unit ethnic composition on work unit outcomes are inconsistent. I begin to address inconsistencies in the literature by incorporating the role of two moderators of intergroup contact, status and cooperation (Allport, 1954), into ethnic composition research. First, I introduce the construct of ethnic status, which reflects the degree of status ascribed to individuals based on ethnic group membership, and predict that work unit ethnic status separation (ESS) will negatively impact work unit processes (conflict, cohesion, trust) and performance (financial, manager-rated, citizenship behaviors). Second, I theorize that elements of the work unit (learning climate, performance climate) and community (ethnic composition, economics, political climate) context will moderate work unit ethnic composition effects, such that cooperative contexts ameliorate, but competitive contexts exacerbate, the negative relationship between work unit ESS and unit-level outcomes. In Study 1, I developed a measure of ethnic status and found support for the stability and validity of ethnic status in both student and adult samples. In Study 2, I used the status measure to calculate work unit composition (i.e., ESS). I then tested the interaction of work unit ESS with elements of the work unit and community context as a predictor of unit-level outcomes in a sample of 703 employees of a large bank, who were nested within 121 geographically dispersed work units (i.e., branches). To assess community contexts, I supplemented the bank sample with data from the United States Census. At the work unit level, I found that high ESS work units experienced less conflict and better financial performance in high learning climates than in low learning climates. At the community level, I found that the negative outcomes of work unit ESS, including high conflict, low cohesion and trust, and poor financial performance, were most severe in communities similarly characterized by high ESS. Results for the remaining work unit (performance climate) and community (economics, political climate) context factors were mixed. Theoretical and practical implications are discussed.