To reply the problematic wondering about the relationship between racial diversity and intermediate performance, threeauthors Orlando C. RICHARD, B.P.S MURTHI and Kiran ISMAIL use reviews of extant literature dealing with diversity
Indeed, they want to compare contradictory views on diversity relying onBlau’s theory heterogeneity and knowledge-based opinions to suggest a close relationship between the both parameters.
The Blau’s theory heterogeneity deals with a certain curvilinear relationshipbetween heterogeneity and social associations. In his opinion, this association depends on opportunities for social contact which are more prevalent in homogeneous groups and highly heterogeneousgroups.
Also they based their reflections on knowledge-based views which explain organizational knowledge is typically transferred by conversion from tacit or implicit knowledge that resides withinindividuals to explicit or codified knowledge. Without forget the increased levels of communication combined with interactions make it possible to generate inimitable knowledge.
Then, they would try totheorize and explore the long-term effects of this diversity.
From the two precedent theory, it’s possible to propose a series of five hypothesis based on this relationship betweenracial diversity and intermediate performance.
• Hypothesis 1: Racial diversity is curvilinearly associated with intermediate firm performance in such a way that low and high, but not moderate,levels of diversity positively correspond with performance gains.
• Hypothesis 2: Racial diversity is positively associated with long-term firm performance
• Hypothesis 3: Industry type will positivelymoderate the strength of relationship between racial diversity and performance such that service-oriented firms will have stronger effects of diversity than manufacturing firms.
• Hypothesis 4:...