Does cultural economics affect country’s competitiveness?

Abstract

This paper provides an analysis of the effects of workforce diversity on rational decision-making within information technology (IT) organizations, postulates and tests a structural model in which surface level (demographical) and deep level (cognitive/functional) diversity, have a direct and indirect impact on rational decision-making through two organizational mediators inclusive organizational climate and task-related cognitive conflict. Based on the theory of social categorization, classification-elaboration model (van Knippenberg et al., 2004) and the theory of bounded-rationality (Simon, 1955, 1979), they put forward seven hypotheses and tested them with the use of covariance-based structural equation modeling (SEM). Since the scale of a primary survey of IT employees was out of reach within the framework of this research, the illustrative empirical data is a simulated data set (N = 379) created to fit a five-factor measurement model that was pre-specified; this process and limitations are made transparent in the Method section, and the data is not to be understood as reflecting actual organizational data. The measurement model was found to have high Discriminant and convergent validity (composite reliability >.80; average variance extracted >.50 across constructs) and the structural model fit the data well, 72(201) = 245.72, p =.017, CFI =.987, TLI =.985, RMSEA =.024. Surface-level diversity had a positive relationship with inclusive climate (b =.37, p=.001) and no relationship with cognitive conflict (b=.06, p=.001); Deep-level diversity was positively correlated with inclusive climate (b=.29, p=.001) and cognitive conflict (b=.38, p=.001). The two mediators, on their part, positively forecasted rational decision-making (b = .41 and b = .24, respectively, p .001), and deep-level diversity had a small positive direct influence (b =.11, p =.10). The model was used to explain 32.5% of the variance in rational decisions making. The results demonstrate the operationalizability of diversity-management research based on SEM and the possibility that organizations interested in promoting the quality of managerial and technical decision-making can be helped by fostering the development of inclusive climates and directing cognitive diversity into productive task conflict and restricting the implementation of pure demographic diversity programs that are not supported by the inclusion-oriented practice. Discussed are implications to theory, practice and future primary-data research in the IT sector.

Keyword : workforce diversity, level of diversity, atmosphere of inclusivity, variety at the surface level, cognitive conflict, rational decision-making, structural equation modeling, information technology