Does Diversity Climate Lead to Customer Satisfaction? It Depends on the Service Climate and Business Unit Demography

• Published in: Organization science (Providence, R.I.) Vol. 22; no. 3; pp. 788 - 803
• Main Authors: McKay, Patrick F., Avery, Derek R., Liao, Hui, Morris, Mark A.
• Format: Journal Article
• Language: English
• Published: Linthicum INFORMS 01.05.2011; Institute for Operations Research and the Management Sciences
• Subjects: Boundary conditions; Business structures; Climate models; Climatology; Competitive advantage; Cultural diversity; Customer satisfaction; Customer service; Customer services; Demographics; Demography; diversity; Employees; Employment; Females; Job performance; Longitudinal studies; Marketing strategies; Minority & ethnic groups; Multiculturalism & pluralism; Objectives; Organization theory; Organizational behaviour; organizational climate; Psychological effects; Public relations; Racial diversity; Referents; Retail trade; Retailing; service; Studies; U.S.A; Workplace diversity; United States > US
• ISSN: 1047-7039; 1526-5455
• DOI: 10.1287/orsc.1100.0550

Extending insights from Cox's interactional model of cultural diversity [Cox, T. H., Jr. 1994. Cultural Diversity in Organizations: Theory, Research and Practice. Berett-Koehler, San Francisco], we examine the influence of diversity climate on customer satisfaction, a key business-unit outcome. In addition, we explore service climate and minority and female representations as boundary conditions of the diversity climate-customer satisfaction relationship. Utilizing longitudinal data from 59,592 employees and 1.2 million customers of 769 store units of a large U.S. national retail organization, the results reveal that, as hypothesized, diversity climate is positively and significantly related to customer satisfaction measured a year later. Moreover, the diversity climate-customer satisfaction relationship is most strongly positive in predominately minority, highly pro-service store units, whereas female representation exhibits null moderating effects. These findings have important research and practical implications.