Diversity Climate as a Key to Employee Retention: The Moderating Role of Perceived Cultural Difference

Abstract

This study examined the contribution of diversity climate to perspective taking, task conflict, and turnover intention of Thai employees hiring by international companies in the service industry and working among racially diverse workforces. Moreover, this study explored the moderating effect of the perceived cultural distance on the relationship between diversity climate and perspective taking. The social exchange theory was employed to explain the relationships. Data were obtained from 389 Thai employees and analyzed by Partial Least Squares Structural Equation Modeling. The results showed that diversity climate was negatively associated with task conflict and turnover intention while positively associated with perspective taking. The perceived cultural distance was found to positively moderate the effect of diversity climate on perspective taking. The study also provided some guidelines for international companies in the service industry that hire racially diverse workforces.