Cross‐level effects of demography and diversity climate on organizational attachment and firm effectiveness

We studied the impact of demographic diversity on individual attachment and firm unit performance in a relatively diverse organization. We implemented cross‐level regression to study gender and race/ethnic categorical, relational, and organizational demography in a sample of 26 units part of a regional restaurant chain. At the individual level, we found that diversity climate (DC) moderates the impact of relational and categorical demography on affective organizational commitment, organizational identification, and intention to quit. At the organizational level, we found that DC moderates the impact of organizational diversity on firm productivity and return on profit. We discuss the importance of organizational DC as organizational context on individual attachment, and implications for firm effectiveness in diverse organizations. Copyright © 2007 John Wiley & Sons, Ltd.