The Effect of Employee Cultural Diversity on Organizational Performance: A Case Study of Oilybia-Kenya

A Project Report Submitted to Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The purpose of this study was to find out the effects of employee cultural diversity on organizational performance. The study was guided by the following objectives; to determine the effect of employee religion on organizational performance, to establish the effect of employee value system on organizational performance and to find out the effect of employee language on organizational performance. A descriptive quantitative research method was used. Primary data was collected using a five scale likert questionnaire. The questionnaire was distributed to oil Libya petrol stations employees who are situated in Nairobi. Data submitted through questionnaire was entered into SPSS 20.0 statistical software and analyzed for descriptive statistics. Sampling technique was used to select a population sample from the entire employee population. Descriptive statistics was used to analyze data. Regression analysis was used to establish the relationship between employee cultural diversity and organizational performance. The research found out that that employee religion had an effect on organization performance. Seven religion variables did not have a significant effect on organizational performance with only three significantly affecting organizational performance in a positive way. Religious beliefs had a negative effect on employee work performance however, they positively influenced work commitment. The study also established that cultural values affected organization performance positively. Five employee value system variables did not have a significant effect on organizational performance with only five which were; company values, customer, business outcomes and team work significantly affecting performance in a positive way. The variable job had a negative effect on organizational performance while cultural values emphasized on team work. The findings revealed that the company emphasized on positive cultural values and discouraged negative cultural values, actions that positively influenced its performance. Lastly the findings revealed that, all the employee language variables did not have a significant effect on organizational performance with only ethnicity and negative working practices having a positive significant effect on organizational performance. The findings showed that differences in language generated conflict because of the lack of skill of being able to identify with other cultural groups. The findings also indicated that differences in language raised communication barriers that hindered effective transfer of knowledge and that having official language use policies negatively affected performance. In conclusion, it is evident that cultural diversity has an effect on organizational performance. Religion, value system and language attributes have an effect on organizational performance both in a positive and negative way. Majority of the attributes positively affected performance with a few having a negative effect on the same. The study therefore recommends that employees be given an opportunity to practice their religion. The company also needs to have a system that fairly allows all the employees to practice their religion and engage in religious activities that both contribute positively to the individual and organization. The study further recommends that the company aligns its values with the employees’ cultural values to avoid conflict. Training needs to be done on the different dimensions of cultural values to reduce on any conflict that arises because of differences in value system, as well as to enhance unity and cohesion at the work place. It is recommended that the company conducts a training on how on how to minimize communication barriers as well as have a seminar on cultural diversity to curb the conflict that arises from diversity in ethnicity. Lastly, having language use policies will also minimize cases of employees feeling outcast when working with colleagues who speak the same language