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Tribal diversity, human resources management practices, and firm performance David B. Zoogah * Morgan State University Abstract This study explores the relationship between tribal diversity, human resources management practices, and rm perfor- mance in Africa. Using multiple data sources and multilevel techniques, I examine tribal diversity as a driver of human resource management-diversity policy (HRM-DP) and an interactive factor inuencing rm performance. Tribal identity is also tested as a determinant of tribal diversity. The results show that HRM-DP mediates the relationship between tribal diversity and rm performance. Tribal iden- tity also relates negatively to tribal diversity, HRM-DP, and rm performance. Lastly, tribal diversity interacts with tribal identity in relating to rm performance. Theoretical and practical implications are discussed to enhance tribal diversity management in Africa. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. Keywords: tribal diversity, tribal identity, Africa, social in- clusion, rm performance Résumé Cette étude explore la relation entre la diversité tribale, les pratiques de gestion en ressources humaines et la perfor- mance des entreprises en Afrique. À partir des sources de données multiples et des techniques multiniveaux, elle considère la diversité tribale comme un vecteur de la dyade gestion des ressources humaines - politique en matière de diversité (HRM-DP) et comme un facteur interactif inuençant la performance des entreprises. Elle teste aussi lidentité tribale en tant que déterminant de la diversité tribale. Les résultats montrent que la dyade HRM-DP médiatise la relation entre la diversité tribale et la perfor- mance des entreprises. Lidentité tribale est aussi négativement reliée à la diversité tribale, au HRM-DP et à la performance des entreprises. Enn, la diversité tribale interagit avec lidentité tribale pour inuencer la performance des entreprises. Larticle sachève par une analyse des impli- cations théoriques et pratiques destinées à rehausser la gestion de la diversité tribale en Afrique. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. Mots-clés : diversité tribale, identité tribale, Afrique, inclu- sion sociale, performance des entreprises Since the twentieth century, social science (anthropology, economics, management, psychology, and sociology) scholars have been examining the heterogeneity of groups in organiza- tions, societies, and countries (see Alesina & La Ferrara, 2005; Cox, 1993; Fearon, 2003; Shore, et al., 2009) resulting in a diversity of paradigms (e.g., value in diversity Cox, 1993; Shore et al., 2009), theoretical frameworks (Nkomo & Stewart, 2006), dimensions (Shore, et al., 2009), and perspec- tives (Cox, Lobel, & McLeod, 1991). Recent reviews (see Nkomo & Stewart, 2006 as well as Shore et al., 2009) show a paucity of studies in racioethnicity, which is the hetero- geneity of racial and ethnic attributes in groups. Shore et al. (2009, p. 119) observed that we still have a very rudimentary understanding of diversity that involves different combinations of multiple races/ethnicities in a work setting.Heeding that call, I focus on the tribe, rather than race, because in the context of this studyAfricamost individ- uals consider the tribe the primary social category of identi- cation with a stronger inuence on interactions and institutions (Awedoba, 2005). Indeed, recent evidence sug- gests that the diversity of ethnic groups and identication are major factors inuencing economic development in Africa (Michalopoulos & Papaioannou, 2015). Further, economic studies of Africa show negative effects of tribal diversity (Alesina & La Ferrara, 2005; Collier & Gunning, 1999) on economic development in contrast to the positive outcomes such as performance and creativity observed in group and organization studies (Ely & Thomas, 2001; Simons & Rowland, 2011). *Please address correspondence to: David B. Zoogah, Earl Graves School of Business, Morgan State University, 1700 E. Cold Spring Lane, Baltimore, MD 21040. Email: [email protected] Canadian Journal of Administrative Sciences Revue canadienne des sciences de ladministration (2016) Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1363 Can J Adm Sci (2016) Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

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Canadian Journal of Administrative SciencesRevue canadienne des sciences de l’administration(2016)Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1363

Tribal diversity, human resources managementpractices, and firm performance

David B. Zoogah*Morgan State University

AbstractThis study explores the relationship between tribal diversity,human resources management practices, and firm perfor-mance in Africa. Using multiple data sources and multileveltechniques, I examine tribal diversity as a driver of humanresource management-diversity policy (HRM-DP) and aninteractive factor influencing firm performance. Tribalidentity is also tested as a determinant of tribal diversity.The results show that HRM-DP mediates the relationshipbetween tribal diversity and firm performance. Tribal iden-tity also relates negatively to tribal diversity, HRM-DP,and firm performance. Lastly, tribal diversity interacts withtribal identity in relating to firm performance. Theoreticaland practical implications are discussed to enhance tribaldiversity management in Africa. Copyright © 2016 ASAC.Published by John Wiley & Sons, Ltd.

Keywords: tribal diversity, tribal identity, Africa, social in-clusion, firm performance

*Please address correspondence to: David B. Zoogah, Earl Graves Schoolof Business, Morgan State University, 1700 E. Cold Spring Lane,Baltimore, MD 21040. Email: [email protected]

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

RésuméCette étude explore la relation entre la diversité tribale, lespratiques de gestion en ressources humaines et la perfor-mance des entreprises en Afrique. À partir des sources dedonnées multiples et des techniques multiniveaux, elleconsidère la diversité tribale comme un vecteur de la dyadegestion des ressources humaines - politique en matière dediversité (HRM-DP) et comme un facteur interactifinfluençant la performance des entreprises. Elle teste aussil’identité tribale en tant que déterminant de la diversitétribale. Les résultats montrent que la dyade HRM-DPmédiatise la relation entre la diversité tribale et la perfor-mance des entreprises. L’identité tribale est aussinégativement reliée à la diversité tribale, au HRM-DP et àla performance des entreprises. Enfin, la diversité tribaleinteragit avec l’identité tribale pour influencer la performancedes entreprises. L’article s’achève par une analyse des impli-cations théoriques et pratiques destinées à rehausser lagestion de la diversité tribale en Afrique. Copyright © 2016ASAC. Published by John Wiley & Sons, Ltd.

Mots-clés : diversité tribale, identité tribale, Afrique, inclu-sion sociale, performance des entreprises

Since the twentieth century, social science (anthropology,economics, management, psychology, and sociology) scholarshave been examining the heterogeneity of groups in organiza-tions, societies, and countries (see Alesina & La Ferrara,2005; Cox, 1993; Fearon, 2003; Shore, et al., 2009) resultingin a diversity of paradigms (e.g., value in diversity – Cox,1993; Shore et al., 2009), theoretical frameworks (Nkomo &Stewart, 2006), dimensions (Shore, et al., 2009), and perspec-tives (Cox, Lobel, & McLeod, 1991). Recent reviews(see Nkomo & Stewart, 2006 as well as Shore et al., 2009)show a paucity of studies in racioethnicity, which is the hetero-geneity of racial and ethnic attributes in groups. Shore et al.

(2009, p. 119) observed that “we still have a very rudimentaryunderstanding of diversity that involves different combinationsof multiple races/ethnicities in a work setting.”

Heeding that call, I focus on the tribe, rather than race,because in the context of this study—Africa—most individ-uals consider the tribe the primary social category of identi-fication with a stronger influence on interactions andinstitutions (Awedoba, 2005). Indeed, recent evidence sug-gests that the diversity of ethnic groups and identificationare major factors influencing economic development inAfrica (Michalopoulos & Papaioannou, 2015). Further,economic studies of Africa show negative effects of tribaldiversity (Alesina & La Ferrara, 2005; Collier & Gunning,1999) on economic development in contrast to the positiveoutcomes such as performance and creativity observed ingroup and organization studies (Ely & Thomas, 2001;Simons & Rowland, 2011).

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In addition, there is an increasing surge of multinationalsinto Africa with the goal of maximizing return on investmentfrom the human and natural resources of African countries(Chironga et al., 2011) because these countries have: a highgrowth rate (Economic Commission for Africa, 2012);foreign direct investment, particularly from China, is grow-ing, (Maswana, 2009); and the outlook for economic growthin the coming years is so bright (World Bank, 2010). Forexample, six African countries feature in the top 10 fastestgrowing economies in the world in the past decade.1

Although economic studies suggest that tribal diversity—defined as the degree to which a country’s tribal composi-tion is heterogeneous—is a major factor underminingeconomic development of Africa (Alesina & La Ferrara,2005), I draw from the “value in diversity” paradigm inorganization studies (Cox, 1993; Shore et al., 2009) toexamine the contextual positive effects of tribal diversityof African countries on firm performance. I also aim toexamine (a) tribal identity or the extent to which individualsfeel a sense of connection with their tribe as an antecedentand moderator of tribal diversity and (b) the mediation of hu-man resources management (diversity policy) of organiza-tions (HRM-DP) in the relationship. The lack of studies ontribal diversity leaves managers and executives wonderinghow they can optimize the benefits of tribal diversity ofAfrican countries, and how to manage the diverse tribalgroups within and across countries.

Theoretical Background

Diversity theory emerged from demography and the de-mographic composition of groups and has been studiedwidely in the social sciences. A review of the literatureshows diverse definitions that range in breadth (Nkomo &Cox, 1996; Shore et al., 2009). Even though diversity hastypically been defined as the degree of heterogeneity in agroup, Nkomo and Cox (1996, p. 339) pointed out that“scholars are referring to ‘diversity in identities’ based onsocial and demographic groups and how differences inidentities affect social relations in organizations.” Theydefined “diversity as a mixture of people with differentgroup identities within the same social system” (p. 339).Group identities identified in the literature include attributessuch as race, gender, function, attitudes, and so forth thatrange from individual to group, organizational, and societalattributes (Milliken & Martins, 1996; Pelled, 1996). Theseattributes include observable and nonobservable characteris-tics that are assumed to lead to positive outcomes, increasedinformation, enhanced problem-solving ability, constructiveconflict and debate, increased creativity, and higher qualitydecisions (Shore et al., 2009).

Harrison, Price, and Bell (1998) found that over time,nonobservable diversity in terms of satisfaction and commit-ment had more impact on cohesion than observable diversity

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

attributes of age, sex, and race. Harrison, Price, Gavin, andFlorey (2002) found support for their model in which per-ceived observable and nonobservable diversity characteris-tics negatively relate to social integration, which positivelyrelates to task performance. They further reported that inthe context of team diversity, collaboration moderates thenegative relationship between perceived diversity and teamsocial integration such that observable diversity reduces thestrength of this relationship, while nonobservable diversityincreases the strength of this negative relationship. Jehn,Northcraft, and Neale (1999) reported that observable diver-sity positively relates to perceived performance, satisfaction,intention to remain in the group, and commitment, whilenonobservable diversity negatively relates to perceived andactual group performance, group efficiency, satisfaction, in-tent to remain in the group, and commitment. Further,Cunningham and Sagas (2004) found that nonobservablediversity (i.e., values) is associated with lower job satisfac-tion and higher turnover intentions, but that the relationshipis not significant for observable diversity. In contrast,Mohammed and Angell (2004) found that neither observablenor nonobservable diversity impact relationship conflict.Phillips and Loyd (2006) examined the interaction effectof observable and nonobservable diversity on dissentinggroup members. They suggested that observable diversity(vs. homogeneity) may be beneficial to incongruent groups.Lastly, Phillips, Northcraft, and Neale (2006) found thatobservable diverse groups outperform observable homoge-neous groups regardless of nonobservable similarities.

In their review of diversity in organizations, Nkomo andCox (1996) as well as Nkomo and Stewart (2006) and Shoreet al., (2009) identified major theories used to examine diver-sity, one of which is social identity theory (SIT) (Ashforth &Mael, 1989). SIT is a cognitive theory, proposing thatindividuals tend to classify themselves and others into socialcategories and that these classifications have a significanteffect on human interactions. Drawing on SIT, Joshi, Liao,and Jackson (2006) found that among sales employees on437 teams in 46 units of a large company, team demographiccomposition and unit management composition moderatedthe relationship between individual demographic attributesand pay. In a review of workplace diversity, Kochan et al.(2003) summarized the results and conclusions reached instudies of the relationships between race and gender diversityand business performance carried out in four large firms by aresearch consortium known as the Diversity Research Net-work. They sought the “business case” for diversity andfound “few positive or negative direct effects of diversityon performance” (p. 3). They suggested that given the differ-ent types of diversity influences on individual and group out-comes, a nuanced view of diversity seemedmore appropriate.

Nkomo and Stewart (2006) indicated that theracioethnicity and gender area does not constitute a theoryper se; rather, research in that area is focused ondocumenting differential treatment in organizations based

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on race and gender. Nonetheless, that research is paltry, withthe bulk focusing on racioethnicity in the US, comparing blackpeople with white people in particular. And while attention toracial identity and ethnic identity is gaining a foothold in the lit-erature (e.g., Bell & Nkomo, 2001; Ely, 1995), little researchexists on the identities of African social systems. Specifically,tribe, which is the observable characteristic of interest here, islacking in the literature. African countries are dominated bytribal groups. Of course, tribes are not unique to Africa; theyare prevalent in the Middle East, Latin America, and Asia. Forexample, in the Middle East, Jordan, Lebanon, Palestine, andYemen have multiple tribes. Central Asian countries likeAfghanistan, Kazakhstan, Tajikistan, and the Kyrgyz Republicalso have tribes. In rural and remote parts of Indonesia, tribesserve as a major form of social organization and tribal and clanmembers live on specific plots of land reserved for theirfamilies. In Latin America, the Indian tribes are active inpolitical and economic activities of countries such as Peru,Bolivia, and Columbia.

The difference, however, is that the number of tribesand degree of diversity is greater in the African context. Asimilar but different concept is ethnic diversity, whose focusis the extent to which a group is heterogeneous with respectto ethnic origin. A tribe differs from an ethnic group in thesense that the latter is broader. However, they are often usedinterchangeably. In this paper, I have used the tribe conceptbecause in Africa, tribal identification is stronger (Herbst,2000). Even though there are multiple racial categories(e.g., whites in Southern Africa, Arabs in Northern Africa,and traditionalists in Sub-Saharan Africa), the majorityidentifies with tribes rather than races (Deng, 1973). Tribaldiversity manifests through language, corporal insignia,and behaviour. The heterogeneity of languages in eachAfrican country, the distribution of corporal insignia—com-monly termed tribal marks—and the heterogeneous patternsof behaviour enable us to observe tribal differences andgauge the performance of members of a particular tribe. InNigeria, the Ibos, distinguished by their linguistic attribute,Ibo, have been observed to be very industrious andentrepreneurial (Olutayo, 1999). It is therefore likely thatthe degree of tribal heterogeneity within a country caninfluence firm performance through the marshalling of adifferential knowledge base, different sets of experiences,and different views of the world (Shore et al., 2009). As Iargue in the expectations below, the degree of tribalidentification likely determines the level of tribal diversity.

Hypotheses

Tribal Identity and Tribal Diversity

I propose tribal identity as an antecedent of tribal diver-sity. Identity, the extent to which individuals view themselveseither as individuals or part of a social group (Ashforth &

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Mael, 1989; Tajfel & Turner, 1979), has been examined by di-verse domains in the social sciences. Identity in the manage-ment and organizational science domain, which focuses onthe extent to which individuals identify with organizations, de-rives from sociological and psychological perspectives(Reynolds, Turner, & Haslam, 2003), and has been related todiversity in organizations (Nkomo & Cox, 1996). Drawingfrom that literature, I argue that tribal identity, the degree towhich individuals identify with their tribes in Africa, is likelyto determine tribal diversity.

The social identity perspective encompasses social cate-gorization theory and social identity theory (Reynolds et al.,2003). It provides a basis for understanding how the tribalcomposition of workplaces in Africa influences behavioursand outcomes of employees. Consistent with the socialidentity perspective, which proposes that individuals classifythemselves and others on the basis of overt demographicattributes, including ethnicity and gender (Ashforth & Mael,1989; Tajfel & Turner, 1979), I contend that employees arelikely to view, and subsequently favour, their tribal membersas in-groups, and show bias to nontribal members who areout-groups (see Hewstone, Rubin, & Willis, 2002 for areview of social identity).

Tribal identification seems relatively stronger in theSub-Saharan African environment than in other parts of theworld (Herbst, 2000) to the point that some scholars contendthat tribal group identity as an institutional element may beat odds with the state (Posner, 2005). Other scholars haveobserved that tribal identity negatively affects industrialproductivity (Alesina, Spolaore, & Wacziarg, 2000). Byamplifying the positive characteristics of tribal membersand denigrating nontribal members, employees “protect, en-hance, or achieve a positive social identity” for themselvesand members of their in-group (Tajfel, 1982, p. 24).Consequently, they may be less likely to accept, endorse,or interact with nontribal members. High tribal identity isassociated with high homogeneity; if tribal identity is high,tribal diversity is likely to be low. I therefore hypothesize:

H1: Tribal identity relates negatively to tribaldiversity.

Tribal Identity and Human Resources ManagementDiversity Policy

Organizations harness differential knowledge, experience,and skills by managing human resources effectively. Essentialto that outcome is the development of a human resources man-agement diversity policy (HRM-DP), which provides guide-lines on how diverse groups can be attracted, developed, andfostered to excel. Diversity policies that foster employees’ iden-tification with their social categories influence their interactionswithin the organization. Consistent with SIT, the tribal identity

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of employees is likely to influence their interactions in organiza-tions (Brickson, 2000; Nkomo & Cox, 1996; Nkomo &Stewart, 2006). Social identity, the sum total of the social iden-tifications people use to define themselves, has been shown tobe high among Africans with regard to their tribal groups(Awedoba, 2005; Collier & Gunning, 1999).

The degree of in-group favouring and out-groupharming behaviours observed in the literature suggests thattribal identity is likely to be negatively associated withHRM-DP in organizations. Managers of a particular tribeare likely to establish policies that favour homogeneityrather than heterogeneity, and make decisions that counterrecruitment and selection of nontribal members. The in-group/out-group dynamics may also have consequences foremployees’ earnings. Tribal members may be favoured withregard to bonus and pay increases, particularly if there are noestablished compensation policies and committees that cantemper the biases of high tribally-identified managers. Highethnic identification is therefore likely to be negativelyassociated with the establishment of HRM-DP. I thereforehypothesize that:

H2: Tribal identity relates negatively to HRM-DP inorganizations.

Tribal Identity and Firm Performance

The arguments for the negative relationship with HRM-DP also apply to firm performance. Rather than optimizingtheir productive efforts, tribal members are likely to satisfice,particularly if the organization is viewed as heterogeneous.In addition, high tribal identity is likely to be associated withunderperforming staffing outcomes and managerial behavioursthat undermine, rather than facilitate, interactions between di-verse tribal employees in the workplace (Awedoba, 2005).

Tribal identity is associated with conflict at the nationallevel (Collier & Gunning, 1999), and research shows bothsoft conflict (e.g., coup d’état) and hard conflict (e.g., war)result from ethnic identification (Collier, 2007). Both formsof conflict undermine industrial output. Coups d’état oftenresult from military juntas and nationalism, which lead tonationalization of enterprises (Collier, 2007). In addition todestruction of property, wars are associated with disruptionof firm operations due to human and material logistical con-straints. Wars in Liberia, Sierra Leone, and Cote d’Ivoire allemerged from ethnic identification and negatively affectedindustrial activity and outcomes (Buhaug & Rød, 2006;Collier & Hoeffler, 2002). High tribal identity is associatedwith negative bias toward outgroup members and increasedmyopia. It leads to a reduced effort on the part of employees.It is therefore likely that:

H3: Tribal identity relates negatively to firmperformance.

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Tribal Diversity and Firm Performance

Research shows that diversity yields positive outcomesbecause of the potential to harness multiple ideas, experi-ences, and capabilities of members (Cox, 1993; Williams& O’Reilly, 1998). Diversity harnesses the stock of compe-tencies, knowledge, and social and personality attributes,including creativity (Becker, 1964), which are sources ofideas, experience, and capabilities, and which determinefirm performance (Richards, 2000; Roberson & Park,2007). The greater the tribal diversity, the greater the humancapital, and the more likely firm performance will be high.Because tribal diversity involves mutual understanding, itis likely to foster social integration, which contributes tosocial and economic stability (Harrison et al., 2002). Inaddition, tribal diversity is likely to increase social control,which is the extent to which group members control the be-haviours of each other. For example, Greif (1993) arguedthat traders in ancient times formed coalitions along triballines in order to monitor agents by exchanging informationon their opportunistic behaviour. In this case, tribalaffiliation helped sustain a reputation mechanism in the pres-ence of asymmetric information. Further, in the absence oflegally enforceable contracts, membership in tribal groupscontrols what individuals can do. Punishment and reciproc-ity are directed not only toward the individual, but alsotoward other members of the group, which is a type ofself-enforcing mechanism (La Ferrara, 2003). A similarreasoning is proposed by Fearon and Laitin (1996) toexplain intertribal cooperation.

At the organizational level, O’Reilly, Williams, andBarsade (1997) analyzed 32 project teams and found thatmore diversity leads to more conflict and less communica-tion, but that controlling for the latter also leads to higherproductivity. Richards (2000, p. 164) found that “racial di-versity interacted with business strategy in determining firmperformance measured in three different ways, as productiv-ity, return on equity, and market performance. The resultsdemonstrate that cultural diversity does in fact add valueand, within the proper context, contributes to firmcompetitive advantage.” In a review of the psychologicalliterature, Brooke and Tyler (2010) found that diversityrelates positively to corporate performance.

Studies at the national level also show that tribal diver-sity influences not only economic performance, but also firmperformance through the human capital function: leveragingof capabilities and behaviours of tribal members (Alesinaet al., 2000). Tribal diversity may enter the production func-tion as “intermediate inputs” (i.e., more variety of individualskills), which increases total output. Lazear (1999) discussedhow different skills in a production unit may increase overallproductivity, and Ottaviano and Peri (2003) investigated thepros and cons of diversity in production. Diversity andrelated amenities affect the value of land (rents), whichenters the production function.

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It therefore seems that the more diverse a country, thegreater the repository of skills and competencies that firmsmay obtain. Among the Ibos of Nigeria, members aresocialized with trading skills. Business savvy thereforetends to be high among their members. The Yorubas alsosocialize individuals to be intellectually curious. Othertribes have different socialization outcomes. Collectivelytherefore, the capabilities of these tribal groups can beharnessed to maximize productivity, not only at thenational level but also at the firm level. Based on the abovereasoning, I hypothesize:

H4: Tribal diversity relates positively to firmperformance

Tribal Diversity and HRM-Diversity Policy

Tribal diversity is associated with heterogeneous skills,experiences, capabilities, and knowledge because of theunique acculturation processes of tribes. Firms operating intribally diverse countries are therefore expected to have greaterhuman capital stocks and flows (Alesina, & La Ferrara, 2005)even though diversity is generally associated with conflict,particularly when tribal identification is high. In order toharness the potential of tribal diversity, firms are likely toestablish and implement HRM-DP. The diversity policiesmay attract more competencies and experiences. Corporatediversity management may also be easier in countries withhigh diversity because firms are likely to draw from the expe-rience of national tribal diversity management initiatives.Employees are likely to be more receptive to diversitymanagement activities due to their prior socialization.Staffing may also be facilitated by the ease of multiplerepresentations to serve the different tribal groups. It there-fore seems that for countries in which tribal diversity is high,there is likely to be a high proportion of diversity policiesamong firms. I therefore hypothesize:

H5: Tribal diversity relates positively to HRM-DP.

Mediation of HRM-Diversity Policy

It has already been established that HRM practicesrelate positively to firm performance in the United States(Huselid, 1995), Europe (Stavroua, Brewster & Charalambous,2010), and Asia (Zheng, Lamond & Kam, 2008). As arguedabove, studies also show a direct relationship betweendiversity and firm performance. What has not been defini-tively established, however, is whether HRM practices me-diate the relationship between diversity at the national leveland firm performance. I explored that question with a focuson one practice – HRM-DP. I contend that tribal diversity atthe national level influences firm performance to the extent

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

that HRM practices are enabled. If HRM managers can eas-ily find diverse skill-sets, they are likely to staff their orga-nizations in a way that maximizes creativity andinnovation, thereby enhancing firm performance. Easterlyand Levine (1997) argued that a large portion of “Africa’sgrowth tragedy” can indeed be attributed to the effect of eth-nic fragmentation. Alesina and La Ferrara (2003) testedwhether the negative correlation between ethnic fragmenta-tion and growth holds irrespective of the level of economicdevelopment or whether it is mitigated when the benefits ofheterogeneity for productivity are taken into account. Theyfound that “fractionalization may have positive (or lessnegative) effects on output at higher level of development”and “GDP per capita and fractionalization has the expected(positive) sign, suggesting that indeed fractionalization hasmore negative effects at lower levels of income” (Alesina& La Ferrara, 2005, pp. 9-10). Consistent with Collier(2000), who argued that fractionalization has negativeeffects on growth and productivity only in nondemocraticregimes (democracies manage to cope better with ethnicdiversity), firm diversity policies are likely to temper thenegative effects of tribal diversity. In other words, for firmsoperating in countries with high tribal diversity, the diver-sity practices implemented by HRM are likely to neutralizeconflicts that might arise from high ethnic identification. Itherefore hypothesize:

H6: Diversity policy mediates the relationship be-tween tribal diversity and firm performance.

Method

Data for this study are from three major sources: theWorld Bank’s Enterprises Survey (www.worldbank.org),the CIA Fact Book (www.cia.gov), and the Africa Report(www.theafricareport.com). The World Bank has beensurveying employees and firms from several Africancountries since 2005. The CIA has also been gathering dataon demographics of countries all over the world. Finally, theAfrica Report publishes data on firm performance for theperiod 2009 to the present.

MeasuresTribal identity. This continuous variable was measured

with one item from the Afrobarometer (www.afrobarometer.org). The item - “Let us suppose that you had to choosebetween being a [Ghanaian] and being a [R’s Ethnic Group].Which of the following best expresses your feelings?”- hasfive anchors that range from high identification with tribeor ethnic group on the one hand and high identification withcountry on the other (see Figure 1).

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Tribal diversity. This variable was computed from theCIA Fact Book using Blau’s (1977) diversity index, which isan adaptation of Shannon’s diversity index. It is frequently

Figure 1. Tribal diversity in African countries

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

used to compute diversity (1-ΣPi2) where P is the proportion

of members in a tribal group and i is the number of differentcategories represented in a tribe. For example, Country A

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composed of 15% Ewe, 56% Akan, 10% Ga, 9% Dagomba,5% Fante, would have a diversity index of .68, which differsfrom Country B with 32% Yoruba, 38% Ibo, 10% Ogoni,and 20% Fulani tribes and a diversity index of .74.

Human resources management diversity policy. Icoded whether the companies in the sample had HRM-DP(1 = yes, 0 = no) using online databases the includedthe companies’ websites.2 For companies that did notspecify their HRM-DP on their websites, additional searcheswere conducted using legitimate prominent businesssources such as ThisIsAfrica, n.d. (www.thisisAfrica.com),The Africa Report, n.d. (www.TheAfricaReport.com), andeven international magazines such as The Economist(www.Economist.com). Of the 493 firms, I obtained HRM-Diversity Policies for 320 firms. After excluding firms fromcountries not in the Afrobarometer database, I had a finalsample of 210.

Firm performance. This variable was taken from theAfrica Report. It focused on sales and net profit measuredin US dollars. According to the Africa Report, a largenumber of African companies (n = 5,913) are surveyed.After crosschecks and verification, they established a rank-ing of Africa’s top 1,550 companies. I used data for the500 companies that are published. All financial data has aclearly-defined source, generally communicated to the mag-azine by the companies themselves, and must refer to thefinancial year (e.g., 2009 or 2010). If the financial data is pre-sented in local currency, it was converted into US dollaramounts according to the rate prevailing on the last dayof the particular year (e.g., 31 December 2009). All compa-nies that fall under the legal jurisdiction of at least one ofthe 53 countries in Africa (except Zimbabwe) are included.As a result, there are holding and subsidiary companies inthe list. In the case of both holding and subsidiary compa-nies, a pooled estimate was used. I excluded firms fromcountries that were not in the Afrobarometer database,resulting in the reduced sample.

In addition, the following control variables—popula-tion, gross domestic product (GDP), GDP per capita, region(dummy coded as south, west, east, central, and northernǂ),income group (low, middle, and highǂ), economy (agricul-ture, industry, and serviceǂ3), and industry—were includedbecause they have potential to influence the effects of tribaldiversity on firm performance. They were adopted from theWorld Bank Enterprises survey.

Data Analysis

Multilevel techniques were used to test the relationshipsbecause the hypotheses involve country and firm levels.Multilevel techniques distinguish the proportion of variancesat the country and firm levels. They also show the cross-level effects suggested by H2-H5. Two-level models werespecified to test the hypotheses, where level 1 reflects 478

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

firms and level 2 reflects 27 countries. In addition, I usedmultilevel mediation analysis to examine mediation ofHRM-DP in the tribal diversity - firm performance relation-ship. The mediation represents a 2-1-1 model (level-2variable influencing a level-1 criterion through a level-1mediator) (see Preacher, Zhang, & Zyphur, 2011). I testedfor cross-level interactions but they were not significantand therefore are not reported in the results section. Inaddition, I conducted robustness checks by using tribaldiversity data from Fearon (2003) and tribal identity surveydata from round 3 of the Afrobarometer. The result patternswere similar to those reported here. I am therefore confidentthat the results are not due to chance.

Results

Descriptive Statistics and Correlations

Table 1 provides summary statistics of tribal identifica-tion, tribal diversity, HRM-DP, and firm performance acrosscountries and region. The overall purpose of this study is toexamine the effects of tribal diversity and tribal identity onfirm performance mediated by HRM practices. Figure 1shows a wide variation of tribal diversity across 47 countriesin Africa mainland. Some are homogenous (d < .30; e.g.,Egypt, Libya, Rwanda, and Tunisia) and others are moder-ately heterogeneous (.30 >d < .70; e.g., Algeria, Botswana,Burundi, Lesotho, Morocco, Swaziland, and Zimbabwe).Still others are highly heterogeneous (d > .70; e.g., Angola,Cameroon, Democratic Republic of Congo, Ghana, Liberia,Nigeria, South Africa, Tanzania, and Uganda).

In Figure 2, we get insight on the variation in tribalidentity. The illustrative countries show that only 36%,33%, 30%, 30%, 23%, 20%, and 16% of respondents preferonly national identity in Botswana, Benin, Burkina Faso,Zimbabwe, Ghana, Nigeria, and Uganda respectively. Anexception is Tanzania, where 71% prefer national identity.This is due to the unification initiatives of Julius Nyerere,the first president of the country who attempted to integrateTangayika and Zanzibar effectively. In sum, the resultssuggest less national identification and more tribalidentification.

Table 2 shows the means, standard deviations, andintercorrelations of the variables in the study. The controlvariables relate to each other, performance indicators(net profit, sales), tribal identity, and tribal diversity at alow to moderate level.

Substantive Results

The null models for sales (z = 132.98, p < .001) and netprofit (23.35, p < .001) were significant. The intraclass cor-relation (ICC), which measures the proportion of variance

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Table 1Human Resources Management (Diversity) Practice and Firm Performance by Country

# Country

HRM Diversity policy

Firm performance

Log (sales) Log (net profit)Numberof firmsMean SD Mean SD Mean SD

1 ALGERIA 0.32 0.10 13.28 0.35 3.07 0.42 222 COTE D’IVOIRE 0.21 0.08 12.57 0.11 2.52 0.36 243 EGYPT 0.57 0.06 13.07 0.12 4.07 0.15 614 MAURITIUS 0.53 0.13 12.56 0.09 2.86 0.33 155 MOROCCO 0.40 0.05 13.06 0.13 3.39 0.20 816 NIGERIA 0.44 0.10 13.25 0.13 3.62 0.16 257 SENEGAL 0.30 0.15 13.55 0.45 4.23 1.75 108 SOUTH AFRICA 0.37 0.04 13.83 0.10 4.01 0.13 1609 TUNISIA 0.42 0.23 12.75 0.15 2.69 0.27 27

TRIBAL DIVERSITY AND FIRM PERFORMANCE ZOOGAH

attributable to country and firm levels, shows some propor-tion of variance that could be due to country-level factors(i.e., diversity). Summaries of the substantive results aredepicted in Figure 3a and 3b. Tribal identity relatesnegatively to tribal diversity (β = -.23, p < .05) and firmsales (β = -.46, p < .001) but positively to HRM-DP (β = .32,p < .01) (see Figure3a). With regard to net profit, the patternsare identical even though the coefficients are lower. Forexample, tribal diversity relates positively to HRM-DP(β = .37, p < .05), which in turn relates positively to netprofit (β = .18, p < .05) (see Figure 3b). Overall the resultssuggest contextual effects of tribal identification and tribaldiversity on HRM-DP and firm performance. H1 wassupported as a result: tribal identity relates negatively at asignificant level to tribal diversity. H2, however, was notsupported: tribal identity relates positively (rather thannegatively) at a significant level to HRM-DP. H3 was alsosupported since tribal diversity relates negatively to firmperformance in Figures 3a-3b. H4 and H5, which proposedthat tribal diversity relates positively to HRM practices andfirm performance, were also supported. Tribal diversityrelates positively to HRM practices at a significant level inFigures 3a and 3b. It also relates positively at a significantlevel to firm performance.

I tested H6 using multilevel mediation. The fixedeffects show that tribal diversity relates to net profit (z = 2.37,p < .05) and HRM-DP (2.57, p < .01). Diversity policiesalso relate to net profit (z = 2.56, p < .05) along with tribaldiversity (2.17, p < .01). The results suggest partialmediation. A similar pattern is observed with regard to sales:tribal diversity relates to sales (z = 2.59, p < .05) andHRM-DP (2.57, p < .01) independently. Diversity policies(3.52, p < .01) and tribal diversity (2.59, p < .05) are bothsignificant in step 3. Overall, there is support for H6, whichproposed that HRM-DP mediates the relationship betweentribal diversity and firm performance.

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Posthoc Analyses

I conducted two post hoc analyses. First, I tested theeffect of diversity on performance only for firms in thespecific industry (n = 37). There were 37 industries, ofwhich 10 showed significant effects.4 These effects werepositive in five industrial sectors and negative in the otherfive. For the other 27 industries, tribal diversity did not relateto firm performance. Second, I tested the interaction of tribalidentity and tribal diversity in relating to firm performance.The joint effects were significant for sales (coef. = 3.58,SE = .61, z = 5.90, p < .001, 95% CI = 2.39 – 4.77) andnet profit (coef. = 3.17, SE = 1.0; z = 3.16, p < .01; 95%CI = 1.21 – 5.14). Slopes and confidence bands of theinteractions are shown in Figure 4.

The results suggest that when tribal identity is low, salesand net profit are high in countries with both low and hightribal diversity. However, when tribal identity is high, salesand net profit are high in countries with high tribal diversitybut low for those with low tribal diversity. The intersectionof values of tribal diversity corresponds to the simple slopespresented in Figure 3 (c & d) for sales and net profitrespectively.

Discussion

Summary

There is increasing evidence that emerging economiesare avenues for increased profitability and growth in Africa(Babarinde, 2009; Kiggundu, 2013; McKinsey Global Insti-tute, 2010; Moss, 2007). The diversity of African tribalgroups is a resource that can be leveraged to maximize eco-nomic and industrial performance (Collier, 2007). Eventhough economic studies have examined the effect of tribal

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Figure 2. Pie charts of tribal identity versus national identity in African countries

TRIBAL DIVERSITY AND FIRM PERFORMANCE ZOOGAH

diversity on economic performance (Alesina & La Ferrara,2005), similar studies at the firm level are lacking. Thisstudy fills that gap.

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Three findings from this study seem significant. First, Ifound support for the negative effect of tribal identity as adeterminant of tribal diversity and firm performance but

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Tab

le2

Correlatio

nsof

Variables

intheStudy

Variable

Mean

SD1

23

45

67

89

1011

1213

1415

1Log

(sales)

13.23

1.03

1.00

2Log

(Net

profi

t)3.60

1.41

0.45***

1.00

3Diversity

policy

0.39

0.49

0.01

0.05

1.00

4Tribaldiversity

0.71

0.62

-0.03

-0.09

-0.12*

1.00

5Tribalidentity

3.89

1.10

0.17*

0.05

-0.10*

.74***

1.00

6Log

(GDP)

25.02

1.25

0.42***

0.25**

0.04

-.36**

0.07

1.00

7Log

(population)

17.23

1.03

0.27**

0.25**

0.03

-.18*

-0.01

.75***

1.00

8Region-West

0.16

0.37

-0.16*

-0.12*

-0.07

0.64***

0.37**

-.38**

0.01

1.00

9Region-East

0.05

0.23

-0.10*

-0.08

-0.01

0.23**

0.18*

-.37**

-.38**

-.11*

1.00

10Region-South

0.36

0.48

0.37**

0.18*

-0.05

0.11*

0.61***

.55***

0.16*

-.33**

-.18*

1.00

11Region-North

0.39

0.49

-0.17*

-0.02

0.10*

-.82***

-.95***

0.01

0.13*

-.35**

-.19*

-.60***

1.00

12Region-Central

0.03

0.18

-0.08

-0.07

0.01

0.31**

-0.04

-.27**

-.30**

-0.08

-0.05

-.14*

-.15*

1.00

13Economy-Low

0.17

0.37

-0.11*

0.11*

0.12*

-.18**

-.39**

-.14*

0.11*

-0.01

-.11*

-.34**

0.32**

0.18**

1.00

14Economy-Medium

0.10

0.30

-0.09

-0.20**

-0.09

0.08

-0.06

-0.16*

-0.08

0.30**

-0.08

-.21*

0.04

-0.06

-0.15*

1.00

15Economy-High

0.73

0.44

0.15*

0.04

-0.04

0.10*

0.38**

0.22**

-0.04

-.19*

0.15*

.43***

-.30**

-.11*

-0.74***

-.55***

1.00

N=425;

*p<

.05;

**p<

.01;

***p

<.001

igure 3. Summarized results of main effects of tribalentity and tribal diversity

TRIBAL DIVERSITY AND FIRM PERFORMANCE ZOOGAH

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

Fid

positive support for diversity policy. The positive effect isconsistent with the theoretical proposition that social identi-ties determine diversity (Nkomo & Cox, 1996). However,the negative effect seems to counter that proposition.Second, diversity policy mediates the relationship betweentribal diversity and firm performance. Sobel tests of media-tion of diversity policy in the relationship between tribaldiversity and firm performance were significant. However,the Sobel test for mediation of diversity policy in the rela-tionship between tribal identity and firm performance wasnot significant. One reason is that identities are intrapersonalcognitive attributes that differ from the structural character-istics of diversity (Milliken & Martins, 1996; Nkomo &Cox, 1996). Another reason may be the different levels:

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Figure 4. Interaction plots of tribal diversity and tribal identity on firm performance

TRIBAL DIVERSITY AND FIRM PERFORMANCE ZOOGAH

tribal identity and diversity are at the national level whileHRM-DP and performance are at the firm level. Multileveltheory suggests that cognitive, affective, and behaviouralphenomena function differently in national and firm levels(Kozlowski & Klein, 2000).

Third, tribal diversity relates positively to HRM diver-sity policies and firm performance, and diversity policiesrelate positively to firm performance. Collectively, the find-ings suggest negative and positive contextual effects of tribalidentity and tribal diversity. In addition, results from theindustry analyses suggest that tribal diversity has a signifi-cant effect on firm performance in some industries. Tribaldiversity relates to profitability negatively in construction,

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

metal/steel, tobacco, mining, and telecommunicationindustries. Even though these industries are labour intensive,they require singularity or homogeneity of thought. To theextent that diversity thought processes are prevalent, as isoften the case in heterogeneous contexts, they undermineinteractions that are essential for performance. In the majorityof industries, the effects were not significant.

These findings are significant for a number of reasons.First, this seems to be the first multilevel study to show thattribal diversity relates to firm performance. It providespreliminary evidence for diversity scholars to build upon infuture studies as they examine other factors influencing thetribal diversity-firm performance relationship. Second, the

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finding that tribal identity relates to HRM-DP and firm per-formance is important. I used an indirect approach byadopting secondary data. Had a survey been administered,respondents would have denied their tribal identification.This tendency is evident in the Afrobarometer data. In thecase of Ghana, for example, 4% of participants identify withtheir tribes. As a Ghanaian, I know that is not true. Tribalismor tribal identity is very high in Ghana, particularly amongmajor tribes like the Akans and Ewes. There is also preju-dice against other tribes. Verifiable anecdotal evidence sug-gests that individuals from northern Ghana (i.e., Dagomba,Gurunni, and Wala tribes) are often discriminated againstwith regard to employment and opportunities.

Overall, the study contributes to the diversity, HRM,and African management literatures. By examining multi-level effects of tribal diversity on firm performance I haveprovided preliminary evidence that future research can ex-pand upon. Unlike other geographic contexts, Africa hasmultiple tribal groups. The benefits of those heterogeneousgroups can be exploited for growth and development(Hobday, 1995). The findings here suggest that the benefitsof diversity are not only limited to the national level, assuggested by economic studies, but also can be extendedto firms.

Applied Implications

The contributions have theoretical and practical impli-cations. Theoretically, they provide a foundation for futureresearch. The model examined in this study can be inte-grated with institutional and human capital theories in futurestudies to validate the RAIT (resource, agency, institutional,and transaction cost) model that was proposed as applicableto Africa (Zoogah, 2008). For example, the effect of humancapital provides insight to foreign organizations that wonderwhat resources are available to influence industrial activityin Africa. Even though other studies recognize the popula-tion of Africa as a resource (Collier, 2007), the capabilitiesof the populations as assets that can be leveraged have notbeen examined. It will be interesting to examine the role ofinstitutional climate in the tribal diversity-firm performancerelationship. Is institutional climate a moderator or mediator?Previous research has shown that institutions are critical to na-tional development (Rodrik, Subramanian, & Trebbi, 2004).In addition, the study has practical implications. First, foreignorganizations, particularly multinational corporations, can usethe findings as a basis to establish mechanisms that enhancethe effects of tribal diversity. The insight from tribal identitycan also be used to develop systems that neutralize high tribalidentification in the workplace.

Limitations and Future Research Directions

Despite the above contributions, the study has limita-tions. First, tribal diversity is computed at the societal level.

Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.

I believe it is important as a preliminary endeavour given thepaucity of multilevel studies and the challenge of organiza-tional data in Africa (Ugwuegbu, 2001; Zoogah, 2008).Nevertheless, tribal diversity at the firm level will also beimportant in showing how societal level diversity relates tofirm-level diversity in influencing firm performance. It islikely that tribal diversity at the firm level has negativeeffects on firm performance instead of the positive effectsobserved in this study. Diversity has been proposed ashaving both negative and positive effects on firm outcomes(Kochan et al., 2003). Another limitation is that I contentanalyzed the HRM diversity policies instead of surveyingcompanies. Although this was appropriate because of theAfrican context, it introduced many challenges that affectempirical research (Ugwuegbu, 2001; Zoogah & Nkomo,2013). Given the extremely difficult challenge of datacollection in Africa (Zoogah & Nkomo, 2013), it wouldhave been almost impossible to obtain responses from 493HRM managers in the 27 countries in the study. Neverthe-less, scholars with resources could conduct future researchusing the survey approach.

Future studies may also examine how other theoriescombine with diversity in explaining organizationaloutcomes. For example, relative deprivation theory can becombined with diversity to explain firm performance toanswer the question: is the effect of tribal diversity on firmperformance greater in more relatively deprived economiesthan in less relatively deprived ones? Future research mayalso examine the relationship between tribal diversity and in-novation. Diversity has been found to relate to firm innova-tion in other contexts (Sampson, 2007). The extent to whichtribal diversity in Africa influences innovation of African or-ganizations will also be a significant question to answer. Iencourage additional studies with more firm level variables.Lastly, Africa is not the only continent with tribal groups;Latin America (Paldam, 2011), the Middle East (Gao,2012), and Asia (Pandey & Singh, 2012) have such groups.Gao (2012) for example, found that tribal diversity relatesnegatively to public goods services. Will the effect observedin this study be found in the Middle Eastern context? How-ever, the degree of heterogeneity is greater in Africa and thatmay account for the variation across the countries. In othercontexts, such variation is likely to be limited. Future re-search will help shed light on this question.

Conclusion

In this study, I tested the effect of tribal identity andtribal diversity on HRM diversity policy and firm perfor-mance using multilevel techniques. I found support for someof the hypothesized relationships. Overall, the findings sug-gest that tribal diversity is determined by tribal identity andrelates to firm performance (net profit and sales). In onesense they confirm previous findings, particularly economic

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studies, on positive and negative effects of ethnic diversity atthe national level but in another sense, they contributeunique insight on the relationship between tribal diversityat the national level and firm performance. Thus, the studycontributes to the HRM and diversity literatures, particularlyin Africa, where there is a paucity of such research.

Notes

1 According to http://www.businessinsider.com/world-bank-fast-growing-global-economies-2015-6

2 I coded other HRM practices – staffing, employee relations,compensation, training and development, and HR Strategy butfocused on only diversity for theoretical reasons.

3 ǂ = thresholds to compare. G-1 dummies are reported andcompared with the threshold.

4 Available upon request from the author.

JEL Classifications: J15, L25, M14

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