The effect of workforce diversity on organizational performance with the mediation role of workplace ethics: Empirical evidence from food and beverage industry

Abstract

This study examines the effect of workforce diversity on organizational performance in the Ethiopian food and beverage sector. It incorporates workplace ethics as a mediator to explain in detail the complex relationship between workforce diversity and organizational performance. The study uses a quantitative design, in which data is collected from a random sample of 359 employees from stratified random firms. A Structural Equation Model (SEM) result verified the viability of three of the four proposed hypotheses. Organizational performance is not directly affected by workforce diversity. But it directly changes in response to the change in workplace ethics. Besides, workplace ethics mediate the relationship between workforce diversity and organizational performance. This implies a more advanced relationship exists between diversity and performance, involving effects transitions via workplace ethics, than what this study initially proposed. Thus, an approach to improving firm performance involves reinforcing good workplace ethics practices. Organizations can mitigate the negative impact of workforce diversity on workplace ethics by creating a more inclusive and ethical workplace. This includes providing training on diversity and inclusion and promoting a culture of respect and understanding.