Independent Variable: Diversity

In the corporate world, the term ‘diversity’ is quite broad with various categories which has
different impacts in the firms’ performance. Firms engage in diversification to sustain
competitive advantages (Heirati, O'Cass, Schoefer, & Siahtiri, 2016; Najafi-Tavani, Najafi-
Tavani, Naudé, Oghazi, & Zeynaloo, 2018) and also response to uncertainties, fast changing
business environment, market disruptions and technological opportunities (Statsenko, Corral
de Zubielqui, 2019, p.1; Almeida & Kogut, 1997; Rosenkopf & Tushman, 1994).

Knowledge diversity can be enhanced through education, skills, training from both internal and
external sources which makes the workforce more innovative in nature (Becker and Huselid,
2006; Coff and Kryscynski, 2011; Hunter et al., 2012; Bogers, J. Foss, Lyngsie, 2018, p.1) and
helps to boost the firms’ performance. “A diverse knowledge background specifically allows
individuals to identify and integrate distant external knowledge that is valuable for a firm’s
internal innovation processes” (Allen, 1977; Cohen and Levinthal, 1990; Rosenkopf and Nerkar,
2001; Bogers, J. Foss, Lyngsie, 2018, p.3). It can help individuals in effective decision making,
stimulating creativity and promoting constructive debates ( Certo et al., 2006; Heavey & Simsek,
2013; Talke et al., 2010; Boone, Lokshin, Guenter, Belderbos, 2018, p.281).

Nationality diversity or Workforce diversity in a firm refers to employees from different

countries and backgrounds. These employees have various knowledge about different markets
on a global scale which helps to grasp innovation opportunities and engage in a diversity of
global external knowledge sourcing initiatives (Boone, Lokshin, Guenter, Belderbos, 2018,
p.282). However, teams may not prefer to work with members across their borders which leads
to conflicts in the opinions, competition, dysfunctional political behavior (Boone, Lokshin,
Guenter, Belderbos, 2018, p.283), group biases, social categorization and this negatively impact
the performance of the firms (Jehn and Greer, 2013; Kim, Jeong, W. Yiu, Moon, 2020, p.5).
Although a diverse workforce of the organizations can signal the stakeholders as fair and non-
discriminatory with high levels of social inclusion that helps to “develop a long-term stable
exchange relationship with the organization based on high levels of trust, which will allow them
to have positive expectations about future long-term exchanges with the organization” (Kim,
Jeong, W. Yiu, Moon, 2020, p.6). This results in better firm performances.

Men and women employees possess different knowledge, skills, opinions and perspectives
which helps firms in decision making (Rogelberg and Rumery 1996; Ali et al. 2014; Kim, Jeong,
W. Yiu, Moon, 2020, p.6). They have differences in their characteristics, behavior and also their
style of doing the tasks and handling their teams such as men are tend to be more competitive,
aggressive, rational, decisive, ambitious ( Eagly & Carli, 2003; Fernando, Jain, Tripathy, 2020,
p.486); on the other hand women are collaborative, empathetic, kind and also have superior
information processing, monitoring, planning and corporate social engagement capabilities
(Glass, Cook, & Ingersoll, 2016; Herring, 2009; Fernando, Jain, Tripathy, 2020, p.486). When it
comes to leadership styles men tend to be more task-oriented, dominant, and hierarchical
where as women are more people-oriented, democratic, interpersonal (Bass et al., 1996; Eagly
& Carli, 2003), which tend to benefit the firms as employees became more cooperative rather
than competitive (Rosener, 1995) and motivate each other to be more productive and skilled
(Fernando, Jain, Tripathy, 2020, p.486).
Firms can improve their performance and sustain their growth through recruiting people from
different nations with knowledge diversity as they tend to have ideas, skills and knowledge on a
wider scale and also have the good decision making capabilities as they have already worked on
local and international firms and gained experiences about the global market place. The gender
diversity on the other hand tend to act as a catalyst in running the firms and its operations; the
men employees, although they are strong headed and dominant but their task-oriented nature
will provide the scope to their teammates and colleagues to enhance their knowledge and
decision making capabilities while women employees will support and allow the executives to
share their own perspectives and make them feel important which raises team spirit and
motivate them to improve their performance.
 Performance of
Diversity
Sales Executives

On the basis of the above model, this study has developed the following hypothesis:

H1: There is a positive relationship between the diversity and the performance of the sales
executives. The knowledge, national and gender diversity leads to better performance for firms.
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