Managing diversity in project teams and its effects on organizational effectiveness: the case of Kenya Revenue Authority

Abstract

Diversity management in teams becoming increasingly important to organizations. This study investigated the concept of diversity management in project teams and the influence on organizational effectiveness. The purpose of the study was to determine whether the management of diversity of teams in the Project Management and Business Analysis Office (PMBO) influenced organizational effectiveness at KRA. Four objectives that guided the research were: to determine the influence of managing cultural diversity in PMBO teams on organizational effectiveness; to establish the influence of managing demographic diversity of PMBO teams on organizational effectiveness; to investigate the influence of managing cognitive diversity of PMBO teams on organizational effectiveness; and to assess the influence of managing technical diversity of PMBO teams on the organizational effectiveness of KRA. The study was carried out at the PMBO Nairobi offices at KRA. It was restricted to Nairobi County due to time limitations and inability to travel to all county offices to collect data from PMBO staff. The target population was 200 project managers and team members. A sample size of 180 was used. Structured questionnaires were designed and pilot tested for validity. The questionnaire was collected after one week and reminders sent to ensure high response rates. Responses were analyzed using quantitative methods. Descriptive statistics and correlation tests using Statistical Package for Social Sciences (SPSS) formed the basis of the quantitative analysis. Results of quantitative analysis showed that the management of cultural diversity, cognitive diversity, demographic diversity and technical diversity influenced organizational effectiveness. The management of cultural diversity had a strong positive correlation (0.732) with organizational effectiveness. Religion and ethnicity were found to have a greater influence on the teams in the organization. The management of demographic diversity had a weak positive correlation of 0.482 with organizational effectiveness. Age and geographic differences were found to have greatest effect on the project teams at PMBO. There was a weak positive correlation (0.313) between the management of technical diversity and organizational effectiveness. Similarly, there was a weak positive correlation (0.368) between the management of cognitive diversity and organizational effectiveness. Regression results showed that cultural diversity management had greater effect on organizational effectiveness at 53.5% followed by the management of demographic diversity (23.2%), the management of cognitive diversity (13.6%) and the management of technical diversity (9.7%). The study concludes that cultural diversity has the greatest influence on organizational effectiveness while technical diversity has lower influence on organizational effectiveness. The study recommends that project managers at PMBO could improve cultural diversity by resolving ethnic conflict and encouraging multilingual communication. PMBO could improve demographic diversity by accentuating a culture of respect, providing diversity training and developing norms for demographically teams. Recommendations for improving technical diversity are accommodating alternative perspectives and encouraging cognition among technically-diverse group members while recommendations for improving cognitive diversity are developing cross-functional groups and information integration. The study proposes that the study be carried out on a larger scale to develop a better understanding of the effect of managing diversity in teams on organizational effectiveness.