Organizational Boundary Conditions to Prevent Negative Performance Consequences of Age Diversity

Abstract

This paper seeks to advance the diversity literature by investigating organizational performance consequences of age diversity. Drawing from social-identity and social-categorization theory, we propose that age diversity indirectly relates negatively to company performance through the intermediation of the perceived age-discrimination climate. As main contribution, top managers’ age stereotypes and organizational efforts to support diversity are introduced as organizational-level moderators of the indirect age diversity/company performance relationship. Structural equation modeling was utilized to test the moderated-indirect hypotheses using a multisource data set comprising 63 companies with 17,439 employees. The results supported all hypotheses, indicating that low top managers’ age stereotypes and high organizational efforts to support diversity are potential buffering factors that can inhibit the indirect negative effect of age diversity on performance within an organization. These results are discussed in light of their contribution to the diversity literature as well as their implication for practitioners.