Manager‐Rated Cooperative Climate as a Driver of Business‐Establishment Financial Performance: The Role of Employee Racioethnic Diversity as a Contextual Boundary Condition

ABSTRACT The present study examined Beus et al.'s group‐based climate‐congruence theory in the context of 670 establishments of a national retailer. The theory proposes that climate‐outcome relationships can be influenced by contextual conditions such as industry and national culture. We extended such logic to the indirect relationship between manager‐rated cooperative climate (through collective employee job performance and employee‐rated cooperative climate) and business‐establishment financial performance. Drawing from the information‐based approach to diversity, we conceptualized business‐establishment employee racioethnic diversity as a contextual condition that can amplify the benefits of cooperative climate for business‐establishment performance by providing a variety of knowledge, skills, and abilities (KSAs), experience, and perspectives to bear on work tasks. In support of our predictions, results showed that manager‐rated cooperative climate (Year 1) had a more strongly positive indirect effect on business‐establishment financial performance (Year 3), through collective employee job performance (Year 2) and employee‐rated cooperative climate (Year 2), in establishments with higher versus lower employee racioethnic diversity. We discuss the theoretical and practical implications of our findings considering the study's strengths and limitations.