Empirical modelling of corporate diversity, innovation and company performance in the automotive industry in South Africa

Abstract

This research explores the relationship between corporate diversity, innovation and company performance in South Africa’s automotive industry. The study is motivated by unsatisfactory company performance in this industry, which is linked to various factors such as high market saturation, high labour costs, and the need for innovative products and services. Moreover, the existence of various research gaps, particularly in the testing of concepts such as corporate diversity, innovation and perceived company performance in the South African automotive industry provided the need for the study. The research study is quantitative in nature, adhering to the correlational research design. The stratified random technique was utilised in recruiting 215 operations and marketing professionals from the automotive industry in various provinces of South Africa to participate in the study. Hypotheses were tested using partial least squares structural equation modelling. The results of the study show that two diversity dimensions, namely attitude about diversity and cultural diversity, positively influenced innovation. Innovation positively influenced all five company performance dimensions, namely perceived value, customer loyalty, market performance, financial performance and environmental performance. Using these results, a model through which corporate diversity can be applied to company performance with the mediation of innovation culture is proposed.