The role of purposeful diversity and inclusion strategy (PDIS) and cultural tightness/looseness in the relationship between national culture and organizational culture

• National culture effect on organizational culture varies across cultures.
• National culture effect on organizational culture is moderated by diversity strategy.
• Loose national cultures will have more organizations with diverse cultures.
• Tight national cultures will have organizations with more unique cultures.

The effect of national culture on organizational culture has long been debated by scholars. Institutional theory scholars argue for a strong effect of national culture on organizational culture through institutional isomorphism, whereas organizational culture scholars argue that organizations are capable of creating unique cultures that can bolster their competitive advantage. In this paper, we bridge the gap between the two literatures and propose that tighter cultures are less likely than looser cultures to tolerate deviance from the national culture surrounding them. At the organizational level, diversity strategy can vary dramatically; organizations that purposefully use diversity strategies are more likely to develop unique organizational cultures. Further, the interplay between national and organizational cultures result in greater constraining forces of national culture over organizational culture in tighter cultures than in looser ones; however, diversity strategies in tight cultures are more likely to foster distinct organizational cultures than those found in loose cultures.