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Purpose This study aims to examine the influence of diversity climate perceptions (DCPs) on team member’s contribution to team innovation and team performance in a multicultural team (MCT). The authors also investigate the moderating effect of cultural intelligence on these relationships. Design/methodology/approach The authors draw upon the interactional model for cultural diversity to build their hypotheses. Data was gathered from 43 teams consisting of 217 members using a structured questionnaire. Ratings were obtained from both team members and supervisors. The data collected was analyzed using structural equation modeling. Findings Results indicated that when team members have positive DCPs, it had a positive impact on their innovation and performance in the team. Cultural intelligence was also found to have a direct impact on team member innovation but not on team member performance. Furthermore, cultural intelligence was found to positively moderate the DCPs – team member performance relationship but not the DCPs – team member innovation relationship. Practical implications Managing diversity is a key concern for organizations worldwide given the exponentially rising cultural diversity within the workforce. This study would enable practitioners to understand that developing positive DCPs and cultural intelligence of team members are critical to the success of MCTs. Originality/value Literature has documented mixed results pertaining to team diversity and its effect on performance, resulting in scholars urging the need to explore how the negative effects of team diversity can be mitigated. This research establishes that positive DCPs and cultural intelligence as two key factors contributing to the performance of MCTs.

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Job transfers within the country can lead to adjustment issues, similar to what expatriates face, especially in the case of highly diverse countries, where a host of sub-cultures exist with distinct cultural practices within a single national culture. Intra-national variations in terms of language, ethnicity, food, clothing, economic development, geographic regions or urban-rural differences can be as significant as cross-cultural differences and cause barriers to social integration. Thus, it becomes important to equip employees with cross-cultural capabilities when they are deployed to a culturally distinct part of the country. The purpose of this study is to investigate the role of cultural intelligence (CQ) as a critical capability that can enable the cross-cultural adjustment (CCA) of employees in a domestic context. Participants of this study consisted of employees from the information technology sector of India, who were transferred to a different state within the country in the past 1-month. They were further categorized into those working in culturally homogenous versus heterogeneous environments. Data were gathered using a structured questionnaire. The hypotheses under study were tested using structural equation modeling. The results indicated that CQ enabled the adjustment of employees within the domestic context. Furthermore, the CQ-CCA relationship was found to be positively moderated by intra-national diversity. While the ability of CQ to predict outcomes in cross-cultural scenarios has already been explored in employee mobility literature, this paper addresses the issues of intra-national diversity and domestic adjustment within the CQ framework, and establishes the usefulness of CQ to overcome the challenges put forth by intra-national differences and within-country cultural variations.