Identifying Organizational Faultlines with Latent Class Cluster Analysis

Abstract

Faultline theory proposes that when multiple attributes are aligned in groups they create homogeneous subgroups, characterized by within-group similarities and between-group differences. As homogeneity increases, these differences are increasingly likely to acquire meaning to subgroup members and thus to influence behavior. While the face validity of faultlines is theoretically appealing, empirical measures have been difficult. The most commonly used, Fau, D, and FLS, have been limited to small groups, two or at most three attributes, and do not easily integrate nominal, categorical, and continuous variables. This paper proposes latent class cluster analysis (LCCA) as an additional analytical tool. LCCA is useful for large groups, and facilitates analysis of numerous attributes independent of underlying distributions. After reviewing the multiple-attribute literature, the most common faultline measures are described and compared with LCCA. A study of faultlines in a large organization is presented. LCCA induces a five-class model of organizational faultlines. A comparison of work-related communication contacts indicates that subjects have more within-subgroup than betweensubgroup contacts, supporting the criterion-related validity of the faultline solution.