ABSTRACTThis article analyzes the relationship between cultural diversity and work group outcomes (work group satisfaction and work group performance) in multicultural organizations, in the presence of moderating variables of intragroup conflicts (tasks, relationships and process conflicts). The literature review suggests that cultural diversity negatively affects work team outcomes and triggers conflict. The analysis of empirical data collected from employees of multicultural organizations produces results in line with the literature and suggests that there is a negative relationship between cultural diversity and work group outcomes, while intragroup conflicts have a strong moderating effect on the relationship between the two . While research implies that culturally homogeneous groups perform better, it is often impossible to bring such groups together in the current business landscape. Therefore, targeted cross-cultural training programs can help individuals function well in culturally diverse groups by reducing conflict and generating favorable group outcomes. INTRODUCTION Organizations often rely on culturally diverse groups to coordinate operations across countries, decrease redundant functions, reduce product development time, and bring together a diverse pool of expertise. Culturally diverse groups, however, may not live up to these expectations. Individual differences give rise to intragroup conflicts that hinder group performance as well as group members' satisfaction with the group. Given that homogeneous groups hardly exist and heterogeneous work groups are the necessity of today's organizations, it is pertinent to analyze the element of conflict between members of a group and its effect on the group's performance outcomes. Pakistan, with its strategic geographical location and multicultural society, has been an attractive target for several international organizations investing in this market and setting up operations. These multinational organizations are required to practice multicultural management for effective operations (Islam, 2004). Local employees of such organizations are expected to work with people from different nationalities who bring with them distinct cultures to the workplace that impact the outcomes of their work groups. Another perspective of multiculturalism in Pakistani organizations is the presence of ethnic, gender, religious, sectarian and geographical differences that influence relationships between people working in the same organization. This can be explained by the fact that women tend to experience differential treatment in the workplace. People from different provinces of Pakistan generally differ in their attitudes and behaviors. Muslims tend to have a biased attitude towards non-Muslims, and sectarian differences cause serious conflicts of interest (Zubair, 2006). The current study tends to focus on such intercultural conflicts that influence work team outcomes in the workplace. The study is conducted in Pakistani context on national and international organizations.