As part of the comprehensive transformation of Higher Education in South Africa, three universities merged on 1 January 2005 to form the University of Johannesburg (UJ). All three institutions were creatures of the apartheid ideology and had distinctive institutional cultures and missions. Three institutional culture surveys were conducted between 2008 and 2012 to guage the post-merger culture in the new institution. These surveys provided valuable insights into the psyche of the UJ staff corps and reasons for the initial sense of alienation experienced by many. Despite the ending of South Africa’s apartheid regime in 1994 with the country’s first democratic elections, it is apparent from these culture surveys that diversity and transformation are still regarded primarily as racial constructs. The official race classification system in South Africa (“African”(Black), “Colored”, “Indian”, “White”)perpetuates a culture of racial distinction. The UJ institutional surveys also illustrate this: answers provided to the survey questions indicate that race is still animportant determinant of perceptions of cultural-institutional differences. During the merger,group diversity was clearly determined by allegiance to the one or the other of the legacy institutions. Now, some ten years later, race clearly determines group diversity– albeit not definitivelyso. This poses a significant challenge to successful diversity management, and ultimately a challenge to creating a harmonious environment for sustainable economic development.