TUM Management Insights

Does diversity have a positive or negative effect on a team? – It’s all a matter of perception!

Organizations frequently wrestle with two questions: Is diversity helpful in a team? And, if so, under what circumstances? Diversity is defined here as creating a (work) team that is made up of individuals with a range of different characteristics. This includes not just differences in demographic factors, such as a team that includes people of different genders, ages or nationalities. It also involves differences in character traits – like conscientiousness – or other qualities – such as values or goals – that are not immediately noticeable.

Academic theories make different predictions about whether diversity in a team will have a positive or negative effect on team members and organizations. For instance, the information/decision-making perspective states that teams made up of a range of members have more information at their disposal and can discuss questions with one another more intensely, which can have a positive impact on creativity and innovation. By contrast, social categorization theory states that teams with a range of members tend to form sub-groups, a factor that can have a negative impact on team composition.

An innovative study explored this dilemma and examined in what way the perception of diversity among team members determined whether diversity had a positive or negative impact. This study was conducted by Tanja Hentschel, a Ph.D. candidate for the professor of research and knowledge management (Professor Dr. Claudia Peus), Professor Meir Shemla (Erasmus University of Rotterdam, Rotterdam School of Management), Professor Jürgen Wegge (Technical University of Dresden) and Professor Eric Kearney (University of Potsdam). The researchers asked 241 people from 38 teams how diverse they thought their teams were. They also asked team members whether their teams were dominated by negative or positive emotions, how strongly they identified with their teams and whether emotional conflicts existed in the team. In addition, the team members were asked whether they personally believed that highly diverse teams were effective.

The results confirmed the assumptions of Tanja Hentschel and her colleagues: The perception of diversity in a team determines whether diversity has a positive or negative effect. The key findings of the study were:

– High levels of perceived diversity (non-objective diversity in gender, age, education, nationality or time in service) were related to more negative emotions and emotional conflicts in a team.

– High levels of perceived diversity (non-objective diversity in gender, age, education, nationality or time in service) wererelated to fewer positive emotions and less identification with the team.

– A positive attitude toward diversity among team members in a team could lower high levels of perceived diversity (emotional conflicts and less identification)

The findings show that the perception of team members plays a key role in determining whether diversity in a team has a positive or negative effect. The study offers a helpful lesson for managers and members of company communications departments: They should identify commonalities and address them. For instance, a priority can be placed on a joint team identity (i.e., “We as the purchasing department…”) or joint team goals can be pursued. In addition, it is useful to communicate the benefits of diversity (i.e., innovation potential) so that team members can develop a positive attitude about diversity. As the study found, this is particularly relevant in teams with high levels of perceived diversity.

In summary, the study undertaken by Tanja Hentschel and her colleagues shows that the question of whether diversity is helpful or detrimental in a team depends on the perception of it by team members. In other words, the impact of diversity in a team is determined not (only) by how diverse a team is in terms of demographic considerations, but also and above all on how different or how similar the team members themselves are. And this can be a starting point for companies in addressing the topic.

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