The purpose of this paper is to explore the “black box” of top management team (TMT) processes such as communication and power distribution, examining the example of ethnically diverse TMTs in Latvia.
The study relies on case studies of two multinational companies operating in Latvia.
The findings suggest that ethnic diversity in TMTs leads to more informal and open communication in the teams, but has no clear influence on power distribution in the teams. The results highlight the importance of studying variables that could moderate the effects of ethnic diversity on communication and power distribution; throughout the study, these variables were identified as, but not limited to, environment and shared goals.
This paper uses case studies to explore the black box of team processes, and proposes an alternative operationalization of cultural diversity, measured as ethnic diversity. It also advocates an alternative conceptualization of TMTs expressed in terms of decision‐making power. The paper's major contribution is its opening up and exploration of team processes, usually avoided by researchers because of their assumed complexity. Moreover, the study contributes to TMT studies by presenting the Latvian environment as a unique research locus where ethnic identities are rich and various.
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