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The popular press often touts workforce demographic diversity as profit enhancing because it may reduce the firm's communication costs with particular segments of customers or yield greater team problem-solving abilities. On the other hand, diversity also may raise communication costs within teams, thereby retarding problem solving and lowering productivity. Unfortunately, there is little empirical research that disentangles the above countervailing effects. Diversity in ability enhances the team productivity if there is significant mutual learning and collaboration within the team, while demographic diversity may harm productivity by making learning and peer pressure less effective and increasing team-member turnover. We evaluate these propositions using a novel panel data from a garment plant that shifted from individual piece rate to group piece rate production over three years. Because we observe individual productivity data, we are able to econometrically distinguish between the impacts of diversity in worker abilities and demographic diversity. Teams with more heterogeneous worker abilities are more productive at the plant. Holding the distribution of team ability constant, teams composed of only one ethnicity (Hispanic workers in our case) are more productive, but this finding does not hold for marginal changes in team composition. We find little evidence that workers prefer to be segregated; demographically diverse teams are no more likely to dissolve, holding team productivity (and hence pay) constant, than homogeneous teams.

Although some researchers have recognized that context can play an important role in explaining the mixed findings of past diversity research, to date a comprehensive framework for specifying these contextual influences has been lacking. In order to address this gap, we propose a framework for future research that incorporates contextual variables at extra-organizational, organizational, and team levels. We consider how these various aspects of diversity influence categorization-based or elaboration-based diversity outcomes. We also present findings of a literature review that identifies aspects of diversity context that have received attention directly or indirectly in research conducted between 1999 and 2007.

Several comprehensive reviews are united in drawing the conclusion that the cumulative research evidence on work team diversity is equivocal. Rather than review the extant state of diversity research, in this paper we redirect attention to the context of workplace diversity as a possible explanation for these mixed findings. We discuss how diversity context may be conceptualized, specify various aspects of this context at multiple levels of analysis, and consider how contextual variables can shape the outcomes of work team diversity. We present findings from a literature review (1999–2006) to identify key trends and patterns of results reported in recent research as well as contextual factors that have received attention to date. This paper also considers how the non-significant, positive, negative, and curvilinear effects of diversity reported in studies can be explained by the contextual factors outlined. Implications for future research are also discussed.

Creativity is a strongly context related, collective and collaborative task across multiple boundaries that are of immaterial and material nature. Numerous factors play a role in the emergence of creativity. Leadership styles and diversity have undoubtedly an impact on team creativity. Creative teams face many processes inherent paradoxes which leaders and members need to balance and overcome together. According to the observations and research findings discussed in this chapter, effective management of diversity for creativity requires a ‘humble leadership’ style as well as different communication competencies and strategies. This book chapter provides theoretical and practical insights for those responsible for diversity management in creative teams, based on two empirical studies conducted between 2019 and 2022. Competencies and strategies are presented that may help leaders and teams navigate through highly dynamic, paradoxical interaction processes and, thus, turn their diversity into a creativity asset. In addition, a glimpse of the Team Creativity Navigator (TCN) is offered, which is a new assessment and development tool that supports leaders’ and team members’ learning processes for inclusive, creativity enhancing collaboration. As such, our chapter is an empirically based conceptual contribution with the objective of providing practitioners (and researchers) with insights into appropriate strategies to boost creativity in diverse teams.

Although cross-cultural research tends to compare deeply held values across nations, different cultures can exist within nations, as evidenced by clashes of cultures in Israel, Afghanistan, Iraq, and elsewhere. We refer to multicultural teams (MCTs) to reflect our interest in team dynamics involving people from varying cultures (which may or may not include people of different nationalities). MCTs are likely to be characterized by “cultural value diversity,” or varying cultural values among members, and we present data in support of the hypothesis that MCT performance is influenced more significantly by cultural value diversity than by the aggregated level of any particular cultural value or demographic diversity within the teams.

Purpose – The purpose of this chapter is to explore the effects of team composition on justice climate strength. Specifically, we adopt a social network approach to justice in teams to explore the social-psychological mechanisms underlying diversity effects.

Design/methodology/approach – Using data from 80 self-managed project teams, we consider the impact of surface-level and deep-level diversity in teams on member social network ties and subsequently dispersion in their perceptions of procedural and interpersonal justice.

Findings – The results showed that diversity in team members’ psychological attributes – specifically, preferences for individualism – were associated with variability in members’ attachment to the team. In contrast, team gender and racial diversity were not significantly related to member social network ties. The results also demonstrated a relationship between network tie diversity and both procedural and interpersonal justice climate strength, such that variability in members’ attachment to the team was related to variability in their justice perceptions.

Overall, these findings demonstrate that teams characterized by higher levels of deep-level diversity may experience greater variability in their social interactions, which amplify variability in members’ justice perceptions.

Implications – Practically, these findings suggest that potential performance advantages of informational diversity in teams may come at a cost, as such diversity may reduce the quality of members’ justice experiences. Theoretically, they provide insight into the nature of the relationship between diversity and justice, which is largely dependent on the social psychological processes evoked by diversity. They also highlight team social networks as a useful means for examining such processes and understanding the operation of justice in teams.

The article applies upper echelon theory to explain variation in parent firms’ post-acquisition financial performance. We develop and test a latent variable model hypothesizing that top management team (TMT) demographic diversity affects financial outcomes through teams’ collective beliefs. In so doing we identify three constructs which potentially underlie classic TMT demographic diversity measures. Also, we propose two fundamental structural properties of team beliefs extrapolated from individual level cognitive complexity theory. Results show both positive and negative effects on financial outcomes from the TMT demographic diversity constructs through the belief constructs. We discuss the importance of including mediating constructs when attempting to unravel TMT diversity’s effects on firm level outcomes.

This chapter explores the role of language in the relationship between diversity and team performance. Specifically, we consider how a linguistic approach to social categorization may be used to study the social psychological mechanisms that underlie diversity effects. Using the results of a study examining the effects of gender, ethnicity and tenure on language abstraction, we consider the potential implications for team processes and effectiveness. In addition, we propose a revised team input-process-output model that highlights the potential effects of language on team processes. We conclude by suggesting directions for future research linking diversity, linguistic categorization, and team effectiveness.

The chapter provides a brief review of team diversity research from its roots in group composition and workforce demographics through recent trends toward dynamic multilevel models. The divergence from this research area's early motivations in social justice and inclusion to a primarily economic motivation is highlighted. The chapter also reviews major theories that have been used to explain diversity effects in team interactions and outcomes. The review leads to a discussion of three broad critiques of mainstream diversity research, namely a predominance of US cultural outlook, a narrow disciplinary base in organization sciences and psychology, and inadequate attention and overly simplistic perspective on communication processes. The chapter ends with implications for team diversity research and a discussion of how the suggestions can be applied to emerging dimensions of diversity.