This document summarizes a presentation on diversity effects on sustainable group performance. It defines types of diversity, discusses research showing both benefits and challenges of diversity for group performance, and outlines some practical implications. The presentation addresses how diversity can improve decision-making and problem-solving but also potentially lead to issues like groupthink or polarization among subgroups. It notes the complex trade-offs involved and difficulties translating contradictory diversity research into clear practical advice.

1. Diversity effects on
sustainable group performance
Jesper Bernhardsson
M.Sc. Student in International Business
Stockholm School of Economics | 10 November 2014

2. 10/11/2014 2
Agenda
A. Definitions
B. Research
C. Evaluation and reflections

3. 10/11/2014 3
What is group diversity?
• Demographic variables
• Age, gender, ethnicity, educational level etc.
• Functional backgrounds
• E.g. Engineering, business
• Surface-/deep level diversity
• Age, gender vs. ability, opinion, personality
A
B
C

4. Why is diversity important for companies?
10/11/2014 4
• Underutilized source of competitive advantage
• Optimal group design
• 1/3 >1 female execs in companies (Allbright, 2014)
• Strong relationships between diversity and group
performance, both positive and negative
A
B
C

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Group performance
1. Accomplishing group tasks
2. Strengthening group capabilities
3. Fostering well-being of group members
Hackman & Katz (2010)
A
B
C

6. Is diversity always good?

7. 10/11/2014 7
Groups have different objectives
• Production
• Service
• Decision-making
• Leadership
• Change
• Discovery
• Learning
Hackman & Katz (2010)
A
B
C
Some task types gain more than others from diversity

8. 10/11/2014 8
Homogeneity vs. heterogeneity
“The implication would seem to be that
homogeneous groups should be created in certain
contexts, and diverse groups created in others.”
BUT diverse groups always posses more knowledge.
Hackman & Katz (2010)
A
B
C

9. Diversity research

10. 10/11/2014 10
Decision-making
• Problem-solving ability
• Creativity
Williams & O’Reilly (1998)
A
B
C
Decision-making quality can be vastly improved by design
aimed to make group capabilities broader

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Networks and bonds
• Internal density  group cohesion
• Instrumental and expressive ties
• Complex problem-solving gains from diversity
• External network range
Balkundi & Harrison (2006); Sparrowe et al. (2001); Reagans, Zuckerman & McEvily (2004)
A
B
C

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Groupthink
“A mode of thinking that people engage in when they are deeply involved
in a cohesive in-group, when the members’ strivings for unanimity
override their motivation to realistically appraise alternative courses of
action.”
Janis (1982)
A
B
C
Too strong cohesion can make a high performing group
commit errors it would not otherwise make.

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Building consensus
• Group viability
• Polarization
• Sub-group formation
Knight et al. (1982); Harrison & Klein (2007)
A
B
C
Sometimes diversity leads group members to become more
polarized rather than more moderate in their opinions.

14. Some practical implications

15. 10/11/2014 15
Translating theory into practise – caveats
“So many contingencies [have been] identified and documented that
conceptual models become inelegant and practical advice impossible.”
Hackman & Katz (2010)
A
B
C
Contradictory results and ambiguous relationships makes
theory unwieldy for implementation.

16. 10/11/2014 16
Some personal takeaways
• Trade-offs exist between group efficiency
effectiveness goals
• Diversity can have both positive and negative
impacts on group performance
• Diversity a source of competitive advantage
A
B
C

17. 10/11/2014 17
Some managerial implications
• Create mechanisms that allow members to
participate in knowledge exchange
• Remove frictions that limit information-sharing
• (e.g. social hierarchy, seniority, pride)
• Challenge managers to design groups
according to task.
A
B
C

18. Q&A