Jackson, Josh, Erhardt - 2003 - Recent Research On Team and Organizational Diversity - SWOT Analysis and Inplications
Jackson, Josh, Erhardt - 2003 - Recent Research On Team and Organizational Diversity - SWOT Analysis and Inplications
Aparna Joshi
Institute of Labor and Industrial Relations, University of Illinois, Champaign, IL, USA
Niclas L. Erhardt
School of Management and Labor Relations, Rutgers University, Piscataway, NJ, USA
Received 28 February 2003; received in revised form 19 May 2003; accepted 21 May 2003
Sixty-three studies published in the years 19972002 are reviewed to assess the effects of
workplace diversity on teams and organizations. Four major questions are considered: Which
personal attributes have diversity researchers studied in recent years? What has been learned
about the consequences of diversity for teams and organizations? What has been learned
about the role of context in shaping the effects of diversity? How has research addressed
the multi-level complexities inherent in the phenomenon of diversity? For each question, we
consider the strengths and weaknesses of recent diversity research, point out opportunities
for new research, and identify threats to continued advancement. The review concludes by
considering practical implications of the accumulated evidence.
2003 Published by Elsevier Inc.
During the past decade, the domain of diversity has grown to encompass a wide range
of research on a variety of phenomena. An overview of the debates and history associated
with the term recently appeared in this journal (Ashkanasy, Hartel & Daus, 2002) and
will not be repeated here. Instead, we begin by simply explaining how we use the term
diversity in this article and describing the domain of research that is the focus of this
article.
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Societal Context
Organizational Context
Group (e.g., Team or Department) Dynamics
Individual Dynamics
Diversity
Affective Reactions
Team Behaviors
Long-term
Consequences
* Content
* Structure
* Cohesion
* Satisfaction
*Commitment
* Communication
* Conflict
* Cooperation
* Performance
* Promotion
* Pay
* Turnover
Attributes Studied
Several taxonomies of the content of diversity have been offered to describe the array of
personal attributes of interest to researchers (e.g., Jehn, Northcraft & Neale, 1999; Milliken
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& Martins, 1996). Following Jackson et al.s (1995) taxonomy, we differentiated between
task-related and relations-oriented attributes as well as readily detectable and underlying
attributes. Relations-oriented diversity includes demographics such as age, sex and racioethnicity, which may shape interpersonal relationships but usually do not have direct bearing
on performance. Task-oriented diversity reflects attributes which are likely to be related to
knowledge, skills and abilities needed in the workplace (i.e., function, tenure, education).
Typically, detectable attributes such as age, sex and racio-ethnicity have been considered
representations of an individuals values, beliefs and attitudes (Fiske, 1993). From a legal
perspective these attributes also represent protected categories and are therefore of interest
to organizations aiming to comply with Title VII law. Recently there has been a growing
interest in other detectable traits because they are thought to be associated with work-related
knowledge, attitudes and behaviors.
In addition, there has been a rebirth (cf. Haythorn, 1968; Hoffman, 1959) of interest
in the effects of underlying attributes such as personality and attitudes. Several studies
incorporated Big Five dimensions of personality, attitudinal diversity or other measures of
deep or underlying diversity (e.g., Barrick, Stewart, Neubert & Mount, 1998; Harrison,
Price, Gavin & Florey, 2002).
Summary of Findings
Most studies addressed the effects of readily-detected, relations-oriented traits, such as
sex, racio-ethnicity and age. Together, readily-detected attributes accounted for 89% of
the diversity effects reported. The relations-oriented attributes that researchers most often
included were sex (included in 34% of studies), racio-ethnic diversity (included in 24%
of studies), and age (included in 31% of studies) diversity. Of the effects reported, 24%
were for task-relevant attributes. Specifically, researchers reported the effects of functional
background (24% of studies), education level (19% of studies), and job tenure (13% of
studies) diversity. Table 1 provides details of the reported effects of diversity on the three
categories of outcomes most often examined in recent research.
Diversity with respect to a single attribute (e.g., sex or racio-ethnicity) may influence
attitudes and behavior, but studies that assess only one aspect of diversity fail to capture the
full spectrum of diversity found in organizations (Cox, 1993). Nevertheless, approximately
43% of the studies we reviewed focused on one diversity attribute only. Researchers choices
of focal attributes varied greatly.
On average, researchers reported diversity effects for two attributes, with some combinations being more common than others. Of the studies that included sex diversity, nearly
50% also included racio-ethnic diversity. Studies that assessed age diversity also included
sex diversity (50%), education level diversity (50%) functional diversity (51%), job tenure
diversity (26%) and organization tenure diversity (21%). Task-related attributes, such as
functional background and education level were most often examined in combination with
age. We found few studies of personality diversity (5%) or diversity in terms of attitudes and
beliefs (these studies are grouped under other forms of diversity in Table 1). When underlying attributes were studied, researchers were likely to also include measures of readilydetected diversity (e.g., see Barsade, Ward, Turner & Sonnenfeld, 2000; Eby & Dobbins,
1997; Harrison, Price & Bell, 1998; Simons, Pelled & Smith, 1999; Thomas, 1999).
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Table 1
Frequency of attributes and outcomes studied in diversity researcha
Type of diversity
Performance
outcomes
Process
outcomes
Affective
outcomes
Total
Age
Cognitions/mental models
Cultural values
Education (content)
Education (level)
Functional background
Nationality
Personality
Racio-ethnicity
Sex
Tenure (in job/team)
Tenure (in organization)
Otherb
25
8
2
2
17
18
1
3
11
23
8
13
13
2
5
7
2
5
5
1
1
3
28
8
2
2
18
17
1
5
21
35
9
14
22
a Values indicate the number of effects reported, not the number of published studies. Values do not total 100%
because a study may include more than one attribute and/or outcome.
b Includes aspects of diversity such as value diversity or attitudinal diversity (e.g., diversity in collectivistic
orientation).
Strengths
Studies of readily-detected, relations-oriented diversity (sex, racio-ethnicity, and age)
predominate empirical work on workplace diversity. The rich theoretical background offered by social identity theory and social categorization theory frames much of this research
(Brewer, 1995; Jackson et al., 1995; Williams & OReilly, 1998). Social identity theory has
been used to predict and understand how diversity influences individual attitudes and behavior as well as team dynamics. To explain the effects of diversity on individual outcomes, the
basic argument is that ones similarity on visible and relatively immutable traits influences
feelings of identification (Tsui, Egan & OReilly, 1992). Within groups, identification based
on demographic similarity is associated with in-group biases and team conflict. By extending the logic of theories that explain individual attitudes and behavior, diversity researchers
have found a strong theoretical rationale for making predictions about how diversity is
likely to influence social processes within teams and organizations (e.g., Jehn et al., 1999;
Pelled, Eisenhardt & Xin, 1999). Although social categorization and social identity theory
were developed originally to explain the effects of readily-detected diversity, some scholars
have used these theories to explain the effects of personality and value-based diversity (e.g.,
Thomas, 1999).
Weaknesses
With the exceptions of social categorization and social identity theory, most of the arguments offered to explain the effects of readily-detected attribute diversity assume that
readily-detected attributes are associated with underlying attributes, which in turn, drive
behavior. For example, explanations for the effects of cultural diversity have pointed to
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the behavioral correlates of cultural values and their likely implications for individual behaviors that may influence team performance (Kirkman & Shapiro, 2001; Thomas, 1999).
For researchers who study top management teams, a common line of argument is that
readily-detected diversity reflects cognitive diversity, which in turn influences team decisions and thus firm performance. Despite compelling pleas for researchers to measure
the underlying diversity that is so central to this line of reasoning (Lawrence, 1997), such
research remains scarce.
When researchers invoke underlying diversity as an explanation for the effects of readilydetected diversity, encouraging them to include measures of underlying diversity may
be appropriate. Nevertheless, it is important to recognize that the established theoretical
value of social identity theory justifies research that examines the effects of readily detectable diversity without invoking underlying diversity as the explanation for any observed
results. The logic of social identity theory does not presume an empirical relationship
between readily-detected and underlying attributes. To the contrary, it asserts that intergroup relations cannot be reduced to individual psychology (Turner & Haslam, 2001).
The same is true of other sociological explanations of intergroup relations (e.g., status
characteristics, numerical distinctiveness, institutional racism). Lack of familiarity with
the variety of legitimate theoretical approaches that may shed light on diversity dynamics also represents a weakness in a community of scholars that should value intellectual
diversity.
Another weakness concerns the measurement and conceptualization of an individuals
identity or status characteristics, and thus the measurement and conceptualization of team
and organizational diversity. Most researchers attempt to identify the unique and independent effects of various dimensions of diversity (e.g., sex, racio-ethnicity, age); this is
true even when they include multiple dimensions of diversity in a study. Very few studies (less than 5%) addressed the question of whether the effect of a particular dimension of diversity depends on the presence or absence of other dimensions of diversity.
A few studies that examined multi-dimension diversity illustrate the potential value of
this approach. For example, Jehn and her colleagues (1999) found that informational (education and function) diversity was negatively related to group efficiency when social
category diversity (sex and age) was high, but not when it was low. Similarly, Pelled
et al. (1999) found that the consequences of diversity for team conflict were best understood by taking into account interactive effects for specific dimensions of
diversity.
Recent theoretical contributions to the field call for a multi-dimensional approach to
defining diversity (e.g., Jackson & Joshi, 2001; Lau & Murnighan, 1998; Ofori-Dankwa
& Julian, 2002). It seems likely that social processes and their outcomes are influenced
by the complex confluence of diversity dimensions, not isolated dimensions of diversity.
An R&D team member may identify herself as well as her team members using multiple
attributes (e.g., White female engineer or Asian male scientist). The teams outcomes
may be determined by the configuration of team members demographic and/or identity
profiles (cf. Frable, 1997). Conceptually, it makes sense that the diversity of attribute profiles
found within teams is likely to influence individual and team outcomes. Unfortunately,
diversity researchers (ourselves included!) have not yet succeeded in tackling the challenge
of empirically assessing multi-dimensional diversity.
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Opportunities
The preceding discussion suggests several opportunities for new research. One apparent
opportunity is to incorporate aspects of diversity that were underrepresented. For example,
if worldwide conflicts make religion more salient within the U.S., this may have important
consequences for workplace dynamics. Furthermore, examining religious diversity may
increase the global relevance of diversity research conducted in the United States. It is
interesting to note, for example, that the national census in Ireland identifies the number of people with each of several religious affiliations but it makes no attempt to assess
racio-ethnicity. Conversely, the U.S. census uses numerous categories to describe ethnicity
but it does not assess religion.
Including measures of underlying diversity as well as readily-detected diversity is another
opportunity for gaining new insights. The potential value of this approach was demonstrated
in a study that assessed both gender and attitudinal diversity (Harrison et al., 2002). The
results suggested that readily-detected diversity influenced team functioning when teams
had little experience together, but over time underlying diversity was more influential.
Although the number of studies considering underlying diversity is still small, such research
seems promising. In addition to studies of attitudinal diversity, we hope to see new research
on diversity in cognitive/decision-making styles (see Simons et al., 1999), cultural values
(Kirkman & Shapiro, 2001; Thomas, 1999), personality (Barrick et al., 1998; Neuman,
Wagner & Christiansen, 1999), and mental models (Levesque, Wilson & Wholey, 2001;
Rentsch & Klimoski, 2001).
New theoretical developments might also improve our understanding of diversity dynamics. Most research adopts a psychological approach, applying social psychological theories
such as social identity theory and social categorization theory to understand the effects of
workplace diversity (Brewer, 1995; Northcraft, Polzer, Neale & Kramer, 1995). Including
sociological theories of conflict and competition (e.g., Tolbert, Andrews & Simon, 1995)
and economic theories of labor markets (e.g., Blau, 1977) would undoubtedly enrich our
understanding of diversity dynamics.
Multi-disciplinary work may also stimulate new approaches to measuring diversity.
Sociometric techniques such as social network analysis may offer solutions to the problem of measuring diversitys multi-dimensional nature (e.g., see Joshi, 2002). Greater use
of qualitative ethnographic narratives offers another avenue for new research (e.g., see
Bell & Nkomo, 2001; Li, Xin & Pillutla, 2002; Thomas & Ely, 2001). Content analyses of qualitative narratives may prove useful for understanding which attributes are
most closely associated in everyday cognitive stereotypes and self-concepts, and
thereby provide a grounded basis for investigating the effects of multi-dimensional
diversity.
Overall, for these and other reasons, expanding diversity research to incorporate a greater
diversity of disciplinary insights is an exciting and fruitful opportunity.
Threats
Despite researchers intensive efforts to measure diversity and predict its outcomes, the
literature offers few conclusive findings about the effects of diversity in the workplace.
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Lack of a common paradigm will make it difficult to accumulate comparable findings over
time, while agreement around some issues could accelerate our ability to learn from the
accumulating evidence.
One useful element of a common paradigm would be for researchers (and journal editors) to agree to some expectations for research designs. One expectation might be that
it is preferable to assess multiple dimensions of diversity. Consider, for example, how
quickly our understanding of sex, racio-ethnicity, and age diversity would advance if
the majority of studies that assessed any one of these variables also included the other
two. Including multiple diversity measures could be accepted as appropriate even if a
researchers primary interest lay elsewhere. Consider how much easier it would be to interpret findings about age or tenure diversity if researchers included measures of both in
their studies, rather than one or the other. It would also be worthwhile to provide more
sensitive and precise measures of tenure measures, as suggested by Carroll and Harrison
(1998).
Another useful element of a common paradigm would involve ensuring that analyses
are conducted to control for central tendency composition when assessing the effects of
compositional variance. Under certain conditions, measures of variance are influenced by
mean values as well as dispersion (Bedeian & Mossholder, 2000). Furthermore, there is
some evidence that central tendency and dispersion-based measures of diversity can have
unique effects on team performance (Barrick et al., 1998; Thomas, 1999). Yet, we found
that central tendency indicators were examined in conjunction with variance measures only
35% of the time.
Finally, especially in studies of racio-ethnic diversity, it may be helpful for diversity researchers to consider the specific contours of diversity within a team and pay more attention
to the differential experiences of each identity group. It is apparent that individuals respond
differently to their minority status depending on whether they are in solo, token, or tilted
situations (see De Vries & Pettigrew, 1998), perhaps because these differing situations alter
the salience of particular identities. It is also likely that the experience and meaning of being a minority member varies considerably depending on a persons own specific attributes
(e.g., see Tsui et al., 1992). By extension, team processes and team performance also may be
influenced by the specific structure and content of diversity present, not simply the degree
of heterogeneity or homogeneity (Randel, 2002).
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Summary of Findings
Table 1 shows the distribution of effects studied. Diversity researchers have recently
shown a clear preference for studying performance outcomes rather than affective reactions
and social processes. Consistent with the framework shown in Figure 1, most studies assumed that diversity influences affective reactions and social processes within teams and
organizations. Social processes in turn were assumed to provide the explanations for the
effects of diversity on team and/or organizational performance.
Affective reactions. Decades of research on similarity and attraction indicate that people tend to dislike dissimilar others, all else being equal. By extension, it has been argued that diversity is likely to have negative consequences for affective reactions such
as cohesion, satisfaction, and commitment (e.g., see Pfeffer, 1983). Several early studies
showing that diversity was associated with higher turnover rates seemed to support that
conclusion.
Reflecting the influence of Pfeffers early work, cohesion, satisfaction and commitment
were the most frequently studied affective reactions. Nevertheless, team-level affective
outcomes were assessed in only 8% of the studies we reviewed. When affective reactions
are measured directly (rather than being inferred from behaviors such as turnover), the
pattern of results is much less clear than one might anticipate. The effect of diversity on
affective reactions was sometimes nonsignificant, sometimes mixed depending on which
dimension of diversity is examined, and sometimes positive (Fields & Blum, 1997; Harrison
et al., 1998; Jehn & Mannix, 2001; Jehn et al., 1999). Although diversity was sometimes
associated with negative affective reactions, the overall pattern of results was not as clear,
nor as discouraging, as some readers may have assumed.
Team processes. To explain why diversity might influence outcomes such as turnover
rates and performance, most scholars posit a relationship between diversity and team processes such as communication, use of information, cooperation, and conflict. Based on their
review of studies linking demographic diversity to team processes, Williams and OReilly
(1998), concluded that increased diversity, especially in terms of age, tenure, and ethnicity,
typically has negative effects on social integration, communication and conflict. They also
noted, however, that the scant evidence concerning the effects of educational and functional
diversity suggested that these types of diversity could improve team processes. Approximately 5% of the studies we reviewed examined the effects of diversity on process (e.g.,
conflict, cooperation) alone. In addition, a few studies (19%) examined team processes as
potential mediators of the proposed diversity-to-performance relationship. The general pattern across studies provides little support for the argument that the effects of diversity on
performance are due to the effects of diversity on team processes, as depicted in Figure 1.
For example, in a study of top management teams, the effect of positive affect diversity
on cooperation and conflict depended on the mean level of positive affect present within
teams. The overall pattern of interactions was quite complex and showed no overall positive
or negative effect of diversity on team processes (Barsade et al., 2000). When the dynamic
nature of team processes is considered, diversitys consequences appear to evolve over time
and in relation to impending deadlines (Jehn & Mannix, 2001).
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Even when diversity is associated with both team processes and team performance, formal tests for mediation sometimes support the hypothesis that team processes mediate the
effects of diversity (e.g., Chatman & Flynn, 2001; Elron, 1997), but other results suggest
that the effects of diversity on these two outcomes are independent (e.g., Barsade et al.,
2000).
Performance. Studies of diversitys effects on performance have flourished in recent
years. Nearly 75% of the studies we reviewed examined performance outcomes for teams
or organizations. Performance was typically measured using financial indicators of firm
performance and manager or team-member ratings of team effectiveness.
Our examination of these studies yielded few discernible patterns in the results. For most
diversity dimensions, the findings across studies were mixed. For example, in one study,
team performance was positively related to diversity on two of the Big Five personality
dimensions (extraversion and emotional stability), but was unrelated to diversity on three
of the Big Five dimensions (Neuman et al., 1999).
A study on the effects of sex diversity on the (rated) performance of military officers found
that sex diversity influenced the performance (ratings) of women, but not the performance
(ratings) of men (Pazy & Oron, 2001). A study of student teams working on a simulation
found that sex composition was related to some measures of performance but not others
(Fenwick & Neal, 2001). Other studies of sex diversity have found its effects on performance
are sometimes positive (Jackson & Joshi, 2003; Rentsch & Klimoski, 2001), sometimes
negative (Jehn & Bezrukova, 2003), and sometimes not significant (Richard, 2000; Watson,
Johnson & Merritt, 1998).
Findings regarding age diversity were also mixed. For example, even if one considers
only top management teams, some studies reported positive effects of age diversity on
performance (Kilduff, Angelmar & Mehra, 2000), while others reported no significant
effects (Bunderson & Sutcliffe, 2002; Simons et al., 1999). In a study of sports teams,
Timmerman (2000) found that age diversity was unrelated to performance when the task
required little interdependence (baseball) and negatively related to performance when the
task required more interdependence (basketball).
The pattern of mixed results also holds for studies of international diversity. Some studies
found its effects on performance were positive (Earley & Mosakowski, 2000; Elron, 1997),
but others found that international diversity was detrimental to performance in the long run
(Watson et al., 1998).
There are two exceptions to the general pattern of mixed findings. First, recent results seem
to support the conclusion that functional/occupational diversity improves at least some types
of performance (Barsade et al., 2000; Carpenter, 2002; Jehn & Bezrukova, 2003; Krishnan,
Miller & Judge, 1997; Pitcher & Smith, 2000). Teams that engage in vigorous debate may
gain the most from functional diversity (Simons et al., 1999; Tjosvold, Hui, Ding & Hu,
2003). Note, however, that the positive effect of functional diversity may be sensitive to the
particular measurement approach used in the study (Bunderson & Sutcliffe, 2002).
Second, the evidence that supports the often-made claim that racio-ethnic diversity
improves performance is limited. One study found no significant relationship (Jehn &
Bezrukova, 2003). Some studies reported negative effects of racio-ethnic diversity on performance (Jackson & Joshi, 2003; Kirkman, Tesluk & Rosen, 2001; Leonard, Levine & Joshi,
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2003; Townsend & Scott, 2001). One study (Timmerman, 2000) found that racio-ethnic
diversity was detrimental to performance for a task that required high interdependence
(basketball) and it was unrelated to performance for a task that required little interdependence (baseball). One study (Richard, 2000) found that racio-ethnic diversity was beneficial
for firm performance when a growth strategy was being pursued, but it was detrimental for
downsizing firms.
Strengths
The body of evidence concerning the effects of diversity on performance has grown substantially in recent years. Studies have been conducted in a wide variety of field settings, and
the majority of these studies used comparable research designs. Because multiple dimensions of diversity were often included in these studies, we can be somewhat more confident
that effects are accurately attributed to the correct dimension of diversity. In addition, this
work is grounded in a set of clearly articulated theoretical perspectivesincluding social
identity/social categorization theory (21%), the upper echelons perspective (14%), and the
value-in-diversity approach (11%). As an accepted paradigm emerges, it may become easier
to identify empirical trends across studies.
Weaknesses
Despite these strengths, we recognize some notable weaknesses in the research on diversity and performance. One weakness is that researchers have mostly ignored two important
dimensions of diversitystatus and specific skills. Status and power are often invoked as
explanations for the effects of diversity, yet none of the studies we reviewed attempted
to measure the status of individual team members or the degree of status differentiation
within teams. Similarly, while few diversity researchers would deny the importance of relevant skills and abilities in determining performance (Krishnan et al., 1997), field research
on team and organizational performance has usually ignored the content and structure of
task-specific skill diversity. Arguably, this criticism is less applicable to research on top
management teams, which often includes measures of educational and occupational diversity. But even in these studies, usually no attempt is made to assess the degree of match
between the personal backgrounds of team members and the demands of their current jobs.
The preponderance of studies that examine team and organization outcomes, and the
paucity of research that considers how diversity affects the performance, pay, promotion,
or turnover decisions of individuals with various background attributes is another weakness
of the growing body of diversity research. Studies of team and organizational outcomes are
surely useful, but the increased attention paid to teams and organizations may have come at
the expense of improving our understanding of how diversity shapes the thoughts, feelings,
behavior and long-term career outcomes of individuals.
Opportunities
As we noted, researchers often ignore status differentials among team members. They
do so even when studying top management teams, where authority hierarchies are usually
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quite apparent: CEOs, board members, and executives who do not serve on the board are
not all created equal when it comes to status and authority. The large pool of studies that
have already been conducted on top management teams (TMTs) present a unique opportunity for testing new conceptual models that incorporate status effects. In many instances,
existing data could simply be reanalyzed. By acknowledging status and considering it more
explicitly, future research may begin to clarify how various aspects of team composition
influence social systems.
With a few exceptions, the interplay between leadership and diversity remains largely
unexplored. This is somewhat surprising in light of the blossoming of research that examines
leadership and relational demography (e.g., Pelled & Xin, 1997). Contributions to our
understanding of leadership might be made by diversity research that takes into account
CEO characteristics and the relational similarity of the CEO to other top management team
members (e.g., see Barsade et al., 2000; Pitcher & Smith, 2000). The absence of relevant
theoretical frameworks may be one explanation for the lack of research on leadership and
diversity. Turner and Haslams (2001) recent discussion of the ways in which social identity
processes may influence leaders and followers promises to move such theoretical discussion
forward, however.
Expanding the range of consequences considered in studies of team diversity is another
opportunity. For example, a study of 625 firms found that top management team diversity
was associated with corporate ideology (Goll, Sambharya & Tucci, 2001). Investigating
new diversity consequences goes hand-in-hand with conducting research aimed at understanding the dynamics of diversity in larger organizational units. Whereas many studies
of team diversity have been reported, we know little about whether conclusions from this
research apply to departments, business units, or entire organizations. For example, at the
organizational level, diversity dynamics may provide useful insights about how to more
effectively manage joint ventures, mergers, acquisitions and various forms of strategic alliances (e.g., see Hambrick, Li, Xin & Tsui, 2001; Jackson & Schuler, 2003; Li et al., 2002;
Schuler, Jackson & Lao, 2003). Diversity dynamics may also be useful for understanding
patterns of knowledge flows in organizations (e.g., see Jackson & Erhardt, in press).
Finally, we encourage diversity researchers to consider the individual-level employment
consequences of team and organizational diversity. For example, there is evidence showing
that the proportions of men and women within an establishment influence womens outcomes (e.g., Cohen, Broschuk & Haveman, 1998; Hultin & Szulkin, 1999). Such findings
raise the question of whether team or work unit diversity, defined more broadly as we do in
this article, predicts pay and other individual employment outcomes. By illuminating the
effects of diversity on managers performance ratings and employment decisions, for example, research on team and organizational diversity could contribute to reducing workplace
bias and discrimination (e.g., see Powell & Butterfield, 2002).
Threats
Failure to consider new theoretical models may represent the greatest threat to advancement. For more than a decade, the predominant model underlying most diversity research is
similar to the one shown in Figure 1. While this model may have some merit, the available
evidence does not support the assumption that diversity influences performance through
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its effects of team processes. Perhaps the effects of diversity on affective reactions and
social processes occur somewhat independently of the effects of diversity on performance.
For example, members of diverse work teams may evaluate their teams as being less effective even when external evaluators evaluate them as equally effective (Baugh & Graen,
1997). Alternative causal paths should also be considered. For example, perhaps affective conditions and performance influence behaviors and decisions that shape who stays
in the team, who leaves, who is attracted to the team, and who is admitted as a new
member.
Even small modifications to existing theory could prove useful. For example, diversity researchers typically examine only linear relationships between diversity and outcomes of interest, and ignore possible nonlinear relationships. Departing from this approach, Earley and Mosakowski (2000) found that both homogeneous teams and highly
diverse teams developed more positive team dynamics and subsequently performed better, in comparison to moderately diverse teams. In another example, demography was
pitted against social influence processes as an explanation for executive belief patterns
(Chattopadhyay, Glick, Miller & Huber, 1997). The authors concluded that social influence
processes provided a better explanation of executives beliefs, compared to demography
influences.
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of diversity when the individuals in the team have their identities verified by the reflected
appraisals of other team members.
Team climate and team processes. Just as organizational culture may moderate the effects of organizational diversity, team climates and internal team processes may moderate
the effect of team diversity. West (2002) argued that several aspects of team climate must be
present in order for teams to effectively use their knowledge for innovation. According to
West, favorable conditions include shared team objectives, feelings of safety, effective conflict management, among others. Clark, Anand and Roberson (2000) proposed that member
participation levels influence the effects of diversity on team communication processes that
are used to resolve conflicts.
Strategic context. Researchers interested in the performance-related effects of top management team diversity have been frustrated by the accumulation of conflicting results
during nearly two decades of research. One explanation for the mixed findings is that the
strategic context of firms moderates the relationship (Priem, Lyon & Dess, 1999; West &
Schwenk, 1996). While this explanation seems reasonable, the specific role of strategic
context remains unclear. A socio-cognitive perspective suggests that TMT diversity will be
more beneficial under conditions of greater strategic complexity, because diversity helps
the team deal with the demands of greater complexity (e.g., see Jehn & Bezrukova, 2003;
Richard, 2000). In contrast, the behavioral perspective suggests that TMT diversity will
be more detrimental under conditions of greater strategic complexity, because diversity
makes the necessary coordination among team members more difficult (e.g., see Carpenter,
2002).
Temporal factors. Several studies indicate that the effects of diversity are moderated
by temporal factors. In a study that followed teams over time, sex diversity had negative
consequences for cohesion early in the life of teams, but this effect diminished as teams
were together longer. Conversely, attitudinal diversity had weaker effects for teams with little
experience working together, but negative effects emerged as teams worker together longer
(Harrison et al., 1998). The authors concluded that surface-level attributes have immediate
but short-lived consequences for teams, whereas the consequences of deep-level diversity
take time to emerge and are more long-lasting. Consistent with this conclusion, the effects
of TMT demographic diversity were found to be stronger for teams that had spent less time
working together, as indicated by the members average tenure in the top management team
(Carpenter, 2002). Likewise, another study found that the negative effects of racio-ethnicity,
functional background and organizational tenure diversity were weaker in longer tenured
work teams (Pelled et al., 1999). Studies of relational demography reveal similar temporal
effects (e.g., Chatman & Flynn, 2001).
Earley and Mosakowski (2000) also considered the consequences of time for diverse
teams. Based on their observations of five work teams in the Pacific Rim region, they
hypothesized that cultural diversity homogeneity has positive short-term consequences for
teams, but that cultural diversity can be more beneficial in the longer term, assuming that
the diverse teams eventually develop their own team culture. Follow-up experiments with
ad hoc teams provided support for their hypothesis.
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Strengths
Perhaps the most obvious identifiable strength of recent research is the sheer number of
studies conducted in the workplace. The volume of research conducted in the workplace
increases our confidence that the research results have external validity. Similar reviews
conducted more than a decade ago (Jackson, 1992b; Levine & Moreland, 1990) included
mostly research conducted in laboratory and educational settings. Because so few studies
of workplace diversity had been conducted, inferences about diversity dynamics in organizational settings were based more on speculation rather than direct evidence.
The wide variety of work contexts in which diversity has been studied is another strength of
recent research. Work teams of many types (e.g., top management, product development, service, manufacturing) were observed working on many tasks and in many different industries.
Because many different establishments participated, it is reasonable to assume that the body
of research includes studies conducted in the context of differing organizational cultures,
diversity climates, HR practices and so on. To the extent that similar effects begin to accumulate across studies, researchers can be more confident that those effects are robust and generalizable to other establishments within the U.S., where most of the research was conducted.
Weaknesses
Unfortunately, the moderating effects of context were seldom considered. Furthermore,
we found that researchers usually provided very little information about the context in which
a study was conducted. Not only was context seldom studied explicitly, authors usually
provided rudimentary information about team, organizational or societal contexts. When
researchers explicitly examined the effects of some contextual elements, they often provided
no information about other contextual elements. Lack of information about the context in
which research was conducted may impede our ability to understand the reasons for conflicting results found across studiesand even conflicting results within the same study. For
example, in a study of the effects of racio-ethnic diversity on team process and performance
(Kirkman et al., 2001), the results showed quite different effects for insurance, textile, and
high tech manufacturing teams. The authors provided several thoughtful suggestions about
why teams in these different settings responded so differently to racio-ethnic diversity. Unfortunately, they could not test these ideas, in part because they did not anticipateand
then measurepotentially important aspects of the three work contexts.
Another challenge arises because there is little theoretical clarity concerning how moderators influence the effects of diversity. Research on the relationship between TMT diversity
and firm performance illustrates this problem (see Carpenter, 2002). Strategic management
scholars generally accept the view that competitive and strategic conditions interact with
firm characteristics to determine firm performance. Predicting that TMT diversity will interact with contextual factors such as industry conditions and strategic context fits easily
into existing theory, and several studies have examined the contextual factors as possible
moderators of the effects of TMT diversity on performance. It has been nearly 20 years since
Hambrick and Mason (1984) first suggested such effects, and several related studies have
since been published. Yet, conclusions about how contextual factors moderate the effects
of TMT composition remain elusive.
817
Opportunities
Whether transient or enduring, a variety of contextual factors may shape the effects of
diversity observed in a particular study (for an extended discussion, see Frey, 2000). The
work itself is perhaps the most frequently cited contextual factor mentioned as a potential
moderator of diversity dynamics. The generally accepted assumption is that the potential
benefits of diversity for performance are greater when the task requires creativity and innovation. When the task is routine, or when speed is the goal, diversity may interfere with
performance (e.g., see Jackson, 1992a, 1992b; Williams & OReilly, 1998). Although several laboratory experiments seemed to support this proposition, clear evidence is not yet
available from field studies. Within studies, often the predicted relationship is found for
some dimensions of diversity but not others. Across studies, there is little consistency in
the pattern of moderated diversity effects. Programmatic research is needed to resolve the
question of whether the effects of diversity differ systematically for different types of tasks.
The temporal dynamics of diversity also offer interesting opportunities for new research.
Several diversity scholars have addressed the issue of how time together as a team shapes the
effects of diversity, but other temporal factors have been mostly ignored. Implicit in many
studies of diversity has been an idealized view of teams as work units with a definable birth
date for the teams formation and task initiation. Researchers often seem to assume that all
members of the team are equally dependent on the teams outcomes. Another assumption
seems to be that, for members of the teams studied, the teams work is the primary vehicle
for team members to achieve their work objectives. This idealized situation may have been
present in some studies of diversity, but such situations are rare in work settings. More
typical would be teams that emerged over time, which included some peripheral and some
core members, working on an ambiguous assignment with objectives that changed over
time, with members coming and going, with performance cycles ebbing and flowing, and
so on (e.g., see Ancona & Caldwell, 1998; Marks, Mathieu & Zaccaro, 2001).
Finally, studies of team diversity may benefit greatly by attending to the network structures
in which teams and their members are embedded. Diversitys consequences within a unit
may depend on the social and functional linkages that exist between members of the unit
and other relevant units (Joshi & Jackson, 2003; Reagans & Zuckerman, 2001). A study of
minority board members found that their influence in strategic decisions was greater when
they had strong social ties to other boards. In fact, minority members with strong ties to other
boards exerted even more influence than majority members (Westphas & Milton, 2000).
As another example, a study of Asian employees working a U.S. bank found that Indian
and Chinese workers were less able to translate their educational capital into social capital,
which in turn explained the lower returns to education that they received (Friedman &
Krackhardt, 1997). Understanding how diversity shapes social networks may prove to be
central to understanding the longer-term consequences of organizational diversity.
Threats
The two greatest threats to future advancement in our understanding of the role of context
may be (a) the large number of potentially important contextual factors to consider in combination with (b) the lack of a strong theory to guide researchers in their choice of which
818
contextual factors to study, measure and/or control. A discussion of the contextual moderators that may shape the effects of diversity can quickly become overwhelming due to the
number of potentially important aspects of context. The sheer number of potentially important contextual factors may be a significant barrier to our ability to generate evidence supporting or disconfirming the existence of any general principles about diversitys consequences.
We have mentioned a few contextual factors that may influence the results of any particular
study, but there are many others. Triandis (1995) pointed to the specific histories of organizations and societies as factors that shape intergroup relations in todays organizations. Numerous discussions of diversity management interventions imply that diversity dynamics unfold
differently depending on an organizations HR practices, including socialization practices
(Hopkins & Hopkins, 2002), support for network groups (Friedman, 1996; Friedman, Kane
& Cornfield, 1998), affirmative action programs (Heilman, McCullough & Gilbert, 1996),
diversity training programs (Alderfer, 1992), and other practices that influence the climate
for diversity (e.g., see Brief & Barsky, 2000; Burkard, Boticki & Madson, 2002).
Events in the larger society also might shape the dynamics of workplace diversity. Examples include Anita Hills accusations against Clarence Thomas during congressional
hearings to evaluate his suitability for appointment to the Supreme Court; the terrorist attacks on the U.S. in September, 2001, and subsequent actions taken to increase homeland
security; the debate over whether a club that prohibits women as members should host the
U.S. Open golf tournament; and renewed discussions over affirmative action policies that
arose when the Supreme Court agreed to judge whether the University of Michigans college
admissions practices were unconstitutional. Anecdotal evidence suggests that such events
can alter intergroup-relations in organizations. Undoubtedly, some diversity effects also
depend on characteristics of the predominant national culture (e.g., see Gomez, Kirkman
& Shapiro, 2000).
It is not feasible for diversity scholars to measure, control, or otherwise consider all
of these potentially important contextual factors. Yet, if important contextual factors are
ignored, our understanding of diversity is likely to progress quite slowly. Thus, whenever
possible, researchers should include descriptions of the historical, cultural, temporal and
institutional contexts that may have shaped a studys results. Ideally, as the field develops
richer theoretical models, researchers will become more attuned to the contextual factors
that are likely to be relevant to a particular investigation.
Multi-level Complexities
Diversity phenomena can be observed at several levels of analysis including the individual, dyad, work group, or the organization as a whole. As Table 2 shows, recent research
has focused on the effects of team diversity on team and organizational outcomes (79% of
studies). Few investigations of organizational level diversity were found (13% of studies).
The societal level of analysis was generally not considered in the studies we reviewed, while
individual and dyadic level phenomena were occasionally included.
A few studies incorporated multiple or mixed levels of analysis. Several studies (29% of
those we reviewed) examined the effects of team diversity on firm performance. Whether
such TMT research qualifies as multi-level is debatable, however. In some studies, both
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Table 2
Units of analysis in diversity research
Units of analysis considered
Team/unit membership
Total
Nonmanagement
Top management
Students
Other
22
35
18
20
individual and team consequences were assessed (e.g., Chatman et al., 1998; Eby & Dobbins,
1997; Jehn et al., 1999).
Strengths
In the studies we reviewed, multiple levels of analysis were incorporated due to the
inclusion of (a) outcomes measured at a different level of analysis than diversity (e.g., studies
of top management teams diversity and firm performance), or (b) outcomes measured at
two different levels (e.g., individual and team outcomes). Although our review focused on
studies that adopted a compositional approach to measuring diversity, numerous studies
took other approaches. A long tradition of comparative studies that assess group-based
differences (e.g., sex, age, nationality) continues to generate new findings. Recently, research
on demographic similarity within vertical supervisor-subordinate dyads (e.g., Vecchio &
Bullis, 2001) and horizontal peer-to-peer dyads (see Tsui & Gutek, 1999 for a review)
has become more prevalent. Thus, there is an emerging body of closely related research
conducted at various levels of analysis.
Weaknesses
While the opportunities to conduct multi-level diversity research seems apparent, we
found relatively few examples of such research. We also found few examples of researchers
considering whether their conclusions might have been different if had they chosen other
units of analysis for their research (e.g., relational demography as well team composition).
A multi-level approach to diversity research would acknowledge the nested character of
social systems, which is illustrated in Figure 1. Just as the thoughts, feelings and behaviors
of individuals can be shaped by the diversity of work teams, it is possible that dyadic
interactions are shaped by both relational demography and team composition (Tsui, Xin
& Egan, 1995). Likewise, team processes may be shaped by both team diversity and the
composition of the larger work or educational unit in which the team is embedded. Variations
in organizational demography may account for some of the mixed findings of past research.
The lack of multi-level research parallels the lack of attention paid to context, which we
noted earlier.
820
Opportunities
Recent methodological developments (e.g., see Klein & Kozlowski, 2000a, 2000b) have
improved the tools available for exploring multi-level diversity phenomena. Multi-level
methodologies such as Hierarchical Linear Modeling (HLM) can be used to simultaneously test hypotheses at different levels of analysis, and they can be used to test hypotheses regarding cross-level effects (Hofmann, Griffin & Gavin, 2000). To illustrate,
consider a hypothetical study that examines the performance outcomes of diversity at the
team level. If the study included measures of organization culture, demography, and/or
HR practices, HLM could be used to assess the cross-level moderating effects of these
factors on the team level relationship between diversity and performance. Alternatively
HLM could be used to examine whether effects found at the team level also hold for
larger organizational units (departments or establishment locations) and smaller social units
(dyads).
As another example of using new methodologies, Ruef (2002) used structural
event analysis to understand how the composition of management teams evolved over
time. The studys results suggest the intriguing hypothesis that homogenous teams tend
to add members whose characteristics increase team diversity. In addition to demonstrating the value of structure event analysis, this study ploughs new theoretical
ground.
Threats
Clearly, one threat to improving our understanding of diversity is ignoring the need
to understand diversity as a multi-level phenomenon. At a minimum, researchers must
be careful to match their empirical procedures to the level of their theories. Also, when
reporting the results of research (their own and others), they should be careful to avoid
language that obscures levels-of-analysis issues. Finally, as noted in our earlier discussion
of context, our ability to make sense of diversity research results will be limited to the
extent that researchers fail to attend to and report conditions in the macro environment
that might shape the diversity dynamics under investigation. Beyond these rudimentary
problems are two additional threats that may impede future progress: failure to adequately
develop new theoretical models and letting statistical considerations constrain the evolution
of new theoretical approaches.
In conclusion, we hope that future studies will explicitly examine diversity dynamics at
multiple levels of analysis. Doing so, we believe, is necessary to advance our understanding of the complex and interdependent phenomena that are crowded under the diversity
umbrella.
821
Table 3
Summary of research opportunities and threats
The Most Frequently Studied Attributes
Threats
Opportunities
Incorporate under-represented dimensions of diversity
(e.g., religion)
Threats
threats. Keeping in mind the focus of this review, Table 3 may offer some guidance
for scholars interested in advancing our understanding of how the composition of social systems influences the social dynamics of those systems and their longer-term
consequences.
822
Practical Implications
Many organizations claim to support a variety of initiatives aimed at managing diversity effectively. Most recently, some of these initiatives have been relabeled as aiming to
increase inclusion (e.g., Gilbert & Ivancevich, 2000). Research that evaluates the effectiveness of such initiatives remains scarce, however (see Bezrukova & Jehn, 2001, for
a review). When such research is conducted, successful initiatives are defined as those
that reduce inequalities (e.g., in pay, turnover, and promotion) among demographically
defined groups (see Ragins, Townsend & Mattis, 1998) and/or those that employees simply evaluate as useful. Seldom is the focus on improving the effectiveness of diverse
teams. Thus, it is risky to make recommendations about the steps organizations should
take to reduce potential negative consequences of team and organizational diversity, or
leverage diversity to achieve positive outcomes. This caveat notwithstanding, there is no
shortage of recommendations for how to improve diversity management. Among the many
possible initiatives, many organizations begin (and sometimes end) with training
interventions.
Training
Employer surveys of training practices reveal that diversity training has mushroomed
in the past decade. Fifteen years ago, it was absent from lists of the most common form
of training being offered. Ten years ago, diversity training was being offered in an estimated 50% of large firms. Between 1992 and 1996, the percent of members of the American Management Association who reported having training as a formal component of
the diversity management program rose from 46% to 50% (AMA, 1995). A 1995 survey of the 50 largest industrial firms in the U.S. reported that 70% had formal diversity
management programs with training as a component and an additional 8% were developing such a program (Lynch, 1997). A more recent report found that 67% of employers
surveyed conducted ethnicity or race related diversity training (Sweeney, 2002). In the
aftermath of September 11th, a recent article reported that several companies were increasing their budgets for diversity training although exact figures were not reported (Lee,
2002).
How effective are these training programs? Based on a review of 20 empirical studies (many of them unpublished dissertations), Bezrukova and Jehn (2001) concluded that
such training can result in meaningful intercultural understanding, attitude change and
even behavioral change. Perhaps if more research is conducted to understand how the
design and context of diversity training influences program effectiveness (e.g., Roberson,
Kulik & Pepper, 2001), diversity training will eventually be as useful as it is
popular.
Regardless of the specific training content, organizations generally seem to favor training
that targets individual attitudes and behavior. This approach may give too little weight to the
powerful social dynamics that arise within natural work units, which increasingly emphasize
teamwork. Future interventions might shift the focus of training from the individual to the
team level. Training teams to manage and leverage their own diversity may prove more
effective than training individuals.
823
Systemic Change
Targeted training efforts may be the most common form of diversity intervention adopted
by organizations, but many organizations combine training with other diversity initiatives.
The general consensus seems to be that managing diversity effectively often requires pervasive changes in organizational policies, practices and cultures. This viewpoint is consistent
with the assumption that diversity dynamics are shaped by the organizational context. The
objectives of such change efforts is to go beyond creating an organizational context characterized by structural integration and minimal institutional bias to achieving a context in
which cultural differences are valued, intergroup conflict is minimized (Cox, 1993), and
differences are used to facilitate learning new ways to work that lead to improved organizational performance (Dass & Parker, 1999; Thomas & Ely, 1996).
Compiling a list of the many specific actions adopted by benchmark organizations is
one approach to developing a comprehensive blueprint for change. For example, based on
intensive case studies of one plural and one multi-cultural organization, Gilbert and
Ivancevich (2000) developed guidelines for change that integrated specific changes in human resource practices with suggestions for managing the change process. With the goal of
understanding how to effectively manage the diversity present in cross-functional new product teams, Jassawalla and Shaittal (1999) also conducted intensive case studies as a means to
generating practical recommendations. These suggestions may also be appropriate for teams
in which diversity is created due to differences in racio-ethnicity, sex, age, and so forth.
Pettigrew (1998) used a very different approach to developing a blueprint for creating organizational change. Based on a comprehensive review of a large body of research conducted
in a variety of settings, Pettigrew identified the conditions needed to reduce intergroup bias
and its negative consequences, and described several processes that could be engaged to
create these conditions. To the extent an organizations diversity initiatives support these
processes, they will encourage the development of positive intergroup relations, employee
commitment, and improved productivity (see also Gaertner & colleagues, 2000).
Learning about the other group(s) was one key process identified by Pettigrew. Inaccurate
stereotypes resist change for a variety of reasons, but inaccurate stereotypes can be modified
if people receive sufficient disconfirming evidence. Such learning is often the objective of
diversity awareness training, so Pettigrews analysis supports these initiatives.
Behavioral change is a second key process that is needed to promote positive intergroup
relations. Engaging repeatedly in positive behavior with members of an outgroup can lead to
long-term attitude change toward outgroup members. Thus, a recommendation is for organizations to design interventions to encourage repeated positive interactions with members
of another group. Providing training in the behavioral competencies needed to work effectively in organizations characterized by diversity is one way to encourage people to engage
in positive behavior toward outgroup members.
Creating positive emotions associated with the outgroup is a third key process identified
by Pettigrew. For example, mentoring programs may encourage the development of intergroup friendships. The positive feelings associated with close friendships with members of
an outgroup are likely to generalize to the entire group. The value of personal friendships
may help explain the apparent success of informal mentoring programs (cf. Friedman et al.,
1998; Thomas, 1999).
824
Pettigrew also argued that change is facilitated when people gain new insight about their
own ingroup and come to understand that the ingroups norms and customs represent one
of many possible approaches. In other words, organizations should support true dialogue
among the groups; awareness training, for example, should provide insights about oneself
as well as about others.
Finally, in addition to creating conditions that encourage these four processes, Pettigrew
noted that another necessary condition for positive intergroup relations is the presence of
social sanctions. Results from a study of several hundred organizations were consistent with
this principle. Diversity programs were reported to be more successful in organizations that
required managers to attend training programs and tied compensation and other rewards
for success in meeting goals for recruiting, hiring, developing, and promoting people from
diverse backgrounds (Rynes & Rosen, 1995).
In conclusion, it seems likely that active diversity management will be required in order for organizations to realize the potential benefits locked up within their diverse work
forces. Research-based principles for achieving these benefits and minimizing potential
losses have been offered. Some organizations are, undoubtedly, experimenting with practices that are consistent with these principles. Unfortunately, diversity researchers have not
yet focused much attention on understanding how to create the changes that appear to be
needed. By the end of this decade, perhaps another review of diversity research will yield
useable suggestions for how to create the organizational conditions called for by Pettigrews
analysis.
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Susan E. Jackson is Professor or Human Resource Management and Director for the Doctoral Program in Industrial Relations and Human Resources, School of Management and
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Labor Relations, Rutgers University. Her research interests include managing team effectiveness, workforce diversity, and the design of human resource management systems to
support business imperatives.
Aparna Joshi received her doctorate from the School of Management and Labor Relations
at Rutgers University. She is currently Assistant Professor at the Institute of Labor and
Industrial Relations at the University of Illinois. Her research interests include work team
diversity and the management of global and distributed work teams.
Niclas L. Erhardt is a doctoral student at the School of Management and Labor Relations at
Rutgers University. His primary research interests are workforce diversity, social networks
and knowledge management and their consequences for the performance of teams, business
units and firms.