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Understanding Diversity in Teams
& its Impact on Performance

The effects of diversity in groups have been the subject of hundreds of articles in the psychology and organizational management literatures. While Hambrick & Mason (1984) did not explicitly use the term, functional diversity among the members of top management teams is a key element of their Upper Echelons Theory. Given the importance of the concept and the differential effects of homogeneity vs. heterogeneity (i.e. diversity) in certain entrepreneurial teams, this article explores the meaning of diversity and evidence of its impact on team effectiveness. It explains the Diversity-Process-Performance Linkage and concludes with conditions and recommendations for realizing its potential benefits. These influence recommendations for achieving effective working relations between the entrepreneur-leader and the CFO, as well as the larger team, with particular emphasis on social integration processes to develop cohesiveness.

Readers may find these recommendations resonate in light of recent geo-political debates about diversity (and what some perceive as the failure of many poorly managed 'DEI' initiatives), immigration, and (the lack of) integration.

[coming soon]

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