Does diverse team perform better in organisations?

“The concept of diversity encompasses any sort of difference between individuals. These could be differences in ethnic origin, age, gender, disability, family status, education, social or cultural background, personality or attitudes – in fact, anything which may affect workplace relationships and achievements” (Mullins 2013: 155).


(Grange 2014)

With globalisation around the world, the number of diverse teams is growing. Now researchers have proved that a variety of personnel and the multicultural nature this brings can improve the performance of a team. Consequently, the efficiency of the organisation can also be improved (Smedley 2014). Deloitte’s report in 2012 “Waiter, is that inclusion in my soup?” is based on a survey of 1550 employees from Australia’s leading enterprises. It recognised an increase of 80% in productivity, and in innovation when diversity levels are high (Global Diversity Exchange 2015).

From one point of view, companies that have successfully established themselves in the global market and strive for international development, actively are using diverse teams, because they, in turn, provide the necessary ingredients for successful operation, and high speed of response to external changes (Stanford GSB Staff 1999).

On the other side, it is argued that along with all the benefits diversity brings into organisation, there is one detail often ignored: organisations with high diversity might end up with a variety of conflicts arising from miscommunication. The effectiveness of such teams requires its members to have a clear understanding of the communication processes within the group, and throughout the whole organisation. Managers should be trained in cultural differences and be able to overcome these challenges. One option is to start from the very beginning when forming a team.  Tuckman and Jensen (1977) proposed a five-stage model that groups go through during formation. This is shown below.


(Scrum 2014)

The overall task of the leaders is to overlook and to manage its group members during all stages, particularly at the very first phase, where most often the misunderstanding occurs. It will be helpful if leaders divide responsibilities, define and establish primary rules of conduct and assist its group members in resolving disagreements, motivating team members to compromise and focus their efforts on achieving common goals (Eyre 2015).

The study of Hofstede (1980) where he used national culture as a basic factor of organizational behaviour can help managers of diverse teams to understand possible problems that could occur depending on where individual come from (The Hofstede Centre 2015). However, some argue that his research did not take into account the existence of ethnic groups within cultures and that some of the results could be sensitive to the time when the survey was conducted (Jones 2007). Throughout more than 30 years, culture in some of the countries could change and develop in different directions.

In the video below Anderson (2007), the vice chair of Ernst & Young, discuses the importance of investing in the training of leadership skills that can help manage, motivate and coach diverse teams within organisations.

(Anderson 2007)

I personally like the approach of Snow, Miles, Meyer and Coleman (1978: 546-562) that recommended managers follow four basic steps to increase profitability of the team and to minimize a misunderstanding:

1) Goal. Manager defines a common goal that would increase the degree of commitment of the team members.

2) Role expectations. Team members have to be aware of the role expectations and their responsibilities in order to avoid interpersonal conflicts. If team members have a clear understanding of the roles within the team, it is much less likely that they will come into conflict with each other. If conflicts do arise, the awareness of the role structure provides a constructive basis for their resolution.

3) Clear rules and social interaction. The team members have to understand rules of communication with each other, as they should resolve conflicts and demonstrate distribution of resources and rewards within the team.

4) Monitoring and reporting. Members of diverse teams are often creating a need for a leader to coordinate their work closely and report a progress in a team.

Diverse teams are now one of the major issues in organisations around the world and finding the most effective way to manage them. The Oil and Gas industry is adapting to global changes including the increased diversity within the workforce and accepting a need for leaders to coach and manage these teams (MCE 2015). For example, BP with a global presence in 80 countries, created a code of conduct that “reflects their values based approach – safety, respect, excellence, courage and one team” (BP 2015) to more easily monitor and manage teams across the world.

To summarise, understanding how to manage diverse teams effectively is one of the key issues in modern organisations. Finding the right approach helps leaders improve mutual understandings between members and helps achieve the best results.


5 thoughts on “Does diverse team perform better in organisations?

  1. Very good post about diversity within organisations, i really liked the pro’s and con’s you wrote about the topic and the link you draw between cultural diversity and Hofstede’s Theory. Goof work


  2. I like the way about the steps to improve the performance where it has to be commitment, understand rules and coordinate different groups with diverse cultural backgrounds.You explained very a good level diverse teams and you mentioned something fundamental ” manage diverse teams effectively is one of the key issues in modern organisations”


  3. While diversity can bring positive results in an organisation, it can also create challenges, Brett et al 2005 in their article ‘Managing Multicultural Teams’ observed that Multicultural Teams often generate frustrating management dilemma and that cultural differences can create subtle but substantial obstacles to effective Team work if not recognised early ( Brett, Behfar and Kern 2005).

    Issues of race, gender and even sexual orientation have been to some extent addressed by laws in some countries, however, prejudice in workplace and society will remain with us for a long time.


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