Demography and Design: Predictors of New Product Team Performance

Abstract

The increasing reliance on teams in organizations raises the question of how these teams should be formed. Should they be formed completely of engineers or should they include a range of specialists? Should they be made up to people who have long tenure in the organization, or those with a wide range of experience? As teams increasingly get called upon to do more complex tasks and to cross functional boundaries within the organization, conventional wisdom has suggested that teams be composed of more diverse members. This study suggests that the answer may not be so simple. Using 409 individuals from 45 new product teams in five high-technology companies, this study investigates the impact of diversity on team performance. We found that functional and tenure diversity each has its own distinct effects. The greater the functional diversity, the more team members communicated outside the team's boundaries. This communication was with a variety of groups such as marketing, manufacturing, and top management. The more the external communication, the higher the managerial ratings of innovation. Tenure diversity had its impact on internal group dynamics rather than external communications. Tenure diversity is associated with improved task work such as clarifying group goals and setting priorities. In turn, this clarity is associated with high team ratings of overall performance. Yet diversity is not solely positive. While it does produce internal processes and external communications that facilitate performance, it also directly impedes performance. That is, overall the effect of diversity on performance is negative, even though some aspects of group work are enhanced. It may be that for these teams diversity brings more creativity to problem solving and product development, but it impedes implementation because there is less capability for teamwork than there is for homogeneous teams. These research findings suggest that simply changing the structure of teams (i.e. combining representatives of diverse function and tenure) will not improve performance. The team must find a way to garner the positive process effects of diversity and to reduce the negative direct effects. At the team level, greater negotiation and conflict resolution skills may be necessary. At the organization level, the team may need to be protected from external political pressures and rewarded for team, rather than functional, outcomes.

The Determinants of Innovative Work Behavior in the Knowledge Intensive Business Services Sector in Malaysia

“…It is widely recognized that customer feedback must be used to improve an innovative idea (Burpitt & Bigoness, 1997). To be effective, organizations need to manage their employees' relationships with internal and external members and other groups in order to bring information and other resources into the system (Gladstein, 1984;Ancona & Caldwell, 1992). Additionally, frequent contacts with the competitors have also been found to be vital.…”

Workplace Diversity and Group Relations: An Overview

“…On the other hand, this is balanced against evidence that there is a Group Processes & Intergroup Relations 9(4) 460 negative relationship between diversity, cohesion, and performance, meaning that group cohesion, and performance increase as diversity decreases (Harrison, Price, & Bell, 1998;Simons, Pelled, & Smith, 1999;Wiersema & Bantel, 1992). And, finally, Ancona and Caldwell (1992) and Smith et al (1994) report a null relationship-that diversity and group cohesion have no relationship with performance.…”

Examining Task Oriented and Relations Oriented Team Diversity–An Analytic Review of the Banking Industry

“…This happens because as group members discuss their individual perspectives, conflict may occur where each group member argue over which viewpoint is better. Such conflict is considered to foster the environment for innovative solutions and creativity in general (Ancona & Caldwell, 1992;Bantel & Jackson, 1989;De Dreu et al, 2001) …”

“…Ancona & Caldwell, 1992;Lovelace et al, 2001;Reagans et al, 2001). Many Research studies have indicated that since service-oriented industries are involved more frequent and closer interactions with customers, enhancing diversity based on demographic attributes in such industries can actually enhance a firm's "market competence" giving it a competitive advantage in the service industry (Richard et al, 2007).…”