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Managing Diversity and Enhancing Team Outcomes: The Promise of Transformational Leadership

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In a sample of 62 research and development (R&D) teams, the authors examined transformational leadership as a moderator of the relationship of age, nationality, and educational background diversity with team outcomes. When levels of transformational leadership were high, nationality and educational diversity were positively related to team leaders' longitudinal ratings of team performance. These relationships were nonsignificant when transformational leadership was low. Age diversity was not related to team performance when transformational leadership was high, and it was negatively related to team performance when transformational leadership was low. Two mediated moderation effects help explain these findings. Transformational leadership moderated the relationship of the 3 examined diversity dimensions with the elaboration of task-relevant information, which in turn was positively associated with team performance. Moreover, transformational leadership moderated the relationship of the 3 diversity types with collective team identification, which in turn was positively related to the elaboration of task-relevant information. The authors discuss the theoretical and practical implications of these results. Overall, this study suggests that transformational leadership can foster the utilization of the potential, but frequently untapped, benefits entailed by both demographic and informational/cognitive team diversity. (PsycINFO Database Record (c) 2009 APA, all rights reserved).
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Managing Diversity and Enhancing Team Outcomes: The Promise of
Transformational Leadership
Eric Kearney
Jacobs University Bremen
Diether Gebert
Korea University Business School
In a sample of 62 research and development (R&D) teams, the authors examined transformational
leadership as a moderator of the relationship of age, nationality, and educational background diversity
with team outcomes. When levels of transformational leadership were high, nationality and educational
diversity were positively related to team leaders’ longitudinal ratings of team performance. These
relationships were nonsignificant when transformational leadership was low. Age diversity was not
related to team performance when transformational leadership was high, and it was negatively related to
team performance when transformational leadership was low. Two mediated moderation effects help
explain these findings. Transformational leadership moderated the relationship of the 3 examined
diversity dimensions with the elaboration of task-relevant information, which in turn was positively
associated with team performance. Moreover, transformational leadership moderated the relationship of
the 3 diversity types with collective team identification, which in turn was positively related to the
elaboration of task-relevant information. The authors discuss the theoretical and practical implications of
these results. Overall, this study suggests that transformational leadership can foster the utilization of the
potential, but frequently untapped, benefits entailed by both demographic and informational/cognitive
team diversity.
Keywords: diversity, transformational leadership, elaboration of task-relevant information, collective
team identification, team performance
What can ensure that the positive effects of team diversity
outweigh the drawbacks frequently found to be associated with
heterogeneity? We address this question by examining the role that
transformational leadership can play in managing teams that are
demographically and informationally/cognitively diverse. Since
1990, more studies have been conducted on transformational and
charismatic leadership than on all other popular theories of lead-
ership combined (Judge & Piccolo, 2004). The literature is replete
with studies documenting the positive effects of transformational
leadership on numerous outcomes such as follower motivation,
satisfaction, and performance, as well as—with respect to these
criteria—the superiority of transformational leadership over trans-
actional or laissez-faire leadership styles in most situations (Judge
& Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996).
Transformational leadership has been described as being particu-
larly important given recent developments such as fast-paced
change, mounting pressure to innovate, and heightened globalized
competition, all of which contribute to growing levels of uncer-
tainty (Lim & Ployhart, 2004). Among these important develop-
ments in the workplace are the increasing reliance on teams to
generate the solutions required for sustained business success
(Kozlowski & Bell, 2003) and the inevitably rising levels of
diversity in these teams (Van Knippenberg & Schippers, 2007). In
light of these trends, it is vital to examine if and how the currently
most popular and arguably most generally effective type of lead-
ership (Bass & Riggio, 2006) may be suitable for meeting the
demands entailed by an increasing demographic and information-
al/cognitive heterogeneity in organizational teams. Despite the
current popularity of both diversity and transformational leader-
ship research, a gap exists in both literatures in that it has thus far
not been explored how transformational leadership affects the
balance between the negative and the positive effects spawned by
different types of team heterogeneity.
The effects of diversity are typically explained in the literature
from an information-decision-making perspective (which predicts
positive effects of diversity) on the one hand or from a similarity–
attraction or social categorization perspective (which posit nega-
tive effects of diversity) on the other (Williams & O’Reilly, 1998).
Unlike most previous empirical studies, we consider both of these
perspectives and propose that transformational leadership has a
dual effect. With respect to the information-decision-making per-
spective, we posit that transformational leadership fosters the
elaboration and in-depth processing of the broader range of task-
relevant information that is available in heterogeneous teams. In
line with Van Knippenberg, De Dreu, and Homan (2004), we
Eric Kearney, Jacobs Center on Lifelong Learning and Institutional
Development, Jacobs University Bremen, Bremen, Germany; Diether Ge-
bert, Department of Management, Korea University Business School,
Seoul, Korea.
A previous version of this article was presented at the Academy of
Management 2007 annual meeting in Philadelphia, Pennsylvania. This
research was partially supported by the IBRE Research Fund at Korea
University Business School. We thank Bob Liden, Kevin Lowe, Shung Jae
Shin, Steffen Giessner, and Daan van Knippenberg for their comments and
suggestions on previous drafts of this article.
Correspondence concerning this article should be addressed to Eric
Kearney, Jacobs University Bremen, Jacobs Center on Lifelong Learning
and Institutional Development (JCLL), Campus Ring 1, 28759 Bremen,
Germany. E-mail: e.kearney@jacobs-university.de
Journal of Applied Psychology © 2009 American Psychological Association
2009, Vol. 94, No. 1, 77–89 0021-9010/09/$12.00 DOI: 10.1037/a0013077
77
assume that the elaboration of task-relevant information—that is,
the exchange, discussion, and integration of ideas, knowledge, and
insights pertaining to assigned tasks—is the primary process
whereby diversity can exert positive effects on team performance.
Moreover, concerning the social categorization perspective, we
argue that transformational leadership obviates adverse effects
such as low levels of collective team identification in diverse
teams. These potential negative effects of heterogeneity can dis-
rupt the elaboration of task-relevant information and thus impede
team performance (Van Knippenberg et al., 2004). Figure 1 depicts
these posited linkages. We assume that, primarily via these pro-
cesses, transformational leadership constitutes a viable strategy for
bringing to fruition the propitious effects and at the same time
preventing the deleterious effects of different dimensions of team
diversity, thus enhancing team performance. We tested these as-
sumptions in a field study of 62 research and development (R&D)
teams in the pharmaceutical industry.
Marks, Mathieu, and Zaccaro (2001) have argued that there is a
difference between team processes—that is, the means whereby
team members utilize team resources—and emergent states—that
is, the cognitive, motivational, and affective states of teams. In our
model, we consider the role of collective team identification as an
emergent state in teams as well as the role of the elaboration of
task-relevant information as a team process. By including the
concepts of both emergent states and team processes as intervening
variables, we heed the advice to develop more inclusive models
that enable a deeper understanding of the antecedents of team
performance (Marks et al., 2001).
Our aim is to contribute to two literatures. First, regarding the
diversity literature, we extend the attempts to better understand
when (i.e., the conditions under which) and how (i.e., the processes
through which) both demographic and informational/cognitive di-
versity have more or less positive effects on team performance.
Second, with respect to the transformational leadership literature,
we investigate the role of this leadership style in an increasingly
important context—the management of demographically and in-
formationally diverse teams. Both aspects are of major theoretical
and practical importance. For example, if transformational leader-
ship were identified as a means whereby the balance between the
positive and the negative effects of different dimensions of diver-
sity could be tipped in favor of the former, organizations could
take informed steps in selecting and training leaders of diverse
teams.
Diversity and Team Performance
Due to demographic developments, greater mobility, increas-
ingly globalized markets, and stiffer competition, as well as laws
aimed at furthering fairness in hiring practices, organizational
teams have become more and more diverse over the years with
respect to educational background and demographic characteristics
such as age and nationality (Jackson, Joshi, & Erhardt, 2003).
Diversity can be conceptualized as a characteristic of a social
grouping (i.e., a team, organization, or society) that reflects the
degree to which there are objective or subjective differences
among people within the group (Van Knippenberg & Schippers,
2007). These differences can indicate either separation (i.e., di-
verging positions, opinions, or values), variety (i.e., heterogeneity
with respect to task-relevant categories that the group members
belong to), or disparity (i.e., an unequal distribution of valued
resources) (Harrison & Klein, 2007).
Although increasing diversity is an inevitable trend in today’s
organizations, its effects are not yet fully understood. The extant
literature has not been able to identify direct effects of diversity
that generalize across different studies and contexts (Stewart,
2006; Van Knippenberg & Schippers, 2007). For example, there is
little support for the plausible suggestion that directly task-related
informational diversity (e.g., variety concerning educational back-
ground) generally has more positive effects than does less directly
job-related demographic diversity (e.g., differences regarding age
or nationality) (Bowers, Pharmer, & Salas, 2000; Dahlin, Wein-
gart, & Hinds, 2005; Webber & Donahue, 2001). This has led
some authors to conclude that all dimensions of diversity can give
rise to positive as well as negative effects (Van Knippenberg et al.,
2004).
Hence, more research is needed to examine when (i.e., in the
presence of what moderators) and how (i.e., through what medi-
ators) different types of diversity either benefit or impede team
performance. Past studies have reported that, for example, the
negative effects of demographic diversity diminish over time (Har-
rison, Price, & Bell, 1998), and the positive effects of diversity are
more likely to surface when there are high levels of outcome
interdependence (Schippers, Den Hartog, Koopman, & Wienk,
2003), task interdependence (Jehn, Northcraft, & Neale, 1999),
and collective team identification (Van der Vegt & Bunderson,
2005) and when tasks are complex rather than routine (Pelled,
Eisenhardt, & Xin, 1999). Moreover, Jehn et al. (1999) as well as
Pelled et al. (1999) have identified intrateam conflict as an impor-
tant mediator of the diversity–team outcomes relationship. Other
researchers have found evidence for a mediating role of team
learning (Van der Vegt & Bunderson, 2005) and team reflexivity
(Schippers et al., 2003), respectively. Despite these valuable in-
sights, however, the knowledge of when and how diversity affects
team outcomes is still fragmentary and leaves many questions
unanswered (Van Knippenberg & Schippers, 2007). For example,
Age, Nationality,
and Educational
Diversity
Collective Team
Identification
Elaboration of
Task-Relevant
Information
Transformational
Leadership
Tea m
Performance
Figure 1. Proposed relationships among the variables.
78 KEARNEY AND GEBERT
there is little knowledge on how transformational leadership af-
fects the association of both demographic and informational di-
versity with team performance.
Transformational Leadership and Team Performance
Transformational leadership goes beyond a purely rational so-
cial exchange process by establishing an emotional bond between
leader and followers. It engages the full person of the follower,
including the higher order needs, and thus enables him or her to
perform beyond expectations (Bass, 1985). As conceptualized by
Avolio and Bass (2004), transformational leaders act as role mod-
els, provide inspirational motivation and intellectual stimulation,
and show individualized consideration. They are assumed to fa-
cilitate team performance by aligning team members’ goals and
values and by fostering collective optimism, efficacy, and identi-
fication with the team and its objectives (Bass & Riggio, 2006).
Despite the multitude of studies documenting the positive ef-
fects of transformational leadership on numerous important out-
comes (Judge & Piccolo, 2004), the preponderance of past re-
search has focused on the individual level (Judge, Bono, Ilies, &
Gerhardt, 2002). Because it cannot be assumed that findings at one
level of analysis are automatically applicable to higher levels of
analysis (Kozlowski & Klein, 2000), much more research is
needed on the links between transformational leadership and team
outcomes (Judge et al., 2002). Several scholars have argued that
current organizational trends call for shifting the focus from the
leadership of individuals to the leadership of teams (Chen, Kirk-
man, Kanfer, Allen, & Rosen, 2007; Lim & Ployhart, 2004).
Although many teams in less hierarchical organizations are being
granted more autonomy and control over their activities, leadership
is bound to remain important, because even self-managing teams
are seldom afforded full decision-making authority, and key deci-
sions remain in the hands of those individuals explicitly designated
as leaders (Morgeson, 2005).
Transformational Leadership as a Moderator
Despite several recent studies investigating team-level outcomes
of transformational leadership (Bass, Avolio, Jung, & Berson,
2003; Lim & Ployhart, 2004; Schaubroeck, Lam, & Cha, 2007),
research is needed that examines whether the relationship of both
demographic and informational diversity with team performance
varies depending upon levels of transformational leadership and, if
it does, what processes mediate this moderating effect. Although
organizations assemble heterogeneous teams in the hopes that the
broadened pool of knowledge, skills, and abilities will yield solu-
tions superior to those attainable by homogeneous teams, it is by
no means certain that this increased performance potential will be
leveraged (Stewart, 2006). Teams must learn to work together in
such a way that the resources brought into the group by each
member are fully utilized toward meeting collective objectives.
Leaders are likely to play a key role in facilitating this process
(Hogan & Kaiser, 2005).
However, to the best of our knowledge, only two empirical
studies have thus far examined this important linkage among team
composition, leadership, and team outcomes. Somech (2006)
found that in functionally heterogeneous teams, participative lead-
ership was positively related to team reflection, which in turn
facilitated team innovation, but negatively related to team in-role
performance. By contrast, directive leadership was positively as-
sociated with team reflection when functional heterogeneity was
low. Moreover, Shin and Zhou (2007) have shown that transfor-
mational leadership moderates the relationship between educa-
tional specialization diversity and team creativity such that this
relationship is more positive when transformational leadership is
high rather than low. The findings of both of these studies under-
score the importance of studying leadership as a moderator of the
diversity–team performance relationship.
Our research builds on, extends, and differs from these previous
studies in the following ways. With respect to Somech’s (2006)
findings, the functional heterogeneity in the primary care teams
may not only have constituted variety, but also disparity. For
example, doctors are likely to have more power and influence than
social workers or dieticians. In many other settings, such as R&D
teams, diversity may be more appropriately conceptualized as
variety and/or separation (Harrison & Klein, 2007). Moreover, the
influence of leaders on team outcomes extends well beyond the
degree of participation or direction that the leader provides. Trans-
formational leadership can be either participative or directive
(Bass & Riggio, 2006), but only a fraction of its overall effects are
captured by this distinction. We argue below that transformational
leadership is particularly promising as a means to realize the team
performance potential entailed by a wider range of knowledge and
perspectives (i.e., diversity as variety; Harrison & Klein, 2007).
In examining a demographically highly homogeneous sample,
Shin and Zhou (2007) focused on one type of (informational)
diversity and showed that it was positively related to team creativ-
ity only when transformational leadership was high. We argue that
the promise of transformational leadership with respect to lever-
aging the potential inherent in diversity is even more far-ranging in
that it also extends to demographically diverse teams. Given the
important conceptual differences between demographic and infor-
mational diversity (Dahlin et al., 2005; Jackson et al., 2003;
Williams & O’Reilly, 1998), it is vital to examine the interactive
effects of transformational leadership and different dimensions of
diversity. Moreover, although Shin and Zhou examined team cre-
ativity, we focus on team performance as the dependent variable.
In the context of R&D teams, creativity is an important, but by no
means sufficient, prerequisite for team performance, which to a
large extent depends on whether teams succeed in integrating and
implementing creative ideas. Finally, although Shin and Zhou
examined as a mediator the very specific variable team creative
efficacy, our model is based on the broader categorization–
elaboration model proposed by Van Knippenberg et al. (2004).
Consequently, we examine as mediators an emergent state that we
argue is linked to social categorization effects (i.e., collective team
identification) as well as the team process that, according to Van
Knippenberg et al., is assumed to be directly linked to overall team
performance (i.e., the elaboration of task-relevant information).
In line with Van Knippenberg et al. (2004), we assume that all
types of diversity in teams can have positive effects (i.e., a thor-
ough processing of an enlarged range of task-relevant resources) as
well as negative effects (i.e., less interpersonal attraction and
higher levels of social categorization processes resulting in, for
example, low collective team identification). Assembling informa-
tionally diverse teams that include members from different educa-
tional or functional backgrounds is often regarded as a means to
79
MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
foster a cross-fertilization of ideas and to ensure that the team will
consider various task-relevant perspectives (Jackson, 1995). Al-
though it is obvious that educational background diversity expands
the pool of skills, knowledge, and abilities, demographic diversity
may also be associated with important task-relevant differences
(Dahlin et al., 2005; Wegge, Roth, Neubach, Schmidt, & Kanfer,
in press). For example, both age and nationality diversity are likely
to yield different perspectives on work tasks. Under the right
circumstances, these differences in perspectives may yield syner-
gistic effects and in turn improve team performance. Exposure to
different views forces the team members to think about alternative
solutions they might not have considered otherwise. It thus may
enhance a more careful deliberation not only of the ideas espoused
by others but also of one’s own position. Younger team members
could benefit from the experiences, practical knowledge, and so-
cial networks of their older colleagues, whereas older team mem-
bers stand to gain from the creativity and up-to-date theoretical
knowledge of their younger colleagues. Analogously, team mem-
bers of different nationalities may bring unique and complemen-
tary perspectives to the team. Understanding the effects of age
diversity is particularly important in countries with low birth rates
and aging workforces that face the challenge of intergenerational
knowledge transfer (DeLong, 2004). Moreover, increasing nation-
ality diversity is one of the inevitable effects of globalization
(Dahlin et al., 2005). Age, nationality, and educational diversity
could all help to avoid pitfalls such as premature consensus or
“groupthink” (Janis, 1982). Hence, with respect to the typology
developed by Harrison and Klein (2007), we posit that all three of
these diversity dimensions constitute variety—that is, a broadened
pool of task-relevant resources and perspectives.
At the same time, however, demographic heterogeneity is likely
to covary with differences in values, beliefs, attitudes, and social
ties. These differences may diminish interpersonal attraction and
give rise to deleterious social categorization processes. Moreover,
Dougherty (1992) has pointed out that different educational back-
grounds entail specific interpretive schemata or thought worlds,
which enable a cognitive orientation concerning particular prob-
lems and tasks. It is plausible that such differences in viewing
important issues can likewise lead to less liking, impaired com-
munication and cooperation, as well as adverse social categoriza-
tion processes.
Hence, the relationship of demographic and informational vari-
ety with team performance depends on whether the potential
positive effects of diversity are realized and, at the same time,
whether the potential negative effects of diversity are held in
check. We posit that transformational leadership has this dual
effect of fostering the positive and preventing the negative effects
of diversity. Consequently, we propose the following:
Hypothesis 1: Transformational leadership moderates the re-
lationship of age, nationality, and educational diversity with
team performance, such that this relationship is positive when
levels of transformational leadership are high but negative or
nonsignificant when levels of transformational leadership are
low.
Our model (depicted in Figure 1) assumes two instances of
mediated moderation as the primary explanatory processes for the
moderating effect specified in Hypothesis 1. Mediated moderation
exists when the interaction between two variables (in our model,
diversity and transformational leadership) affects a mediator,
which then affects a dependent variable (Morgan-Lopez & Mac-
Kinnon, 2006).
Elaboration of Task-Relevant Information as a Mediator
With respect to the positive effects of diversity, we assume that
transformational leadership moderates the relationship between
diversity and the elaboration of task-relevant information and that
the elaboration of task-relevant information in turn is positively
associated with team performance. Although the broader range of
task-relevant resources and perspectives that diversity affords con-
stitutes a potential benefit, active steps must be taken to ensure that
teams make use of this variety (Van der Vegt & Bunderson, 2005).
Many studies have shown that it cannot be taken for granted that
individuals who possess unique, nonredundant information will
share this information with their team members (e.g., Stasser &
Titus, 1985) or elaborate constructively on the input provided by
others (e.g., Brodbeck, Kerschreiter, Mojzisch, & Schulz-Hardt,
2007).
We propose that, for several reasons, transformational leader-
ship fosters the exchange and elaboration of task-relevant infor-
mation in diverse teams. Transformational leadership promotes the
internalization of the goals and values that underlie the collective
cause (Bass & Riggio, 2006). Moreover, the charismatic and
inspirational appeals of the transformational leader establish a
unifying superordinate social identity based on the common vision.
Consequently, working toward meeting the common objectives
becomes a means for a follower to enhance his or her self-concept
(Shamir, House, & Arthur, 1993). By fully engaging the followers
motivationally in the effort to realize an inspiring vision, transfor-
mational leaders induce followers to share all their task-relevant
information. Even if it incites dissent and criticism, the team
members are likely to contribute this information because the
collective vision takes precedence over individual—and possibly
egotistical—work-related goals. Furthermore, by providing inspi-
rational motivation, transformational leaders foster collective en-
thusiasm, optimism, and efficacy (Shin & Zhou, 2007). At the
same time, the transformational leader’s individually considerate
behavior ensures that all team members feel acknowledged and
appreciated in their uniqueness and are positively reinforced for
the input they provide. Intellectually stimulating leaders encourage
their teams to welcome and take advantage of diverse knowledge
bases and perspectives (Bass & Riggio, 2006), even if the voiced
views deviate from the general consensus. In this sense, transfor-
mational leaders may become catalysts for creativity and innova-
tion. Moreover, they may act as buffers against performance-
inhibiting levels of stress caused by uncertainty and external
pressures (Bass & Riggio, 2006). Accordingly, we argue that
transformational leadership promotes a thorough consideration of
all available task-relevant resources in diverse teams.
Particularly when the teams’ tasks require creativity, innovation,
and high-quality decision-making, it is this cross-fertilization of
perspectives that enhances team performance and enables propi-
tious effects of diversity through positive synergies—that is, col-
lectively developed group solutions that are superior to the solu-
tions generated by the best individual in the team (Michaelsen,
Watson, & Black, 1989). Hence, we posit that the elaboration of
80 KEARNEY AND GEBERT
task-relevant information is positively related to team perfor-
mance. In line with Van Knippenberg et al. (2004), we assume that
diversity can enhance team performance only to the degree that it
entails added value in the form of nonredundant experience,
knowledge, perspectives, and social network ties. The utilization
of this variety of resources is the team process whereby diversity
can benefit team performance. We therefore posit the following:
Hypothesis 2: The elaboration of task-relevant information
fully mediates the moderating effect of transformational lead-
ership on the relationship of age, nationality, and educational
diversity with team performance.
Collective Team Identification as a Mediator
With respect to preventing the negative effects of diversity, we
argue that transformational leadership moderates the relationship
between diversity and collective team identification—that is, the
emotional significance that individuals attach to their membership
in a given team (Van der Vegt & Bunderson, 2005)—and that
collective team identification in turn is positively associated with
the elaboration of task-relevant information. Collective team iden-
tification is the emotional component of social identification that
has been shown to most adequately capture the motivational force
that induces individuals to engage in interactions with others
(Bergami & Bagozzi, 2000). A large body of research has shown
that individuals tend to prefer to interact with similar rather than
dissimilar others (Byrne, 1971) and that dissimilarity can lead to
less interpersonal liking and to socially categorizing others as
outgroup members, who are subsequently treated less favorably
than ingroup members (Turner, Hogg, Oakes, Reicher, & Weth-
erell, 1987). One such negative effect of low interpersonal attrac-
tion and high levels of social categorizations is low collective team
identification (Van Knippenberg et al., 2004).
Zaccaro, Rittman, and Marks (2001) argued that a team leader’s
main job lies in fulfilling those functions that are not being handled
adequately in regard to the respective team’s needs. Diverse teams
in particular may benefit from a leader’s guidance to shift attention
from the difficulties entailed by the need to accommodate different
backgrounds, perspectives, communication styles, and social iden-
tities to the commonalities and shared goals. Hence, a leader’s role
in diverse teams may consist of emphasizing the potential advan-
tages of variety and thus fostering motivation among the team
members to work through dissent. By furthering collective opti-
mism and efficacy and decreasing perceived stress and uncertainty,
transformational leaders may facilitate a team climate in which
diverse input is appreciated and invited, rather than regarded as an
annoyance. Moreover, transformational leaders are likely to foster
collective team identification in diverse teams by establishing a
superordinate social identity built around common values and
objectives, while retaining the appreciation of and encouragement
for each team member’s uniqueness. Thus, we propose that trans-
formational leadership obviates the potential disadvantage of low
levels of collective team identification in diverse teams and that
this effect of transformational leadership helps foster the elabora-
tion of task-relevant information. Because there are likely to be
other variables such as team potency (Schaubroeck et al., 2007)
through which transformational leadership may affect the pro-
cesses occurring in diverse teams, we posit that collective team
identification partially mediates the moderating effect of transfor-
mational leadership on the relationship between diversity and the
elaboration of task-relevant information.
Although transformational leadership theory (Bass & Riggio,
2006) predicts that this leadership style should enhance collective
team identification, there are no empirical studies that examine
whether transformational leadership actually does have this effect
in diverse teams or whether a high level of collective team iden-
tification in diverse teams is related to a greater utilization of the
available task-relevant resources. Uniting all members of a diverse
team around shared objectives and a common social identity could
theoretically entail the danger that team members might simply
adopt the leader’s vision and repress their own views. Thus, by
enhancing collective team identification, transformational leader-
ship could indirectly impede the elaboration of task-relevant in-
formation and countervail the potential benefits of variety. We
argue, however, that although charisma and inspirational motiva-
tion promote unity in the face of diversity, individually considerate
and intellectually stimulating behavior militates against a situation
in which no one dares to voice reservations for fear of jeopardizing
team harmony. Although intellectual stimulation induces the team
to develop new ideas that may deviate from established views,
individual consideration ensures that team members who voice
such ideas feel valued and reinforced rather than discouraged in
doing so. Hence, we posit that transformational leadership builds
collective team identification in diverse teams not by establishing
a groupthink-like harmony that is based on the team members’
restraint in articulating objections but by creating an atmosphere in
which all task-relevant information is shared and considered in the
interest of obtaining the best possible team results. In this sense,
we propose that collective team identification is an emergent state
in teams that fosters the team members’ willingness to engage in
the elaboration of task-relevant information, which in turn is
needed for high levels of team performance. In sum, we therefore
posit the following:
Hypothesis 3: Collective team identification partially medi-
ates the moderating effect of transformational leadership on
the relationship of age, nationality, and educational diversity
with the elaboration of task-relevant information.
Method
Sample and Data Collection
The sample consisted of 62 R&D teams in a multinational
pharmaceutical company with headquarters in Germany. The team
members interacted frequently and worked interdependently to-
ward common team goals. With the permission of their direct
supervisors, the respective team leaders were asked to have their
teams participate in this study. English-language surveys were sent
out and returned by e-mail. (In this company, English is the
standard language at important meetings and for the dissemination
of team results.) We collected data from three sources: Data on
demographic variables and educational background were provided
by the human resources department; the team members provided
the data on all other variables except team performance, which
team leaders rated longitudinally (6 months after the collection of
team member data). Each team leader was responsible for and thus
81
MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
provided performance ratings of only one team. The teams ranged
in size from 4 to 15 members (M7.73, SD 2.46). The mean
average age of the members of the 62 teams was 39.56 years. Of
the team leaders, 13% were women and 87% were men; of the
team members, 18% were women and 82% were men. Ninety-six
percent of the team members had at least a master’s degree level
of education. Only those teams from which we had received data
from the team leader and from at least 3 as well as at least 50% of the
team members were included in our sample. Overall, data were
collected from 339 team members and 62 team leaders. The mean
number of respondents per team was 5.47. Response rates were 91%
(at the team level) and 71% (at the individual level), respectively.
Measures
Transformational leadership was measured with the 20 items of
the Multifactor Leadership Questionnaire (MLQ-5X Short; Avolio
& Bass, 2004).
1
We used a response format ranging from 1 (not at
all)to5(frequently, if not always). (The MLQ typically uses a
scale from 0 to 4.) Similar to other researchers (e.g., Bass et al.,
2003), we combined the five scales (Idealized Influence Attrib-
uted, Idealized Influence Behavior, Inspirational Motivation, In-
tellectual Stimulation, and Individualized Consideration) into a
single transformational leadership composite. A principal compo-
nents analysis revealed that a single transformational leadership
factor explained 80% of the variance in the dimensions.
Team diversity. Harrison and Klein (2007) convincingly ar-
gued that the operationalization of diversity variables should cor-
respond to the respective conceptualization of diversity (i.e., as
separation, variety, or disparity). Because we posit that age, na-
tionality, and educational diversity broaden the range of task-
relevant experience, perspectives, and network ties and thus entail
a potential for enhanced performance, these diversity variables
constitute variety in our model. Hence, in line with Harrison and
Klein’s recommendations, we measured these variables via Blau’s
(1977) index of heterogeneity, 1 – p
i
2
. In this formula, pis the
proportion of a team in the respective diversity category and iis
the number of different categories represented on the team. The
index varies from 0, indicating no diversity, to a theoretical max-
imum of 1. We calculated age, nationality, and educational back-
ground diversity on the basis of archival data. For age diversity, we
categorized participants by 5-year increments (i.e., 25–29, 30 –34,
35–39, etc.). There were 27 different nationalities represented in
the sample as a whole. The average number of nationalities per
team was 2.8. Concerning educational background, we categorized
individuals on the basis of the academic field in which they
obtained their highest degree. We used the German educational
system to define the categories. Fourteen different educational
backgrounds (e.g., pharmacology, chemistry, medicine) were rep-
resented in the overall sample, and the average number of educa-
tional backgrounds per team was 3.3.
We focused on age and nationality diversity as examples of
demographic heterogeneity because these are frequently re-
searched variables (Van Knippenberg & Schippers, 2007) that are
meaningful to many companies, including the one that provided
the data for the present study. Moreover, we chose to examine
educational diversity because, unlike functional diversity, it offers
only weak social categorization cues and may therefore be the
purest indicator of informational diversity (Dahlin et al., 2005).
Because the proportion of women in our sample was low and
males constituted the majority in all but seven teams, we did not
include gender diversity. Moreover, we did not include tenure
diversity because the company we studied had grown in large part
through acquisitions. Simply measuring tenure in the current com-
pany would not have captured the experience and social networks
acquired in formerly independent companies. Informal conversa-
tions with managers confirmed that the current influence of some
individuals was based in large part on this aspect of their work
history.
Collective team identification was measured with the four items
used by Van der Vegt and Bunderson (2005). Respondents were
asked to rate the degree to which the members of their team “feel
emotionally attached to their team,” “feel a strong sense of be-
longing to their team,” “feel as if the team’s problems are their
own,” and “feel like part of the family in their team” (Van der Vegt
& Bunderson, 2005, p. 538).
Elaboration of task-relevant information. There is no estab-
lished scale that measures what Van Knippenberg et al. (2004)
called the elaboration of task-relevant information. We therefore
developed a four-item measure based on the extant literature. On
a 5-point scale ranging from 1 (strongly disagree)to5(strongly
agree), these items were worded as follows: “The members of this
team complement each other by openly sharing their knowledge”;
“The members of this team carefully consider all perspectives in
an effort to generate optimal solutions”; “The members of this
team carefully consider the unique information provided by each
individual team member”; “As a team, we generate ideas and
solutions that are much better than those we could develop as
individuals.” A principal components analysis with varimax rota-
tion revealed that one factor with an eigenvalue of 3.14 explained
79% of the variance among the items.
Team performance. Six months after collecting team member
data, the team leaders rated their respective teams concerning four
performance criteria suggested by Ancona and Caldwell (1992)
and Van der Vegt and Bunderson (2005): efficiency, quality of
innovations, productivity, and overall achievement. Each team
leader was asked to compare his or her team to other teams that
perform similar tasks. The response format ranged from 1 (far
below average)to7(far above average). Cronbach’s alpha for this
scale was .86.
Control variables. We included three control variables that
prior research has identified as being associated with team pro-
cesses and team outcomes. Team size was measured as the number
of persons on a team. Our team longevity measure was the average
length of time the team members had been on the team (Pelled et
al., 1999). Furthermore, we measured task interdependence with
five items adapted from Van der Vegt and Janssen (2003) using a
five-point scale from 1 (strongly disagree)to5(strongly agree). A
1
The Multifactor Leadership Questionnaire, Form 5X-Short (copyright
2004 by Bruce Avolio and Bernard Bass) is used with the permission of
Mind Garden, 855 Oak Grove Ave., Menlo Park, CA 94025. All rights
reserved.
82 KEARNEY AND GEBERT
sample item is “The members of this team need to collaborate with
colleagues to perform their jobs well.”
Data aggregation, reliability, and confirmatory factor analysis
(CFA). Because we were interested in the team level of analysis,
we calculated median r
wg
values (James, Demaree, & Wolf, 1984),
which indicate the degree of agreement among team members
within teams, as well as intraclass correlation coefficients (ICCs;
Bliese, 2000), which represent the ratio of between-group to total
variance (ICC1) and the reliability of average group perceptions
(ICC2), respectively. Moreover, we calculated aggregate-level
scale internal consistencies based on the average item response of
each team (Chen, Mathieu, & Bliese, 2004). These values were, for
transformational leadership, .94 (r
wg
), .33 (ICC1), .71 (ICC2), and
.93 (); for collective team identification, .92 (r
wg
), .38 (ICC1), .70
(ICC2), and .95 (); for the elaboration of task-relevant informa-
tion, .89 (r
wg
), .29 (ICC1), .62 (ICC2), and .94 (); and for task
interdependence, .90 (r
wg
), .39 (ICC1), .72 (ICC2), and .95 ().
The test statistics (Fratios) associated with the ICC1 values of all
four variables were statistically significant at the .05 level. Overall,
these results justified aggregating responses to the team level
(Bliese, 2000).
Prior to testing our hypothesis, we conducted a CFA to examine
the distinctiveness of our scales for transformational leadership,
collective team identification, elaboration of task-relevant infor-
mation, and task interdependence. We tested the absolute fit to the
data of this four-factor model and examined whether it fit the data
better than did competing models (Kelloway, 1998). The expected
four-factor model fit our data reasonably well,
2
(129) 206.53,
p.001; root-mean-square error of approximation (RMSEA)
.07; standardized root mean residual (SRMR) .05; comparative
fit index (CFI) .94, whereas conceivable alternative models with
fewer factors did not fit our data. For example, a three-factor
model that comprised transformational leadership and task inter-
dependence and combined elaboration of task-relevant information
and collective team identification into one factor exhibited a poor
fit,
2
(132) 403.35, p.001; RMSEA .19; SRMR .13;
CFI .78, as did a two-factor model that included task interde-
pendence and combined transformational leadership, elaboration
of task-relevant information, and collective team identification into
one factor,
2
(134) 629.84, p.001; RMSEA .27; SRMR
.19; CFI .59.
Results
Table 1 presents the means, standard deviations, and correla-
tions among the study variables. None of the diversity variables
was significantly correlated with either the elaboration of task-
relevant information or collective team identification, whereas
transformational leadership was positively related to both of these
variables. Both nationality and educational diversity were posi-
tively associated with team performance, whereas age diversity
was not. There was no significant relationship between transfor-
mational leadership and team performance. The elaboration of
task-relevant information was positively associated with both col-
lective team identification and team performance.
To test Hypothesis 1, which posits a moderating effect of
transformational leadership on the relationship of age, nationality,
and educational diversity with team performance, we conducted a
hierarchical regression analysis with mean-centered predictor vari-
ables (Aiken & West, 1991). We entered the control variables
(team size, team longevity, and task interdependence) in the first
step; age, nationality, and educational diversity as well as trans-
formational leadership in the second step; and the respective
interactions of transformational leadership with the three diversity
dimensions in the third step. Table 2 (Model 1) summarizes the
results. Because the statistical power for detecting moderators in
field studies is inherently low (McClelland & Judd, 1993), in line
with previous research on group diversity (Harrison et al., 1998),
we relaxed significance levels to p.10 for findings involving
interactions. (For all the regression coefficients reported below as
significant at the .10 level, the statistical power at the .05 level was
lower than .60.)
In support of Hypothesis 1, we found a significant change in the
multiple squared correlation coefficient after adding the three
interaction terms (R
2
.17, p.01; see Step 3 of Model 1). The
regression coefficients for the interactions of transformational
leadership with diversity concerning age (b2.23, p.05),
nationality (b1.02, p.05), and educational background (b
1.04, p.05) were all significant. Simple slope analyses (Aiken
& West, 1991) revealed that when transformational leadership was
high, team performance was significantly positively related to
diversity regarding nationality (b1.02, t2.15, p.05) and
educational background (b1.37, t2.55, p.05) but, contrary
Table 1
Means, Standard Deviations, and Correlations
Variable MSD 12345678910
1. Team size 7.73 2.46
2. Team longevity 2.29 1.07 .06
3. Task interdependence 3.99 0.44 .16 .13 —
4. Age diversity 0.55 0.15 .01 .12 .10 —
5. Nationality diversity 0.41 0.25 .07 .07 .16 .14 —
6. Educational diversity 0.46 0.25 .01 .02 .03 .08 .19
7. Transformational leadership 3.48 0.73 .15 .07 .15 .14 .20 .15
8. Elaboration of information 3.73 0.71 .10 .01 .02 .10 .21
.13 .42
ⴱⴱ
9. Collective team identification 3.65 0.60 .30
.06 .10 .06 .02 .08 .32
.54
ⴱⴱⴱ
10. Team performance 5.59 0.73 .01 .07 .16 .05 .26
.25
.10 .44
ⴱⴱⴱ
.18 —
Note. N 62 research and development (R&D) teams.
p.10.
p.05.
ⴱⴱ
p.01.
ⴱⴱⴱ
p.001.
83
MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
Table 2
Results of Regression Analyses
Variable
Model 1: Team performance Model 2: Elaboration of information Model 3: Collective team identification
Step 1 Step 2 Step 3 Step 4 Step 1 Step 2 Step 3 Step 4 Step 1 Step 2 Step 3
Control
Team size 0.01 (0.04) 0.01 (0.04) 0.01 (0.04) 0.02 (0.04) 0.03 (0.04) 0.05 (0.04) 0.05 (0.03) 0.02 (0.03) 0.07
(0.03) 0.09
ⴱⴱ
(0.03) 0.09
ⴱⴱ
(0.03)
Team longevity 0.07 (0.09) 0.05 (0.09) 0.11 (0.08) 0.09 (0.08) 0.00 (0.09) 0.01 (0.08) 0.06 (0.07) 0.05 (0.07) 0.04 (0.07) 0.03 (0.07) 0.02 (0.06)
Task interdependence 0.30 (0.22) 0.23 (0.22) 0.26 (0.21) 0.33 (0.20) 0.07 (0.22) 0.20 (0.20) 0.20 (0.18) 0.20 (0.18) 0.06 (0.18) 0.02 (0.17) 0.02 (0.15)
Step 2: Main effects
Age diversity (AD) 0.08 (0.63) 0.49 (0.61) 0.51 (0.59) 0.59 (0.57) 0.05 (0.54) 0.01 (0.52) 0.55 (0.48) 0.11 (0.45)
Nationality diversity
(ND)
0.56 (0.40) 0.32 (0.38) 0.30 (0.37) 0.30 (0.36) 0.06 (0.33) 0.24 (0.33) 0.37 (0.30) 0.54
(0.28)
Educational diversity
(ED)
0.61 (0.39) 0.55 (0.36) 0.53 (0.35) 0.11 (0.35) 0.05 (0.31) 0.04 (0.30) 0.09 (0.29) 0.04 (0.27)
Transformational
leadership (TFL)
0.01 (0.14) 0.01 (0.13) 0.15 (0.14) 0.45
ⴱⴱ
(0.12) 0.42
ⴱⴱ
(0.12) 0.31
(0.12) 0.34
ⴱⴱ
(0.10) 0.32
ⴱⴱ
(0.10)
Step 3: Interactions
AD TFL 2.23
(1.03) 1.56 (1.04) 1.93
(0.91) 1.41 (0.91) 1.55
(0.77)
ND TFL 1.02
(0.50) 0.68 (0.51) 0.99
(0.44) 0.74 (0.44) 0.73
(0.37)
ED TFL 1.04
(0.51) 0.60 (0.53) 1.30
ⴱⴱ
(0.44) 0.93
(0.47) 1.11
ⴱⴱ
(0.37)
Step 4: Mediators
Elaboration of
information
0.34
(0.15)
Collective team
identification
0.34
(0.16)
R
2
.04 .13 .31 .37 .01 .25 .44 .49 .10 .26 .44
R
2
.04 .10 .17
ⴱⴱ
.06
.01 .24
ⴱⴱ
.19
ⴱⴱ
.05
.10 .16
.18
ⴱⴱ
F0.72 1.17 2.24
2.65
ⴱⴱ
0.21 2.58
4.08
ⴱⴱⴱ
4.35
ⴱⴱⴱ
2.05 2.71
4.03
ⴱⴱⴱ
Note. N 62 research and development (R&D) teams. Unstandardized regression coefficients are reported (with standard errors in parentheses).
p.10.
p.05.
ⴱⴱ
p.01.
ⴱⴱⴱ
p.001.
84 KEARNEY AND GEBERT
to our expectations, not age diversity (b1.29, t1.54, ns). By
contrast, when transformational leadership was low, team perfor-
mance was negatively related to age diversity (b⫽⫺2.00, t
1.72, p.10) and negatively but nonsignificantly related to
diversity regarding nationality (b⫽⫺0.30, t⫽⫺0.47, ns) and
educational background (b⫽⫺0.16, t⫽⫺0.30, ns). Figures 2, 3,
and 4 illustrate these relationships.
Hypotheses 2 and 3 both posit a mediated moderation effect,
which occurs when the interaction between two variables affects a
mediator, which in turn is associated with a dependent variable. To
test for mediated moderation, we followed the procedures outlined
by Morgan-Lopez and MacKinnon (2006) to obtain estimates of
the respective mediated moderation effects. Specifically, we first
regressed the mediator on the control, independent, and moderator
variables, as well as the interactions between the independent vari-
ables and the moderator. Next, we regressed the dependent variable
on the control, mediator, independent, and moderator variables, as
well as the interactions between the independent variables and the
moderator. The estimate of the indirect (mediated moderation)
effect is the product of the path from the respective interaction
term to the mediator and the path from the mediator to the
dependent variable (Morgan-Lopez & MacKinnon, 2006). To test
the statistical significance of the respective indirect effect, we
calculated 90% confidence intervals derived from bias-corrected
bootstrap estimates (Efron & Tibshirani, 1993; Preacher, Rucker,
& Hayes, 2007; Shrout & Bolger, 2002). In comparing different
methods of testing for mediation, MacKinnon, Lockwood, and
Williams (2004) found that bias-corrected bootstrap confidence
intervals had the highest level of statistical power, particularly in
the case of small sample sizes. We concluded the effect to be
statistically significant when the 90% confidence interval excluded
zero.
Hypothesis 2 states that transformational leadership moderates
the relationship of age, nationality, and educational diversity with
the elaboration of task-relevant information and that the elabora-
tion of task-relevant information in turn is positively associated
with team performance. Results confirmed the posited moderating
effect of transformational leadership on the relationship of age, na-
tionality, and educational diversity with the elaboration of task-
relevant information (see Table 2, Step 3 of Model 2). Adding the
respective interactions of transformational leadership with the three
diversity dimensions yielded a significant change in the amount of
variance explained (R
2
.19, p.01), with significant regression
coefficients for all three interactions. Simple slope analyses
showed that when transformational leadership was high, the elab-
Figure 3. Transformational leadership as a moderator of the relationship
between nationality diversity and team performance.
Figure 4. Transformational leadership as a moderator of the relationship
between educational diversity and team performance.
Figure 2. Transformational leadership as a moderator of the relationship
between age diversity and team performance.
85
MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
oration of task-relevant information was positively related to di-
versity concerning age (b1.67, t2.17, p.05), nationality
(b0.73, t1.70, p.10), and educational background (b
1.04, t2.20, p.05). In contrast, when transformational
leadership was low, the elaboration of task-relevant information
was negatively related to educational diversity (b⫽⫺0.85, t
1.78, p.10) and negatively but nonsignificantly related to
diversity with respect to age (b⫽⫺1.24, t⫽⫺1.16, ns) and
nationality (b⫽⫺0.52, t⫽⫺0.90, ns). The indirect (mediated
moderation) effects of the respective interactions of the three
diversity dimensions with transformational leadership via the elab-
oration of task-relevant information on team performance were all
significant (for age diversity, b0.66, SE 0.42, p.05; for
nationality diversity, b0.34, SE 0.21, p.05; and for
educational diversity, b0.44, SE 0.25, p.05). Results
indicated that, in line with Hypothesis 2, the interactive effects of
all three diversity dimensions with transformational leadership on
team performance were fully mediated by the elaboration of task-
relevant information. The formerly significant direct effects of
these interactions (see Table 2, Step 3 of Model 1) were no longer
significant after controlling for the mediator (see Table 2, Step 4 of
Model 1).
Hypothesis 3 states that transformational leadership moderates the
relationship of age, nationality, and educational diversity with collec-
tive team identification and that collective team identification in turn
is positively associated with the elaboration of task-relevant informa-
tion. Results supported the posited moderation effect (see Table 2,
Step 3 of Model 3). Entering the respective interactions of trans-
formational leadership with the three diversity dimensions yielded
a significant change in the multiple squared correlation coefficient
(R
2
.18, p.01), with significant regression coefficients for
all three interactions. Simple slope analyses revealed that when
transformational leadership was high, collective team identifica-
tion was positively related to diversity concerning age (b1.43,
t2.21, p.05) and educational background (b0.88, t2.25,
p.05) but not nationality (b⫽⫺0.05, t⫽⫺0.13, ns). Con-
versely, when transformational leadership was low, collective
team identification was negatively related to diversity with respect
to nationality (b⫽⫺0.97, t⫽⫺1.98, p.05) and educational
background (b⫽⫺0.73, t⫽⫺1.82, p.10) and negatively but
nonsignificantly related to age diversity (b⫽⫺0.94, t⫽⫺1.05,
ns). The indirect effects of the respective interactions of age and
educational diversity with transformational leadership via collec-
tive team identification on the elaboration of task-relevant infor-
mation were significant (for age diversity, b0.53, SE 0.35,
p.10; for educational diversity, b0.38, SE 0.21, p.05).
Contrary to our expectations, however, the analogous indirect
effect involving nationality diversity was not statistically signifi-
cant (b0.25, SE 0.17, ns). The formerly significant direct
effects of the respective interactions of age and educational diver-
sity with transformational leadership (see Table 2, Step 3 of Model
2) were decreased after controlling for the mediator. The regres-
sion coefficient for the interaction between age diversity and
transformational leadership was reduced to a nonsignificant lev-
el—thus indicating full mediation—while the regression coeffi-
cient for the interaction of educational diversity with transforma-
tional leadership was lowered but remained significant after
controlling for the mediator—thus indicating the partial mediation
we had expected (see Table 2, Step 4 of Model 2). Overall, these
results lend partial support to Hypothesis 3.
Discussion
Parallel to the rising interest in the effects spawned by an
increasingly diverse work force and in what can be done to ensure
that the benefits of diversity outweigh its costs (Van Knippenberg
& Schippers, 2007), an abundance of research in the last 2 decades
has shown that transformational leadership is positively related to
many important outcomes (Judge & Piccolo, 2004). This study
links these two literatures and empirically examines the claim that
transformational leadership helps to realize the performance po-
tential inherent in both demographic and informational diversity.
Results confirm that transformational leadership moderates the
relationship of age, nationality, and educational diversity with
team performance. Both nationality and educational diversity were
positively related to team performance only when transformational
leadership was high. These relationships were nonsignificant when
transformational leadership was low. Age diversity was not sig-
nificantly associated with team performance when transforma-
tional leadership was high, and it was negatively associated with
team performance when transformational leadership was low. Two
mediated moderation effects shed some light on how transforma-
tional leadership may exert advantageous effects on the perfor-
mance of diverse teams. First, the respective interactive effects of
age, nationality, and educational diversity on team performance
were fully mediated by the elaboration of task-relevant informa-
tion. Second, results indicated that collective team identification
fully mediated the interactive effect of age diversity with transfor-
mational leadership and partially mediated the interactive effect of
educational diversity with transformational leadership on the elab-
oration of task-relevant information.
Theoretical Implications
Our study makes a contribution to both the diversity and the
transformational leadership literature. With respect to diversity, we
believe that both demographic and informational heterogeneity
constitute potentially valuable variety—as defined by Harrison and
Klein (2007)—and that it depends on contextual conditions such as
the type of leadership that is provided whether this variety will
have predominantly positive or negative effects. Under some cir-
cumstances, the latter may prevail even in the case of highly
task-related diversity, as shown by the negative relationship be-
tween educational diversity and both the elaboration of task-
relevant information and collective team identification when trans-
formational leadership was low. On the basis of our findings, we
would argue that transformational leadership helps to tap the
benefits of team diversity as variety by fostering the utilization of
the enlarged pool of ideas and perspectives. At the same time,
transformational leadership ensures that demographic or informa-
tional differences among team members do not lead to harmful
effects of diversity, such as low collective team identification,
which may impede the utilization of the full range of task-relevant
resources and perspectives. Against the backdrop of the
categorization– elaboration model (Van Knippenberg et al., 2004),
we addressed both the information-decision-making perspec-
tive— by examining the elaboration of task-relevant information as
86 KEARNEY AND GEBERT
a team process—as well as the social categorization perspec-
tive— by measuring collective team identification as an emergent
state in teams—in order to respond to calls by several authors (e.g.,
Marks et al., 2001; Srivastava, Bartol, & Locke, 2006) to provide
more inclusive and thus more theoretically and practically useful
models of the determinants of team performance.
Regarding the transformational leadership literature, perhaps the
most surprising finding of the present study was the nonsignificant
relationship between transformational leadership and team perfor-
mance. This result contradicts the preponderance of findings in the
transformational leadership literature (Judge & Piccolo, 2004) and
again raises the question of what factors may act as substitutes for
leadership in certain contexts (Kerr & Jermier, 1978). For exam-
ple, the participants in our sample had exceptionally high levels of
education and were on average older (and may thus have had more
experience and training) than the participants in previous studies of
transformational leadership in R&D teams (Keller, 2006; Shin &
Zhou, 2007). Most importantly, however, our study, having found
no significant relationship between transformational leadership
and team performance, underscores the need identified by
Schaubroeck et al. (2007) to go beyond the investigation of main
effects at the individual or organizational level and examine the
conditions under which transformational leadership at the team
level is likely to be more or less effective. Because moderation is
symmetric, we could have also cast transformational leadership as
the predictor and team diversity as the moderator variable. Aside
from contributing to the still nascent literature on transformational
leadership of teams, the present study shows that transformational
leadership is particularly likely to have beneficial effects on team
performance when these teams are diverse with respect to age,
nationality, and educational background. By contrast, our findings
suggest that high levels of transformational leadership in homo-
geneous teams may occasionally even have detrimental effects on
team outcomes. Further research is needed to examine whether this
rather surprising finding may be due to certain particularities of
our sample (in the sense that these may have constituted viable
substitutes for transformational leadership).
Moreover, it is interesting that although the correlation between
the transformational leadership ratings provided by the team mem-
bers and those supplied by the team leaders was .65 ( p.001), the
mean of the leader ratings (3.71) was significantly higher than that
of the member ratings (3.48). Although the moderating effect of
transformational leadership on the diversity–performance relation-
ship was also confirmed when we used leader instead of member
ratings (with R
2
.13, p.05, in the third step of Model 1
depicted in Table 2), it appears that, at least in this sample, team
leaders viewed themselves as exhibiting transformational leader-
ship to a greater extent than did their followers. It would be
interesting to systematically examine in future studies the impact
of such perceptual differences.
Practical Implications
Because diversity is likely to further increase in the future
(Fullerton & Toossi, 2001), the importance of transformational
leadership—as a means to unlock the performance potential inher-
ent in heterogeneous teams—is likewise bound to increase. This
presupposes, however, that organizations recognize transforma-
tional leadership as a strategy that can be specifically tailored to
the challenge of managing diversity. Our results are therefore
highly important for organizations that either employ diverse team
compositions intentionally to stimulate performance or seek ways
of coping with an increasingly diverse workforce, without yet
having discerned the benefits that heterogeneity can entail. Nev-
ertheless, the first step for organizational managers is to realize
that a broadened range of task-relevant resources and perspectives
does not automatically improve team performance. In order to
fully benefit from age, nationality, and educational diversity and to
prevent the negative effects that all of these diversity types may
engender, organizations must take active and informed steps. Our
results indicate that organizations with diverse teams would be
well advised to appoint as team leaders those individuals who
possess transformational qualities or to train team leaders to lead
more transformationally. Several studies have shown that trans-
formational leadership is a skill that can be developed (e.g.,
Barling, Weber, & Kelloway, 1996). Moreover, organizations
could attempt to identify qualified individuals who exhibit trans-
formational leadership behaviors and consider these individuals as
potential leaders of diverse teams. Our findings suggest that find-
ing and developing transformational team leaders is considerably
more important when teams are diverse rather than homogeneous
with respect to age, nationality, and education.
Besides identifying transformational leadership as a strategy
that holds much promise with respect to managing diversity, our
results offer insights into how transformational leadership may
affect diverse teams. This knowledge may give organizations
further options in regard to fostering performance in heteroge-
neous units. As predicted by Van Knippenberg et al. (2004),
diversity appears to benefit team performance via the elaboration
of task-relevant information. Ultimately, diverse teams are likely
to outperform homogeneous teams to the extent that they utilize
their greater range of task-relevant resources to create synergies
that are beyond those attainable on the basis of a more homoge-
neous input. Hence, organizations may consider what additional
measures they could take to facilitate this elaboration of task-
relevant information in diverse teams. At the same time, they must
prevent dysfunctional social categorization processes from under-
mining the exchange, discussion, and integration of ideas and
perspectives. Although transformational leadership apparently has
this beneficial dual effect, top managers could attempt to augment
their team leaders’ efforts by shaping their organizational culture
with these two goals in mind. Measures that emphasize interde-
pendence, trust, and shared goals may have similar effects as
transformational leadership. For example, team-based incentive
and reward systems may complement or perhaps even serve as
substitutes for transformational leadership in diverse teams. This
search for measures that could complement or be used in lieu of
transformational leadership may be particularly important for or-
ganizations that establish flatter, less hierarchical structures and
rely on shared leadership and self-managing teams.
Limitations
We acknowledge limitations of our study. First, our sample
consisted only of R&D teams in one pharmaceutical company.
Highly complex R&D tasks may be particularly suitable for large
potential benefits of team diversity (Pelled et al., 1999). Further
research is needed to investigate whether the obtained results
87
MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
generalize to other types of teams and tasks. Second, we relied on
subjective performance ratings. At least for our sample, objective
data regarding team performance could only have been collected at
a higher level of analysis comprising numerous teams or entire
departments. Third, we did not directly measure social categori-
zation processes, which are usually cited as the origin of impaired
outcomes in diverse teams (Williams & O’Reilly, 1998). Instead,
as is typical in the diversity literature (Van Knippenberg & Schip-
pers, 2007), we relied on an indirect measure, which in our case
was collective team identification. This approach was premised on
the logic that high collective team identification is likely to be an
indication of low levels of dysfunctional social categorizations.
Further research is needed to examine whether this assumption is
valid. Fourth, despite the fact that we tested some of the examined
relationships with data from different sources and used a partly
longitudinal design, our study relied on correlational data. Hence,
other factors not considered here may have exerted an influence on
our findings, and more research is needed to ascertain the causal
linkages that our model implies. However, the fact that we mea-
sured team performance 6 months after we had collected the team
member data lends some credence to the assumption that our
findings are a reflection of the interplay of diversity and transfor-
mational leadership actually preceding success. Moreover, collect-
ing data from different sources (archival data as well as data from
team members and team leaders) circumvents the problem of
common-method bias.
Conclusion
In sum, the present study shows that transformational leadership
can help turn demographic and informational differences among
team members into an asset rather than a liability. In light of the
fact that most of the previously identified moderators of the
diversity– outcome relationship (such as team longevity, task in-
terdependence, task complexity, and collective team identification)
are not directly controllable, transformational leadership could be
a key factor in fostering performance and preventing process
losses in diverse teams. We hope that our results will stimulate
both the leadership and the diversity literature and that researchers
in both fields will feel encouraged to afford closer scrutiny to the
important role that leadership plays in making the most out of the
increasing levels of demographic and informational diversity in
today’s organizations.
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MANAGING DIVERSITY AND ENHANCING TEAM OUTCOMES
... According to Mohammed and Angell (2004), team processes (including encouraging all team members to participate) and team orientation (both of which can be thought of as belonging indicators) weakened the negative effects of gender and deep-level dissimilarity on relationship conflict, which in turn predicted performance. When a leader uses transformational leadership to unite his or her followers around common goals and values, it reduces the impact of demographic differences on team performance (Kearney & Gebert, 2009). Uniqueness is viewed in a different light in this work than it is in ours, but it's interesting to see that uniqueness and belongingness share some common themes. ...
... According to Mohammed and Angell (2004), team processes (including encouraging all team members to participate) and team orientation (both of which can be thought of as belonging indicators) weakened the negative effects of gender and deep-level dissimilarity on relationship conflict, which in turn predicted performance. When a leader uses transformational leadership to unite his or her followers around common goals and values, it reduces the impact of demographic differences on team performance (Kearney & Gebert, 2009). Uniqueness is viewed in a different light in this work than it is in ours, but it's interesting to see that uniqueness and belongingness share some common themes. ...
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... According to Mohammed and Angell (2004), team processes (including encouraging all team members to participate) and team orientation (both of which can be thought of as belonging indicators) weakened the negative effects of gender and deep-level dissimilarity on relationship conflict, which in turn predicted performance. When a leader uses transformational leadership to unite his or her followers around common goals and values, it reduces the impact of demographic differences on team performance (Kearney & Gebert, 2009). Uniqueness is viewed in a different light in this work than it is in ours, but it's interesting to see that uniqueness and belongingness share some common themes. ...
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Transformational Leadership, Second Edition is intended for both the scholars and serious students of leadership. It is a comprehensive review of theorizing and empirical research that can serve as a reference and starting point for additional research on the theory. It can be used as a supplementary textbook in an intense course on leadership--or as a primary text in a course or seminar focusing on transformational leadership. New in the Second Edition: New, updated examples of leadership have been included to help illustrate the concepts, as well as show the broad range of transformational leadership in a variety of settings. New chapters have been added focusing specifically on the measurement of transformational leadership and transformational leadership and effectiveness. The discussion of both predicators and effects of transformational leadership is greatly expanded. Much more emphasis is given to authentic vs. inauthentic transformational leadership. Suggestions are made for guiding the future of research and applications of transformational leadership. © 2006 by Lawrence Erlbaum Associates, Inc. All rights reserved.
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This book shows how the cost of losing human knowledge in a technology-intensive world seriously affects organizational success. It explains what leaders must do to retain critical know-how as millions of aging baby boomers begin retiring from the workforce in the next decade. This aging workforce will produce an unprecedented skills shortage in many sectors. Particularly at risk is the tacit or experiential knowledge needed to maintain high levels of performance in today's complex technological, scientific, and management fields. The book shows how this threatened loss of intellectual capital or 'brain drain' can be addressed with increased attention to workforce planning, knowledge management, and knowledge retention initiatives. It provides a framework and action plan to help managers tackle the interdependent challenges of increased retirements, more competitive recruiting, and greater turnover among mid-career employees created by changing workforce demographics.
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We examined the impact of surface-level (demographic) and deep-level (attitudinal) diversity on group social integration. As hypothesized, the length of time group members worked together weakened the effects of surface-level diversity and strengthened the effects of deep-level diversity as group members had the opportunity to engage in meaningful interactions.
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We surveyed management teams in 102 hotel properties in the United States to examine the intervening roles of knowledge sharing and team efficacy in the relationship between empowering leadership and team performance. Team performance was measured through a time-lagged market-based source. Results showed that empowering leadership was positively related to both knowledge sharing and team efficacy, which, in turn, were both positively related to performance.