Role Of Team Diversity on Team Performance and Ambidexterity

Abstract

Diversity as a topic is increasingly becoming important aspect of organizations and society in general. Team diversity could bring different perspectives and thus diverse teams could reap the benefits such as better performance, innovation, and problem-solving abilities. Teams face challenge of deciding between alignment activities focused on organizational goals vs adaptability activities helping organizations adapt to changing external environments. Teams that balance both types of activities are known as ambidextrous teams. Through literature review, it was found that there is knowledge gap in understanding the link between team diversity, performance, and ambidexterity. This thesis tries exploring various diversity factors and its relation to team performance and ambidexterity. Further the thesis investigates if there are any differences in the link between team diversity, performance and ambidexterity based on firm types, that is product vs service-based firms.
To find the solution to the link, semi-structured case interviews was conducted. 6 team managers from product-based firms and 4 managers from service-based firms participated in the research. Data from these 10 semi-structured case interviews was analyzed using AtlasTi software and results of qualitative research is presented in the thesis. Various ways in which one can conceptualize diversity, advantages & disadvantages of diversity and its effect on team performance & ambidexterity is presented in this thesis based on the qualitative analysis of semi-structured case interviews.
The exploratory study indicates that semi-conductor team mangers conceptualize diversity from both social and information/decision making perspectives. Common surface level diversities such as function, experience, gender etc. were reported. At the same surface level diversities such as working style, task motivation, etc. were reported. The results indicate that teams various diversity factors can lead to divergent thinking and elaboration of task-relevant information thus improving team performance. Some of the reported benefits of diversity include increased knowledge base, better service to customers, better decision making, etc. Realization of diversity benefits is not straightforward; it comes with challenges. Some of these challenges due to diversity include complex team management, increased conflicts, increased time and effort. Thus, it is important for organizations to provide necessary support and environment for reaping the benefits from diversity. Such organizational control is more in terms of structures of teams in case of product-based firms; structural decisions drive ambidexterity and division could take place based on diversity types such as functional diversity, experience diversity etc. However, decentralized structures and informalization of non-routine activities in firms can enable better exploration. And diversity types such as experience, function or skills act as deciding factors in determining extent of structural decentralization and informalization of non-routine activities. Decentralization of non-routine activities can thus enable ambidexterity. Contrary to product-based firm, all the service-based firms reported that employees need to have skills and abilities to capture customer needs and deliver them on time. Therefore, it is evident that all the employees in service-based firms could be involved in exploration. Thus, naturally the employees in service organizations are involved in both the types of activities. Diversities such as skill and working style can thus enable contextual ambidexterity in service-based firms by enabling employees to serve customers better.