The preventative benefit of group diversification on group performance decline: An investigation with latent growth models

Jia Li*, Meir Shemla, Jürgen Wegge

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Integrating the open systems perspective of groups and the contingency approach to diversity, we study how group diversification (i.e. a process in which a group becomes more diverse over time as members join and/or leave the group) affects group performance change in an adverse task environment characterized with uncertainty and risks for failure. We argue that diversification benefits performance by reducing group performance decline in adversity. Group size increase, however, attenuates this preventative benefit of group diversification. Focusing on organizational tenure and gender, we studied 279 sales groups (3,277 individuals) in a large German financial consulting company from 2004 to 2008. In this period, a national legislative change prompted the company to withdraw its star product from the market and presented adversity to the sales groups. Results from latent growth models (LGMs) overall support our arguments. This research extends the (conditional) beneficial view of diversity from a static theoretical space about groups’ being diverse to a dynamic one about groups’ becoming diverse.
Original languageEnglish
Pages (from-to)332-348
Number of pages17
JournalJournal of Organizational Behavior
Volume42
Issue number3
Early online date24 Jan 2021
DOIs
Publication statusPublished - Mar 2021

Keywords

  • change
  • gender
  • group diversity
  • group performance
  • organizational tenure

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