Abstract

As new ventures are being formed, magazines and textbooks encourage entrepreneurs to build diverse teams, ensuring that relevant competencies are represented. There is, however, little scholarly support for this notion. Instead, it seems that team diversity is a double-edges sword, which can bring informational benefits but also informational challenges (Dahlin, 2005). In this paper, we propose that the effectiveness of team diversity depends on whether mechanisms are in place that allow team members to exchange, discuss and integrate task-relevant information and perspectives (Pieterse et al., 2013). The business plan can serve as such a mechanism of information elaboration, which provides a platform for team members to interact and integrate their perspectives. The nature of the tasks also influence the relationship between team diversity and performance. When tasks are complex and uncertain, diverse and extensive information processing seems more beneficial than when tasks are simple and routinized (Horwitz & Horwitz, 2007). We therefore suggest that teams can benefit more from diversity when it pursues innovative business ideas than imitative ideas.

Share

COinS