Diverse Management Is Not Always A Good Thing

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New study on how diverse management is not always a good thing to be presented at Academy of Management Specialized Topics Conference

We have always heard that a diverse management team can enrich the creativity, culture and success of a firm. However, a recent study published by the Academy of Management found that too much diversity at the founding of an organization can actually hamper a team’s performance and ultimately, the company’s overall success.

The study, “Born into Chaos: the Role of the Founding Environment and the Performance Impacts of Founding Team Composition,” examined 1,383 organizations facing high uncertainty at their start and found that a lack of homogeneity in a management team can disrupt growth and lead to collapse. Strong individual differences between team members can create issues with collaboration and focus, causing the structure of the team to weaken and the firm to crumble. These new findings encourage company founders and entrepreneurs to pay special attention to the balance of diversity on their management team when launching a new business, as appropriate team composition may make or break their success.

This new study will be presented at the Academy of Management’s “From Start-up to Scale-up: Coping with Organizational Challenges in a Volatile Business Environment” Specialized Topics Conference in Tel Aviv, December 17-19 (website here). The conference aims to explore the unique organizational challenges start-up firms face as they grow within and beyond their established markets, including diversity and its implications on performance.