Culturally Diverse Teams: Risks and Rewards

Published on the UniSA Business Magazine, August 2017

WRITERS: Cheri Ostroff and Chia-Yen (Chad) Chiu

Teams are a core building block for organisations. When executed well, they allow individual members to contribute their unique knowledge and skills, so that when combined, better performance, quality, creativity, innovation and customer service results. This can be especially true for culturally diverse teams; their resource base is stronger, and they can draw upon a greater repertoire of responses, perspectives and expertise. Social capital–or the ability to connect with and gain knowledge from people external to the team–is also greater. All of which should lead to superior team performance in diverse teams. Yet, they often fall short. And herein lies the paradox–people prefer similarity.

From decades of research in management, psychology and sociology, we know that individuals who work with people from a similar background, culture or ethnicity have more positive attitudes and behaviours at work, and are less likely to quit. Individuals are attracted to those they see as similar to themselves. They prefer to join groups of similar others and are more likely to interact with them. One reason for this is characteristics such as race or ethnicity are automatically categorised in the mind and influence how individuals react and interact with one another, evoking conscious or subconscious stereotypes, biases and judgments. Those from different cultural backgrounds are categorised as ‘outsiders’ while similar others are categorised as ‘insiders’ and consequently perceived to be easier to communicate with.

When individuals work in a team comprising similar others, they tend to feel a greater sense of psychological safety, exhibit greater satisfaction and loyalty, and have a stronger desire to remain in the team than individuals working in diverse teams. In contrast, racial or ethnic differences among team members can result in disintegration, lack of cohesion, interpersonal or task conflicts, as well as reduced morale. That’s why achieving the promise of superior performance outcomes in culturally diverse teams can be challenging. Similarity is good for individuals. Diverse teams can be good for organisations. So, how can we overcome the potential conflict and communication problems to reap the benefits of diversity, and still have individual members who are satisfied and committed?

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