How status, not only diversity, impacts team performance

For decades, academic research has looked at the effect of race and gender diversity in teams on performance of that team or the organisation as a whole. A different area of scholarship has examined how status differences among team members based on race and gender influence their interactions.

Research by Cambridge Judge Business School faculty members Prithviraj Chattopadhyay, Professor of Organisational Behaviour, and Elizabeth George, KPMG Professor of Management Studies, weaves these 2 areas together to develop a novel theory that advances understanding in ways that have important management implications.

The research focuses on understanding how social identity-based status management strategies within teams – whether enhancing or protecting status – shapes how team demographic diversity affects team performance. In other words, diversity standing alone tells a far less complete picture than diversity influenced by status-related actions by team members.

“There are plenty of studies that look at how to make diversity work,” says Prithviraj. “Our study says that if you understand gender and race based status of team members and the attributes of the status hierarchy in which the team is embedded, you can better understand why diversity improves performance in some teams in ways that diversity doesn’t improve diversity in other teams. What has also bugged me for many years is that although a lot of research has been conducted on faultlines – such as faultlines set up in teams comprising male engineers and female customer service representatives – faultline research has ignored status. Our research addresses that research gap.”

How 20 years of research linked status, diversity and team performance

The origins of the research date back to a theory paper Prithviraj and Elizabeth authored back in 2004 on how demographic dissimilarity affects individuals’ identification with groups within status hierarchies defined by different combinations of status legitimacy, stability and permeability.

“Since that study was published, we’ve spent the next 20 years figuring out empirical work supports our theory, and the paper on team diversity and status takes all of that research and applies it to understanding the impact of team diversity on performance,” says Prithviraj.

That research draws on 2 different areas of study: relational demography, which examines how status differences among team members with different demographic attributes influence their interactions, and research on team diversity that focuses on how well diverse teams perform.

“Our primary objective in this paper is to present a novel theoretical model that, by explicitly considering the relative status of its members, stipulates the nuance and complexity that is needed to better understand why diversity has differential effects on team performance,” says the research. “This status lens, we argue, will help explain the variance in the performance of diverse teams.”

The research underlines the importance of such social identity management strategies team members use to gain or maintain status, and also looks at the proportion of higher and lower status members on the team in order to deepen understanding of how diversity influences team performance and dynamics.

Why status has been overlooked in research on diverse teams

Previous studies have examined how team diversity has the potential for both positive and negative effects on team performance, including a much-cited 2012 study in the Academy of Management Journal that was a meta-analysis of how demographic differences impact team functioning and performance. Thus, most research in this area has focused on identifying moderators of the relationship between diversity and team performance.

“Missing from this body of research is a consideration of what is arguably a vital ingredient in shaping the processes underlying the team diversity-team performance relationship: the status differences that are associated with demographic diversity,” says the research by Prithviraj and Elizabeth. The research outlines how persistent stereotypes that imply higher status for men than women and higher status for the dominant racioethnic group in a country or community plays out in teams that are embedded in different status hierarchies.

How people navigate status differences within diverse teams

When we consider the status of demographic attributes and the enveloping status hierarchies, there are important nuances that need to be taken into account, says Prithviraj:

“People often move forward by buying into the norms of the higher status group, and that may be a minority buying into the norms of someone with a country’s dominant skin colour – and people can fight their way up under certain conditions. But, for example, if you’re a woman in Saudi Arabia you are not going to fight your way through in this way.

“There’s another aspect to this: we always assume that people will fight for their group. But if, for example, someone from another country or background comes to the UK to study and they want to stay in the UK, they may network more with people who are from the UK and take on the norms of the UK group.”

These examples, based on relational demography and social identity theory, illustrate the 3 ways in which individuals seek to change or maintain status within a team, the research says. For members of lower status groups, individuals may pursue membership of higher status teams or professional categories (such as women seeking to enter traditionally male spheres), or they may alternatively seek a change in intergroup hierarchy to increase the status of their group relative to other groups. Further, they may seek recognition of certain attributes of the lower status group that may be less central to the hierarchy.

Conversely, says the research, members of higher status groups “may seek to protect their status by being selective about who is admitted to their team or professional category (social mobility), resisting change to the intergroup status hierarchy (social competition), or only recognising lower status group members’ superior standing on attributes that are perceived as sufficiently peripheral to the status hierarchy (social creativity)”.

A practical tool for managing diverse teams more effectively

The practical implication of the research is clear: managers can use the insight on status to see where they might expect stronger positive and negative effects of diversity on team performance. Moreover, the research identifies when particular interventions made to enhance the work of diverse teams may be more effective.

“The team diversity literature has woefully lacked consideration of the status of the demographic attributes that make a team diverse, as well as features of the associated status hierarchy,” the research concludes. “This omission is particularly problematic given that social identity theory, invoked by a majority of scholars to explore team diversity, is explicit in describing the need to include these factors in understanding team dynamics.

“This omission has also made the literature on team diversity less relevant to scholars of inequality. We hope our status lens on team diversity dynamics stimulates new research on this critical issue.”