unraveling the effects of cultural diversity in teams: a

RETROSPECTIVE

Unraveling the effects of cultural diversity

in teams: A retrospective of research

on multicultural work groups and an agenda

for future research

Gunter K Stahl1 andMartha L Maznevski2

1Institute for International Business, Vienna

University of Economics and Business,Welthandelsplatz 1, 1020 Vienna, Austria; 2Ivey

Business School, Western University, 1255

Western Road, London, ON N6G 0N1, Canada

Correspondence:GK Stahl, Institute for International Business,Vienna University of Economics and Business,Welthandelsplatz 1, 1020 Vienna, Austriae-mail: [email protected]

AbstractOur 2010 Journal of International Business Studies article, ‘‘Unraveling the Effects

of Cultural Diversity in Teams: A Meta-analysis of Research on Multicultural

Work Groups,’’ attempted to take stock of existing research on cultural diversityin teams, to reconcile conflicting perspectives and past results, and provide a

better understanding of the mechanisms and boundary conditions under which

diversity affects team outcomes. To guide our analysis, we developed atheoretical framework outlining how cultural diversity leads to both process

gains and losses in teams, and specifying the contextual conditions under

which diversity contributes to effective team outcomes. We tested our

hypotheses in a meta-analysis of research on cultural diversity in teams,encompassing 108 primary studies with a combined sample size of 10,632

work groups. The results suggested that cultural diversity does not have a direct

impact on team performance but rather that the effect is indirect, mediated byprocess variables such as creativity, cohesion, and conflict; and is moderated by

contextual influences such as team tenure, the complexity of the task, and

whether the team is co-located or geographically dispersed. Unexpectedfindings raised important questions about the dynamics of diverse teams and

underscored the need for further examination. In this Retrospective, we reflect

on progress made in research on culturally diverse teams over the last decade,

highlight remaining gaps and open questions, and propose an agenda forfuture research.

Journal of International Business Studies (2021) 52, 4–22.https://doi.org/10.1057/s41267-020-00389-9

Keywords:: culture; cultural diversity; global teams; meta-analysis; Decade Award

INTRODUCTIONIn our original article, ‘‘Unraveling the effects of cultural diversityin teams: a meta-analysis of research on multicultural workgroups,’’ (Stahl, Maznevski, Voigt, & Jonsen, 2010), we argued thatour study added to the existing literature on diverse teams in twoimportant ways. First, we attempted to take stock of and synthesizethe findings from previous research on cultural diversity in teams,to reconcile conflicting perspectives and past results, and to

Received: 15 September 2020Revised: 26 October 2020Accepted: 26 October 2020Online publication date: 18 January 2021

Journal of International Business Studies (2021) 52, 4–22ª 2021 Academy of International Business All rights reserved 0047-2506/21

www.jibs.net

propose an agenda for the next stage of research inthis field. Second, and more ambitiously, anothergoal was to improve our understanding of themechanisms and boundary conditions underwhich cultural diversity affects team outcomesboth theoretically and empirically. Thus, the aimof our paper was not just to summarize what hadbeen found in previous research on diverse teamsand provide a descriptive account of empiricalregularities (and irregularities) but to go a stepbeyond existing reviews of the literature anddevelop a theoretical understanding of mediatingmechanisms and contextual contingencies andthen test those ideas using meta-analytictechniques.

Our point of departure in the JIBS Decade Award-winning article was an idea that we had developedover more than a decade of dialogue, based onresearch and review of the literature on multicul-tural teams, as well as our experiences as manage-ment educators, consultants, and coaches workingwith diverse teams – namely, the now widelyaccepted notion that cultural diversity presents a‘double-edged sword’ or mixed blessing for workgroups. Diversity can be a source of friction andconflict – and, hence, an obstacle to effective teamfunctioning. But it can also be a source of synergyand learning – a powerful seed for something new,depending on factors that were poorly understoodand under-explored in team diversity research atthe time we embarked on this study. As we set outto explore some of the yet-unidentified factors thatmay moderate the relationship between diversityand team performance, we realized how little wasactually known about the mechanisms and contin-gencies underlying the effects of cultural diversityin teams. Of course, there was a rich literature ondiversity in work teams (for early meta-analyses ofthis work, see Bowers, Pharmer, & Salas, 2000;Horwitz & Horwitz, 2007; Stewart, 2006; Webber &Donahue, 2001), including plenty of studies thathad looked at the link between cultural diversityand team outcomes (for our meta-analysis, weidentified 108 studies that focused on culturaldiversity and its consequences for team outcomes),but the evidence was inconsistent and confusing.While some studies found significant positive cor-relations between diversity and team performance(e.g., Earley & Mosakowski, 2000; Thomas, Ravlin,& Wallace, 1996), others produced significant neg-ative correlations (e.g., Jehn & Mannix, 2001;Kirkman, Tesluk, & Rosen, 2004). There were nometa-analyses available that focused specifically on

cultural diversity and its effect on team perfor-mance, but existing meta-analyses of research onwork group member diversity/heterogeneity hadfound no overall relationship with team perfor-mance (Bowers et al., 2000; Webber & Donahue,2001), had found a small positive effect (Horwitz &Horwitz, 2007), or had found a small negative effect(Stewart, 2006) across studies. This inconsistentpattern of results led diversity scholars to concludethat ‘‘research evidence demonstrating a businesscase for work team diversity is by and largeequivocal’’ (Joshi & Roh, 2007: 2), and that ‘‘muchis still unknown regarding the nature of diversity,its impact on work group outcomes, and theintervening mechanisms’’ (Webber & Donahue,2001: 142).

There was, however, the consensus among schol-ars that clarifying the mixed effects of diversity inteams would only be possible by carefully consider-ing contextual moderators and mediating mecha-nisms in both theory and empirical research ondiverse teams (Joshi & Roh, 2007; Mannix & Neale,2005). As we set out to disentangle what researchershad learned from decades of research on work groupdiversity and reconcile conflicting perspectives andfindings in this field, we developed some theoreticalideas about the mechanisms and boundary condi-tions under which diversity may contribute posi-tively or negatively to team outcomes.

In this Retrospective, we begin by revisiting theoriginal paper, highlighting the most importantelements and findings, to set the foundation for therest of the paper. Next, we comment on progress inthe field in the past decade, identifying severalareas of advancement. In the remainder of thepaper, we reflect on three areas in need of furtherresearch: specifying the type of (cultural) diversitymore carefully, opening up the black box in therelationship between cultural diversity and perfor-mance in International Business (IB) research ingeneral, and addressing both the positive andnegative aspects of cultural diversity in a morenuanced way.

A RETROSPECTIVE PERSPECTIVE ON TEAMDIVERSITY RESEARCH

Theoretical Framework: Diversity Drives ProcessGains and Process Losses through Forcesof Divergence and Barriers to ConvergenceIn our 2010 paper, we focused on one particulartype of diversity: cultural differences. Most team

Unraveling the effects of cultural diversity in teams Gunter K Stahl and Martha L Maznevski

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Journal of International Business Studies

diversity research assumed that all diversity sources(gender, ethnicity, sexual orientation, etc.) affectwork groups in the same way, and there are clearlysome similarities among different types of diversity(e.g., van Knippenberg & Schippers, 2007). How-ever, there was already evidence that differentdiversity sources influence team outcomes in dif-ferent ways (Horwitz & Horwitz, 2007; Joshi & Roh,2009). Cultural diversity, in particular, may affectteam processes and outcomes differently than othertypes of diversity (Lane, Maznevski, Mendenhall, &McNett, 2004; Lane & Maznevski, 2019; Taras et al.,2019). Cultural differences often operate at a sub-conscious level; therefore some of their effects maynot be recognized or may be misattributed. At thesame time, differences in culture are often a sourceof categorization and stereotyping (Mannix &Neale, 2005; Mortensen & Hinds, 2001), so theeffects of cultural diversity may be stronger thanother diversity sources.

A central tenet of our theoretical framework, asillustrated in Fig. 1, was that cultural diversitydrives process gains and process losses throughforces of divergence and barriers to convergence. Inline with theories of social identity, social catego-rization, similarity attraction, and informationprocessing, we proposed that cultural diversityincreases divergent processes in teams, leading toboth process gains and process losses. A divergentprocess that creates a process gain and may con-tribute positively to team performance is creativity.A divergent process that creates a process loss and

could decrease team performance is conflict. Con-versely, our theoretical framework suggested thatcultural diversity decreases convergent processes inteams. Convergent processes are those whichprovide integration and cohesion, and align theteam around common goals and values. Likedivergent processes, some convergent processes(e.g., the emergence of group identity and mutualtrust) lead to process gains and contribute posi-tively to team performance. Some convergent pro-cesses (e.g., conformity and compliance) canhinder effective team performance, for example,by making the team closed to dissent and vulner-able to groupthink. Thus, the underlying premiseof this framework was that cultural diversity doesnot have a direct impact on team performance butrather that the effect is indirect, mediated byprocess variables such as creativity, cohesion, andconflict.

Further, we proposed that diversity affects thesemediating processes or intermediate outcomes inopposing ways, i.e., cultural differences may have apositive effect on some outcomes (e.g., creativity)and an adverse effect on others (e.g., cohesion).Finally, our theoretical analysis suggested that theextent to which the process gains from diversitycan be maximized, and the process losses mini-mized will depend on three broad sets of factors,two of which we were able to test in our meta-analysis. First, we proposed that whether teammembers differ in overt demographic characteris-tics, such as nationality, ethnicity or race (i.e.,

Figure 1 Theoretical framework guiding the meta-analysis. Adapted from Stahl, Maznevski, Voigt, & Jonsen (2010).


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surface-level diversity), or in deep-seated psycho-logical characteristics such as cognitions and values(i.e., deep-level diversity) would affect team out-comes in different ways; and that the hypothesizedpositive and negative effects of cultural diversitywould depend on whether a team is composed ofmembers from several different countries (cross-national diversity) or members from a single coun-try (intra-national diversity). Second, we predictedthat aspects of the team context, such as teamtenure, the complexity of the task, and whether theteam is co-located or geographically dispersedwould moderate the effects of cultural diversityon outcomes. Third, our analysis suggested that theway the team process is managed (including thestaffing of the team, the communication process,group decision-making, and so on) would influenceteam outcomes like creativity, social integration,and conflict. Since there was a paucity of researchon these more process-oriented and management-related factors, we could not include them in themeta-analysis. These considerations did, however,inform our theory development.

From this framework, we developed a set ofhypotheses on how intermediate team outcomesrelate to cultural diversity, as well as moderatorhypotheses to theorize and study how the level andtype of cultural diversity and aspects of the teamcontext might affect team outcomes. We did notformulate a specific hypothesis linking culturaldiversity to overall team performance. The veryidea of our theoretical framework was that processgains and process losses resulting from diversitymight offset one another in their impact on teamperformance, and would further depend on con-textual moderators. The overall impact on teamperformance would be difficult, if not impossible,to predict.

Meta-Analytic Results: Cultural Diversity IndeedAppears to be a ‘Double-Edged Sword’We tested our hypotheses using a meta-analysis ofexisting research on cultural diversity in teams,encompassing 108 primary studies with a com-bined sample size of 10,632 teams. Consistent withthe theoretical logic explained above, the meta-analytic results revealed that overall team perfor-mance was unrelated to diversity, with a meaneffect size close to zero. Further analyses showed anumber of significant effects on intermediate teamoutcomes. As expected, the results suggested thatteams gain from increased diversity in terms ofgreater creativity, but diverse teams tend to suffer

from process losses due to increased conflict andreduced cohesion or social integration. Diversitywas positively associated with three types of con-flict (task conflict, relationship conflict, processconflict) relevant to the effective functioning of ateam, but only the relationship with task conflictwas significant.

Contrary to our predictions, the meta-analyticresults indicated that cultural diversity was unre-lated to communication effectiveness and posi-tively associated with team member satisfaction.The hypothesis that culturally diverse teams are lessprone to groupthink could not be tested due to thesmall number of studies that examined this ques-tion empirically. Collectively, these findings sup-ported the conclusion that cultural diversity isassociated with divergent processes. More diverseteams experience the process gain of increasedcreativity, but also the process loss of increased taskconflict. Cultural diversity’s association with con-vergence was less clear. More diverse teams sufferedthe process loss of lower social integration andcohesion, but contrary to expectations, culturallydiverse teams did not experience less effectivecommunication, and they had higher satisfactionthan homogeneous teams.

Counter to our hypotheses, but not entirelyunexpected to us, we found that both the level(surface vs. deep) and type (cross-national vs. intra-national) of cultural diversity were largely unre-lated to the team outcomes assessed in our meta-analysis. These ‘‘null findings’’ had the potential tostimulate and guide further exploration in the fieldof cross-cultural management in general and workon culturally diverse teams in particular. Tung andher colleagues (Tung, 1993, 2008, 2016; Tung &Stahl, 2018; Tung & Verbeke, 2010) have chal-lenged the traditional view that the effects of cross-national diversity are stronger than for intra-na-tional diversity, arguing that ‘‘intra-national varia-tions can often be as significant as cross-nationaldifferences’’ (Tung, 2008: 41). The findings of ourmeta-analysis supported this view by demonstrat-ing that neither the positive effects of culturaldiversity (on creativity and satisfaction) nor theadverse effects (on social integration and conflict)were more pronounced in teams composed ofmembers from several different countries than inteams composed of members from a single country.With regard to the level of diversity, our theoreticalanalysis had suggested that surface-level attributessuch as race or ethnicity would be associated withsimilarity-attraction and social-identity effects, and


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deep-level indicators such as cognitions and valueswould be related to information-processing advan-tages and value-incongruence effects. Contrary toour hypotheses, the findings showed that creativ-ity, conflict, satisfaction, and social integrationwere all unrelated to the level (deep vs. surface) ofcultural diversity.

These results highlighted the importance ofspecifying both the type and level of culturaldiversity more carefully in research on diverseteams. Rather than assuming that cross-nationaland intra-national diversity, and surface-level anddeep-level diversity, affect team processes andoutcomes in similar ways just because the patternsof correlations are similar, we needed a more fine-grained understanding of how different diversitysources (e.g., ethnicity, language, values, cogni-tions) may affect the dynamics of culturally diverseteams in different ways. For example, deep-levelcognitive differences such as holistic versus analyticcognitive style (e.g., Nisbett, 2003) may lead toinformation-processing advantages and improvedgroup decision-making in a Sino-American workgroup, while deep-level value differences maysimultaneously lead to social categorization pro-cesses, reduced cohesion, and increased potentialfor conflict in the team. We concluded that thesimple categorization of surface-level and deep-level, which was ubiquitous in the diversity litera-ture, may thus be misleading.

The use of meta-analysis to detect moderatingeffects not testable in the primary studies generallyled to the study’s most interesting results – andsubstantially larger effect sizes than those obtainedin the main effect analysis. The results of sub-groupanalyses revealed that the effects of cultural diver-sity on team outcomes are moderated by variousaspects of the team context, but not always in theexpected direction. For example, contrary to expec-tations, we found that cultural diversity was asso-ciated with higher levels of conflict and lesseffective communication in teams that had spentmore time together compared to teams with lesstenure. Another unanticipated, and potentiallyconsequential, finding was that geographicallydispersed teams had less conflict and more socialintegration than co-located teams. This findingsuggests that we needed to understand much moreabout how diverse teams function when they aregeographically dispersed. As we argued in our 2010paper, the lower level of conflict in dispersed teamsmay represent an avoidance of engaging differencesin values and opinion openly, or team members

may simply have fewer chances to experienceconflict related to value incongruence. Anotherexplanation is that expectations play a critical rolein shaping team outcomes such as conflict andsocial integration. Members of dispersed multicul-tural teams may be more attentive to culturaldifferences, more inclined to resolve conflicts con-structively, and less prone to behavior that isdetrimental to the effective functioning of a team,such as cultural stereotyping, the formation of sub-groups based on nationality, or social exclusion ofteam members who do not conform with thedominant values of the team.

In sum, although the meta-analytic resultsmostly supported the theoretical model, there weresome unexpected findings that raised intriguingquestions about the dynamics of culturally diverseteams and suggested promising directions forfuture research: Can surface-level indicators ofcultural diversity, such as nationality, ethnicorigin, or race, serve as a proxy for deep-levelindicators such as cultural values? Does the poten-tial for intercultural miscommunication and con-flict increase, rather than decrease, in teams withlonger tenure, maybe because process losses due todiversity’s effects accumulate over time, especiallyin teams experiencing significant pressure andstrain? And could it be that a remote or virtualteam context (as opposed to working in a co-located team) makes it easier, not more difficult, toavoid dysfunctional cultural clashes and create aclimate of inclusion in a team? If so, what are themechanisms that allow members of geographicallydispersed teams to build trust and achieve highlevels of social integration while minimizing cul-tural friction? And what role does communicationtechnology play in this process? These questionsare even more relevant today, in a post-Covid-19environment and increasingly digitalized world,than they were 10 years ago when our article cameout.

REFLECTING ON A DECADE OF PROGRESSSignificant progress has been made in multiculturalteams research since we published our meta-anal-ysis, of course, not only building on our researchbut also on other studies.

Our main recommendation was that futureresearch should move beyond the question ofwhether cultural diversity has a positive or negativeeffect on team performance, and instead move onto fine-tune our understanding of processes as


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mediators and how these relationships are affectedby moderators. Research now takes as a startingpoint that cultural diversity has both positive andnegative effects, and particularly that diversityincreases divergent processes and makes conver-gent processes more challenging. At the same time,the field of teams in management studies in generalhas also progressed, articulating more specific rela-tionships between processes and emergent states(Waller, Okhuysen, & Saghafian, 2016). The impactof this precision can also be seen in internationalmanagement studies. In this section, we review andcomment on the progress in research on mediatingprocesses, contextual and individual moderators,complex field studies that combine mediators andmoderators, and the role of X-Culture in studyingmulticultural teams.

Intervening Processes that Mediate the Diversity–Performance Linkage: Creativityand CommunicationResearch has progressed significantly on two sets ofimportant processes that link cultural diversity andteam performance: the divergent process of creativ-ity, and the convergent process of communication.

Culturally diverse teams are more creativeThe largest effect size in our meta-analysis indi-cated that teams with high cultural diversity weremore creative than teams with low cultural diver-sity. Because creativity is part of the process ofinnovating for new solutions (and often the two areeven measured interchangeably in teams research),it is a very important intermediate team outcome.When we conducted our meta-analysis, we weredisappointed not to be able to test any moderatorsfor this relationship as we had only five studies thatincluded creativity. Research on the relationshipbetween diversity (including cultural diversity) andcreativity in teams has almost exploded in the past10 years (e.g., Crotty & Brett, 2012; Jang, 2017;Leung & Wang, 2015). The cultural studies weresummarized well in a recent meta-analysis by Wanget al. (2019). Based on 44 studies conductedbetween 1985 and early 2018 (most of them after2010), they reinforced that deep-level diversity isassociated with more creativity due to its relation-ship with higher information diversity. This effectis moderated to be (more) positive when the team iscollocated or is engaging in a task with highinterdependence. Surface-level diversity, whichcan raise social identity threats, was negativelyrelated to creativity and innovation for simple tasks

and unrelated for complex tasks (other moderatorswere not significant). Further research will certainlyexplore more nuances around these relationships.

Language differences raise barriersto communication, overcoming them requires payingattention to other team dynamicsWith respect to communication, there has been along-overdue increase in research on the role oflanguage differences in multicultural teams’ com-munication. We were not able to test the role oflanguage differences at all in our meta-analysis, asthere were not enough studies. The Journal ofInternational Business Studies special issue on lan-guage (Brannen, Piekkari, & Tietze, 2014) set alandmark in this field. Two papers in that specialissue focused on the relationship between lan-guage, communication, and other processes inmulticultural teams. Tenzer, Pudelko, and Harzing(2014) looked at the relationship between languagebarriers and trust, showing that language differ-ences and cultural differences are related in com-plex ways in their activation, perception, andimpact. Hinds, Neeley, and Cramton (2014)showed the processes through which languagedifferences and fluency levels influence powerdynamics in teams, and the moderation of manag-ing those dynamics through emotional regulation.These studies showed that language and culture areclearly related to each other, but the language andculture diversity activate and affect communicationand other processes in multicultural teams. Theyhave set a strong foundation for examining howcommunication barriers can be overcome.

Contextual Moderators: GeographicConfiguration and Virtual TeamsProbably the most important, and certainly themost-studied, contextual moderator affecting mul-ticultural teams is the extent to which they aregeographically dispersed. Global Virtual Teams(GVTs) are internationally distributed teams work-ing on joint tasks with international componentsor implications (Gibson & Gibbs, 2006; Maznevski& Chudoba, 2000), and they usually conduct mostor all of their work together using communicationtechnologies rather than face-to-face. As demon-strated by a large body of research on GVTs andvirtual work, working together over technologyincreases the challenges faced by teams of anycomposition (Jimenez, Boehe, Taras, & Caprar,2017; Reiche, Bird, Mendenhall, & Osland, 2017;Zander, Mockaitis, & Butler, 2012). In our meta-


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analysis, we were surprised with the finding thatvirtual teams had less conflict and more socialintegration than co-located teams. We suggestedpossible explanations, but the already-publishedresearch did not help us resolve the finding. Sincethen the research on GVTs has flourished. As notedby Zander and colleagues (2012), in GVTs it is notalways easy to tease apart the extent to whichdynamics are influenced by diverse composition,dispersed configuration (and virtual communica-tion), or their combination. The effects on media-tors of working virtually are similar to the effects ofcultural diversity: both provide opportunities fordivergence but raise barriers to convergence. Theresearch patterns suggest that their effects usuallymultiply each other’s impact, especially in increas-ing barriers (Jimenez et al., 2017). Working virtu-ally decreases the amount of non-verbalcommunication, and, therefore, decreases theamount of information available to develop judge-ments about trust, cohesion, and commitment(Reiche et al., 2017; Scott & Wildman, 2015).Working across time zones and across infrastruc-tures increases the coordination costs of a projectdramatically (Jonsen, Maznevski, & Davison, 2012).On the other hand, by being able to work acrosstime zones, GVTs have the opportunity to workaround the clock and access different networks andinstitutional resources (Wildman & Griffith, 2015).

In the past decade, more fine-grained researchhas been conducted on the relationship betweencultural diversity and team mediators in dispersedteams. For example, Zakaria (2017) examined alarge team’s e-mail communications through dif-ferent stages of a decision-making process. Shediscovered that people from high-context culturestended to use more indirect structures in theirwritten communication, compared with peoplefrom low-context cultures. However, she also sawthat people changed their communication stylewith different receivers and through different deci-sion stages, suggesting that culture is not a simpledeterminer of virtual communication style. Klit-møller, Schneider, and Jonsen (2015) found thatwhen team members from different cultures com-municated using verbal media (e.g., telephone)rather than written media (e.g., e-mails), they weremore likely to engage in social categorizationleading to negative stereotypes and reduced trust.

Some recent research has begun to uncover themechanisms through which working virtually canlead to positive dynamics and outcomes in GVTs.Nurmi and Hinds (2016), in a qualitative study,

discovered that people engaged in global virtualwork appreciated the opportunities to learn andinnovate, and this in turn increased their satisfac-tion and engagement. The effect was enhancedwhen team members had the opportunity for off-job recovery, and did not need to be available allthe time. Magnusson, Schuster, and Taras (2014)discovered that GVTs with a high average level ofmotivational cultural intelligence (CQ) put in extraeffort to overcome perceived cultural differences,and increased their communication and conflictmanagement effectiveness. Zakaria and MohdYusof (2020) examined the development of trustin GVTs over successive stages of a project. Theysaw that responsiveness was key to signaling relia-bility and adaptation, and therefore initiatingcycles of increased trust-building. Responsiveness,though, was often affected by internet availabilityand time zone differences, and teams that were notmindful about these factors could ignore each otherand spiral into cycles of decreased trust. Teams withmembers who were willing to engage in construc-tive conflict and revisit issues overcame the barriersto responsiveness and therefore trust-building. Thecommon thread across these recent studies is theteam members’ willingness to put in extra effort toovercome barriers, and future research will examinethe antecedents of motivation further.

Individual-Level Factors: Individual TeamMembers Can Make a Big DifferenceRecent research has addressed the effects of threeimportant categories of individual-level modera-tors: individual knowledge and skills for workingacross cultures, individuals who are bi- or multi-cultural themselves, and team leader behaviors.

Cross-cultural competences and cultural intelligenceAn extensive stream of research has examinedcross-cultural competences and cultural intelli-gence (CQ) (Bird, Mendenhall, Stevens, & Oddou,2010; Szkudlarek, Romani, Caprar, & Osland, 2020;Thomas et al., 2015), the set of knowledge, skills,and abilities required to interact effectively withpeople from different cultural backgrounds. Thisresearch has demonstrated clearly that increasedcross-cultural competences lead to more effectivecommunication, conflict management, trust build-ing, and other processes and emergent states thatmediate high team multicultural performance.Recent research has linked these competences morespecifically to the team context, affirming theirimportance in teams. For example, followers’


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increased cultural intelligence led to better indi-vidual task performance in global virtual teams,especially when contact intensity with the leaderincreased (Presbitero, 2020a). Further, when per-ceived cultural distance is high, a leader is morelikely to rate a team member’s performance as highif the leader also perceives that the team memberhas high cultural intelligence (Presbitero, 2020b).Another study showed that team members aremore likely to voice disagreement or new informa-tion if they or the leader has high cultural intelli-gence (Ng, Van Dyne, & Ang, 2019). Teamdynamics over time are characterized by reciprocalcausation, so it is also important that individualsdevelop cross-cultural competences through theirexperiences in multicultural teams (Caligiuri,2015).

Individuals who are multiculturalAnother important stream of research on theimpact of individuals has evolved around multi-cultural individuals and how they affect organiza-tional phenomena, as described recently in acomprehensive review by Vora et al. (2019).Research shows that multicultural individuals havea positive impact on several processes important inmulticultural teams, including boundary-spanningcommunication (Yagi & Kleinberg, 2011) and socialcapital development (Fitzsimmons, Liao, & Tho-mas, 2017). In a recent study, Backmann andcolleagues explored how cultural identity pluralityis related to bridging processes in multinationalteams (Backmann, Kanitz, Tian, Hoffmann, &Hoegl, 2020). They confirmed that individuals withmore cultural identities engage in these bridgingbehaviors, with cultural intelligence as a mediator.We are sure to see more studies illustrating howmulticultural individuals contribute to multicul-tural teams (Dau, 2016; Fitzsimmons, Miska, &Stahl, 2011). Different individuals have differentways of integrating (or not) their separate culturalidentities, and the identities within an individualmay be seen by others as more or less positive(Fitzsimmons, 2013). Because this aspect of indi-vidual-level multiculturalism is related to the inter-sectionality of diversities (see below), it isimportant that future research examine the effectsof different types of multiculturalism.

Individuals as team leadersFinally, the leader as an individual-level moderatorhas also been examined. The field of global leader-ship has progressed significantly (Mendenhall

et al., 2018), and global teams are recognized as inimportant context both for practicing global lead-ership and for developing global leaders (Maznevski& Chui, 2018). Zander and colleagues (2012)applied the literature on team leadership to globalteams and concluded that transformational leader-ship combined with cross-cultural competencesprovide appropriate leadership for helping multi-cultural teams to overcome barriers and realizeopportunities. An increasing body of researchfocuses specifically on the role of the leader inmulticultural teams. For example, Troster and vanKnippenberg (2012) found that leaders who wereopen to non-dominant ideas increased affectivecommitment, which in turn encouraged teammembers to voice local and contradictory ideas.Eisenberg and Mattarelli (2017) suggest that leaderswho are effective cultural brokers help to bridgedifferences across subgroups, leading to more effec-tive knowledge exchange. Lisak and Erez (2015)found that individuals high on all three of culturalintelligence, global identity, and openness to cul-tural diversity were more likely to emerge as leadersof multicultural teams. In another study, Lisak,Erez, Sui, and Lee (2016) demonstrated, in an R&Dorganization, that leaders with a strong globalidentity helped their multicultural teams focus onteam-shared goals and innovate together. Studieslike these, bringing together leadership, cross-cul-tural effectiveness, and team dynamics to explaineffectiveness in multicultural teams, developimportant knowledge for practitioners and we hopeto see more of them.

Complex Combinations: Mediators, Moderators,and Multiple Levels of AnalysisWe also note that we have a rise in more complexstudies looking at combinations of mediators andmoderators, including configurations of modera-tors at different levels of analysis simultaneously.One approach being applied more frequently inthese studies is social network methodology. Forexample, Haas and Cummings (2015) applied socialnetwork methods within teams to examine knowl-edge exchange. They demonstrated that individualdifferences related to international configurationand different types of personal experiences affectedthe knowledge exchange process differently, withsome flows moderated by people’s prior experiencetogether. Vahtera et al. (2017) looked both withinand across teams in an organization to uncover theantecedents of negative perceptions of social iden-tity groups, to develop our understanding of how


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multicultural and globally dispersed teams linkdifferent parts of an organization together. Inanother study on networks of global virtual teams,Mattarelli et al. (2017) interviewed the brokers whoexplicitly connect the dispersed teams. They foundthat brokers who have a personal professionalidentity related to growth and learning tend tohave more accurate perceptions about distant co-workers and enable teams to adapt their routinesand do more challenging work.

Other studies have incorporated more analysis ofthe organizational environment into the multi-level complex research models. Hajro, Gibson, andPudelko (2017) explored how a multinationalorganization’s climate with respect to the role ofdiversity affected knowledge exchange in multina-tional teams. They found that the more effectivepattern of oscillating between assertive and coop-erative knowledge exchange was more prevalent ifthe organization’s climate explicitly valued usingcultural diversity to inform work. In the mostcomprehensive study examining multiple media-tors and moderators over time, Gibson, Dunlop,and Cordery (2019) reported on a longitudinal fieldstudy of global teams in a multinational miningorganization. They found that some formalizationpolicies (but not others) had a positive effect onteams’ effectiveness, but only when implementedat some (but not other) points in the team’sjourney. These effects were moderated by teammembers’ personal needs for structure.

These complex studies are challenging to under-take. They adapt multiple methodologies and oftenexamine cause–effect relationships over time inorder to parse the separate effects. We are pleased tosee the field having evolved to the extent of beingable to test relationships in these types of studies.

X-Culture as an Early Stage Research LabFinally, it is important to acknowledge the contri-bution of the X-Culture project to research onmulticultural teams in the past decade. X-Culture isa multi-lateral initiative bringing together thou-sands of undergraduate and graduate students intoglobal virtual teams each semester, to work onconsulting projects for real clients (Taras, 2020).X-Culture was launched in 2010 with the dual goalsof providing a relevant and valuable learningexperience for students, and an opportunity forscholars to conduct research on virtual teams. Inaddition to delivering on its educational mandate,the initiative delivers for international manage-ment scholars the equivalent of social psychology’s

student labs for studying dynamics in the earlystages of research. The X-Culture research programis now bearing real fruit in providing tests ofhypotheses before taking them to more complexfield settings (e.g., Jang, 2017; Jimenez et al., 2017)and deconstructing the different effects of inputand process variables more precisely (e.g., Taraset al., 2019). It is an important contribution andwill allow us to turbo-charge more of our complexresearch designs.

In sum, the field of multicultural teams has madesignificant progress in the last decade, especially inthe focus on different mediators and moderators incomplex settings. The studies build on the theoret-ical foundations of information processing andsocial identity effects, and develop further richnessaround these perspectives by looking at how theyexplain performance in different empirical con-texts. At the same time, the studies highlighted inthis review represent ‘‘best practice’’ and not yet thenorm for the field. In the next section, we turn torecommendations for future research, whichinclude building on these best practices andextending them to other areas in InternationalBusiness research.

LOOKING AHEAD TO THE NEXT DECADEIn this section, we focus on three areas of relevanceto future research. First, we suggest there is inter-esting and important work to be done on theconstructs of culture and cultural diversity inmulticultural teams research. Second, we recom-mend a closer examination of the relationshipbetween cultural diversity and performance acrossIB research, examining the relationships amongmultiple types, sources, and levels of (cultural)diversity more precisely. Finally, we advocateresearching the positive effects of diversity whilecommunicating the negative and mixed effectsmore carefully.

Culture and Cultural Diversity in TeamsOne of the unexpected findings of our 2010 meta-analysis was that the level of cultural diversity(surface vs. deep) was unrelated to team outcomessuch as creativity, conflict, satisfaction, and socialintegration, leading us to conclude that the simplecategorization of surface-level and deep-level maybe misleading and that future research on diverseteams needs to specify the level of cultural diversitymore carefully. Although some studies still do notaddress or specify the level of cultural diversity,


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most are much more careful now. At the same time,though, they tend to define culture and diversityquite narrowly. Even while providing caveats thatculture is not necessarily about nationality, mostmulticultural teams studies look only at nationalcultures, and within that most focus only on a fewdimensions for differentiating cultures and defin-ing multicultural team diversity. Zellmer-Bruhnand Maloney, in their recent review of cross-cultural teamwork, note that this narrow concep-tualization of both culture and diversity has hin-dered the growth of the field, and they recommendexpanding both of these constructs (Zellmer-Bruhn& Maloney, 2020).

Three recent studies have provided importantperspectives for future research. The aforemen-tioned meta-analysis by Wang et al. (2019) offersa fine-grained analysis of how surface-level anddeep-level diversity attributes, in conjunction withteam characteristics such as team virtuality, taskcomplexity, and task interdependence, influenceteam creativity and innovation. In another study,Taras et al. (2019) abandoned the distinctionbetween surface-level and deep-level indicatorsaltogether and instead proposed a refined theoret-ical model that differentiates between the effects ofpersonal versus contextual diversity and specifieshow these distinct forms of diversity affect taskoutcomes and psychological outcomes in differentways. Their results revealed that contextual diver-sity (defined as differences in the characteristics ofthe environments that the team members comefrom, including economic development, humandevelopment, and national cultural orientations)has a positive effect on task outcomes; and personaldiversity (defined as differences pertaining to thepersonal characteristics of the team members,including differences in age, gender, languageskills, and personal values) has a negative effecton psychological outcomes. Tasheva and Hillman’scomprehensive conceptual framework (Tasheva &Hillman, 2019) suggests differentiating amongthree types of diversity (human capital, socialcapital, and demographic) at two levels of analysis(within-person and among people in a team). Theyargue that for tasks with different levels of requiredinterdependence, these sources of diversity may becomplementary or substitutes. These recent studiesshould lead the way for more research on howdifferent diversity attributes, moderated by teamcharacteristics and contextual conditions, affectprocesses and outcomes in diverse teams.

On a related note, the field must develop andadopt much more precise ways of measuring diver-sity. When we conducted our meta-analysis, diver-sity was usually measured by the proportion of theteam in different categories. If there were twocategories (e.g., domestic and international), themeasure could simply be proportion of the minor-ity category. If there were more than two cate-gories, multi-proportionality was calculated tocreate a heterogeneity index (Blau, 1977). If thediversity variable was continuous, for examplevalue diversity as measured by a self-assessmentsurvey, diversity was measured by variance onthose variables. Research today is still dominatedby the same types of measures. Studies of psychicand perceptual distance, though, have popularizedmore sophisticated approaches to measuring per-ceptual distance between two people or two entities(Beugelsdijk, Kostova, Kunst, Spadafora, & vanEssen, 2018; Zaheer, Schomaker, & Nachum,2012), from comprehensive distance arrays to spa-tial dependence drawing from geography tech-niques (e.g., Plummer, 2010). We are beginning tosee this perspective in multicultural teams, but sofar it has mainly been applied to dyads withinteams (e.g., Magnusson et al., 2014; Ng et al., 2019).Mathematically, diversity could be measured asdistance among multiple group members. If wecould measure the extent of diversity more pre-cisely, we would be able to explore, for example,whether there are thresholds of diversity abovewhich specific leadership interventions areessential.

In addition, it is abundantly clear that moreresearch is needed on intersections of differenttypes of diversity. Multicultural teams are rarelydiverse only on culture. Especially for global work,they are usually diverse on gender, functionalbackground, and possibly even organizational rep-resentation. One finding we found interesting inour meta-analysis was not in our 2010 publication.While there was no direct effect between culturaldiversity and performance, teams that were high onboth cultural diversity and gender diversity hadsignificantly lower performance (effect size - 0.11,p\ .001), lower satisfaction (effect size 0.31,p\ .01), and lower cohesion (effect size - 0.13,p\ .01) (Stahl, Maznevski, Voigt, & Jonsen, 2006).Space prohibited our exploration of that result inthe article, but we have reflected on it since.

It is possible that we were picking up the effect offaultlines or other patterns of intersectionality.Most research on diverse teams focuses on one


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‘‘source’’ of diversity at a time, seeing other sourcesas moderators. We followed this pattern when wepublished the meta-analysis. Faultline researchexamines the alignment of two or more types ofdiversity in a team, such as gender and culture ornationality and function (Lau & Murnighan,1998, 2005). In general, research has found thatfaultlines tend to moderate relationships betweendiversity and outcomes, such that any negativeimpact of diversity is more negative when faultlinesare ‘‘activated,’’ or perceived as salient by the team’smembers (e.g., Antino, Rico, & Thatcher, 2019;Bezrukova, Spell, Caldwell, & Burger, 2016;Spoelma & Ellis, 2017). In other words, faultlinessplit groups into ‘‘us’’ and ‘‘them,’’ and it is difficultfor groups to bridge these faultlines. Empiricalresearch on faultlines has rarely examined culture(especially deep-level elements of culture, such asvalues) as one of the dimensions of diversity. Thereis a well-established stream of research on faultlinesin top management teams (e.g., Orlando Curtae,Wu, Markoczy, & Chung, 2019), and another onfaultlines based on information- and identity-basedcharacteristics (Spoelma & Ellis, 2017). The findingsfrom this research are highly relevant to multicul-tural teams. For example, Spoelma and Ellis foundthat external threats mitigated the negative effectsof identity-based (gender) faultlines on teamcreativity.

Intersectionality acknowledges the fact that allindividuals identify with and are influenced bymultiple identities simultaneously, and all of theseidentities can be considered sources of diversity ifthey differ within a team. IB research focuses oncultural diversity because cultures influence sharedexperiences of, expectations for, and assessments ofsocial interactions and decision-making, which inturn affect the conduct of business. Experiences ofother social identities also greatly affect sharedsocial interactions and decision-making. For exam-ple, gender, sexual orientation, race, neurologicalcharacteristics, and socio-economic status are allassociated with both individual and commonlyshared perspectives. Their combinations have com-plex effects, depending in part on whether theyreinforce or complement each other with respect tothe way they are perceived by others or areembedded within the society’s or an organization’spower systems.

In today’s environment, it is no longer enough tolook at one source of diversity alone. In the future,we hope to see better articulation of dimensions ofdiversity, more precise measurement of diversity,

and richer examination of configurations andintersectionalities of diversity.

Open the Black Box of the Diversity–PerformanceLink Beyond Multicultural TeamsAs we noted at the outset of this Retrospective,research on the effects of cultural diversity in teamshad yielded inconclusive, and sometimes conflict-ing, results. Thus, one of the aims of our study wasto clarify the mixed effects of cultural diversity inteams and to reconcile conflicting perspectives andpast results. It is important to note, though, thatthe pattern we observed was not confined to studieson culturally diverse work groups. Rather, it hadbeen observed with respect to cultural diversity andcultural distance in a wide range of IB contexts anddifferent subfields within IB research, includingwork on MNE performance, foreign market entry,FDI and expansion, international alliances andM&A, cross-border knowledge transfer and learn-ing, and other research on culture in IB (Leung,Bhagat, Buchan, Erez, & Gibson, 2005; Tihanyi,Griffith, & Russell, 2005). For example, Tihanyiet al. (2005: 270) summarized the results of theirmeta-analysis of research on cultural distance asfollows: ‘‘[R]esults failed to provide statistical evi-dence of significant relationships between culturaldistance and entry mode choice, internationaldiversification, and MNE performance. The exam-ination of moderator effects, however, yieldedimportant results. …Substantial additional researchis needed before the role of cultural distance is fullyunderstood.’’ Similarly, Cartwright and Schoenberg(2006: 3–4), in a review of research on the role ofculture in cross-border M&A, concluded that ‘‘therelationship between culture and performance con-tinues to intrigue and confuse researchers as studiesexamining this link in relation to internationalM&A have produced rather mixed, and oftencontradictory results. … Existing research remainsincomplete in some way.’’ Taken together, theevidence indicated that across various domains ofIB studies, effect sizes for the relationship betweencultural differences (or related constructs such ascultural distance and cultural diversity) and perfor-mance outcomes were generally small and oftennot significantly different from zero. Effects seemedto be contingent on contextual factors, and resultsabout the direction of effects were inconclusive and‘‘confusing.’’

In our meta-analysis of team diversity research,we found two complementary theoretical explana-tions for a zero-direct-effect relationship between


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cultural diversity and team performance and other‘‘anomalies’’ identified in past research: simultane-ous positive and negative effects on intermediateoutcomes; and, moderated relationships with inter-mediate outcomes. We also found the effects ofstudy design characteristics, which could have beenrelated to different methods testing the same thing,or the different methodologies in fact identifyingdifferent relationships. In addition, there werealternative explanations we were unable to test inour meta-analysis, but that help explain the some-times-puzzling results obtained in prior research.These explanations are summarized in Table 1.Although these explanations have been exploredin research on multicultural teams, they have notbeen as systematically applied in other areas of IBresearch, and we suggest that research wouldbenefit from adopting these perspectives. We lookmore closely at each of the explanations in turn.

Positive and negative effects on mediating variablesOur theoretical framework applied the input-medi-ator-output approach to understanding group rela-tions (Lepine, Piccolo, Jackson, Mathieu, & Saul,2008; Mathieu, Maynard, Rapp, & Gilson, 2008).We proposed that cultural diversity drives processgains and process losses by increasing divergenceand raising barriers to convergence (Earley & Gib-son, 2002; Mannix & Neale, 2005). We anticipatedthat these two effects on mediating variables mightpartially or fully cancel each other out, and theresults of our meta-analysis largely supported thispattern. Overall, team performance was unrelatedto diversity, and diverse teams’ gains from greatercreativity and higher team member satisfactionwere about evenly matched with losses fromincreased task conflict and lower social integration.As described above, research on multicultural teamsin the past decade has studied these mediatingvariables with much more depth.

This mediating pattern may also explain theconflicting or zero-direct-effect relationshipsbetween cultural differences and performancefound in other domains of IB research, such as

work on entry mode choice, MNE performance,cross-border knowledge transfer and learning, andinternational alliances and M&A (Beugelsdijk et al.,2018; Stahl, Tung, Kostova, & Zellmer-Bruhn, 2016;Tihanyi et al., 2005; Tung & Verbeke, 2010). Forexample, Tihanyi et al. (2005: 278–279) concludedfrom the results of their meta-analysis that ‘‘culturaldistance does not appear to be directly related toentry mode choice, international diversification, orMNE performance’’ and suggest that this ‘‘dis-turbing’’ pattern of results might be due to inter-vening processes, such as MNEs’ risk-minimizationstrategies and learning effects. As another example,and closely paralleling the results of our meta-analysis of team diversity research, the findings of ameta-analysis of research on cultural distance andcross-border M&A (Stahl & Voigt, 2008) revealedthat post-merger performance was unrelated tocultural differences, with a mean effect size of zero.However, the effect sizes derived from the primaryresearch studies ranged widely, from highly nega-tive to highly positive. Further analyses revealedthat cultural distance predicted outcomes such associocultural integration, synergy realization, andfinancial performance in opposing ways (e.g., theeffect on synergy creation was positive, the effecton sociocultural integration was negative), cancel-ing each other out in their impact on overall M&Aperformance.

Moderated relationshipsOur meta-analysis clearly suggested that culturaldifferences mattered to the performance of diverseteams, but they indeed seemed to present a ‘‘dou-ble-edged sword’’ or mixed blessing – they could bepositively or negatively associated with the samemediating outcome, depending on other factors.Sub-group analyses unearthed a number of contex-tual factors that moderated the relationshipsbetween cultural diversity and intermediate teamoutcomes. As reviewed above, recent research onmulticultural teams has enhanced further

Table 1 Opening up the black box of the diversity–performance link: explanations for a zero-direct-effect relationship and other

‘‘anomalies’’ found in previous research

Explanations for a zero-direct-effect relationship

1. Positive and negative effects on intermediate processes and outcomes, which partly or fully offset one another.

2. Moderated relationships (e.g., the impact of contextual and management-related factors).

3. Effects of study design and sample characteristics.

4. Non-linear effects on outcome variables (e.g., the ‘‘too-much-of-a-good-thing’’ effect).


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understanding of these moderated relationships,with some studies examining them in complexcombinations.

Again, there appear to be some striking similar-ities between the dynamics of cultural diversitywithin teams and the way cultural differences affectprocesses and outcomes in other organizationalcontexts, such as international R&D collaborations,joint ventures, and M&A. For example, Stahl andVoigt’s (2008) meta-analysis on M&A revealed thepresence of contextual influences, such as thedegree of firm relatedness and the integrationapproach taken by the acquirer, which moderatedthe relationships between cultural distance andvarious M&A outcomes. Tihanyi et al., in theirmeta-analysis on cultural distance effects in IB, alsofound that ‘‘[t]he examination of moderatoreffects…, yielded important results. The culturaldistance–international diversification relationshipwas negative for high-technology industries, whileit was positive for other industries.’’ (Tihanyi et al.,2005: 270).

However, research on cultural distance and cul-tural diversity in other parts of IB has not yetilluminated the role of moderators in sophisticatedways. For example, Beugelsdijk et al. (2018), inprobably the most comprehensive meta-analysis ofresearch on cultural distance and firm internation-alization to date, found opposing cultural distanceeffects depending on whether home and hostcountries are developed or emerging markets. Theirresults suggest that when the home country is anemerging market, the negative effect of culturaldistance on performance turns positive; alterna-tively, when the host country is an emergingmarket, the negative effect of cultural distance onperformance becomes even more negative. How-ever, due to the small number of primary studiesthat tested these contingencies, they were unableto explore alternative explanations of the homeand host country and developed and emergingmarket moderator effects. Importantly, Beugelsdijkand colleagues observed that there is a paucity ofwork examining the role of management-relatedfactors. The few studies that addressed manage-ment aspects such as the benefits of the transfer ofpractices yielded large effect sizes of cultural dis-tance. They concluded: ‘‘Understanding when andfor which aspects of the internationalization pro-cess cultural differences really matter is a necessarystep in learning how to manage and possiblyleverage such differences’’ (Beugelsdijk et al.,2018: 123).

Effects of study design and sample characteristicsThis leads us to another important observation,namely how aspects of the research design mightimpact study results. Our meta-analysis revealedthat the study setting (laboratory or field) and thelocation where the research was carried out (NorthAmerica or elsewhere) influenced the researchfindings, and so did the study design (longitudinalor cross-sectional). Regarding the latter, few studiesused a longitudinal design to look at interveningprocesses and how they unfold over time, or to testhow team outcomes change over time. Whereas thelarge number of studies that utilized a cross-sectional design found that cultural diversity, onaverage, was negatively associated with team per-formance, the considerably smaller number ofstudies that utilized a longitudinal design yieldeda positive mean effect size, suggesting that diverseteams outperform homogenous teams over time.Was this effect simply study characteristics, or wasthere more going on about longitudinal tasksproviding more context for the benefits ofdiversity?

As another example, the results of our meta-analysis suggested that the geographic regionwhere the research was carried out influenced thestudy results. While studies conducted outside ofNorth America found that cultural diversity ispositively associated with conflict, studies carriedout in North America found no such relationship.Obviously, these results must be interpreted withsome caution – for example, it cannot simply beconcluded that the members of historically diversesocieties such as Canada or the US, compared tocountries like Germany or Japan, are better able tomanage conflict associated with cultural diversity.It could also be that cross-country cultural diversityoutside North America is greater than or worksdifferently from cultural diversity within NorthAmerica (mostly within either Canada or theUnited States, not cross-country). But these find-ings alert us to the fact that demographic attributeslike race or ethnicity play a different role indifferent countries.

Thus, researchers need to pay more attention tohow aspects of the study design, location, andsample characteristics may affect the culturaldynamics of the research being conducted. As wereviewed, there have been more complex fieldstudies published about multicultural teams in thepast decade. They provide precise theorizing andtesting about elements of the study design andcontext (e.g., Cramton & Hinds, 2014; Gibson


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et al., 2019; Hajro et al., 2017; Hinds et al., 2014).Yet not all studies on multicultural teams followthis pattern, and we encourage more studies to dothis.

Other areas in IB should follow suit. For example,Beugelsdijk et al. (2018), in their meta-analysis ofthe literature on cultural distance and firm inter-nationalization, found that cultural distance effectsare sensitive to the measurement and operational-ization of cultural distance (e.g., perceptual mea-sures or cultural distance index based on secondarydata), as well as the sample structure (e.g., devel-oped or emerging markets). Again, due to the smallnumber of studies that addressed these contingen-cies, the authors were unable to fully explore theeffects of study design characteristics, but theresults of this meta-analysis highlight their impor-tance and present opportunities for future research.

Non-linear effects of diversity on outcome variablesThere is another possible reason for the inconsis-tent and sometimes confusing results obtained inpast research that is methodological in nature. Itseems likely that the effects of cultural differencesare not always linear but may vary depending onthe amount of cultural diversity present in a teamor organization. Drawing on March’s (1991) explo-ration versus exploitation organizational learningframework, Stahl and Tung (2015) proposed thatacross various IB contexts and levels of analysiscultural diversity exhibits an inverse U-shapedrelationship with the capacity for learning andother positive outcomes. That is, as diversityincreases – across individuals in an organization,across different sub-units in an MNE, across differ-ent groups in a societal setting – the capacity forlearning and the potential for synergy increases,but beyond a certain threshold level, the relation-ship turns downwards as the amount of diversitybecomes overwhelming and hard to manage orcope with. In other words, there might be a ‘‘too-much-of-a-good-thing’’ effect (Grant & Schwartz,2011) when it comes to cultural differences andcultural diversity. This is consistent with the gen-eral idea that many positive qualities have coststhat at higher levels may begin to outweigh theirbenefits. The greater variety of ideas, perspectivesand experiences that a diverse team brings to thetable may thus be an asset and contribute toimproved group decision-making as long as thegroup’s diversity is at a moderate level, but at veryhigh levels (e.g., if team members come from verydifferent cultures or if several diversity sources

combine and their effects align or accumulate)they can be harmful and lead to miscommunica-tion, lack of cohesion, and conflict (e.g., Earley &Mosakowski, 2000; Lau & Murnighan, 1998).

Becoming serious about opening the black boxof culture’s impactIn general, research on culture in IB has sufferedfrom overly simplistic assumptions about cause andeffect relationships, specifically the assumptionthat cultural differences have a direct effect onperformance, regardless of the process and context.Few studies have attempted to test more complexmodels that include various levels of culture,moderating variables, intervening processes, andmultiple outcome measures. To advance researchon culture in IB, we need to adopt more complex‘‘input-process-output-context’’ models. Gibson,Maznevski, and Kirkman (2009) caution that suchcomplex moderated mediation models necessitatechanges in research design, particularly with regardto sampling and data analysis. For example, inves-tigating the influence of multiple moderator vari-ables and intervening mechanisms concurrentlymay require more complex field research, includingthe need to engage in longitudinal studies, espe-cially when these moderators include process-ori-ented and management-related factors (Tung &Stahl, 2018).

More research on the Positive Effects of Diversity,and More Careful Communication of the Negativeand Mixed EffectsIt is now widely accepted among diversity andcross-cultural management scholars that culturaldiversity has both positive and negative effects, andour 2010 meta-analysis indeed provided evidencesupporting the ‘‘double-edged sword’’ nature ofcultural diversity in teams. However, the field ofteam diversity research is still characterized by anover-emphasis on the negative, and researchershave expended little effort on developing newtheoretical perspectives highlighting the positivedynamics of cultural diversity. In their review ofthe team diversity literature, Stahl, Makela, Zander,and Maznevski (2010) concluded that all but one ofthe dominant theoretical perspectives on culturaldiversity in teams are consistent with the problem-focused view of diversity. They emphasize theprocess losses resulting from reduced perceptionsof similarity-attraction among team members; neg-ative biases associated with social categorizationprocesses; feelings of dislike and resentment due to


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incongruent values; and communication barriersresulting from differences in language and commu-nication styles. The only ‘‘positive’’ exception isinformation-processing theory, which holds thatdiversity may lead to information processingadvantages due to team members’ different per-spectives, knowledge bases, and decision-makingstyles, which, if properly harnessed, can enhancecreativity and decision-making quality. This posi-tive exception has been studied extensively alreadyin the relationship between cultural (and othertypes of) diversity and creativity (Wang et al.,2019), but other positive aspects of cultural diver-sity have not yet been researched.

Stahl and Tung (2015) have argued that currenttheory in IB, in general, tends to over-emphasizethe ‘‘dark side’’ of culture by focusing primarily onthe difficulties, costs, and risks associated withcultural differences and underlying drivers whilepaying scant attention to the potentially positiveeffects of cultural diversity and how they can beexplained. Their content analysis of 1141 articleson culture in IB published in the Journal of Interna-tional Business Studies over a 24-year time periodrevealed a 17:1 imbalance of negative over positivetheoretical assumptions in studying the role ofculture in various IB contexts, demonstrating thatthere is an overwhelming emphasis on the liabili-ties associated with cultural differences. Thus, thereis a need to develop new theoretical models toexamine the positive aspects of cross-culturaldynamics and account for the mixed effects ofcultural differences observed in various sub-fieldswithin the IB field, including work on culturallydiverse teams.

At the same time, ironically, the managementperspective on diversity tends to be overwhelm-ingly positive. McKinsey & Company reportedagain in 2020 that ‘‘The business case for inclusionand [gender, ethnic and cultural] diversity isstronger than ever. For diverse companies, thelikelihood of outperforming industry peers onprofitability has increased over time, while thepenalties are getting steeper for lack of diversity’’(Dixon-Fyle, Dolan, Hunt, & Prince, 2020). Accord-ing to their research, companies in the top quartileof gender and ethnic diversity in the executiveteam are likely to perform better than the industryaverage on earnings before interest and taxes(EBIT), while companies in the bottom quartile ofgender and ethnic diversity in the executive teamare likely to perform worse than the industryaverage on EBIT. Boston Consulting Group (BCG)

reported that companies with more diverse (onmany dimensions, including culture and ethnicity)management teams had higher proportions of theirrevenue coming from innovation (Lorenzo, Voigt,Tsusaka, Krentz, & Abouzahr, 2018). The WorldEconomic Forum declared that ‘‘The business casefor diversity in the workplace is now overwhelm-ing’’ (Eswaran, 2019). These studies tend to uselarge cross-sectional samples with public data totest correlations, although some (e.g., McKinsey)are now tracking firms over time and can examinewithin-firm trends. Further, these studies rarelyexamine mediators or moderators in any depth orwith rigorous research designs. A Google search‘‘Does diversity improve performance?’’ produces aplethora of results from the popular press andconsulting firms ‘‘showing’’ that diversity increasescompany and board performance, and very fewlinks questioning the notion (the few are inevitablyacademic studies).

We find it curious and unsettling that the well-established finding from academia, that diversity isa double-edged sword, tends not to be shared by oraccepted in practice. In our own experience withleaders in organizations, the message ‘‘diversity isalways good’’ does not fit with most people’s livedexperience. Yet the message itself has the potentialto shut down the very dialogue it needs to open upby denying any possibility that diversity can lead tolower performance, and dismissing the importanceof contingencies (moderator variables). We suggestthis is an area in which practitioner-scholar dia-logue has not yet been sufficient, and we must takeour share of responsibility for that. For example,our research on mediators and moderators inmulticultural teams should be better integratedwith research on multicultural competences devel-opment, as illustrated by the studies on cross-cultural competences and CQ in teams reviewedabove. These approaches should be applied not justto international management situations but alsomore frequently (and with more legitimacy) towithin-country situations and intersectionalities(Maznevski, 2020).

Conclusion: More Research NeededWith global tensions around immigration, refu-gees, prejudice, and pandemics at new heights,research on multicultural teams has never beenmore important. At the same time, the potentialbenefits from multicultural teams, such as innova-tion, improved decision-making, and engagementin distributed working relationships, have never


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been more needed. Multinational enterprises andthe societies in which they operate need to knowhow diversity is related to performance, in whichconfigurations and which contexts diversity mat-ters most, and, importantly, how the potentialbenefits of diversity can be unleashed while thefrictions arising from diversity can be mitigated. Inthe field of international business, in general,diversities of all kinds will likely widen in light ofthe rising economic power of emerging markets,the seismic changes that have occurred in theinternational political landscape, and the growingeconomic, social and environmental problems fac-ing the world (George, Howard-Grenville, Joshi, &Tihanyi, 2016). These developments highlight theurgent need to understand diversity and its impactsin today’s world to avert mistakes and, possibly,cataclysmic consequences that cultural misunder-standing, discordance, and conflict may bring(Tung & Stahl, 2018).

By studying diverse teams and organizations witha broader sense of culture, more nuanced measure-ment of diversity, and more fine-grained examina-tion of the relationships between multiple sourcesof diversity and combinations of moderators andmediators, we can improve our understanding ofhow cultural diversity can create value for globalorganizations and society, such as learning throughcross-border knowledge-sharing and collaboration,leveraging the talent of migrants and refugees, andunleashing of creative potential in diverse teams.Addressing these research questions will also allowus to offer managers leading diverse teams andorganizations much-needed guidance and the abil-ity to build capacity in this important area.

We are pleased that the field has grown inrichness in the past 10 years, enough that we canoffer direction for today’s scholarship, multina-tional enterprises and societies. Yet we find our-selves impatient, reflecting that the progress is notnearly enough. As a field, we have not kept pacewith the accelerating needs of our stakeholders. Wedo not have adequate answers or clear advice forthe ever-more-complex situations that leaders ofglobal organizations face. We hope that scholars inthe field share our sense of urgency and that thereflections and suggestions in this Retrospectivehelp propel this research forward.

ACKNOWLEDGEMENTSWe gratefully acknowledge the contributions of ouroriginal co-authors Andreas Voigt and Karsten Jonsen,and of our close friend and diversity professionalJosefine van Zanten (IMD). We also express ourappreciation to the JIBS Decade Award committee;to Alain Verbeke, Dana Minbaeva, and Piers Steel fortheir insights into the impact of the original paper; andto the anonymous reviewers of the Retrospective.Professor Stahl acknowledges support from the Centerfor Sustainability Transformation and Responsibility(StaR) at the Vienna University of Economics andBusiness. Professor Maznevski acknowledges researchfunding from the Ivey Business School and from theSocial Sciences and Humanities Research Council ofCanada. Thank you to Ivey Research AssistantsRebecca Taylor and Komal Patel for their contributionsto the literature reviews.

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ABOUT THE AUTHORSGunter K Stahl is Professor of International Man-agement and Co-director of the Centre for Sus-tainability Transformation and Responsibility(STaR) at theVienna University of Economics andBusiness (WU Vienna). His current research inter-ests include the drivers of corporate responsibilityand irresponsibility, grandsocietal challenges andtheir implications for international business andmanagement, and the changing nature of globalwork.

Martha L Maznevski (Ph.D., Ivey) is Professor andCo-Director of Executive Education at Ivey BusinessSchool, Western University, Canada. Her researchfocuses on multicultural teams, cross-culturalcompetences, global leadership, diversity andinclusion, and leading continuous and disruptivechange in a complex environment. She teaches indegree programs at all levels and works globallywith executives in companies and not-for-profitorganizations.

Publisher’s Note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutionalaffiliations.

Accepted by Alain Verbeke, Editor-in-Chief, 26 October 2020. This article has been with the authors for one revision and was single-blindreviewed.


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