Managing Diversity and Enhancing Team Outcomes: The Promise of Transformational Leadership

In a sample of 62 research and development (R&D) teams, the authors examined transformational leadership as a moderator of the relationship of age, nationality, and educational background diversity with team outcomes. When levels of transformational leadership were high, nationality and educational diversity were positively related to team leaders' longitudinal ratings of team performance. These relationships were nonsignificant when transformational leadership was low. Age diversity was not related to team performance when transformational leadership was high, and it was negatively related to team performance when transformational leadership was low. Two mediated moderation effects help explain these findings. Transformational leadership moderated the relationship of the 3 examined diversity dimensions with the elaboration of task-relevant information, which in turn was positively associated with team performance. Moreover, transformational leadership moderated the relationship of the 3 diversity types with collective team identification, which in turn was positively related to the elaboration of task-relevant information. The authors discuss the theoretical and practical implications of these results. Overall, this study suggests that transformational leadership call foster the utilization of the potential, but frequently untapped. benefits entailed by both demographic and informational/cognitive team diversity.