Harrison, D.A., & Klein K.J. (2007)

Academy of Management Review

Elena Tecchiati

What‘s the difference? Diversity constructs as separation, variety, or disparity in organizations

The challenges

¤  Diversity in organizations

¤  Diversity in researches and investigation ¤  New theories

¤  New studies

¤  19 „diversity“ investigations in 1988 vs. 134 in 2003

Efforts from studies

¤  Cumulative findings about consequences of within-unit differences have been weak and/or inconsistent

¤  According to different authors the results were „mixed“

¤  Theories and analyses must be refined ¤  Elaborating mediators & moderators

Problem

¤  The very construct of diversity requires closer examination and refinement

¤  Diversity ≠ heterogenity, dissimilarity or dispersion

Diversity: a definition

¤  The distribution of differences among the members of a unit with respect to a common attribute (X), such as tenure, ethnicity, conscientiousness, task attitude or pay.

¤  Unit-level compositional construct

¤  Describing diversity of a given attibute within a unit, one describes the unit as a whole

What do we talk about when we talk about diversity?

Demographic variables

¤  Gender

¤  Race and ethnicity

¤  Tenure

¤  Education

¤  Functional background

¤  Marital status

Nondemographic variables

¤  Values

¤  Attitudes

¤  Conscientiousness

¤  Affect

¤  Dress

¤  Network ties

¤  Individual performance

¤  Pay

Diversity of attributes

¤  Such as age, values, and personality ¤  limits within-unit behavioral and social integration

¤  fosters conflict and turnover

¤  Diminishes morale, cohesion, and performance

(Williams & O‘Reilly, 1998)

A diversity typology

3 types of Diversity

¤  Separation

¤  Variety

¤  Disparity

Separation

¤  Team members hold opposing positions on a task

¤  i.g., differences in attitude

Separation representation

Minimum Moderate Maximum

Separation: overview

MEANING AND SYNONYMS

ATTRIBUTE SHAPE AT MAXIMUM

DIVERSITY

ATTRIBUTE EXAMPLES

PREDICTED OUTCOMES

FOUNDATIONAL THEORIES

Composition of differences in

(lateral) position or opinion among

unit members, primarily of value, belief, or attitude; Disagreement or

opposition

Bimodal distribution, with

half of unit members at highest and

lowest endpoints of the attribute S

continuum

Opinion, beliefs, values and attitudes, especially

regarding team goals and processes

Reduced cohesiveness,

more interpersonal

conflict, distrust, decreased task performance

Similarity attraction;

social categorization;

attraction, selection and

attribution (ASA)

Investigations in separation

¤  Reduced separation = greater similiarity = higher levels of cooperation, trust and social integration.

¤  Increase of separation = low cohesion, high conflict, high rates of withdrawal, and poor performance

¤  Minimum separation = unit members‘ position is equivalent (perfect agreement within the unit)

¤  Homogenity is beneficial for the group

Variety representation

Minimum Moderate Maximum

Variety: overview

MEANING AND SYNONYMS

ATTRIBUTE SHAPE AT MAXIMUM

DIVERSITY

ATTRIBUTE EXAMPLES

PREDICTED OUTCOMES

FOUNDATIONAL THEORIES

Composition of differences in

kind, source, or category of

relevant knowledge or

experience among unit

members; unique or distinctive information

Uniform distribution, with even spread of members across

all possible categories of the

attribute V (no continuum)

Content expertise, functional

background, nonreduntant network ties,

industry experience

Greater creativity,

innovation, higher decision quality,

more task conflict,

increased unit flexibility

Information processing; law of requisite variety;

variation, selection, and retention (VSR)

Variety summarized

¤  Members differ from another qualitatively

¤  The attribute has no high or low

¤  „categorical variability“ (Miner, Haunschild, & Schwab, 2003: 790)

Maximum and mininum variety

¤  Minimum variety: all members belong to the same category

¤  Maximum variety: the richest possible distribution of information > perfect homogenity (maximum heterogenity within a unit)

¤  When two categories, moderate variety is not possible

Variety in investigations and research

¤  Units where members draw from different pools of information, knowledge, background, etc. will make more effective decisions and deliver more creative products than units whose members draw from the same pool of resources.

¤  Variety as „sociocognitive horsepower“ (Carpenter, 2002: 280)

¤  Units whose members bridge structural holes in an interunit network are likely to be more crative and productive (Burt, 2002)

¤  Heterogeneous teams can match complex competitive challenges and uncertain contexts with a requisite level of cognitive and experiential variety (Ferrier, 2001)

Moderate variety

¤  Can lead to problems of „unshared information“ because members may fail to discuss information not shared by all or the majority of the group (Gruenfeld, Mannix, Williams, & Neale, 1996)

Disparity representation

Minimum Moderate Maximum

Disparity: overview

MEANING AND SYNONYMS

ATTRIBUTE SHAPE AT MAXIMUM

DIVERSITY

ATTRIBUTE EXAMPLES

PREDICTED OUTCOMES

FOUNDATIONAL THEORIES

Composition of (vertical)

differences in proportion of

socially valued assets or

resources held among unit members;

inequality or relative

concentration

Positively skewed distribution, with one member at highest endpoint of the attribute D continuum and others at lowest

Pay, income, prestige, status, decision-making

authority, social power

More within-unit competition,

resentful deviance,

reduced member input, withdrawal

Distributive (in)justice and

(in)equity; status hierarchy;

Tournament; Social

stratification

Disparity summarized

¤  Empirical treatments of disparity in the literature not usual

¤  More common in sociology

¤  Disparity is asymmetric

¤  Disparity is high if 10% of the unit holds a great deal of D

¤  Disparity is low if 90% of the unit holds a great dela of D

Disparity in the research

¤  Variable D as resource, such as pay, power, prestige, status.

¤  Disparity-based research assumes that

1.  Within units, members can differ in the extent to which they hold or receive a share, amount, or proportion of D

2.  Units differ in the extent to which D is distributed among or possessed by their members

3.  Differences among units in the extent to which their D is distributed equally among unit members lead to predictable and important consequences (e.g., fewer member expressions of voice)

Disparity in theory and research

¤  Theories and investigations in disparity are rare

¤  Researches commonly predict that status, power, or pay disparity incites competition, differentiation, and deviance among some unit members (e.g., Bloom, 1999)

¤  Disparity may foster conformity, silence, suppression of creativity and withdrawal (Hollander, 1958)

¤  Marked disparity in team member power diminished team performance by distracting team members from key tasks and interrupting the flow of information

Social capital

¤  Centralization may be viewed as a measure of how unequal the individual actor values are (Wassermann & Faust, 1994):

¤  If the valued resource D is social capital, the structure of a network might illustrate disparity

¤  Social capital is accessed and conveyed through interpersonal ties (Adler & Kwon, 2002)

¤  In a highly centralized unit‘s network structure, network ties are unevenly distributed. Only one or few members are highly central and, thus, highly influential.

Implications of the Diversity Types for Theory Building

Meanings (general)

¤  Separation reflects stand point of position

¤  Variety reflects information

¤  Disparity reflects possession

More precision

¤  For future research, using the correct definition of diversity

¤  Theory building regarding diversity is enhanced by authors‘ explicit specification and justification of the diversity type of interest

¤  Stronger difference when maximum diversity

Why precision?

¤  The same distribution may mean different types of diversity, may need different explanations and interpretations

¤  E.g. differences in growing from minimum to maximum ¤  Maximum separation: unit members polarize

¤  Maximum variety: there is one of a kind

¤  Maximum disparity: unbalance within the unit members

New theoretical approaches

¤  Maybe max. separation leads to subunits identification and weak unit identification

¤  Maybe max. variety does not lead to conflict but to openness toward other ideas, as no one shares the same idea

Guideline

¤  Theory building should careful visualize the shape and consequences of maximum separation, maximum variety and maximum disparity

¤  Focus from differences within dyads to the pattern of differences withing the unit as a whole

Implication for Theories and Evidence About Demographic Diversity

Most frequent demographic variables

¤  Age

¤  Sex

¤  Race/ethnicity

¤  Organization and team tenure

¤  Education level

¤  Educational content

¤  Functional background

Educational content & Functional background

¤  Qualitative differences in the kinds of information held by unit members

¤  They could be conceptualized as variety, as separation or as disparity

Tenure

¤  Researchers may conceptualize it a s separation ¤  „Similarity in time of entrance into the group may facilitate both

attraction and interaction“ (O‘Reilly, Caldwell, & Barnett, 1989: 33)

¤  It can be conceptualized as variety ¤  Differences in experiences, information bases, internal and

external network ties

¤  It can be conceptualized as disparity ¤  Individual tenure can be positively associated with status or

authority within a team ¤  Tenure diversity within a team may result in empowerment or

disempowerment

Gender diversity

¤  It may be conceptualized as separation ¤  When it reflects a distribution of opposing beliefs about the

appropriateness of critical team processes or outcomes ¤  When it is negatively related to cohesion and identification

within a unit

¤  It may be conceptualized as variety ¤  When it may spark creativity and innovation

¤  It may be conceptualized as disparity ¤  „power“ differences ¤  discrimination

Other variables

¤  Such as age, educational level, race, or ethnicity

¤  can be conceptualized as separation, as variety and as disparity

How to define the type of diversity?

¤  It depends on unit members‘ context-dependent interpretation of the variable in question

¤  Organization

¤  Purpose of the study/investigation

¤  Unit members‘ perception

Guideline

¤  A precise specification of diversity type is essential

¤  It allows theorists to defferentiate and compare conceptual models, facilitating understanding and cross-fertilization and paving the way for empirical tests of contrasting conceptions

Methodological Implications of the Diversity Typology: Linking Theory About Differences to Method

Operationalizing Separation

Index Formula Min to max Assumed Scale of measurement

Standard deviation (SD)

√ [Σ(Si – Smean)2/n]

0 to [(u – 1)/2]

Interval

Mean Euclidean Distance

Σ√ [Σ(Si – Sj)2/n]/n

0 to [(u – 1)/√(2)]

Interval

Standard deviation

¤  √ [Σ(Si – Smean)2/n]

¤  Describes within-unit diversity as a sample value

¤  Does not estimate a population parameter

¤  Its denominator contais n (not n-1)

Minimum and maximum SD

¤  Minimum is „0“

¤  Maximum is (u-1)/2 ¤  u is the upper bound of the continuum

¤  E.g.: continuum from 1 to 7, max. SD is (7-1)/2 = 3

¤  Maximum SD does not increase with size of unit

¤  Disadvantage: it cannot be compared across different separation variables

Mean Euclidean distance

¤  Σ√ [Σ(Si – Sj)2/n]/n ¤  Distance of one member i from all the other members j

¤  Minimum is „0“

¤  Maximum measure (u – 1)/√(2) increases with team size ¤  u is the upper bound of the continuum

¤  Also cannot compared across variables with different metrics

Operationalizing Variety

Index Formula Min to max Assumed Scale of measurement

Blau

1-Σpk 2

0 to (K-1)/K

Categorical

Teachman (entropy)

-Σ[pk x 1n(pk)2]

0 to – 1 x ln(1/K)

Categorical

Blau‘s index

¤  Qualitative distinctions for the conceptualization of variety (not distances)

¤  Blau as the most common index for variety

¤  1-Σpk 2

¤  To understand the formula: p is the proportion of unit members in K categories

Peter Blau (1918-2002)

Maximum and mimimum Blau

¤  0 to (K-1)/K

¤  Maximum: members of a team are spread equally (evenness) over the K categories („richness“ of species)

¤  The Blau‘s index reflects the chance that two randomly selected group members belong to different categories

¤  Blau‘s indexes are not directly comparable when the number of categories is not the same across diversity variables (less potential diversity when dyads, e.g., gender)

¤  Maximum possible variety increases with unit size

Teachman‘s (entropy) index

¤  -Σ[pk x 1n(pk)2]

¤  Originally developed by Shannon (1948)

¤  p as the proportion of unit members in the K categories

¤  Index rises as unit members are spread more evenly and across a richer number of V categories

Jay Teachman (1950-)

Maximum and minimum of the Teachman index

¤  0 to – 1 x ln(1/K)

¤  Not comparable across different V-type variables when different number of categories (as Blau index)

¤  Blau more used as it occupies a tidier range of 0 to (a value close to) 1

Operationalizing Separation

Index Formula Min to max Assumed Scale of measurement

Coefficient of variation

√ [Σ(Di – Dmean)2/n] Dmean

0 to √(n – 1)

Ratio

Gini coefficient

(Σ Di – Dj )/(2 x n2 x Dmean)

0 to 1 – (1/n)

Ratio

Coefficient of variation

¤  Formula √ [Σ(Di – Dmean)2/n] Dmean captures the asymmetry that is fundamental to the conceptualization of diversity as disparity: ¤  SD divided by the mean

¤  Disparity reflects distance between unit members and the dominance of those who have higher amounts of attribute D (resource)

¤  Greater disparity when minority holds great amounts of D

¤  In sociology CV used as a measure of income inequality

Maximum and minimum of CV

¤  0 to √(n – 1)

¤  CV at its maximum when n-1 individuals are at the lower bound l of a ratio-level continuum

¤  Max CV sensitive to sample size, teams with less members have less disparity than smaller teams

Lower bound l

¤  If l is „zero“ nobody holds any amount of D and the absolute value of D held by the nth person does not matter, as the person has all of D in the unit ¤  E.g., number of articles published in a team of 8 persons: if 7

had no articles, CV does not change if the 8th person has 10 or 100 articles published

¤  CV: √(8-1)= 2.65

¤  If l > 0, the upper bound u does matter ¤  The further the distance on D that one or a few elite persons

are above the rest of the persons within a unit, the higher the CV

Gini coefficient

¤  Used in finance and economy

¤  Formula(Σ Di – Dj )/(2 x n2 x Dmean) ¤  as the sum of all pairwise absolute differences between unit

members on variable D divided by (2 x n2 x Dmean)

¤  Only appropriate for attributes that have ratio-level properties (ratio: relationship between two numbers of the same kind)

Maximum Gini coefficient

¤  0 to 1 – (1/n)

¤  Depends on n as well

¤  But it should be less of a limiting factor than for CV when it is used in larger vs. smaller groups

On the folly of conceptualizing S or V While operationalizing D

Specifications

¤  Researchers already made mistakes

¤  CV most widely applied diversity index

¤  CV to assess separation or variety is misleading!!!

¤  Researchers sought to assess separation or variety, but assessed disparity using CV

¤  Interpretations can only be wrong

Example

¤  „Commitment to meeting project deadlines“ conceptualized as separation

¤  Teams have equal separation ¤  SD of commitment in Team S1 and S2 = 10

¤  But in Team S1 level of commitment is 40 and Team 2 is 20

¤  If used CV ¤  Team 1 CV= .25

¤  Team 2 CV = .5

Guideline

¤  Conceptualization must be aligned with operationalization

¤  CV is not a universal diversity index

¤  Researchers must specify diversity of research and use the index already mentioned

Accounting for the Mean When Testing for Diversity Effects

SD and CV

¤  Difference: CV is ratio between SD and mean

¤  Attention: mean and SD are two independent (incorrelated) measures

Mean 1 Mean 2 Same SD

Team A Team B

Guideline

¤  Mean is necessary in tests of diversity as separation and disparity

¤  Researchers in the fields of separation and disparity should first statistically control the within-group mean of the attribute

Operationalizing Demographic Diversity: Separation, Variety, and Disparity

Previous studies

¤  Some researchers have often conceptualized one form of diversity and operationalized another one

¤  There is no way of correction after studies

¤  Validities may be called into question

„Overall“ Diversity

¤  Researchers seek to assess overall within-unit diversity averaging diversity indexes arriving to a single index

¤  But: a unit or team itself does not have diversity ¤  An ATTRIBUTE of individuals within units has diversity

¤  It is not possible to sum different indexes ¤  Interpretation is not possible

¤  Thinking of the possibility to add indexes of the same type of diversity (e.g., gender and ethnicity if diversity) ¤  But the two variables should be positively correlated ¤  In the literature no sign of positive correlation

Critical methodological drawbacks to this approach

¤  Overall diversity treats the causal force of each component variable as equal masking effects that might be due mainly to one variable rather than another

¤  Overall diversity measures masks substantive differences among units that have the same overall composite score (e.g., team with 2 whites and 6 African-Americans, or six whites and 2 African-Americans, Blau index is the same)

Guideline

¤  Simple operationalization of overall diversity should be avoided unless ¤  Theoretical motivations for their aggregate effects are clear,

or

¤  Evidence of their convergent validity can be shown.

Perceived Diversity

¤  In some studies units were asked about their perception of diversity

¤  This approach is ok if test theories address perception of differences

¤  Perceived diversity may have more proximal explanatory power than actual diversity

Construct validity

¤  Measures of perceived diversity are not likely to be construct-valid measures of „actual“ diversity

¤  Lack of accurate assessment of the unit members

¤  Perceived diversity ratings are likely to be biased, relative to measures of actual diversity

¤  Ingroup members may overestimate their own unit‘s diversity

Guideline

¤  Measures of perceived diversity should not substitute for measures of actual diversity

¤  Measures of perceived diversity can provide an operationalization of a useful, substantive construct -members‘ perception of unit diversity - that may be related to but is different from actual unit diversity

Instruments for perceived diversity

¤  Researchers may need to develop distinct instruments for perceived separation, perceived variety and perceived disparity

¤  If so, their questions, response formats, and anchors should reflect the diversity type under consideration

Sampling the Full Range: Between-Unit Variance of Within-Unit Diversity

¤  To avoid range restriction, researchers need samples where sufficient between-unit variability in diversity ¤  to allow effects to be revealed

¤  A significant interaction indicates asymmetric separation effects (i.e., the impact of separation depends on the level of S)

¤  Researchers need samples that have different amounts of category richness or unevenness across units

¤  Samples must include ¤  units in which variety is very low and

¤  units in which variety is very high

Future Directions for Theory and Research

Suggestions

¤  The diversity typology presented suggests new fields of research: ¤  Unit-level consequences of within-unit inequality in power,

status, and other valued resources

¤  Diversity and social network

¤  Antecedents of separation, variety, and disparity in organizations

¤  Also research about the relationship among the three diversity types

Relationship among the three types of diversity

¤  Considering

1.  Strategies for disentangling assumptions of demographic separation, variety, and disparity

2.  Relationships among and interactive impacts

3.  Multilevel diversity effects

Disentangling separation

¤  How to proceed when researchers are interested in demographic diversity?

¤  Answer: Test the theoretical assumptions specific to each diversity type

¤  Examination of the individual-level relationship of the variables within units required

Prior analysis

¤  Researchers can resolve uncertainty analyzing more concretely in order

¤  to test the fundamental and distinctive assumptions underlying diversity as separation, as variety, and as disparity

¤  Payoff: moving forward deciphering the nature and effects of demographic diversity

Relationships Among and Interdependent Effects of Diversity Types

¤  Separation, variety, and disparity may be causally related

¤  They may have consequences for the unit outcomes

¤  Diversity of one type can engender divesity of a second type

Separation

¤  Separation can engender variety ¤  E.g., if unit members are sharply separated, they might be

motivated to get new information to support their position, including seeking out others to support them

Variety

¤  Variety can engender separation ¤  Variety in disciplinary training may lead to separationin

support for qualitative research than others

¤  Variety can lead to separation and than to conflict (but not always)

Disparity

¤  Disparity can engender variety and/or separation

¤  Disparity may cause separation in beliefs, attitudes, or values related to unit processes and outcomes that might dislodge the current status hierarchy

¤  Disparity may cause variety ¤  Unit members that have less status, power, and influence are

likely to form coalitions with others who are similarly less powerful

Diversity Moderating Diversity

¤  The three diversity types may interact to influence unit outcomes

¤  Ideas about joint effects of within-unit demographic differences (Lau and Murnighan, 1998): in order to become faultlines within a unit, the diversity attributes in question must: 1.  Be apparent to unit members

2.  Covary or coincide strongly within the unit

3.  Create a small number of homogeneous subgroups of factions

Forming a faultline

¤  The correlation of two attributes within a unit insufficient to form a faultline ¤  E.g., task satisfaction and organizational commitment: their

joint occurrence will not necessarily divide the unit into two or more clearly differentiated factions

¤  But: as the number of factions grows, faultlines will weaken

¤  Strong faultlines occur within a unit, when ¤  two or more variables have coincidentally maximum

separation or disparity, ¤  or both, ¤  but also when they are coupled with only modest variety

Variety and Faultline

¤  When variety is high, faultlines will weaken

¤  As unit members cannot be divided into two or just a few sharply divided subsets

Effects of separation

¤  Low separation may allow a team to realize the benefits of team members‘ variety of expertise and experience

¤  Team with no separation in member goals, attitudes, or beliefs but high in variety may fail to use team‘s ideas

¤  Minimal separation of attitudes within the unit may trigger ¤  constructive debate and discussion,

¤  stimulating members to reveal to one another their distinctive knowledge and expertise

Joint Impact of the Three Forms of Diversity

¤  Example: ¤  Research team: Separation high (attitudes towards

paradigm study), no/moderate D or V(number of publications)

¤  But if D and V were higher than S, the team would have conflict, but able to reach across factional boundaries to leverage its variety

Multilevel Influences

¤  Diversity as a multilevel construct ¤  But most studies of diversity are single-level studies (unit-level)

¤  One possible approach: ¤  move up a level of analysis and consider diversity across

units within organizations along the S,V, and D attribute in question

¤  Effects of within-unit diversity may depend on the composition (diversity) of the organizational context

Complementary multilevel approach

¤  Consider the implications of diversity types for the experiences and reactions of individuals within units

Conclusion

¤  Considering the three types of diversity in research

¤  Complementary as important factor approaching diversity measurement

¤  The three types of diversity differ in their substance, shape, maxima, and implications

¤  Researchers should specify diversity types

¤  Key question: „What‘s the difference?“

¤  Result: cleaner, more cumulative understanding of diversity in organizations

Thanks! Elena Tecchiati

Elena.tecchiati@cdc-leadership.com