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Re-examining Diversity as a Double-edged Sword for Innovation Process
Presenter: Siran ZhanCo-authors: Ying-yi Hong, Namrita Bendapudi
Current Inconsistencies
• Ethno-cultural diversity and innovation– Mixed findings!
• 2 theoretical mechanisms– Social categorization (Tajfel & Turner, 1986):
• Ingroup vs. outgroup, conflict• Negative impact on creativity
– Information processing (Cox & Blake, 1991; Dahlin, Weingart, &
Hinds, 2005):
• Cognitive diversity (Horwitz & Horwitz, 2007)
• Positive effect on creativity
Conceptual Mix-up
Figure 2. Two teams with identical degree of ethnic diversity but differing degrees of cultural diversity. The distance in between the circles representing ethnic groups denotes their cultural distance or dissimilarity.
Korean-American
Vietnamese-American
Team A
Chinese-American
Korean-American
Mexican-American
Team B
German-American
Research Objectives
• Objective of the present study:– Conceptually distinguish between diversity of
ethnic grouping categories and diversity of culture.– Theoretically map these two aspects of diversity
onto two distinct mechanisms via which diversity influences creativity and innovation.
– Empirically tease apart these two aspects of diversity and test their respective effects on the innovation process at the national level.
Theoretical Model
Innovation Input Innovation Output
Ethnic Diversity
Cultural Diversity
Ethnic Polarization
Multiplicity arising from ethnic categorical variety.
Richness arising from cultural distance or dissimilarity among groups.
Extent to which the population is divided into sizable sub-groups.
Aspects of the environment conducive to innovation within an economy.
The results of innovative activities within the economy.
Theoretical Model
Innovation Input Innovation Output
Ethnic Diversity
Cultural Diversity
Ethnic Polarization
(-)
(-)
(+)
(-) (-)
(+)
(+)
Method
• Empirically tease apart ethnic and cultural diversity: Fearon’s (2003) dataset of ethnic and cultural fractionalization– Ethnic fractionalization: blau’s index– Cultural fractionalization: captures linguistic distance
• We removed its shared variance with ethnic fractionalization
• Polarization index: Montalvo & Reynal-Querol (2005)
• Global Innovation Index• Control: total value add accounted for by industries
typically generating large numbers of innovations, democracy, geographical conditions
Results
Innovation Input Innovation Output
Ethnic Diversity
Cultural Diversity
Ethnic Polarization
-.31*
.29*
.08
-.30*
1 .36**
Figure 3. Simple slope plot with ethnic polarization as the moderator variable on the cultural diversity-innovation output relationship for year 2014. High polarization and low polarization groups were created using median split.
Theoretical Contribution
• Conceptually distinguished two aspects of diversity: ethnic categorical variety and cultural distance or dissimilarity
• Empirically demonstrated the contrasting effects of ethnic diversity and cultural diversity
• At the macro level, using a process model to understand when and how diversity affects innovation
Managerial Implications
• Successful diversity management requires minimizing the negative effects of ethnic diversity while maximizing the positive effects of cultural diversity.
• How to achieve that?– Override sub group identification and interests with
shared identity and interests– Form teams with members from distant cultures– Avoid polarized group structure, e.g., in merger and
acquisition
