Common sense suggests that leadership should affect the relation between diversity and group performance, but common sense is frequently wrong and invariably imprecise. Fortunately, scientific research can be used to evaluate conclusions based on common sense. A nice illustration is provided in a recent paper by Lisa Nishii of Cornell University and David Mayer of the University of Michigan.
As Nishii and Mayer point out, past research has found inconsistent relations between group diversity and performance. They propose that this inconsistency is due in part to differences in leader behavior.
Specifically, when managers develop good relationships with all their subordinates, the negative effects of diversity are diminished, eliminated or reversed. Although those of us in the diversity arena tend to emphasize the positive effects of diversity, it is important to acknowledge that diversity also may have negative effects. Nishii and Mayer point out that diversity can stimulate in-group favoritism, relational conflict, miscommunication, power imbalances, and the like, all of which may motivate group members to leave. Thus, they explore the relation between diversity and voluntary turnover—and how this relation can be affected by leader behavior.
Leader behavior can be analyzed and described in many ways. Nishii and Mayer adopt the well-established leader-member exchange, or LMX, theory of leadership. Briefly, LMX theory posits that leader-employee relations vary in their quality. With some employees, leaders develop high-quality social exchange relationships. With other employees, the relationships are of lower quality and limited to economic exchanges. Nishii and Mayer argue that negative effects of diversity should be diminished when the average level of LMX is high (on average, the leader has high quality relations with subordinates), when LMX differentiation is low (the leader has similar relations with all subordinates), and especially when the average level of LMX is high and the differentiation is low (the leader has high quality relations with all subordinates).
