Value diversity and performance in small groups

This paper aims to contributes to the literature on team diversity, both in general as well as relating to Chinese managers. Previous studies largely focused on the link between work group heterogeneity in terms of different ages, genders or nationalities of the members and performance. It adds to this body of knowledge by investigating the relationship between the composition of value priorities of team members and achievement, team identity and intra-team communication. The assumption behind this is that differences in value priorities represent the underlying latent source for team diversity, which is only insufficiently represented by the above observable demographic variables.,To test for optimal value priority composition, a series of experiments was conducted with 29 project teams and four team types comprising 174 Chinese expatriates at a German business school.,The general result is that (in the long run) highly heterogeneous teams and (in the short run) highly homogeneous teams outperform moderately heterogeneous work groups. However, the major contribution is that the relation between value diversity and performance has a modified upright U-shaped format. It specifically requires the attempt to close as many value gaps as possible.,This new insight, which has not been adequately explained by previous studies, results from the existence of a circular structure in which values are organised. Based on this specific outcome, the paper provides recommendations for practicing managers both in China and elsewhere, admits limitations and paves the way for future research avenues.