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The belief that organizations work best if "the boss" simply gives orders and the hired help blindly obeys has long been discredited as the best way to run a business - not that some bosses wouldn't love to have that sort of working arrangement today. Unfortunately for them, faced with fast-changing environments and increasingly complex tasks, businesses have discovered the value of adopting team-based work structures in which the shared knowledge and abilities of individual team members have the opportunity to influence each other dynamically.
Even more so when team members comprise people of different ages, backgrounds and experiences and consequently have a greater common pool of knowledge, with everyone bringing something unique to the discussion. However, there is a paradox with demographic diversity. Researchers have argued that diversity might represent a "double-edged sword" in that the degree to which group members differ from each other might have both positive as well as negative consequences.
Positive consequences have been explained by an information-processing approach which states that diversity can be beneficial in teams. This may occur as knowledge and information are more likely to be non-overlapping among the team members, which can lead to increased innovation and team performance, or be used to find creative solutions to problems. In contrast, negative consequences have been explained by social identity theory and self-categorization processes, or the similarity-attraction paradigm which argues that the activation of diverse group belongingness may lead to differences in values and fault lines. These may make communication more difficult and...