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Diversity in Organizations

Author

Listed:
  • Mello, Antonio S.
  • Ruckes, Martin

Abstract

This Paper develops a theory of diversity in work groups within organizations. Diversity is determined by the group members' dfferences in backgrounds. Diverse teams possess more information than homogeneous ones. If beliefs and preferences are expressed openly, diverse teams can reach better decisions. However, due to their members' heterogeneous backgrounds diverse teams are more prone to conflict. The Paper shows that the relative performance of heterogeneous and homogeneous groups depends on the leader's authority to make personnel decisions, especially whether the leader can replace team members. A number of implications follow regarding the shaping and composition of organizations.

Suggested Citation

  • Mello, Antonio S. & Ruckes, Martin, 2001. "Diversity in Organizations," CEPR Discussion Papers 2673, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2673
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    Citations

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    Cited by:

    1. Costa, Dora L. & Kahn, Matthew E., 2006. "Forging a New Identity: The Costs and Benefits of Diversity in Civil War Combat Units for Black Slaves and Freemen," The Journal of Economic History, Cambridge University Press, vol. 66(4), pages 936-962, December.

    More about this item

    Keywords

    Economics of organizations; Diversity; Authority; Conflicts;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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