Entrepreneurial Team Diversity and Performance: An Investigation of What and How

Abstract

In entrepreneurship research there is growing interest in the diversity of entrepreneurial teams because of their potential to shape new business growth. However, research on the relationship between different type of team diversity and entrepreneurial team performance remains inconsistent and inconclusive; especially empirical studies exploring the effect of personality diversity on entrepreneurial team performance are very rare. Using 144 teams in a university entrepreneurial park, this study investigated: (1) what type diversity affects entrepreneurial team performance; and (2) how does the effect occur. Three major findings emerged from this study. First, functional specialty diversity can improve entrepreneurial team performance. Skill diversity can improve entrepreneurial team performance only when leadership is shared among team members. Second, team members’ personalities matter; the effects of personality on entrepreneurial team diversity differ across the Big-5 personality traits. Third, shared leadership mediates the personality diversity - performance link. These findings advance research in entrepreneurship, groups and teams, and shared leadership, and provide practical implications for entrepreneurs regarding team composition as well.