How Does Functional Diversity Lead to Team Innovation?

Abstract

Optimal conditions for team innovation are critical for organizations to adapt to current fast-paced market. Consequently, having a good understanding on the processes facilitating these conditions is important both for researchers and practitioners. The current study aiming to shed light on these processes tests the knowledge integration theory of team innovation proposed by Van Knippenberg (2017). Specifically, it examines the role of knowledge resources of teams on team innovation, by investigating how functional diversity leads to team innovation through potential mediation of information elaboration and moderation of shared meta-knowledge. The team level analysis with a multi-sourced data obtained from 37 teams revealed a significant negative relationship between functional diversity and information elaboration, and a significant positive relationship between information elaboration and team innovation. Furthermore, when the indirect effect of mediation was taken into account and the information elaboration was controlled for, the direct effect between functional diversity and team innovation became positive and significant. The implications regarding the variables that reflect the knowledge integration perspective of team innovation, have been discussed to gain a better understanding of an innovative team’s cognition and to guide future research. On a practical level, teams are advised to incorporate information elaboration as a tangible step into innovation processes, highlight pro-diversity beliefs and contributions by each subgroup to minimize negative effects of functional diversity and support development of shared meta-knowledge within the team.