Top Management Team Nationality Diversity is Good

I have mentioned team faultlines as a determinant of teams before. Among others it was determined that clear faultlines in nationality diversity is less effective. Recent research in the Strategic Management Journal reexamines the relationship between top management team (TMT) diversity and firm performance. It turns out that a specific form of TMT diversity is important: nationality diversity

There is a positive relationship between nationality diversity and firm performance.

This becomes stronger in:

1. Longer tenured teams;
2. Teams working in internationalized firms;
3. Teams working in growth markets.

The combination of these two research insights is that nationality diversity is beneficial, creating clear ‘nationality’ camps (faultlines) in your team is not.