On entrepreneurial courses, women students benefit from women mentors being assigned to their teams. Regarding team diversity, when imposed across multiple dimensions, communication and conflict costs might outweigh potential benefits arising from a more diverse skill set.
Students are divided into teams that vary in terms of the socio-demographic diversity of their members to see how team diversity affects team performance. Teams are assigned either a woman or a man section leader, so some students have same-gender leaders, while others have different-gender leaders.
A required course on an MBA programme. Throughout the course, students are required to design and launch a real microbusiness in teams of five to seven people. Teams are supervised by a section leader, who is also responsible for teaching the entrepreneurship course. Two months into the semester, students present their projects to faculty members. If the project is rated as achievable by the first panel, it’s also presented at the end of the semester to a panel of judges from the relevant industry. The panel ranks all the projects based on team performance and the quality of the idea.
- To maximise team and individual performance on the course
The course was held at a top business school in a city considered to be a worldwide entrepreneurship hub.
First-year MBA students at a top business school. Most students have worked in finance or consulting prior to business school. Over 30 per cent of them worked in venture capital or technology-related areas after graduation, so they represent a sizeable labour inflow for the entrepreneurial ecosystem. Participants are ethnically diverse and 40 per cent are women.
Teams vary in two dimensions:
- Team diversity: Teams vary in how diverse they are in terms of the gender, ethnicity, education and work experience of their members.
- Role model: Teams and their members are assigned either a woman or a man section leader, so some participants have a same-gender mentor, while others have different-gender mentors.
- Team performance was negatively affected by higher ethnic diversity across members, with this effect being driven by the intersection of ethnicity and gender. The effect vanished when individuals were in gender and ethnically diverse groups by choice.
- Reducing educational background diversity also increased team performance, while no effects were found for gender and industry diversity when assessed uni-dimensionally.
- Women performed better when they were assigned a woman section leader.
- In order to exploit the benefits of diversity in entrepreneurship, policymakers need to think about strategies that go beyond forcing diverse team formation – for instance, policies aimed at eliminating existing biases against underrepresented groups.
- Where possible, young women should be assigned women mentors and supervisors.