From diversity to performance: the role of positive and negative team processes in cross-border teams

Abstract

In the context of globalization and the increasing reliance on cross-border teams within multinational corporations, cultural diversity has become both a valuable resource and a significant managerial challenge. While diversity can enhance knowledge sharing and innovation, it may also create communication barriers and interpersonal conflict. However, prior studies have often examined either the positive or negative effects of diversity separately, resulting in a fragmented understanding of diversity dynamics in cross-border teams. Therefore, this study aims to investigate the role of positive and negative team processes in the relationship between crossborder team diversity and team performance. The study develops an integrated research model grounded in the Categorization–Elaboration Model (CEM), information-processing theory, and social categorization theory. Data were collected from 306 employees working in multicultural and cross-border teams at A.P. Moller – Maersk through an online survey using seven-point Likert scales. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to test the proposed hypotheses and research model. The findings indicate that cross-border team diversity positively influences information elaboration and team creativity, which subsequently enhance team performance and innovation outcomes. At the same time, diversity also increases relationship conflict and miscommunication, which negatively affect team performance. This study contributes to the literature by providing a more comprehensive understanding of the dual effects of cultural diversity in cross-border teams. The findings also offer managerial implications for multinational organizations in managing multicultural teams more effectively and leveraging diversity as a strategic advantage