R&D Team Diversity and Performance in Hypercompetitive Environment

Research summary: This article examines the effects of an R&D team's composition on its performance outcomes in hypercompetition. The fundamental feature of firms in hypercompetitive settings is that they are constantly challenged to improve their competitiveness in a relentless race to outperform one another. Analyzing a unique data set from the Formula 1 motorsport racing industry, we find an inverse U-shaped relationship between team diversity in task-related experience and performance an important result that diverges from well-established theories developed in more stable environments. Fundamentally, we show that the role of R&D team experience diversity varies depending on the size of the organizations in which R&D teams operate. While we find a moderating effect for firm age, this effect is not as robust as that of firm size. Managerial summary: This article examines the relationship between R&D team composition and performance in fast-moving environments. Firms in these environments are constantly challenged to improve their competitiveness by outperforming one another. Analyzing a unique data set from the Formula 1 motorsport racing industry, we find that a team's diversity in job-related experience increases its performance up to a certain extent. Once R&D teams become too diverse, performance decreases because communication and coordination become more difficult. We also show that the role of R&D team diversity varies depending on the size of the organizations in which R&D teams operate. Overall, our findings provide several novel implications for the strategy, innovation, and team literatures. Copyright (c) 2016 John Wiley & Sons, Ltd.


Published in:
Strategic Management Journal, 38, 7, 1455-1477
Year:
2017
ISSN:
0143-2095
Keywords:
Laboratories:




 Record created 2017-03-13, last modified 2018-09-13


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