Demographic Diversity for Building an Effective Entrepreneurial Team : Is it Important?

Entrepreneurs are usually considered as heroic individuals; but teams of entrepreneurs are increasingly common, especially in high-technology areas. However, demographic diversity in entrepreneurial teams is not widely studied. This article focuses on demographic diversity in entrepreneurial teams and its effect on team effectiveness. Data is drawn from interviews with 174 entrepreneurs representing 79 high-technology entrepreneurial teams. Studied are age, gender, functional background, team-level cognitive comprehensiveness, and team commitment. Found that team diversity by itself does not positively affect the performance of entrepreneurial teams. Instead, team commitment and cognitive comprehensiveness are positively and significantly related to team effectiveness. Nor does demographic diversity significantly contribute to cognitive comprehensiveness or team commitment. Effective teams have high member commitment, use diverse perspectives on problems, use a variety of potential solutions, and use various criteria for evaluating solutions. Findings suggest scholars and practitioners must concentrate on team processes that build commitment and promote comprehensiveness in team decision making. Teams must create an environment of trust and loyalty for improving team commitment. (TNM)