Do Others Think You Have a Viable Business Idea? Team Diversity and Judges' Evaluation of Ideas in a Business Plan Competition

Participants in a business plan competition organized by a Singapore university are studied in order to determine the degree to which team diversity influences external evaluation of the team's business ideas.Following a review of the literature on team diversity, it is hypothesized that the business ideas of larger groups that feature task-related diversities (such as education backgrounds and levels) will receive higher external evaluation.Other hypotheses predict that non-task-related differences (such as age, gender, and employment status) will have a negative impact on team outcomes.A final hypothesis predicts that smaller teams will reap more benefits from diversity than will large groups. Each of the 154 teams participating in the Singapore competition submitted three- to five-page descriptions of their business ideas, as well as basic personal information. According to analyses of these documents, diversity accounts for only 21% of the variation in external evaluations.Most of the hypotheses are supported by the data: task-related diversity is related to higher evaluations, while non-task-related diversity is related to lower evaluations. Surprisingly, however, larger teams receive better evaluations when task-related differences, particularly education background differences, are present. (SAA)