Situational Leadership Manage Faultline: A Moderated Model ofFaultlines, Leadership Behavior and Task Interdependence

Ziwen Sheng, Seungmin OhKrannert School of Management, Purdue University

Abstract

In this study, we explored the characteristic and the effect of demographic faultline as well as how to deal with the negative effect of faultline. We found FLSPosition, FLSAge and FLSOverall had an inverted U-shape relationship with group size. Faultline strength reached the highest when group size is ranging from 12 to 16. Faultline had a negative effect on job satisfaction, and procedural justice helped reduce the negative effect on job satisfaction. Faultline also had a negative effect on communication quality, which was moderated by change-oriented leadership and relation-oriented leadership. We also found a significant three-way interacting effect of task-oriented leadership, task interdependence and faultline that task-oriented leadership was more effective for teams with low task interdependence than for teams with high task interdependence. We compared two main faultline indexes, and we found some inconsistent result. Further studies need to develop better measures to reflect the dynamics of faultline.

IntroductionTeam diversity has caught much attention over the last several decades. From the point of information-processing, organizations can take advantage of diverse knowledge, skills and ability to solve complex problems (e.g., Jackson, Mary & Whitney, 1995). However, people also tend to form ingroup - outgroup bias based on demographic attributes (Sawyer, Houlette & Yeagley, 2006), which will damage the team process and thus inhibit the benefits of diversity. Lau & Murnighan (1998) proposed faultline to explain the negative effects of team diversity. More and more research went beyond lab-setting studies (Phillips et al., 2003; Sawyer et al., 2006) to examine the influence of faultline on team dynamics at organizational field (Gibson & Vermeulen, 2003; Kunze & Bruch, 2010; Bezrukova et al., 2012). Researches found demographic faultlines directly impaired team functions (Molleman, 2005), increased conflicts (Lau & Murnighan, 2005; Li & Hambrick, 2005; Pearsall, Ellis & Evans, 2008), and inhibited communication (Thatcher, Jehan & Zanutto, 2003; Jehn, Northcraft, & Neale, 1999). A group of moderators were found to mitigate the negative effects of faultlines on performance (Thatcher & Patel, 2012). One set of moderators are about individual characteristics, such as salience of subgroup differences (Meyer, Shemla, & Schermuly, 2011), prodiversity beliefs (Homan et al., 2007; van Dick et al. 2008; Homan et al., 2010). Another set of moderators are team characteristics, such as task autonomy (Molleman, 2005), interdependence (Schippers et al., 2003; Rico et al., 2012), and shared objectives (van Knippenberg et al., 2010). Lastly, leadership is also important in dealing with faultlines (Shin & Zhou, 2007; Kunze & Bruch, 2010).

However, no studies have examined the moderating effect of organizational justice on faultlines relationship with performance. Nor did they examine the interacting effect of leadership and team characteristics on faultlines dynamics. However, organizational justice is very important in team process. Organizational justice is effective to improve morale and deal with negative emotions. Examining the moderating effect of organizational justice can help learn how to lessen the negative effect of faultlines. Also knowing the situational use of leadership can manage faultlines better. Besides, we have two other minor objectives in this study. First, we want to know the current characteristic of faultlines in real organization, such as the distribution of faultline strength and the relation between group size and faultline strength. Second, we want to compare different faultline measures in our study. Faultline measures can just tell us dormant faultline strength, and it may not be definitely activated. The comparison can let us know the reliability of the measures. Both minor objectives aim at generalizing conclusions to other organizations.

Concept of faultlineFaultlines are defined as hypothetical dividing lines that split a group into relatively homogeneous subgroups based on the group members demographic alignment along multiple attributes (adopted from Lau and Murnighan 1998). Lau and Murnighan (1998) used social identity and self-categorization theories to explain the underpinning of group faultlines. Any salient attributes can form subgroup identity. Members who share the identity will perceive themselves as in-group members and others out-group members (Tajfel & Turner.1979). The formation of subgroups will generate conflict and decrease creativity (Lau & Murnighan, 1998). Team members may form demographic faultlines based on ethnicity, gender (van Knippenberg, De Dreu & Homan, 2004), or informational faultlines based on knowledge and background (Bezrukova et al., 2009).

Faultline also varies in strength. The strength of a faultline indicates the level of similarity within potential subgroups and its width the extent of dissimilarity between them (Lau & Murnighan, 1998; Molleman, 2005). The strength of group faultlines depends on three compositional factors: (1) the number of individual attributes apparent to group members, (2) their alignment, and, as a consequence, (3) the number of potentially homogenous subgroups. Group faultlines increase in strength as more attributes are highly correlated, reducing the number and increasing the homogeneity of the resulting subgroups (adopted from Lau and Murnighan 1998). For example, a convergent diversity structure in a group (all men are young and all women are middle-aged) has higher faultline strength than a cross-cut diversity structure (men and women have both young and middle-aged members). Cross-cut diversity structures were found to have higher information sharing and improved decision-making than convergent structures (Sawyer et al., 2006; Homan et al., 2007). When group size increases, it is likely to have more convergent diversity attributes within subgroups. More people in the subgroup can support each other and that will make the categorization more salient and thus increase faultline strength. When group size increases to certain extent, subgroups are likely to share more diversity attributes which will decrease faultline strength. Furthermore, when group size is very large, it is likely to form more than two subgroups according to optimal distinctiveness theory. When subgroups increase, faultline strength goes down. As a result faultline strength will first increase and then decrease with group size.

H1: The relationship between group size and demographic faultline will be curvilinear (inverted U-shaped)

Faultline and Team ProcessResearch found that demographic faultline increased task conflict and relationship conflict (Thatcher et al., 2003; Li & Hambrick, 2005), decreased morale and performance (Gibson & Vermeulen, 2003; Molleman, 2005). When subgroups form, discrimination and conflicts will increase between subgroups. Ingroup members dont like outgroup members, and will take a bias when processing the opinions from outgroup members. The pessimistic perception of their opinions being discriminated will also decrease their intention to share information and opinions in the group. As a result, team members may not be willing to tell their opinions frankly in the group and be more willing to discuss within subgroups. When conflicts increases and team process is impaired, its hard for team members to cooperate well to finish tasks. Thus the conflicts and bias will further decrease job satisfaction.

There is a debate whether dormant faultline will cause these negative effects. Dormant faultline is a hypothetical faultline that is calculated based on group diversity configuration. Pearsall et al. (2008) found that gender faultlines that were not activated had no negative effect on creativity. Also Jehn & Bezrukova (2010) pointed out groups with activated faultlines were more likely to form coalitions, have high levels of group conflict. Nether less, over the effects of group diversity, dormant faultline strength still explain additional variance with respect to group performance (12%), group satisfaction (12%), task conflict (8%), process conflict (9%), and relationship conflict (12%) (adopted from Thatcher & Patel, 2012). The activation of faultlines depends on the salience of subgroup differences (Homan et al., 2008; Meyer et al., 2011) and triggering activities (Chrobot-Mason et al., 2009). It is reasonable that the salience of subgroup differences increases with dormant faultline strength. So, dormant faultline still has effect on team process. Furthermore, although there is only one faultline at one period (Lau & Murnighan, 1998), different faultlines together may influence final outcomes. For example, an affirmative activity may activate gender faultline and later age faultline may be activated by distributive outcome. Different faultlines influence team dynamics over the time. Based on this argument, we propose that different faultlines may each explain some part of the team process.

H2: Demographic faultlines will be negatively associated with job satisfaction.H3: Demographic faultlines will be negatively associated with communication quality.

Faultline and Organizational JusticeOrganizational justice is always an important factor influencing a lot of organizational outcomes (Moorman, 1991; McFarlin & Sweeney, 1992; Masterson et al., 2000), such as job satisfaction, commitment and performance (Colquitt et al., 2001). There are mainly three types of organizational justice: distributive justice, procedural justice and interactional justice. Later interactional justice has been found to consist of two specific types of interpersonal treatment, interpersonal justice and informational justice. Distributive justice is the judgments regarding the fairness of outcomes or allocations; procedural justice is the judgments regarding the fairness of process (Cropanzano et al., 2001; interpersonal justice reflects the degree to which people are treated with politeness, dignity, and respect by authorities or third parties involved in executing procedures or determining outcomes; informational justice focuses on the explanations provided to people that convey information about why procedures were used in a certain way or why outcomes were distributed in a certain fashion (Colquitt et al., 2001).

There were two approaches explaining the effects of organizational justice. One is instrumental model which posits that individuals are motivated to seek control and controlling procedures can serve to maximize the favorability of outcomes. Another is relational model which states organizational justice indicates a positive, full-status relationship with the authority figure and group members and promotes within-group relationships. Later Masterson et al. (2000) found interactional justice affected supervisor-related outcomes via the mediating variable of leader-member exchange and procedural justice affected organization-related outcomes via the mediating variable of perceived organizational support.

Organizational justice can be perceived both from organization and supervisor. Justice form organization influences organizational-related outcomes, while justice from supervisor influences supervisory outcomes (Cropanzano et al., 2001). Perceptions of procedural justice from supervisor can increase commitment and job satisfaction through perceived supervisory justice because employee have more control of the working process, which helps deal with the pressure. Perceptions of informational justice from supervisor can increase commitment and job satisfaction through leader-member exchange because more feedback from supervisor can promote subordinate relationship and make them more committed to the team and goals. If leaders in the team improve organizational justice and further increase team identification, faultlines will be less likely to lead to negative group processes based on stereotyping and outgroup biases (Jehn & Bezrukova, 2010). When members have strong team identification and high level of commitment, they will hold the team goals as priority and work toward a common performance goal without process loss, mitigating the negative effect of faultline on job satisfaction

H4 (A): Informational justice will moderate the relationship between demographic faultline and job satisfaction, such that the effect of demographic faultline will be lower for teams with high informational justice than for teams with low informational justice.H4 (B): Procedural justice will moderate the relationship between demographic faultline and job satisfaction, such that the effect of demographic faultline will be lower for teams with high procedural justice than for teams with low procedural justice.

Leadership BehaviorLeadership has been identified as an important moderator that mitigates the negative effect of faultlines on team performance (Shin & Zhou, 2007; Kunze & Bruch, 2010). They found transformational leadership influence team process through articulating a compelling vision, stimulating change, and considering team members needs. When transformational leadership builds a new task-related identity, the negative influence of faultline is compromised. However, few studies identified the situational effect of leadership in faultline. Shin & Zhou (2007) failed to found the interacting effect of transformational leadership, team tenure and educational specialization heterogeneity.

Actually transformational leaders exhibit four behaviors: (a) individualized consideration, understanding and appreciating different needs and viewpoints within the group, (b) intellectual stimulation, questioning of assumptions, reframing of problems, and thinking about concepts using novel paradigms, (c) inspirational motivation, energizing group members' desire to work cooperatively to contribute toward the collective mission, and (d) idealized influence, broader consideration of perspectives, moral issues and implications of one's actions (adopted from Sosik, Avolio & Kahai, 1997). In order to examine the effect of leadership, its better to analyze through behavior approach because each set of behavior may exert different influence on team process. For example, Intellectual stimulation and Individualized consideration have higher leadership effectiveness than management by expectation and contingent reward (Lowe, Kroeck & Sivasubramaniam, 1996). Lambert et al. (2012) found that the fit between leader consideration and initiating structure needed and received is very important; excess levels of consideration were associated with favorable attitudinal outcomes, while excess levels of initiating structure were associated with unfavorable attitudes.

Yukl (2005) analyzed previous research and summarized three metacategories of leadership behavior: task-oriented behavior, relations-oriented behavior and change oriented behavior. Task-oriented behavior is primarily concerned with accomplishing the task in an efficient and reliable way. The behaviors include short-term planning, clarifying roles and objectives, and monitoring operations and performance. Relations-oriented behavior is primarily concerned with increasing mutual trust, cooperation, job satisfaction, and identification with the organization. The behaviors include supporting, developing, and recognizing. Change-oriented behavior is primarily concerned with understanding the environment, finding innovative ways to adapt to it, and implementing major changes in strategies, products, or processes. The behaviors include influencing organizational culture, developing a vision, implementing change, increasing innovation and learning.

Change-oriented leadership (COL) shares some common characteristics with transformational leadership and charismatic leadership. Change-oriented leadership forms a consolidated identity by developing a vision and uniting team members towards the goal. A consolidated identity will lessen the salience of diversity attributes and thus mitigate the negative effect of demographic faultline on communication quality. Relations-oriented behavior (ROL) directly deals with conflicts through building trust and improving cooperation. Leader consider individual members needs and thus individual views are valued and individual communication is promoted (Shin & Zhou, 2007).Team leader acts as an intermediary to manage the conflicts and increase the communication quality. Task-oriented leadership (TOL) focuses on clarifying roles and objectives. When team member is clear about their roles and objectives, the clear goal with guide their behavior to generate more communication and cooperation behavior to complete the task.

H5 (A): Change-oriented leadership will moderate the relationship between demographic faultline and communication quality, such that the effect of demographic faultline will be lower for teams with high change-oriented leadership than for teams with low change-oriented leadership.H5 (B): Relation-oriented leadership will moderate the relationship between demographic faultline and communication quality, such that the effect of demographic faultline will be lower for teams with high relation-oriented leadership than for teams with low relation-oriented leadership.H5 (C): Task-oriented leadership will not moderate the relationship between demographic faultline and communication quality, such that the effect of demographic faultline will be low for teams with high task-oriented leadership than for teams with low task-oriented leadership.

Task InterdependenceTeam characteristic is an important factor in diversity and team research. Webber & Donahue (2001) stated that team type served as moderator between diversity and performance. Members of top management teams, project teams, and action/involvement teams, for example, are more likely to be heterogeneous on highly job-related attributes such as functional and educational background, but are less likely to be heterogeneous on less job-related attributes such as age, race, and gender. The opposite applies to production teams. However, they still only focused on the diversity attributes, not task structure. Task structure provides an orientation for how members make decisions (Mitchell & Silver, 1990; Lam, 1997). With different task structures, the group faces different procedural requirements for accomplishing its objectives. van Knippenberg et al. (2004) pointed out task requirement moderated the relationship between diversity and performance. When task required information processing and creative solution, diversity contributed to team performance. Task interdependence could explain the inconsistent relationship between faultline and team performance. For example, Homan et al. (2007) found faultline has positive effect on performance, while Jehn and Bezrukova (2010) found the opposite. According to definition, desert survival (Homan et al., 2007) is a low interdependence task, while tower building (Jehn & Bezrukova, 2010) is a high interdependence task.

Task interdependence indicates the extent to which the projects task requires working with other areas (Stewart & Barrick, 2000). Task interdependence suggests that coordination, joint decision making, and problem solving are necessary in order to complete the tasks. Cooperation and competition theory (Deutsch, 1949) is usually used to explain the mechanism of task interdependence. Cooperation and competition theory proposes that how individuals goals are aligned will determine their interaction style, which then influences their performance. Cooperation and competition theory classify situations into cooperative and competitive situations. In a cooperative situation, team members goals are positively related. Task requires members to cooperate. Studies of task interdependence have demonstrated that higher levels of task interdependence result in more communication, helping, and information sharing than do individualistic tasks. While in a competitive situation, team members goals are negatively related. Each member wants to prove he is the most competent. Anyones success means others failure. Situation will force them to compete with each other. For example, salesman will compete with each other for the highest sales, and researchers need to cooperate with each other to finish the task. High task interdependence forms a consolidated goal for team members, making team members generate more discussion and coordination to accomplish the task (De Dreu, 2007), which in turn decreases the conflicts and bias. Thus the negative effect of demographic faultline on communication quality will be mitigated by high task interdependence.

H6: Task interdependence will moderate the relationship between demographic faultline and communication quality, such that the effect of demographic faultline will be low for teams with high task interdependence than for teams with lower task interdependence.

Task Interdependence and Leadership BehaviorThe situational approach emphasizes the importance of contextual factors that influence leadership process. Leadership behavior should fit with contextual factors such as task structure to reach leadership effectiveness (Lambert et al., 2012). The three metacategories of leadership behavior should be compatible with task interdependence to reach leadership effectiveness, although each leadership behavior is not clearly linked to a different outcome (Yukl, 2005). The key is how to adopt appropriate leadership behavior to meet the needs of situation.

Task interdependence indicates the extent to which the projects task requires working with other areas (Stewart & Barrick, 2000). That means high task interdependence requires more communication and cooperation to accomplish tasks. Thus conflicts and discrimination is very detrimental in high task interdependence. Relation-oriented leadership increase mutual trust, cooperation and identification within the team, and promote more communication and cooperation. Consequently, relation-oriented leadership is very helpful in high task interdependence. However, low task interdependence doesnt ask for high communication and cooperation. Therefore, relationship-oriented behavior may not be as effective as it is in high task interdependence. Low task interdependence emphasizes on individual task performance. Task-oriented leadership clarifies roles and objectives and change-oriented leadership develops a vision, which will make team members more clear about their tasks and focus on their own task. Then it will contribute to necessary communication and overcome conflicts to finish their tasks in return. Task-oriented leadership and change-oriented leadership will not be more effective in high task interdependence, because high task interdependence already make clear the goal and objectives.

H7: A three-way interaction between demographic faultline, change-oriented leadership and task interdependence is expected, such that the moderating effect of change-oriented leadership is more significant for teams with low task interdependence than for teams with high task interdependence.H8: A three-way interaction between demographic faultline, relation-oriented leadership and task interdependence is expected, such that the moderating effect of relation-oriented leadership is more significant for teams with high task interdependence than for teams with low task interdependence.H9: A three-way interaction between demographic faultline, task-oriented leadership and task interdependence is expected, such that the moderating effect of task-oriented leadership is more significant for teams with low task interdependence than for teams with high task interdependence.

MethodsSampleOur study population is a worldwide Korean chemical organization. Data were collected in 2011. Archival data on the groups came from two annual company surveys: culture survey and leadership survey. The surveys were designed through a consulting project. The surveys included team name, employees task type, age, position level, and education information. We restricted teams within white-color employees based in Korea with team size ranging from 4 to 16. We chose only white-color teams because blue-color teams has little requirement for knowledge sharing and cooperation in the company. Then we deleted the survey whose answer is all the same, but made sure the remaining response was over half of the team size. 287 teams remained in culture survey. Then we matched leadership survey data with culture survey data. 24 teams lacked leadership survey data and 263 teams remained. There were 2166 employees including 1822 males. The functions of teams included management, production, research and sales. Employees average age was 35.4 years.

MeasuresDemographic Faultlines. We included main faultline measures, one developed by Thatcher et al. (2003) and another by Shaw (2004). Thatcher et al. (2003) developed a measurement of faultline strength (Fau) and faultline distance (FauDist). Faultline strength calculates the percent of total variation in overall group characteristics accounted for by the strongest group split by calculating the ratio of the between-group sum squares to the total sum of squares (faultline strength can take on values between zero and one, with larger values indicating greater strength). Faultline distance is the extent to which subgroups diverge as a result of accumulated differences between subgroups (Bezrukova et al., 2009). Fau and FauDist can use both continuous and categorization variables. Shaw (2004) used cross-classification approaches to calculate faultline strength (FLSOverall). FLS simultaneously measures inter-and intra-subgroup heterogeneity and it also can automatically calculate the faultline strength based on each diversity attribute, like age faultline (FLSAge) and school faultline (FLSSchool). FLS can only use categorization variables. We all included 4 diversity attributes into faultline measure: gender, position, age, and education level. For categorization variables, age has 5 categories (1=over 45, 2=40-45, 3=35-40, 4=30-35, 5=below 30), position level has 3 categories (1=assistant manager, 2=manager, 3=senior manager) and education has 4 categories (1=below high school, 2=college, 3=university, 4=oversea schools). Why we chose school instead of education level is there was not a big difference of education level, but school origin varied a lot.

Job Satisfaction. We chose items from culture survey to reflect job satisfaction. Items are: What I am currently doing in the company are something important and valuable; I feel the sense of achievement and pride and rewarding through my work; Work in the company is fun and enjoyable. We averaged individual job satisfaction to reflect group-level satisfaction. Due to the culture issue, the reported data was all very high and coherent. Thus we didnt calculate Rwg. Cronbachs is .88.

Communication quality. We chose items from culture survey to reflect communication quality. Items are: team members communicated very well with each other; inter-departmental cooperation is doing well; team members can tell their own opinion frankly and openly to their supervisor. Cronbachs is .87.

Task Interdependence. We coded task interdependence by task type. Research teams are 4; management teams are 3; production teams are 2; sales teams are 1. Research team requires more knowledge sharing and cooperation, thus has the highest task interdependence. Management team needs coordination and communication as well, but less higher than research team. Production team requires less knowledge sharing than management team, but still needs some coordination. Sales team is more competitive, and thus the task interdependence is the lowest.

Informational Justice. We chose items from culture survey to reflect informational justice. Items are: I am getting a career advice from my supervisor and co-workers; my boss gives a reasonable feedback about my performance evaluations. Cronbachs is .71.

Procedural Justice. We chose items from leadership survey to reflect procedural justice. Items are: as well as the results of the work, the process is also considered to give fair compensation; operation of the organization(team) is based on principles and is transparent; all transactions in business relationships (to partners, customers, etc.) provides fair opportunity, to be treated fairly; plays fair and square in business practice, rather using unfair methods or immoral business practice. Cronbachs is .99.

Change-oriented leadership. We chose items from leadership survey to reflect change-oriented leadership. Items are: provides vision and goals which catalyze members enthusiasm; improves organization's business process and work methods in order to innovate constant customer value; as a personal and organizational (team) leader in business, he provides creative ideas or suggestions; breaks away from existing business practices and work traditions to encourage and promote members' new ideas and initiations. Cronbachs is .88.

Relation-oriented leadership. We chose items from leadership survey to reflect relation-oriented leadership. Items are: values individuality and diversity of each member rather than force his ideas or style upon members; identifies each member's strengths and abilities and provides support to maximize each individual's ability in work; motivates members to participate voluntarily by taking the initiative and setting an example as a leader; motivates members by listening attentively, praising and recognizing them. Cronbachs is .97.

Task-oriented leadership. We chose items from leadership survey to reflect task-oriented leadership. Items are: presents his ideas to members clearly and simply; to achieve the goal, a detailed execution plan is established, must accomplish the goal with a thorough inspection; manages organization to maximize team work in order to create excellent performance results. Cronbachs is .97.

Control Variables. We adopted group size and team average age as control variables. We restrain the group size from 4 to 16, because teams less than 4 people cannot form 2 subgroups of over 2 people and Thatcher et al. (2003)s faultline measurement limit the group size below 16.

ResultsTable 1 displays means, standard deviations, and correlations among all variables. Fau is not significantly correlated with any other faultline measures, including FLSOverall. The correlation between FLSPosition and FLSAge is .64 (p < .01). Thats reasonable because sometimes age is positively related to position level. Table 2 shows the mean of faultline strength measures for different task types. Except FauDist, FLSGender, FLSSchool, other indexes dont have a significant difference among different task types.

Table 3 shows the results of the hierarchical regression analysis testing the relationship between group size and faultline strength. We found the square items of FLSPosition, FLSAge and FLSOverall were significant. FLSPosition, FLSAge and FLSOverall had an inverted U-shape relationship with group size. The square item of FauDist is partial significant (p < .2). Hypothesis 1 was partially supported. Faultline strength usually reached the highest when group size ranges from 12 to 16.

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Table 1 Means, Standard Deviations, and Pearson Correlations among Variables

MeanS.D.12345678910111213141516

1.Group Size8.053.14

2.Average Age35.713.00-.25**

3.Fau.52.12.01-.16**

4.FauDist.92.21-.19**.04.10

5.FLSGender.12.13.14*-.14*.10.38**

6.FLSPosition.15.08.21*-.18**.08.18**.64**

7.FLSAge.16.09.19**.21**.05.14*.20**.24**

8.FLSSchool.11.09.49**-.05-.03-.02.20**.31**.51**

9.FLSOverall.22.10.36**-.33**.08-.11.20**.21**.12*.29**

10.Task Interdependence2.731.03.32**-.01.07.23**.46**.71**.66**.68**.37**

11.Communication Quality4.52.28-.11.22**.04.05-.15**.02.03-.01-.10.04

12.Informational Justice4.54.27-.45.19**-.02.08-.16**-.01.05-.01-.14*.04.73**

13.Procedural Justice4.61.53.03.16**-.12*-.01-.13*-.24**-.10-.01-.16*-.22**.13*.17**

14.Job Satisfaction4.49.29-.17**.34**.02.07-.16**-.07.03-.01-.17**-.01.72**.64**.21**

15.Change-oriented Leadership4.50.21-.78.19**.01.10-.14*-.06.16*-.01-.05.08.41**.39**.74**.37**

16.Relation-oriented Leadership4.51.53.06.17**-.16*-.03-.16*-.24**-.07-.03-.14*-.20**.16**.20**.96**.21**.83**

17.Task-oriented Leadership4.52.46.01.17**-.10.02-.03-.03.08.01-.07.05.20**.25**.90**.19**.69**.90**

* p < 0.05, ** p < 0.01.

Table 2 One-way ANOVA of Comparing Faultline Strength among Task Types

Fau1FauDistFLSGenderFLSPositionFLSAgeFLSSchoolFLSOverall

Task TypeMeanS.D.MeanS.D.MeanS.D.MeanS.D.MeanS.D.MeanS.D.MeanS.D.

Management.53.11.96.22.14.13.16.08.16.09.10.09.23.10

Production.51.11.84.18.08.11.14.09.16.09.09.07.20.10

Research.54.13.96.23.12.14.16.10.15.09.13.09.23.12

Sales.51.10.97.21.12.12.15.06.16.07.12.07.22.08

Sig.33.00.02.76.93.01.30

Table 3 Regression Analysis with Faultline Strength as Dependent VariableFauFauDistFLSGenderFLSPosition

Model 1Model 2 Model 1Model 2 Model 1Model 2 Mode l1Model 2

Group Size- .187**-.281.141* .527+.211***.056.194** .848**

Group Size2.096- .393#.158-.666*

R2 .035.035.020.026.044.045 .037.054

R2.000.006#.001.016*

FLSAge FLSSchoolFLSOverall

Model 1Model 2 Model 1Model 2 Model 1Model 2

Group Size .491***1.179***.358*** .601*.319***.909**

Group Size2- .701**- .248- .601*

R2.241.259.128.131.102.115

R2.018**.002.013*

# p < 0.2; + p < 0.1; * p < 0.05, ** p < 0.01; *** p < 0.001.

Table 4 Regression Analysis with Job Satisfaction as Dependent VariableJob Satisfaction

Model 1Model 2Model 3Model 4Model 5Model 6

Fau.09#.02.01.11#.10#.03

FauDist- .22**- .05- .04- .18*- .18*- .11#

FLSGender- .04- .08- .09- .14- .10- .13

FLSPosition- .01- .01- .00- .04- .03- .06

FLSAge- .12#- .09#- .09- .18*- .20*- .17*

FLSSchool- .16*- .07#- .08#- .17*- .15*- .14*

FLSOverall.25#.12.12.33*.35*.33*

Informational Justice.62***.61***

Procedural Justice.20**.92***

Fau*Informational Justice- .02

FauDist*Informational Justice.02

FLSGender*Informational Justice- .02

FLSPosition *Informational Justice- .04

FLSAge*Informational Justice- .08

FLSSchool*Informational Justice.02

FLSOverall*Informational Justice.13

Fau*Procedural Justice.08

FauDist*Procedural Justice.12

FLSGender*Procedural Justice- .70#

FLSPosition*Procedural Justice- .66+

FLSAge*Procedural Justice.60*

FLSSchool*Procedural Justice- .24

FLSOverall*Procedural Justice.27

R2.08.43.43.09.13.23

R2.35***.01.04**.10***

# p < 0.2; + p < 0.1; * p < 0.05, ** p < 0.01; *** p < 0.001.

Figure 1 Interactions: Moderated Effected of Organizational Justice

Figure 2 Interactions: Moderated Effected of Leadership Style (FauDist)

Table 5A Regression Analysis with Communication Quality as Dependent Variable (FauDist)Communication Quality

Model 1Model 2Model 3Model 4Model 5Model 6Model 7Model 8Model 9Model 10Model 11Model 12

Average Age.19**.13*.13*.12+.20**.16*.15*.15*.20**.17*.16*.14*

Group Size- .06- .05- .07- .06- .06- .06- .07- .06- .07- .08- .07- .10#

FauDist- .09#- .10+- .09+- .13*- .16*- .16*- .11+- .11+- .16*

Task Interdependence.08#.08.07.11+.10#.10+.12*.11+.09#

Change-Oriented Leadership.36***.33***.33***

Relation-oriented Leadership.18**.23**.26**

Task-oriented Leadership.14*.16*.16*

FauDist*Task Interdependence .04.04 .06.05 .07.08#

FauDist*COL.10#.07

FauDist*ROL.16*.16*

FauDist*TOL- .03.45**

FauDist*COL*Task Interdependence- .09#

FauDist*ROL*Task Interdependence.06

FauDist*TOL*Task Interdependence- .53***

R2.05.20.21.22.05.10.13.13.05.09.10.15

R2.15***.01.01#.05**.02*.00.04*.01.05***

# p < 0.2; + p < 0.1; * p < 0.05, ** p < 0.01; *** p < 0.001.

Table 5B Regression Analysis with Communication Quality as Dependent Variable (FLSOverall)Communication Quality

Model 1Model 2Model 3Model 4Model 5Model 6Model 7Model 8Model 9Model 10Model 11Model 12

Average Age.19**.13*.14*.14*.20**.17*.16*.16*.20**.16*.16*.15*

Group Size- .06- .07- .07- .06- .06- .10#- .10#- .10#- .07- .13+- .12#- .12#

FLSOverall.02.02.00.06.03.04.11#.08.09

Task Interdependence.07.07.08#.10#.10#.09#.11+.10+.10#

Change-Oriented Leadership.37***.37***.39***

Relation-oriented Leadership.17**.27**.28**

Task-oriented Leadership.18**.22**.21**

FLSOverall*Task Interdependence - .04- .04- .05- .07- .07- .08

FLSOverall*COL.00- .00

FLSOverall*ROL.13#.09

FLSOverall*TOL- .12#- .37

FLSOverall*COL*Task Interdependence- .08#

FLSOverall*ROL*Task Interdependence.07

FLSOverall*TOL*Task Interdependence.25

R2.05.19.19.20.05.09.10.10.05.09.10.10

R2.14***.00.01#.04*.01#.00.04*.01.00

# p < 0.2; + p < 0.1; * p < 0.05, ** p < 0.01; *** p < 0.001.

Figure 3 Interactions with change-oriented leadership and Task Interdependence (FauDist)

Figure 4 Interactions with relation-oriented leadership and Task Interdependence

Figure 5 Interactions with task-oriented leadership and Task Interdependence

Hypothesis 2 predicted that demographic faultline would be negatively associated with job satisfaction. As partial support of H2 in table 4, FauDist (= - .18, p < .05), FLSAge (= - .18, p < .05) and FLSSchool (= - .17, p < .05) were negatively related to job satisfaction. However, the FLSOverall is positively related to job satisfaction (= .33, p < .05), different from other FLS measures. In model 3, no results support H4 (A). All interaction items were not significant. We chose the most significant variable, FLSAge, to draw the moderating effect figure. In figure 1, the two lines are nearly parallel, and the difference between two lines is small. In model 6, H4 (B) received partial support. Procedural justice moderated the effects of FLSPosition (= - .66, p < .01) and FLSAge (= .60, p < .05) on job satisfaction, and R2 is .10 (p < .001). However, the sign of FLSages interaction item was opposite to FLSGenders and FLSPositions. As shown in Figure 1, the changes of slope are different.

Hypothesis 3 predicted that demographic faultline would be negatively associated with communication quality. We found Fau is not significantly related to job satisfaction and communication quality and we chose FauDist and FLSOverall to compare the results. In table 5A, FauDist was negatively related to communication quality in model 6 (= - .13, p < .05). In table 5B, FLSOverall was not significantly related to communication quality. H3 received partial support. In table 5A, the moderating effect of relationship-oriented leadership was significant (= .16, p < .05); the moderating effect of change-oriented leadership was partial significant (= .10, p < .2); task-oriented leadership was not significant (= - .03, p > .2). As shown in Figure 2, teams with higher ROL had higher communication quality than teams with low ROL. In table 5B, all moderating effect of leadership styles were not significant at significance level of .05.

Hypothesis 6 predicted that task interdependence would moderate the relationship between demographic faultline and communication quality. No results supported H6 from table 5A and 5B. No interaction items were significant. However, three-way interaction effect between FauDist, task-oriented leadership and task interdependence was significant (= - .53, p < .001; R 2= .05, p < .001). Three-way interaction effect between FauDist, change-oriented leadership and task interdependence is partial significant (= - .09, p < .2; R 2= .01, p < .2). Three-way interaction effect between FauDist, relation-oriented leadership and task interdependence is not significant. In Figure 3 and 5 we can see moderating effects of COL and TOL were more significant for teams with low task interdependence than teams with high task interdependence. In Figure 4, moderating effect of ROL is more significant for teams with high task interdependence than teams with low task interdependence, although not significant. When we compare table 5A with 5B, the results were inconsistent. Only three-way interaction effect between FLSOverall, change-oriented leadership and task interdependence is partial significant (= - .08, p < .2; R 2= .01, p < .2). H7 and H9 received partial support. H8 didnt receive support.

DiscussionConsistent with previous research (Molleman, 2005; Lau & Murnighan, 2005; Li & Hambrick, 2005; Pearsall et al., 2008), we found demographic faultline had negative effect on team job satisfaction and communication quality. Team members perceiving salience of diversity attributes were likely to form subgroups and thus impaired the team process. The composition and arrangement of the diversity among members is an important factor influencing team process and performance other than diversity itself (Thatcher, Jehan & Zanutto, 2003).

Next we found procedural justice mitigated the negative effect of faultline on job satisfaction. However, we didnt find the moderating effect of informational justice and faultline on job satisfaction. The reason may be that both the scale of informational justice and job satisfaction were from culture survey and there was high common-method-bias. While the scale of procedural justice was from leadership survey, and it could exhibit the moderating effect better. This also confirmed that justice from supervisor influences supervisory outcomes (Cropanzano et al., 2001). Another explanation of the insignificant result is that informational justice is only part of interactional justice; interactional justice or interpersonal justice may be a better moderator than informational justice. In this study we couldnt get the survey of interactional justice and thats why we examine only informational justice. Interactional justice actually can be better explained by leader-member exchange theory. Team leaders can mitigate the negative effect of faultline on job satisfaction by building relationship with subordinates to better complete the tasks.

We also found relationship-oriented leadership moderated the relationship between faultline and communication quality. Relation-oriented leadership mitigated the negative effect of faultline on communication through building trust and improving cooperation. The moderating effect of change-oriented leadership and faultline was partial significant and we didnt find moderating effect of task-oriented leadership and faultline. The reason may be that task-oriented leadership emphasizes task itself and may not simulate much communication, relation-oriented leadership focus on building relationships while change-oriented leadership shares some characteristics of both task-oriented leadership and task-oriented leadership and is moderately in the middle. However, we still think all three leadership behavior can mitigate the negative effect of faultline on team performance, in different ways.

We didnt find the moderating effect of task interdependence and faultline on communication. The reason may be that cooperation and competition theory are more applicable in decision-making tasks and our sample included not only decision-making teams. In a decision-making team with high task-interdependence, team achieves a successful outcome only when all of the information held by individual members is accurately shared with others (Lam, 1997). However, other task structures like production tasks may not require so high communication quality and the high performance can be achieved by high cooperation without high communication.

Further we examined the three-way interaction effect of task interdependence, leadership behavior and faultline. The interaction effect of task-oriented leadership was significant that the moderating effect of task-oriented leadership and faultline was more effective in teams with low task interdependence. Task-oriented leadership made the goals and tasks clear in teams with low task-interdependence and thus contributed to team performance by increasing necessary communication. Although the other two interaction effects were not significant on significance level of .05, Figure 3 showed that the direction of relationship is what we assumed that change-oriented leadership was somewhat more effective in teams with low-task interdependence and relation-oriented leadership was somewhat more effective in teams with high-task interdependence.

We also compared two measures of faultline and examined the characteristic of demographic faultlines. What surprised us was that FLSOverall wa positively related to job satisfaction and was inconsistent with other faultline index. FLSOverall chose the highest faultline strength from all splits. Did it generate different dynamics? We dont know. However, the CEM model can help analyze the complex dynamics in the future. We examined the relationship between group size and faultline strength. We found FLSPosition, FLSAge and FLSOverall had an inverted U-shape relationship with group size, and faultline strength reached the highest when group size is ranging from 12 to 16. Some faultline strength was right-skewed, such as FauGender and FauSchool (Appendix). However, the algorithm just calculated faultline strength in the situation of two subgroups. So if a team has more than two subgroups, the faultline strength should be weaker and is consistent with our prediction.

Limitation and Future DirectionsThe main limitation is that the scales we used is not matured scales and thus may not have high content validity. Furthermore, respondents didnt complete the survey seriously and the data structure was not very good. As a result, the results may not reflect the true relations very well. Thats why we also highlighted the results within the significance level of .2.

The results of two faultline strength algorithm were not consistent. Further research should continue developing better faultline measures that can really capture the content and dynamics of faultline. Perceived faultline configuration and perceived faultline strength together may help analyze the dynamics among different faultlines.

In model 4 of table 4, FauSchool and FauAge had stronger relationship than other faultlines. Maybe social context played an important role in faultline formation and faultline dynamics, because Korea is a country with high power distance and senior people receive more respect in Korea. Faultline strength just deals with normative fit and doesnt consider normative fit. Further studies can investigate the culture difference of faultline dynamics.

In this study we examined many faultlines together in one model. Different faultline had different results. We proposed that different faultlines may influence final outcomes at different time and each may explain some variance of the outcome. Chrobot-Mason et al. (2009) summarized five triggers that activate social identity faultlines, such as differential treatment, assimilation and insult or humiliating action. Further studies can examine how social context factors activate faultlines and how different faultlines evolve and interact with each other (Gratton, Voigt & Erickson, 2007).

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Appendix Faultline Distribution