Faultine strength captures how many demographic attributes align within a group or, in other words, how cleanly a group may split into two homogeneous subgroups (emphasis on similarities).
We can have a high diversity in a team and a very weak faultline strength.
Faultlines affect team functioning depending on the type:
- Demographic faultlines have a negative effect: reduce cohesion and increase conflict
- Ability and personality faultlines have a lesser effect
Source: Molleman, Group Decision and Negotiation, 2005
Even in Top Management Teams (TMT), faultlines has impacts, impacting the firm expansion:
- The more international experience in the TMT, the more likely to invest in novel foreign territories.
- The stronger the demographic faultline in the TMT, the less likely to invest in novel foreign territories
Source: Barkema and Shyrkov, Strategic Management Journal, 2006
Strong TMT faultline has a negative effect on firm profitability.
Source: Van Knippenberg et al., Human Relations, 2010
To compensate that negative faultline, you must develop shared vision: shared vision, shared goal, shared objectives.
Demographic diversity enables diverse backgrounds and inputs but increases conflict.
The stronger the faultline, the greater likelihood of teamwork breaking down and falling trap to diversity rejection.