Resolving the Diversity Paradox in Project Management

Abstract

The purpose of this study was to check how cognitive diversity influences project performance to illustrate both the bright and dark sides of cognitive diversity in project management settings. It proposes innovative work behavior, knowledge hiding and distrust as mediating variables between cognitive diversity and project performance. The analysis was performed through regression analysis. The results show that most of the hypotheses are accepted and some of them have been rejected in this research. The bright side of cognitive diversity is manifested by the innovative work behavior whereas dark side is represented by distrust among project members. Specifically, the direct relationship of cognitive diversity and project performance is positively significant. For mediating effects, cognitive diversity’s effect on project performance via innovative work behavior is significant. That is, when cognitive diversity increases innovative work behavior also increases, which in turns improves project performance. Similarly, distrust negatively mediated the relationship between cognitive diversity and project performance in that when cognitive diversity increases, distrust increases, which in turns dampen the project performance. However, this research could not find the mediating influence of knowledge hiding. Furthermore, the present research proposed inclusive leadership as a moderator to mitigate the dark side and strengthen the bright one. In particular, inclusive leadership moderated the positive relationship from cognitive diversity to innovative work behavior. Similarly, inclusive leadership was able to moderate the positive relationship between cognitive diversity and distrust among project members such that when the leadership style is inclusive, the positive relationship between cognitive diversity and distrust is mitigated. In short, when inclusive leadership is prevalent in cognitively diverse environment, it strengthens the innovative work behavior and weaken the distrust’s risk. This research has important research implications. The findings of the current research can also help managers understand the dual effects of cognitive diversity and how they can channelize it through inclusive leadership to increase its bright side and mitigate the dark one.