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.
Conclusion:
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.