Diversity research—what do we currently know about how to manage diverse organizational units?

Diversity with respect to demographic variables such as gender, age, and cultural background, as well as directly job-related characteristics such as tenure, educational specialization, and functional background is both a challenge and an opportunity. We review the extant literature on how best to manage diverse organizational units. We discuss the definition and conceptualization of diversity, its direct effects on team performance and team member satisfaction, as well as the mediating variables that explain these effects and the moderating variables that determine when the positive effects of diversity are likely to prevail over the negative effects. We conclude by offering managerial suggestions on how to leverage diversity’s potential.