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date: 21 October 2017

Faultlines

Summary and Keywords

Group faultlines are hypothetical dividing lines that may split a group into subgroups based on one or more attributes. An example of a strong faultline is a group of two young female Asians and two senior male Caucasians. Members’ alignment of age, sex, and ethnicity facilitates the formation of two homogeneous subgroups. On the other hand, when a group consists of a young female Asian, a young male Caucasian, a senior female Caucasian, and a senior male Asian, the group faultline is considered weak because subgroups, regardless of how they are formed, are diverse.

As a relatively new form of group compositional pattern, the group faultline is associated with subgroup formation, and these subgroups, rather than the whole group, can easily become the focus of attention. When members strive to obtain more resources and protect their subgroups, between-subgroup conflict, behavioral disintegration, lack of trust, lack of willingness to share information, and communication challenges are likely. As a result, group performance is often negatively affected, and sometimes groups may even be dissolved. These results were repeatedly found in studies of experimental groups, ad-hoc project groups, organizational teams, top management teams, global virtual teams, family businesses, international joint ventures, and strategic alliances.

Keywords: group faultlines, subgroup, diversity, team composition, conflict, team dynamics

Introduction

Group faultlines are “hypothetical dividing lines that may split a group into subgroups based on one or more attributes” (Lau & Murnighan, 1998, p. 328). Thus, a group of individuals who vary widely in terms of age, status, and height, but who, across this variation, can also be categorized into two subgroups depending on their gender would be said to have a gender faultline; i.e., a hypothetical line that aligns the members, according to this attribute, into relatively homogeneous, gender-based subgroups that still vary across age, status, and height (Lau & Murnighan, 1998, 2010).

Faultlines within groups get stronger as more attributes align together. Thus, in the same group, if the women were all tall, young accountants and the men were all older, balding engineers, the group would possess a much stronger faultline that might lead to the formation of two more clearly delineated subgroups. In contrast, a four-person group that included one young female accountant, one young male engineer, one older female engineer, and one older male accountant would, at least on the surface, have a weaker faultline because their observable characteristics do not align so clearly. In this latter group, the formation of any subgroup would lead to a diversity of attributes within each subgroup, making them less cohesive (and strong).

Lau and Murnighan (1998) identified these intragroup structures to address some of the limitations of the group diversity literature, which, until that time, tended to investigate and assess the impact of group diversity one attribute at a time (e.g., Joshi, Liao, & Roh, 2011; Williams & O’Reilly, 1998). Early research in this literature, for instance, examined how heterogeneous versus homogeneous group membership for a single member attribute (like the example in the first paragraph of this article) might influence group processes and outcomes. When groups were studied only on the basis of their racial diversity, for instance, the quality of their group decisions increased over time, typically because of the availability of multiple perspectives (Watson, Kumar, & Michaelsen, 1993)—but this left considerable variance that was due to differences in other personal characteristics unaccounted for.

Essentially, the one attribute-at-a-time approach suffered from two problems. First, focusing on a single, chosen attribute could not always explain the group’s processes or the driver of its outcomes across various contexts. Thus, the underlying causes of group diversity research exhibited considerable variation that resisted parsimonious explanation. Second, focusing on a single attribute could reduce the attention paid to other potentially important member attributes: each group member carries a unique array of attributes, including surface-level ones, such as gender, race, and age, and deep-level ones, such as personality, values, and beliefs, and the combination of these attributes could easily be the most important forces behind group behavior. Thus, teams composed of a number of members, all of whom have their own specific list of attributes, could create an n (number of team members) × m (number of attributes per member) matrix of attributes for each group. In addition, uncovering group faultlines revealed a compositional pattern approach that opened new avenues for examining potentially complex subgroup dynamics.

The use of the name faultline is rooted in the geological construct describing the Earth’s compositional crust. A team’s composition resembles the Earth’s multilayered, rock-based structural crust. Similarly, each team consists of a number of members (e.g., rocks), each having a unique array of attributes. The overlay of rocks of the Earth’s crust can be viewed like the overlay of attributes within the team: each has faults (i.e., fractures) from one layer to the next. When the crusts remain undisturbed, its fissures can lie dormant for millions of years. Similarly, the fissures across the members of a group may also go undetected, potentially for many, many years; indeed, the team members may never become fully aware of their existence.

Thus, members may never discover the multitude of characteristics that embody their team’s skills, interests, and potential. They may never be fully aware of the differences that they experience in terms of their group’s identity, the presence of a common enemy, or the importance of upcoming work projects—all possible reasons to direct members’ focus away from their individual differences and toward their interpersonal similarities (Homan et al., 2008; Antino, Rico, Sanchez-Manzanares, & Lau, 2013).

The fact that faultlines can remain dormant for long periods of time also explains why the effects of diversity often seem to be mixed and inconsistent (Williams & O’Reilly, 1998). The triggering or activation of the Earth’s faults leads to earthquakes of various degrees that can shake the ground and cause disaster to nearby areas. Similarly, but much less seriously, Lau and Murnighan (1998) suggested that the triggering or activation of faultlines within a group can shake team members’ understandings of each other and can create subgroup conflict, detrimental group processes, and reduced performance.

Faultline Attributes

Faultlines vary as a function of individuals’ surface demographic attributes, such as gender, age, and race, and their deep individual characteristics, such as personality, values, and beliefs. Early research on faultlines examined their effects as a result of demographic attributes such as gender (Pearsall, Ellis, & Evans, 2008) or nationality (Cramton & Hinds, 2004). However, what may have seemed like solely surface-level effects may have masked the concurrent effects of deeper attributes (Harrison, Price, Gavin, & Florey, 2002).

Faultline Strength

As note, faultlines can vary in strength. Complete homogeneity within a subgroup and stark heterogeneity across subgroups—within the same team—characterize groups with strong faultlines. For instance, a group of two young female Hispanic secretaries (in their 20s) and two older male African American accountants (in their 50s) would have a strong faultline due to the homogeneity underlying the two subgroups (on gender, race, age, and occupation). In contrast, a more random mixing of their demographic characteristics of the group members would create a group with weaker faultlines—if one existed at all. A group with moderate faultlines would include individuals whose characteristics would fall between the two extremes; i.e., a group of two female Hispanic secretaries who are about 30 years of age and two male African American accountants who are about 40 years of age may have moderate faultline strength. While this latter group has two homogeneous subgroups, the age distance between the two subgroups is small enough to potentially dampen some of the negative effects of the other attributes’ alignments.

Faultline Types

By definition, the alignment of one or more attributes can lead to the existence of a faultline (Lau & Murnighan, 1998). Studies that exemplify this approach have focused on specific types of groups in which one attribute formed a salient divider within the group. Geographical locations of global virtual teams (Cramton & Hinds, 2004; Polzer, Crisp, Jarvenpaa, & Kim, 2006; O’Leary & Mortensen, 2010) working for the parent company in international joint ventures (Li & Hambrick, 2005), multipartner alliances (Heidl, Steensma, & Phelps, 2014), and family versus nonfamily members in top management teams of family businesses (Minichilli, Corbetta, & MacMillan, 2010) are some examples.

As research on faultlines has progressed, attention has moved from a focus on faultlines that result from a single attribute (e.g., Lau & Murnighan, 2005) to faultlines that are based on the alignment of multiple attributes (Lau & Murnighan 2005; Sawyer, Houlette, & Yeagley, 2006; Barkema & Shvyrkov, 2007; Rico, Molleman, Sánchez-Manzanares, & Van der Vegt, 2007; Homan et al., 2008; Bezrukova, Spell, & Perry, 2010; Tuggle, Schnatterly, & Johnson, 2010; Meyer, Shemla, & Schermuly, 2011; Van Knippenberg, Dawson, West, & Homan, 2011; Bezrukova, Thatcher, Jehn, & Spell, 2012; Rico, Sanchez-Manzanares, Antino, & Lau, 2012; Hutzschenreuter & Horstkotte, 2013; Chung et al., 2015; Meyer, Shemla, Li, & Wegge, 2015). Some studies have also focused on a combination of demographic attributes and some deep-level characteristics such as personality (Rico, Molleman, Sánchez-Manzanares, & Van der Vegt, 2007).

Recent research has also subdivided faultline types into socially and informationally based (Bezrukova et al., 2010). While these sets of faultline types are based on multiple attributes, demographic attributes such as gender and age create socially based faultlines (Bezrukova, Jehn, Zanutto, & Thatcher, 2009; Choi & Sy, 2010), while personal attributes that are associated with task-related information or expertise, such as education, tenure, and education specialization, create informationally based faultlines (Bezrukova et al., 2009; Choi & Sy, 2010; Cooper, Patel, & Thatcher, 2014; Hutzschenreuter & Horstkotte, 2013).

By differentiating the source of faultlines, research can explore whether the potential effects of faultlines, via their underlying mechanisms, also differs.

Faultline Mechanisms

Individuals like to interact with people who are similar to themselves. When group faultlines are strong, members tend to shift their primary focus, at least partially, from their relatively heterogeneous large group to their more homogeneous subgroups. Thus, faculty groups often have a stronger focus on their departments than on their school or their college (the larger group entity). This can result in subgroup identification becoming stronger and, at the extreme, creating a state similar to subgroup ethnocentrism, a focus on subgroups rather than groups or even organizations (Cramton & Hinds, 2004). When these dynamics are active, group members tend to care more about their subgroups than they do about their larger, overall group (Sawyer et al., 2006; O’Leary & Mortensen, 2010).

At the same time, salient subgroup boundaries can accentuate the conflict and reduce the trust between subgroups (Polzer et al., 2006; Pearsall et al., 2008; Jehn & Bezrukova, 2010; Earley & Mosakowski, 2000; Thatcher & Patel, 2012). For instance, in terms of resource allocation, in-subgroup favoritism can become prevalent, leading to an increase in group disagreements and conflict. Thus, when a department discusses next year’s budget, it is not uncommon to see subgroups competing to maximize their own outcomes, even though they belong to the same department.

Over time, continuous conflict and lack of trust can erode group cohesion (Li & Hambrick, 2005; Polzer et al., 2006; Rico et al., 2007; O’Leary & Mortensen, 2010), reduce information sharing (Homan et al., 2008; Meyer et al., 2011; Rico et al., 2012; Hutzschenreuter & Horstkotte, 2013), and diminish the quality of intragroup communication (Lau & Murnighan, 2005; Tuggle et al., 2010; Earley & Mosakowski, 2000). Overall, these subtle, internal processes can also reduce a group’s decision quality (Sawyer et al., 2006; Rico et al., 2007), creativity (Pearsall et al., 2008), and learning (Lau & Murnighan, 2005; Gibson & Vermeulen, 2003), contributing to diminished group effectiveness (Cramton & Hinds, 2004; Lau & Murnighan, 2005; Li & Hambrick, 2005; Homan et al., 2008; Bezrukova et al., 2009; Choi & Sy, 2010; Jehn & Bezrukova, 2010; Minichilli, Corbetta, & MacMillan, 2010; Rico et al., 2012). Some groups or alliances even dissolve when they cannot manage the existence of strong faultlines (Dyck & Starke, 1999; Heidl et al., 2014).

Since the introduction of the concept of group faultlines (Lau & Murnighan, 1998), researchers have tested these mechanisms in different settings. The detrimental effects of group faultlines have been consistently and extensively documented (Thatcher & Patel, 2012) across many different types of teams, including experimental groups (e.g., Rico et al., 2012), project teams (e.g., Cronin, Bezrukova, Weingart, & Tinsley, 2011), organizational teams (e.g., Chung et al., 2015), top management teams (e.g., Cooper et al., 2014; Ndofor, Sirmon, & He, 2015), global virtual teams (e.g., Polzer, Crisp, Jarvenpaa, & Kim, 2006), family businesses (Minichilli et al., 2010; Li & Lau, 2014), international joint ventures (e.g., Li & Hambrick, 2005), and strategic alliances (Heidl et al., 2014).

As noted, group faultlines can be dormant for years. For instance, mixed-gender groups will often have subgroups of men and women, with some team members experiencing gender-related conflict and others not even being cognizant of gender differences as an issue. Lau and Murnighan (1998) proposed that group faultlines need to be triggered, or activated, to negatively affect group processes and outcomes: Absent activation, groups may never experience subgroup formation, high levels of conflict, or the lower levels of satisfaction that often accompany strong faultlines (Jehn & Bezrukova, 2010).

One type of trigger is a faultline-related event or issue (Cramton & Hinds, 2004; Pearsall et al., 2008). In an organizational group with a strong age faultline, for instance, discussion of retirement packages will be more likely to activate the faultline than will a potential increase in parking fees at a local garage. Also, when an age-related faultline is triggered, team members will become more aware of their age differences, thereby increasing the likelihood that this same faultline will be activated in the future.

Alternatively, in a team that includes people with different linguistic skills, the surfacing of one language rather than another can trigger nation-based faultlines (Kulkarni, 2015; Hinds, Neeley, & Cramton, 2014). In an interview study of employees working in multinational companies, for instance, Kulkarni (2015) found that employees felt momentarily excluded when they heard a conversation in a language that they did not understand. Even though short-lived, these feelings may have far-reaching consequences in terms of team members’ evaluations of their own self-worth, their willingness to contribute, and team effectiveness.

Just as faultlines have triggers, they also have remedies for their resulting negative consequences (Antino et al., 2013). Early research found that cross-cutting subgroup membership effectively mitigated negative faultline effects (Homan et al., 2008; Rico et al., 2012). Cross-cutting subgroup membership occurs when the members of different subgroups diverge on faultline-related characteristics, but are similar on other important characteristics. Thus, by highlighting the similarities between the members of conflicting subgroups, distinct boundaries across subgroups become less clear and subgroup identification or related conflict will be less likely. Introducing reward structures that focus on cross-cutting membership can accomplish the same goal (Homan et al., 2008). In essence, cross-cutting decreases the clarity of subgroup boundaries and increases opportunities for cross-subgroup interactions, reducing the chance for potentially intense group conflict.

In addition to cross-cutting membership, between-subgroup network ties can alleviate the negative effects of strong group faultlines. Ren, Gray, and Harrison (2014) found that friendship ties between subgroups dampened the entrenching effects of relatively homogeneous subgroups, and conversely, animosity ties tended to amplify the negative effects of faultlines. In groups such as global virtual teams or international joint ventures, however, cross-cutting membership is unavailable and social network ties are needed to manage group faultlines.

Besides cross-cutting membership, a strong emphasis on overall group identity (Homan et al., 2008), superordinate goals (Rico et al., 2012), and shared group objectives (Van Knippenberg et al., 2011; Zimmermann, 2011) has alleviated some of the negative impact of strong group faultlines. By increasing the salience of the overall group, members can focus their shift from their subgroup to the group, thus reducing subgroup bias and increasing cooperation.

Effects of Context on Group Faultlines

Besides the internal structure of groups, the external context, including the nature of the task (Rico et al., 2007), informal group meetings (Tuggle et al., 2010), the sociopolitical context (Zimmermann, 2011), organizational cultural alignments (Bezrukova et al., 2012), and group leader characteristics (Meyer et al., 2015), can all influence the impact of negative faultline effects.

Group tasks are important for at least two reasons. First, a group’s task can trigger or activate faultlines, which may otherwise be dormant. Discussing the incentive packages for nonfamily members when different, family-based payoff packages are available, for instance, can activate a family-based faultline (Li & Lau, 2014). Second, task autonomy (i.e., how much discretion group members have in making task-related decisions) can have a similar impact (Rico et al., 2007). When the members of a strong faultline group work on a highly autonomous task, underlying, previously unforeseen faultlines can result in a potent influence on their group cohesion and decision quality. Clearly, faultline effects require that members perceive and act on their subgroup differences before faultlines can have their negative effects on conflict, intrasubgroup integration, and overall group performance.

This suggests that a social context that facilitates communication between subgroups can attenuate the negative effects of group faultlines. For instance, Tuggle and colleagues (2010) found that strong faultlines in boards of directors reduced the psychological safety required to discuss sensitive entrepreneurial issues. When meeting arrangements were informal, however, interactions among board members became more frequent and between-subgroup understanding increased. Even when faultlines were strong, this arrangement opened doors of communication and increased the board members’ willingness to interact, thereby reducing the negative impact of their faultlines on the board.

Sociopolitical context can also play an important role in global faultlines. When political tensions between two countries are high, member nationality becomes a salient attribute and the alignment of nationality differences can be accentuated (Zimmermann, 2011). Within organizations, sociopolitical context is often marked by the extent to which subcultures at various levels are similar. When group, department, and organizational cultures align, tension among employees should diminish. In a study of a Fortune 500 information-processing company, for instance, Bezrukova et al. (2012) found that groups with strong faultlines performed better than those with weak faultlines when both their group and organization cultures emphasized results, promoting strong subgroups and strong alignments.

The roles of group leaders can also have potent effects. In a study of over 3,000 financial consultants working in 325 teams, Meyer and colleagues (2015) found that when group faultlines were strong, individual members’ performances were not hurt during a crisis if their subgroup included the leader. In contrast, subgroups that did not include the leader suffered stronger negative faultline effects.

Faultline Outcomes

Because group faultlines are a group-compositional construct, many of the outcomes that research has observed have emerged at the group level, ranging from group processes such as behavioral integration (Li & Hambrick, 2005; Polzer et al., 2006; Rico et al., 2007; O’Leary & Mortensen, 2010), conflict (Pearsall et al., 2008; Choi & Sy, 2010; Jehn & Bezrukova, 2010; Earley & Mosakowski, 2000), and trust (Polzer et al., 2006), to group satisfaction (Lau & Murnighan, 2005), learning (Gibson & Vermeulen, 2003; Lau & Murnighan, 2005), information elaboration (Homan et al., 2008; Meyer et al., 2011; Rico et al., 2012; Hutzschenreuter & Horstkotte, 2013), team identification (Sawyer et al., 2006), and transactive memory (O’Leary & Mortensen, 2010). Research has also focused on group outcomes such as team creativity (Pearsall et al., 2008) decision accuracy and quality (Sawyer et al., 2006; Rico et al., 2007), and overall performance (Cramton & Hinds, 2004; Lau & Murnighan, 2005; Li & Hambrick, 2005; Homan et al., 2008; Bezrukova et al., 2009; Choi & Sy, 2010; Jehn & Bezrukova, 2010; Minichilli, Corbetta, & MacMillan, 2010; Rico et al., 2012).

Research has also extended to top management teams and boards of directors (Cooper et al., 2014). Faultline strength has had an impact at all these organizational levels. In deciding whether to expand business to a foreign location, for instance, Barkema and Shvyrkov (2007) found that top management teams with strong faultlines did not favor novel foreign expansion. Behavioral disintegration, lack of communication within groups, and low psychological safety increased the difficulty in getting consensus and commitment from the teams’ members in making risky decisions. As previously noted, Tuggle et al. (2010) also found that boards of directors were less reluctant to discuss critical entrepreneurial issues when group faultlines were strong.

While upper-echelon group faultlines have an impact on group decisions, their impact on firm performance can be considerably more complicated. Hutzschenreuter and Horstkotte (2013) proposed that task-based rather than demographically based faultlines in top management teams would enhance information-processing capacity so that the benefits of their different points of view would not be diminished by interpersonal differences, but rather would be enhanced by their varying analyses of the task. Thus, strong, task-related top management team faultlines could be maximized by the members’ diverse analytic approaches to their problems. In contrast, Ndofor et al. (2015) found that a top management team’s ability to utilize its breadth of resources was limited when strong faultlines negatively affected firm performance. More research on upper-echelon faultlines and firm performance is required to disentangle these currently mixed results.

Besides group and organizational outcomes, group faultlines have influenced individual group members. Bezrukova et al. (2010) found that group members who experienced injustice became less cooperative and reported feelings of increased psychological distress. However, members of groups with strong faultlines reported less stress, probably because they had benefited from their similarities with other strong subgroup members. Chung et al. (2015) found that team members were less loyal to their employers when they belonged to strong gender-faultline teams. The lack of behavioral integration and trust within the larger teams decreased employee attachment to their organizations. This pattern, however, did not emerge for the members of strong subgroups within strong task-related faultline groups.

In addition to members’ distress and organizational loyalty, group faultlines have influenced members’ performance during crises. With strong faultlines, group members performed better when the team leader belonged to their subgroup. With their leaders’ support, members gained additional resources to manage their work during a crisis (Meyer et al., 2015). Conversely, when group members and their leader belonged to different subgroups, members’ performance during crises was drastically hurt.

Recently, faultlines have also been applied across teams. In multifirm alliances, for instance, representative teams from a number of partner firms joined together to manage an alliance. A natural firm-based faultline inherently emerged within this kind of team structure. Heidl et al. (2014) found that alliances with strong faultlines were more likely to dissolve than alliances with weak faultlines. Also, when the partner firms were similarly central within their industry network, the likelihood of dissolution for their alliance increased. As network centrality is a source of resource and power, equal power between partner firms seemed to make concessions (and, ultimately, successful agreements) more challenging.

Measures and Methods

The development of faultline measures has become a separate subtheme within the faultline literature. Early measures focused on how to capture within-subgroup and between-subgroup differences among a list of personal attributes. Thatcher et al.’s (2003) Fau measure and Shaw’s (2004) Faultline Strength (FLS) measure represents two significant contributions on early faultline measures. Both were widely used (Thatcher et al., 2003; Bezrukova et al., 2010, 2012; Ndofor et al., 2015; Ren et al., 2014; Shaw, 2004; Sawyer et al., 2006, Choi & Sy, 2010; Chung et al., 2015). While these measures capture the strength of group faultlines, they do not identify a faultline’s location or exact subgroup membership.

For faultlines formed on the basis of a single attribute, such as family membership, the parties to an international joint venture, or to a global virtual team, the location of a faultline is easily predetermined, and neither Fau nor FLS is appropriate in calculating faultline strength. As a result, researchers in these special contexts have developed their own measures. Li and Hambrick (2005), for instance, measured the factional faultline size in international joint ventures by calculating the distance (a minor modification of the d-statistic) between two factions on the basis of four demographic attributes. Minichilli et al. (2010) measured family faultline strength by calculating the ratio of family to nonfamily members in the top management teams of family firms.

While both measures have enabled many faultline researchers to measure group faultline strength and investigate how group faultline strength relates to group processes and outcomes, they have some shortcomings (like all measures). For instance, both measures have difficulties combining nominal, categorical, and continuous variables into a single measure, as they require that continuous variables be converted into discrete categories (Shaw, 2004) or into standardized, nominal, and categorical variables (Thatcher et al., 2003). Lawrence and Zyphur (2010) suggested measuring faultline strength by latent class cluster analysis (LCCA), which can accommodate various types of data without transformation. In addition, researchers do not need to assume the number of subgroups a priori. LCCA identifies the number of faultlines, the number of subgroups, and the subgroup means in a group using an entropy statistic, typically in studies on organizational strategy (Barkema & Shvyrkov, 2007; Tuggle et al., 2010).

Meyer and Glenz (2013) proposed an alternative measure that they called Average Silhouette Width (ASW) faultline clustering. Like LCCA, ASW is based on cluster algorithms. They suggest that ASW is more sensitive to subgroup homogeneity and is better able to deal with missing values than LCCA. When selecting an appropriate faultline measure, Meyer, Glenz, Antino, Rico, and González-Romá (2014) recommended the following factors for consideration: the number of subgroups (two or more), the nature of the group’s attributes (categorical or continuous, or a combination), subgroup membership, and group size (10 or more). According to Meyer et al. (2014), when the number of subgroups is expected to be only two, Fau will be an appropriate choice. For groups with a potential for three or more subgroups, they suggest that researchers consider FLS, LCCA, or ASW, depending on the combination of other factors.

Methodologically, group faultlines have been studied using different methods, including experiments (Lau & Murnighan, 2005; Polzer et al., 2006; Sawyer et al., 2006; Rico et al., 2007; Homan et al., 2008; Pearsall et al., 2008; Jehn & Bezrukova, 2010; O’Leary & Mortensen, 2010; Rico et al., 2012; Meyer et al., 2015); simulations (Shaw, 2004); archival studies (Li & Hambrick, 2005; Barkema & Shvyrkov, 2007; Bezrukova et al., 2009; Tuggle et al., 2010; Van Knippenberg et al., 2011; Hutzschenreuter & Horstkotte, 2013; Heidl et al., 2014; Ren et al., 2014); surveys (Bezrukova et al., 2010; Chung et al., 2015); and qualitative methods (Kulkarni, 2015; Ren et al., 2014). Findings across these disparate methodological approaches all tend to provide general support for the negative impact of group faultline strength on group processes and outcomes (Thatcher & Patel, 2012).

Unresolved Faultline Puzzles

Are Group Faultline Effects Always Negative?

Many studies have demonstrated that group faultline strength is positively related to conflict and diminished group performance (Thatcher & Patel, 2012). However, some scholars have questioned whether these negative effects are simple and linear because the findings have been mixed: The direct effects of group faultlines on group performance have not always been significant (Lau & Murnighan, 2005) and, in some cases, the strength of group faultlines has been positively related to group performance (Bezrukova et al., 2012; Li & Lau, 2014).

One defining feature of group faultlines is the underlying potential for relatively homogeneous subgroup formation. These subgroups, regardless of their size, enable similar members to bond with each other. Due to these similarities, communication, trust, and support within subgroups can emerge, even early in a group’s development processes. Thus, compared to a group of strangers, members may find satisfaction with some of (but not all) the members of the entire group, and this may mitigate the effects of an overall group faultline. This kind of scenario also has time to play out, as faultlines rarely activate immediately. When a faultline has been triggered, however, between-subgroup conflict and communication challenges have an opportunity to both arise and become noticed. Thus, the positive effects of strong group faultlines may be only temporary.

Another reason why a positive faultline-performance relationship might emerge comes from the combination of faultline types and an appropriate context. Bezrukova et al. (2012) proposed that informational faultlines that are based on education, functional background, and tenure could have a positive impact on group performance as a function of the alignment of different subgroupings and organization cultures. In essence, when the external environment shares similar cultures, informational faultlines can provide a mix of knowledge that can be selectively and effectively utilized to achieve the overall group goal.

Does Subgroup Size Matter?

When group faultlines are strong, subgroups will likely evolve, with different subgroups varying in size. Will these kinds of differences be detrimental to the group?

Subgroup size is often a matter of power. Larger subgroups imply more support from relatively homogeneous members, who therefore are more likely to be ready to voice their opinions. In contrast, members of smaller subgroups are more likely to worry that their voice will receive little support and be opposed or even ignored by the members of larger subgroups. Thus, minority subgroup members are more likely to remain silent, even when they do not agree with the larger subgroup (Phillips, 2003). As a result, Lau and Murnighan (1998) suggested that groups with unequal subgroup sizes would be more likely to experience covert rather than overt conflict (if not too extreme). In contrast, when subgroup sizes are equal, members from each subgroup should be able to perceive that they have equal power and therefore can voice their opinions and compete for resources openly.

Members in smaller subgroups who lack power are likely to be more sensitive to what happens within and beyond their groups and therefore may perceive more conflict and be less satisfied than powerless members of larger subgroups (Lau & Murnighan, 2008). Because of their different perspectives, however, these group members can also provide novel ideas that are essential for enhancing group decision quality and creativity. If they remain silent, groups will suffer. Phillips (2003) found another way for members from smaller subgroups to contribute: When presenting different opinions, members from smaller subgroups have a higher chance of gaining acceptance than those from larger subgroups because their ideas are expected to be different from the ideas of the members of the larger subgroups—if only they can overcome the obstacles of contributing their ideas in the first place.

In sum, at a minimum, different subgroup sizes in faultline groups can activate power plays, members’ perceptions of threats, and variations in their expectations of self and others. It is still too early to know the range of reactions to equal or unequal subgroup sizes, but they clearly seem like a worthwhile issue for future research.

The Effects of Membership in Different Subgroups

When group faultlines are strong, members tend to identify with their corresponding subgroups. This is an inherent assumption in the faultline literature. However, members’ perception of subgroup membership may not be as straightforward as one may anticipate. Given the wealth of attributes, we expect that shared perception of subgroup membership may not be a norm.

In addition, group members can perceive themselves to belong to a subgroup whose own members’ perceptions of subgroup membership may or may not align. For instance, research on group membership (Mortensen, 2014) indicates that group boundaries can be unclear and that individuals’ perceptions of group membership may vary across members. Subgroup boundaries may be even more diffuse and also may be subject to change over time and particular events (e.g., Murnighan & Brass, 1991).

A possible extension of faultline theory is that when group faultlines are strong, subgroup boundaries will be clearer and members’ perceptions of subgroup membership will be more likely to align. Also, when members are aligned along multiple attributes or along a single, salient attribute, subgroup membership identity salience will highlight within-subgroup similarity and between-subgroup differences (Tajfel & Turner, 1986), making both overall and subgroup perceptions alignment more likely. In contrast, when group faultlines are weak, various alignment perceptions are more likely to emerge and, depending on event triggers or personal identity salience, subgroup boundaries are likely to be more diffuse and ill defined.

The subgroup boundary issue involves a fundamental assumption of faultline research, but it is also one that has not been addressed yet. Understanding members’ perceptions of their subgroup memberships would contribute considerably to further understanding of the underlying dynamics of group faultlines.

How Applicable Is the Group Faultline Concept in Business and Political Settings?

Although the concept of faultlines entered the literature almost 20 years ago, its full potential has been far from realized. Recent studies, for instance, have begun to tap into different types of organizational teams. Besides studies in international joint ventures (Li & Hambrick, 2005) and global virtual teams (Polzer et al., 2006), group faultlines have been applied to understand family businesses (Minichilli et al., 2010) and multipartner alliances (Heidl et al., 2014). These different types of teams share at least one similarity: Inherent in their group or organization structure, there is at least one alignment that has the potential to divide team members into subgroups. In international joint ventures, top management teams typically consist of members from each firm in the venture, and these factions of firm representatives form natural, cohesive subgroups. This makes integrating these kinds of top management teams a challenge (Li & Hambrick, 2005). For global virtual teams, the members are often distributed among various countries and locations. Different languages, cultures, and time zones also create natural faultlines within these groups. Polzer et al. (2006), for instance, identified challenging trust and conflict issues among colocated subgroups within global virtual teams. In family business top management teams, differences between family and nonfamily members can often create immediate issues, including both trust and power (Li & Lau, 2014); and in multipartner alliances, groups with representatives from partner firms carry an inherent firm-based faultline that can be particularly disruptive (Heidl et al., 2014).

Beyond these applications, other possibilities include the potentially unique group processes that result after a merger or an acquisition. The faultline between acquiring firms and those that are being acquired can be particularly strong. A salient new firm identity, including attributes from the previous acquiring and acquired firm identities, depends, at least in part, on whether the strength of an merger and acquisition (M&A) faultline can be weakened. Entrepreneurial firms can face similar dynamics: founder effects have been consistently documented in entrepreneurial research as significant and long-lasting (Hsu & Lim, 2013). However, when entrepreneurial teams grow, new, nonfounding recruits can bring different values, vision, expertise, and attributes that divide founding and nonfounding members. When this faultline is strong, it can be particularly detrimental to firm development in the same way that other faultlines are.

In addition to business applications, political applications are possible. Transnational teams consist of members from various countries to achieve a common purpose; however, these groups have cross-national faultlines that are inherent in the groups’ very existence. Whether this kind of national faultline is activated can depend on the nature of the groups’ tasks. If these national faultlines are activated, they have the potential to stimulate intense group conflict and a lack of cross-national trust. Thus, overcoming these issues when national alliances are strong and where bicultural membership is minimal can increase the difficulties in promoting strong cross-country programs.

Other Types of Faultlines

The original definition of faultlines did not mention the nature of faultline attributes (Lau & Murnighan, 1998). Subsequent empirical studies have examined group faultlines on the basis of demographic attributes, including gender, race, age, organizational affiliation, and education (Lau & Murnighan, 2005; Thatcher & Patel, 2012). However, these findings do not preclude the possibility that group faultlines can be built upon nondemographic attributes such as personality, values, or professional identities.

Drawing from the insights in diversity research, group diversity based on surface and deep attributes has revealed differential impact on groups over time (Harrison et al., 2002). Surface attributes are readily observable personal characteristics such as gender, race (skin color), and age. Deep attributes are personal characteristics that tend to be discovered more slowly, like personality, values, and interests. Research has shown that the effects of surface diversity tend to be short term, while those of deep diversity are more long-lasting.

These findings naturally lead to questions concerning the temporal effects of group faultlines that are based on surface attributes. Extending Harrison et al.’s (2002) findings suggests that group faultlines built on the basis of deep attributes will be more long-lasting than those based on demographic or surface attributes. This perspective helps to explain some of the early, mixed findings on the main effects of group faultlines (Thatcher & Patel, 2012).

In contrast, Lau and Murnighan (1998) proposed that faultline-related conflict will likely persist if faultines are triggered continuously. This would mean that faultline-based conflict will continue over time if subgroup identification remains strong, as conflict between subgroups will probably reinforce existing subgroup boundaries. Future empirical studies are needed to disentangle these conflicting effects.

Besides temporal effects, another outstanding question is whether deep group faultlines will have similar or different effects on group processes and outcomes. If differences exist, will they be a matter of degree or kind? All these issues suggest that future empirical studies are sorely needed to compare surface and deep faultlines.

Cultural Differences in the Dynamics of Faultlines

The faultline concept was developed in North America, and subsequent studies have primarily been conducted in North America and Europe (Thatcher & Patel, 2012). It is, therefore, not clear whether similar effects will emerge in African, Asian, or Latin American countries or cultures. In North America, an individualistic culture prevails, and individual differences, including both demographic and deeper attributes, are important. In less individualistic cultures, however, subgroups may form according to personal identification with leaders, or even political interests. Investigating faultlines outside North America and Europe will enable us to learn more about these kinds of potential effects.

One often-mentioned faultline mechanism is that groups with strong faultlines will experience intense conflict that is detrimental to group performance. Will faultline effects be as strong in collectivistic cultures or cultures that emphasize harmony? Might they be reduced by other policies and practices? In addition, in cultures with high power distance, will group members tend to accept and follow their leaders’ decisions? Will faultline effects be reduced when a powerful leader takes over? These contextual differences are important avenues for understanding the boundary conditions of group faultline effects.

Will Group Faultline Strength Increase or Decrease over Time?

A final puzzle concerns faultline development over time. When groups start with a strong faultline, will subgroups grow stronger and more cohesive over time? This trend is possible if subgroup identification increases and between-subgroup conflict entrenches the whole group. This is often seen in deep and intense conflict between two families in a village, two factions within a faculty (Human Resources versus Organizational Behavior subgroups within departments of management), or two political parties within a country. This type of conflict can sometimes seem to have a life of its own, so cross-cutting membership becomes almost impossible.

Strong and enduring conflict within groups is rarely comfortable. Faultline management tactics, such as cross-cutting membership, superordinate goals, and building friendship ties across subgroups, can deactivate strong group faultline effects. If these tactics do not work, however, members may choose to quit—and changing member composition is another way to alter faultline strength. At the extreme, break-ups and alliance dissolutions can become increasingly likely (Dyck & Starke, 1999; Heidl et al., 2014).

Summary of Faultlines

Group faultlines comprise an approach to group member composition that has led to significant effects on group member relationships and group performance. Its widespread applications in small to large, regional to global, rank-and-file to top management, and entrepreneurial to multifirm alliance teams direct us to rethink a variety of different strategies for managing teams and groups. Although considerable evidence supports its relationship with group conflict, trust, and poor performance, many puzzles have not yet been resolved. With more understanding, there seems to be a good chance for achieving a better understanding of faultline dynamics and coming up with more effective solutions for managing group faultlines.

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