Do Differences Make a Difference? : A Single Case Study on How Cultural Diversity Affects the Innovation Process

Abstract: Background:  The increment of global population flows has challenged businesses to harness the potential of a culturally diverse environment. Nonetheless, previous studies on the effect of cultural diversity on teams has been equivocal, specifically when it is related to a firm’s innovation process. Mostly, these said studies have been focusing on cultural diversity as an input and innovation performance as an output. This means, understanding the mechanisms under which cultural diversity affects team performance has yet to be established. There is however a consensus among scholars that cultural diversity can act as a “double-edged sword” as it can be a source of friction and conflict, but also synergy and learning.  Purpose:  The purpose of this study is to explore multicultural team dynamics involved in the new product development process and determine if and how cultural diversity affects the innovation process, particularly, in a global knowledge-intensive firm. Our study aims to contribute to a deeper understanding of how cultural differences drive specific team processes, and thereby, offer both practitioners and scholars important insights.  Method:  We made use of a qualitative research approach with an exploratory design and a single holistic case study of a Swedish-based global, knowledge-intensive company. By conducting semi-structured interviews with members of multicultural NPD teams and one HR representative, we gained an understanding of different views and experiences that shape the team dynamics, which ultimately influences the innovation process.  Conclusion:  The results of this study suggest that cultural diversity does not directly impact the innovation process, but rather the effect is influenced by certain contextual factors and materializes through specific team outcomes. These outcomes could positively or negatively impact the innovation process.