Fostering innovation in functionally diverse teams: The two faces of transformational leadership

Abstract

Empirical research on the effects of functional diversity on team innovation has yielded largely inconsistent results, showing positive, negative, as well as nonsignificant effects. For capitalizing on the positive potential inherent in functionally diverse teams, opening the black box between cross-functionality and team innovation by analysing mediating and moderating processes thus seems to be highly relevant. In this article, task and relationship conflicts are introduced as mediators of functional diversity and team innovation. Within this framework, transformational leadership is discussed as a moderator. It will become apparent that the role of transformational leadership in fostering the innovativeness of cross-functional teams is rather ambiguous. The discussed mediators and the moderator transformational leadership are integrated into a comprehensive framework and propositions for future research are derived.