Diversity and Inclusive Leadership: An Entrepreneurial Opportunity?

Introduction

Conversations on diversity within teams are driven by theoretical concepts that either focus on the links firms have with their outside world, as proposed by Pfeffer & Salancik’s (1978) resource-dependence theory, or conflicts that emerge from disharmony within teams, predominantly based on agency theory and group dynamic perspectives (Johnson et al., 2013). Accordingly, Herring (2009) classifies the literature in two categories: diversity-as-value and diversity-as-conflict. Diversity increases the number of communication channels through which firms secure and control resources (Pfeffer & Salancik, 1978), but tension among team members can undo such benefits through conflicts of interest (Jensen & Meckling, 1976), cognitive disparity (Daft & Weick, 1984) or structural imbalances leading to unequal participation (Westphal & Milton, 2000). With age, gender or racial diversity being the main types of diversity examined (Yadav & Lenka, 2020), empirical findings on this matter are mixed. A non-trivial number of studies suggest that the overall benefits of diverse teams are either positive (e.g. Hillebrand et al., 2020) or insignificant (e.g., Stahl et al., 2009). These benefits come to surface in the form of improved innovative capacity (Bocquet et al., 2019), creativity (Stahl et al., 2009) and organizational performance (Caron et al., 2019). It is therefore legitimate to ask to what extent inclusive leadership practices are being adopted to manage diversity to offset the negative aspects of conflict and capitalize on the benefits diversity offers.

Few studies that assess the implications of diversity have extended the concept to the idea of inclusive leadership. The inclusive leader differs from other forms of leadership styles, such as transformational or servant leadership, by recognizing followers’ uniqueness and identity (Randel et al., 2018). The diversity and leadership literatures recognize the concept of inclusive leadership but have thus far operated in isolation and lack integration (Roberson & Perry, 2021). And this despite the inclusive leader playing a central role in harnessing the positive aspects of diversity (Leroy et al., 2021). The inclusive leader is the key enabler to bring diversity to fruition by identifying opportunities to challenge processes (Leigh et al., 2010) and ways for followers to participate in decision-making (Roberson & Perry, 2021). Such opportunistic traits are a recurring theme in the classic entrepreneurship literature of the Austrian School (Praag, 1999) and have been adopted by management theorists, such as Drucker (1985), to describe the driving force behind innovation. The need to continuously find and seize opportunities in a dynamic environment demands openness to change. Taking advantage of change is an intrinsic motive for the entrepreneur to act (Mises, 1951) and embracing change is a key feature of the inclusive leader (Gotsis & Grimani, 2017). If both the entrepreneur and the inclusive leader possess opportunistic behaviors and are open to change, a common ground between the two domains might exist.