Leveraging Age Diversity in Times of Demographic Change: The Crucial Role of Leadership

Leveraging Age Diversity in Times of Demographic Change: The Crucial Role of Leadership

Katharina Janz (Jacobs University Bremen, Germany), Claudia Buengeler (Jacobs University Bremen, Germany), Robert A. Eckhoff (Jacobs University Bremen, Germany), Astrid C. Homan (VU University Amsterdam, The Netherlands) and Sven C. Voelpel (Jacobs University Bremen, Germany & EBS Business School, Germany)
DOI: 10.4018/978-1-4666-1812-1.ch010
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Abstract

With demographic change, organizations today are seeing changes in societal make-up translated to the composition of their workforce. In the future, younger and older employees will have to work together synergistically to achieve good performance. The authors argue that it will be largely up to leaders to prevent the negative effects of age diversity, i.e. social categorization and intergroup bias, and to facilitate the positive effects of age diversity, i.e. the sharing of unique knowledge resources held by young and old. The authors argue that certain leadership behaviors and especially their combinations have great promise in leading diverse teams, and highlight why they should be used in conjunction with positive beliefs about diversity.
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Introduction

Globalization and demographic change are increasingly altering the composition of the workforce. Falling birthrates, extended life expectancies due to significant improvements in welfare systems and healthcare, as well as the aging of the baby boom generation contribute to shifts in societal and workforce composition (Fullerton & Toossi, 2001; Greller & Simpson, 1999). Therefore, one of the, arguably, most important diversity dimensions for business success in years to come will be age diversity, but organizations are not seeing the full impact of demographic change just yet (Leibold & Voelpel, 2006; Voelpel, Leibold, & Früchtenicht, 2007). Nonetheless, organizations have to face up to what sometimes appears daunting: to increasingly compete for the few well-educated young professionals with other companies, retaining their older employees and the knowledge they possess upon their retirement, and ultimately leveraging the potential that lies within their age-diverse workforce.

Inclusion of age diversity on any organizational agenda is vital because age has significant effects on team outcomes and individual behavior and cognition (e.g., Pelled, Eisenhardt, & Xin, 1999; Schaie, 1996; Wechsler, 1944; Zenger & Lawrence, 1989). As employees are increasingly likely to work in teams with significant age gaps between co-workers, employers seek to leverage the potentially positive effects of age diversity in the hope that a broadened perspective and knowledge base leads to superior performance. However, this does not come about automatically. In this chapter, we will highlight why and how leadership plays a crucial role in making age-diverse teams work.

First, we will give an overview of the current research on age diversity and its implications for organizations. We present empirical findings supporting both a positive and a negative view of age diversity for team functioning. Second, because understanding how individuals change with age is important to understanding team functioning in age-diverse teams, we discuss changes in individuals over the lifespan, specifically intellectual functioning, goal orientations, and personality. Third, we highlight current research on leadership and diversity beliefs, a potential leverage of age diversity in teams. Finally, we conclude with a section on how to leverage age diversity in practice.

Key Terms in this Chapter

Information Elaboration: Sharing and expanding of knowledge through use of informational diversity within teams.

Social Categorization: Process in which others themselves as well as attitudes towards them are perceived as being similar or different from oneself and each other.

Demographic Change: Changes in the population affecting society at large as well as the workforce, e.g. due to a significant fall in birth rates, increased life expectancies.

Age Diversity: Differences between within a team that pertain to age differences between team members (younger and older team members). Age differences do not only operate on the surface level but are also accompanied by informational diversity, i.e., younger team members possess recent theoretical and technological knowledge, while older team members will have a large experience base, knowledge of organizational processes, etc.

Leadership: Behaviors and practices used to influence others in order to attain their contribution towards team and organizational goals.

Life Span Development: Changes in physical, cognitive, social, and emotional development throughout the lifespan of individuals, which can have a bearing on age-diverse teams.

Diversity Beliefs: Fundamental attitudes and values attributed to diversity in general or to specific diversity dimensions.

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