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EDI
31,8
Leaders’ transformational,
conflict, and emotion
management behaviors
694 in culturally diverse workgroups
Oluremi B. Ayoko
The University of Queensland Business School, The University of Queensland,
Brisbane, Australia, and
Alison M. Konrad
Richard Ivey School of Business, University of Western Ontario,
London, Canada

Abstract
Purpose – Previous research has shown that diversity is related to both task and relationship
conflict in groups. The purpose of this paper is to posit that leadership is an important factor
for maintaining high group performance and morale under conditions of conflict. Specifically, the
paper argues that leader conflict management, emotion management, and transformational behaviors
determine the impact of conflict on group outcomes.
Design/methodology/approach – Data were collected from 585 people in 89 workgroups from
eight public service organizations in Australia. The authors used hierarchical regression to test the
hypotheses regarding group performance and morale. To test mediation and moderation, the authors
followed the procedure outlined by Baron and Kenny. Finally, they used the formulas provided by
Preacher, Rucker and Hayes to test for moderated mediation.
Findings – Results showed that diversity increased task conflict but was unrelated to relationship
conflict. Both task and relationship conflict were negatively associated with group performance and
morale, and effective leadership reduced these negative effects to zero. There was also a partial
support for the authors’ theoretical model predicting that leadership moderates the indirect effect of
diversity on group outcomes occurring through the mediator of conflict.
Research limitations/implications – A greater amount of variation in the diversity of work groups
included in the sample would have been useful for overcoming problems of restriction of range, which
likely reduced ability to observe an association between diversity and group outcomes. Based on the
results, in order to prevent negative emotions from task and relationship conflict from damaging group
performance, leaders of diverse groups can act to manage those emotions among their group members.
Results from this study implicate conflict management training. While training for conflict management
is beyond the scope of this research, further research should examine this issue.
Originality/value – The study extends research in the area of diversity, leadership and group work.
In particular, it demonstrates that transformational leadership is an important factor for maintaining
high group performance and morale under conditions of conflict. It also offers practical assistance to
individuals entrusted with the responsibility of managing culturally diverse workgroups.
Keywords Diversity, Leadership, Conflict, Emotions, Performance management, Australia
Paper type Research paper

Equality, Diversity and Inclusion: An

The issue of managing diversity is still a challenge for organizations in the twenty-first
International Journal century ( Jackson and Joshi, 2010). Van Knippenberg and Schippers (2007) define
Vol. 31 No. 8, 2012
pp. 694-724
r Emerald Group Publishing Limited
2040-7149 Alison M. Konrad expresses her gratitude for the support of the Corus Entertainment Chair in
DOI 10.1108/02610151211277581 Women in Management from the Richard Ivey School of Business.
diversity as a characteristic of social grouping that reflects the degree to which objective Leaders’
or subjective differences exist between group members. Although research in workplace management
diversity has quadrupled in the last few decades, yet, most of the outcomes demonstrate
that diversity has paradoxical effects on team processes and outcomes (Joshi et al., 2011; behaviors
Jackson et al., 2003; Milliken and Martins, 1996; Williams and O’Reilly, 1998). For
example, diversity in teams is linked with negative outcomes (e.g. poor communication;
Mohammed and Angell, 2004) and with positive outcomes (e.g. creativity; Lovelace 695
et al., 2001) or even neutral effects (see Cunningham and Sagas, 2004). Recent work is
identifying the conditions such as employee involvement that must be in place for
diversity to generate organizational benefits (e.g. Yang and Konrad, 2011).
In particular, one of the negative outcomes of diversity is conflict (Jehn et al., 1999;
Pelled, 1996; Olson et al., 2007). Workgroup diversity is associated with conflict in
teams, both task conflict and relationship conflict (Ayoko et al., 2002; Chatman and
Flynn, 2001; Jehn et al., 1997; Jehn et al., 1999; Pelled, 1996; Pelled et al., 2001). The
conflict resulting from workgroup diversity has the potential to benefit performance if
it generates the elaboration of more possibilities and perspectives in problem-solving
discussions (van Knippenberg et al., 2004). Workgroup conflicts often do not result in
positive outcomes, however, as demonstrated by meta-analytic research linking both
task and relationship conflict to poorer performance (De Dreu and Weingart, 2003).
Additionally, new evidence emerging from another meta-analytical study (de Wit et al.,
2011) suggests that while relationship and process conflict are negatively linked with
performance, the effect of task conflict on outcomes is even more complex indicating that
task conflict is only associated with positive outcomes when the link between task
and relationship conflict is weak. The implication of these meta-analytic findings is that
for conflict to result in positive outcomes, it must be managed effectively (Jehn, 1995;
Jehn and Mannix, 2001). Hence, the link between conflict and performance in teams is
not simple and linear, but moderated by contextual factors. Overall suggest that the
paradoxical relationship between diversity and processes (e.g. conflict) and outcomes
may be related to the inability to assess all important dimensions of context.
In the present research, we agree with Jackson and colleagues (2003, see also
DiTomaso and Hooijberg, 1996; Martins et al., 2003) to argue that one of the under-
researched contextual factors of potential importance for affecting the relationship
between conflict among diverse teams and outcomes is leadership. Specifically, to
date, few empirical studies have been conducted to investigate the connection
between leadership behaviors and processes at the team level (see Ayoko and Callan,
2010; Ayoko et al., 2008; Kotlyar and Karakowsky, 2007; Walumbwa et al., 2011).
According to Zaccaro and Klimoski (2002), the success of organizational team
performance depends partly on effective team and leadership processes. They further
argue that an important research goal in organization science should be to understand
how leadership and team processes connect to enhance collective success in
organizations. In spite of the fact that literature is replete with theoretical and empirical
work in the area of leadership (e.g. Avolio and Yammarino 2002) and team processes
(e.g. see Jehn, 1995, 1997), Zaccaro and Klimoski (2002) contend that “we still know
relatively little about how leaders create and direct team processes to achieve collective
success” (p. 5, see also, Kozlowski et al., 1996). In particular, we know little about how
to best lead teams that are socially and demographically diverse.
Team leaders tend to have greater authority than other team members (Edmonson,
2003), while effective leaders are expected to have more knowledge, skills, and abilities
in the area of people management (Bell and Kozlowski, 2002). For these reasons, team
EDI members are likely to look to the leader to guide the group successfully when they
31,8 become muddled in potentially destructive conflicts. Nevertheless, very little is known
regarding the impact of leaders on the outcomes of conflicts in diverse teams (Zaccaro
et al., 2001). Pelled et al. (2001) found that supervisor facilitation mitigated the
relationship between tenure dissimilarity and conflict in a Mexican workplace,
although in that sample, tenure similarity rather than dissimilarity was associated
696 with greater conflict. Gibson and Vermeulen (2003) also found that leader
performance management behaviors enhanced learning in diverse teams, which
suggests that leadership is important for generating positive outcomes, such as
learning from task conflicts in teams. Ayoko et al. (2012) argued that leadership
behaviors focussed on antecedents to the expression of emotion limit the likelihood
that cognitive or task conflict escalates to become affective conflict in virtual teams.
Similarly, Ayoko et al. (2008) demonstrated that an emotional intelligence climate
(e.g. conflict management norms) moderated the link between task conflict and
destructive reactions to conflict while leaders with higher levels of inspiration and
communication of vision were linked with minimum levels of bullying by team
members (Ayoko and Callan, 2010).
Given these prior findings, the leader’s actions during team conflict events are likely
to be critical to effective performance because of the potential for conflict to generate
negative emotions and damage relationships among interdependent team members.
Leaders must manage team members’ emotions during conflicts in order to avoid the
development of a negative group emotional history, because heated exchanges and
emotional outbursts have the potential to ignite a negative self-reinforcing cycle of
interpersonal attacks and blaming (Kelly and Barsade, 2001). If events generating
negative emotions are repeated over time, they have the potential to damage important
work attitudes driving decisions to work productively, to behave cooperatively, and to
remain with the organization (Ashkanasy et al., 2002).
Despite the publication of a special issue of Leadership Quarterly on diversity
leadership in the mid-1990s (Chen et al., 1996), relatively little research to date has
examined the impact of leaders on the effectiveness of diverse teams (Nishii and Mayer,
2009; Ospina and Foldy, 2009). The few studies that have been done have validated the
effectiveness of transformational leadership (Ayoko and Callan, 2010; Ayoko et al.,
2008; Kearney and Gebert, 2009) and a high level of leader-member exchange shared
across the entire workgroup (Nishii and Mayer, 2009; Stewart and Johnson, 2009). In
particular, few studies have investigated the potential for leadership to moderate the
outcomes of conflict in diverse teams, however. We propose that leaders who engage in
conflict management, emotion management, and transformational leadership
behaviors can effectively channel conflict in diverse teams toward constructive
processes that result in better team morale and performance. We test our ideas using a
multiple-source dataset based on a sample of 89 work groups and 585 individuals.

Conceptual model and hypotheses

The conceptual model guiding our research is shown in Figure 1. Based on prior
research and theorizing (Kochan et al., 2003; Mannix and Neale, 2005; Pelled, 1996), we
begin with a diversity – group processes – outcomes model. The dimension of diversity
serving as the focus of this study is racioethnicity (Cox, 1993), which is defined as a set
of visibly distinguishable identity groups determined on the basis of such features as
hair texture, skin color, and facial features and linked to stereotypes and prejudice.
Beyond their visible distinctiveness, members of racioethnic groups, such as Chinese,
African American, Australian Aboriginal, and white Canadian, also share distinct Leaders’
cultures, or sets of beliefs, norms, and values that guide desirable goals and behaviors. management
Specifically, diversity literature distinguishes between underlying deep-level
characteristics like attitudes, opinions, information, and values, which take time to behaviors
emerge in groups (Harrison et al., 1998, 2002; Jehn et al., 1999) and surface-level or
observable (e.g. ethnicity, age, and gender; Milliken and Martins, 1996) characteristics
that are more immediately apparent (Riordan, 2001). Empirical studies also show that 697
both surface and deep-level diversity make a difference for group outcomes and
significantly affect the experiences of the individuals within a team (e.g. Harrison et al.,
2002; Milliken and Martins, 1996) and impact group processes ( Jehn et al., 1997, 1999).
In practice, the visible and cultural components of racioethnicity are often impossible
to disentangle, and theorists must consider both the stereotyping and prejudice based on
surface-level differences and the variation in perspectives and values based on deeper-
level cultural differences (Ospina and Foldy, 2009). Julian et al. (2009) report that the higher
the cultural diversity in the team, the more highly members evaluate each other in terms
of their ability to get along and help each other. Prior research has also linked racioethnic
diversity to both task and relationship conflict in teams (Ayoko et al., 2012; Chatman and
Flynn, 2001; Pelled et al., 1999), as well as to creativity in generating ideas and solving
problems (Cady and Valentine, 1999; Leung et al., 2008).
The group processes we focus upon are task and relationship conflict. Jehn (1997)
describes task conflict as encompassing conflict of ideas in the group and disagreement
about the content and issues of the task. Explicitly, it is the consciousness that there are
disagreements about the actual tasks being performed in the group even when group’s
goals may be shared (Brehmer, 1976). In contrast to task conflict, relationship conflict
pertains to disagreements based on personal and social issues that are not related to work
( Jehn and Chatman, 2000). The outcomes of interest are team morale and performance.
Particularly, morale is a well-constructed variable in psychology and organizational
behavior (e.g. Al-Adaileh and Al-Atawi, 2011; Chang and Lyons, 2012; Marmenout, 2011),
with considerable importance for management practice (Pane Haden and Cooke, 2012;
Stahl et al., 2012). For example, Rosenbaum and Rosenbaum (1971) examined morale and
productivity consequences of group leadership style, stress, and type of task. In their
study, they found that students in the absence of stress were more productive. More
recently, Iverson and Zatzick (2011) investigated labor productivity and the value of
showing consideration for employees’ morale and welfare. The study demonstrated that
organizations with more extensive high performance work systems reduce productivity
losses from downsizing by heightening their consideration for employees’ morale and

Group/team
Diversity processes Outcomes
Racioethnic Task conflict Performance
diversity Relationship morale
conflict

Leader behaviors
Figure 1.
Conflict management
Leadership as a moderator
of the diversity-conflict-
Emotion management
performance relationship
Transformational leadership
EDI welfare. Altogether, morale has been consistently shown to have desirable outcomes for
31,8 the group (e.g. Motowidlo and Borman, 1978).
In the present study, we add to prior diversity-process-outcome theorizing by positing
leader conflict management, emotion management, and transformational leadership
behaviors as moderators of the process-outcome relationship. As such, we conceptualize
one of the primary roles of the leader in the diversity-conflict-outcome model to be that of
698 an effective manager of conflict. Hence, effective leaders do not necessarily dampen the
workgroup conflicts arising from diversity. Especially, task conflicts should not be
prevented because the elaboration of differing viewpoints regarding tasks is a potential
source of high performance (Alper et al., 1998; Jehn, 1995; Jehn and Chatman, 2000; Pelled
et al., 1999; Phillips and Lloyd, 2006; Van de Vliert and De Dreu, 1994; Van de Vliert et al.,
1999; van Knippenberg et al., 2004). Explicitly, van Knippenberg et al. (2004) suggest that
diversity research has been associated with inconsistent findings because research in
diversity has paid little attention to important moderators. They proposed that team
diversity will be linked with elaboration of task-relevant information and perspectives
within the group (e.g. group members’ exchange, discussion, and integration of ideas,
knowledge, and insights) relevant to the group’s task. Given the on-going discussion,
we propose that the group process of conflict is an important feature of the task
elaboration process in diverse work teams and that leadership is an important moderator
of this process. Therefore, rather than reducing the amount of conflict, we suggest that
leaders should help their groups to effectively manage the conflicts that do arise in
order to enhance morale and performance. In the next sections, we discuss why
conflict management, emotion management, and transformational leadership behaviors
in particular are valuable for effective conflict management by leaders of diverse
workgroups.

Leader conflict management behaviors

Many conflict researchers espouse the positive effects of task conflict (De Dreu, 2006;
Jehn, 1995, 1997; Simons and Peterson, 2000); however, task conflict can result in
negative outcomes for teams if it degenerates into relationship conflict. For example, a
task disagreement between a supervisor and a subordinate over time can degenerate to
a relationship conflict especially if the subordinate perceives the task conflict as an
attempt by the supervisor to put him/her (i.e. employee) down in front of the other team
members. Additionally, the results of the meta-analysis conducted by De Dreu and
Weingart (2003) found that task conflict was negatively correlated with team
performance, the correlation was significantly weaker if task conflict was less strongly
correlated with relationship conflict (see also de Wit et al., 2011), denoting the fact that
task conflict may be closely connected with relationship conflict.
Although a number of studies have examined the moderating role of conflict
management in the relationship between intragroup conflict and outcomes (DeChurch
and Marks, 2001; Somech et al., 2009; Tekleab et al., 2009), these studies focus on the
behaviors of team members and little research has examined the role of the leader in
managing conflict in teams (Zaccaro et al., 2001, see Ayoko et al., 2010 for an exception).
We argue that leader conflict management behaviors are critical for eliciting positive
outcomes from task conflict and also ensuring that task conflict does not degenerate
into relationship conflict.
Leader conflict management behaviors comprise an understanding of the conflict
triggers, the conflict cycle and conflict management behaviors as well as implementation
skills. Overall, conflict management behaviors involve understanding one’s own and
others’ conflict management styles. Research shows that employees have an expectation Leaders’
that group leaders will resolve conflicts between group members (Ayoko and Härtel, management
2002), and third-party involvement is a significant strategy of managing the negative
outcomes of interpersonal conflict in organizations (Giebels and Janssen, 2005). In this behaviors
case, we reason that leaders who actively manage team conflicts are likely to increase
group morale because their behavior meets expectations. In the present research, we
describe active conflict management strategies as those that involve some assertiveness 699
in dealing with the conflict. These strategies require conflict partners or third parties to
use collaborating, compromising, or competing styles for resolutions or to tenaciously
persuade one of the conflicting parties (Ohbuchi and Takahashi, 1994). In contrast,
passive conflict management strategies are those strategies that are void of self-
assertiveness in dealing with conflict such as avoidance and accommodation conflict
management styles (see Tang and Kirkbride, 1986; Ohbuchi and Takahashi, 1994). While
the outcome of leadership styles is expected to vary across cultures (Brodbeck et al., 2000),
Xie et al. (1998) show that passive conflict management (e.g. conflict avoidance) is linked
with negative outcomes in four different national cultures. We unpack the different
conflict management behaviors below.
Five distinct conflict behaviors, i.e., competing, accommodation, collaboration,
compromise, and avoidance, are commonly identified in conflict management research
(De Dreu et al., 2001; Van de Vliert and Kabanoff, 1990). Competing refers to a situation
where each party pursues its own interests (Montoya-Weiss et al., 2001).
Accommodation refers to “giving in to the opponent” (Euwema et al., 2003, p. 121).
Collaboration refers to an attempt to reach an outcome that integrates the interests of
all involved parties (Montoya-Weiss et al., 2001). Avoidance refers to “moving away
from the conflict issue” (Euwema et al., 2003, p. 121). This behavior is characterized by
avoiding confronting other people (Montoya-Weiss et al., 2001). Compromise refers to
“settling through mutual concessions” (Euwema et al., 2003, p. 121).
According to Kormanski (1982), each of the conflict management behaviors have
both advantages and disadvantages. Therefore, a comprehensive approach to conflict
management includes the application of the most appropriate tactic to each
conflict event. Leaders who can thoughtfully apply many different conflict
management strategies are likely to be the most effective. Prior studies show that
comprehensive conflict management can strengthen interpersonal relationships,
increase mutual trust and understanding, and enhance willingness to cooperate
(Euwema et al., 2003). Furthermore, the ability to use a variety of conflict management
strategies is likely to be particularly important for leaders of diverse teams (where
members come from differing countries or teams with in-country ethnic differences),
because modal practices relating to conflict management vary across cultures (Kamil,
1997; Triandis, 1994). Additionally, the work of Graham et al. (1988) and Kirkbride et al.
(1991) shows that collectivist (e.g. Asians) tend to use passive strategies such as
avoidance to deal with conflict, whereas westerners (e.g. Americans) tend to
confront conflict directly (see also Graham et al., 1988; Kirkbride et al., 1991; Tang
and Kirkbride, 1986; Tse et al., 1994). Due to cultural differences in preferred conflict
management strategies (Kamil, 1997), leaders who can engage in a comprehensive
set of conflict management styles will most likely be effective at managing conflict to
create good outcomes in racioethnically diverse groups.
Within diverse work groups, comprehensive conflict management behaviors on the
part of the leader should interact with task conflict to create favorable outcomes. For
instance, the use of collaboration ensures that different perspectives are valued.
EDI Compromise can ensure divergent interests are considered. Confrontation can
31,8 increase people’s awareness of differences. Comprehensive conflict management by
the leader should also interact with relationship conflict to minimize the negative
outcomes of personal animosities and incompatibility. For example, given that
a cooperative conflict management style is linked with conflict efficacy and team
performance (Alper et al., 2000), we anticipate that a leader who engages in
700 cooperative conflict management behaviors may be modeling cooperative behaviors
for group members to imitate. In the same way, a leader who confronts interpersonal
antagonism sends a clear signal to group members about expectations of
professionalism and respect in the workplace.
In summary, employees are likely to expect their leaders to provide third-party
assistance when conflicts arise in their groups, and effective conflict management in
diverse workgroups is likely to require leader flexibility in using a variety of conflict
management styles. Active conflict management should improve the experience,
confidence, and understanding leaders have about different methods of managing
conflict, leading them to take a more comprehensive conflict management approach.
Through an iterative process, active conflict management on the part of leaders is
likely to create a positive group process in culturally diverse workgroups, and it may
be crucial for increased performance and morale in the team. Active conflict
management behavior on the part of the leaders is particularly important because team
leaders are likely to have the skills to apply active strategies appropriately in culturally
diverse teams. By comparison, passive approaches to conflict, specifically, doing
nothing or accommodating the other party, do not require as much skill and may be
accomplished by team members without leader input:

H1a. Active conflict management on the part of the leader will result in a less
negative (or more positive) association between task conflict and the
workgroup’s performance and morale.

H1b. Active conflict management on the part of the leader will result in a less
negative association between relationship conflict and the workgroup’s
performance and morale.

Leader emotion management behaviors

Scholars are increasingly integrating emotion into the study of workplace conflict (Bell
and Song, 2005; Bodtker and Jameson, 2001; Von Glinow et al., 2004; Yang and
Mossholder, 2004). Empirical findings suggest that conflict can invoke potentially
damaging negative emotions. For example, verbal communication during conflict has
been shown to include personal elements that suggest the escalation of negative
emotions (Lovelace et al., 2001). Also, disagreeable approaches to managing conflict
such as threats, being condescending, and pressuring others, can involve emotions
of anger, frustration, and irritation (Alper et al., 2000; Van de Vliert et al., 1999).
The expression of emotions may be exaggerated in the team through the process of
emotional contagion (Hatfield et al., 1994). Moreover, disagreements among group
members may be interpreted as personal attacks (Simons and Peterson, 2000),
regardless of whether the issues involve tasks or relationships among group members,
which may explain why meta-analysis finds that both task and relationship conflict are
associated with detrimental group outcomes (De Dreu and Weingart, 2003). Given that
diversity is associated with conflict in groups, these findings suggest that for teams to
benefit from diversity, group leaders must be able to manage the negative emotions Leaders’
triggered by both task and relationship conflict. management
Specifically, Pescosolido (2002) proposes a new role for group leaders – the
manager of group emotions. He argues that a leader who manages group emotions behaviors
will be able to reduce uncertainty and create shared emotion within the group by
modeling particular emotional responses. Nevertheless, empirical research on the
management of emotions in groups by leaders is limited, especially those emotions 701
related to conflict in culturally diverse groups. The lack of studies in this area is not
surprising as the organizational behavior literature has predominantly revolved
around cognition rather than feelings (George, 2000). However, scholars have
proposed that emotion management behaviors increase information-processing
capability in ways that enhance employees’ ability to motivate, plan, and achieve
(Salovey and Mayer, 1990). The successful regulation of emotions allows individuals
to refocus their own and others’ attention on important organizational problems
(Salovey and Mayer, 1990). Conversely, if negative emotions are not processed and
resolved in a constructive way, group efficiency and effectiveness suffer ( Jehn, 1997).
Furthermore, leaders who manage workgroup emotions may help employees
express their emotional reactions to conflict appropriately. Suppression of conflict-
related emotions can lead to anxiety and self-righteousness (Tjosvold, 1998), but when
these emotions are appropriately expressed, they can affirm interdependency and focus
energy on solving underlying problems (Tjosvold, 1998; Tjosvold and Su, 2007).
According to Plutchick (1987), empathy is a core social awareness skill that involves
the sharing of both positive and negative emotions that should promote a bond
between team members. This bond, created through emphatic team interactions and
behaviors, should combine to produce an emotional atmosphere conducive to increased
cohesion and performance (Rapisarda, 2002) and less conflict. In this regard, Ayoko
et al. (2008) found that teams with less-well-defined emotional intelligence climates (e.g.
empathic concerns) were associated with increased task and relationship conflict and
increased conflict intensity. Thus, consistent with research on emotional intelligence
(Van Rooy and Viswesvaran, 2003), we propose that leaders of culturally diverse
workgrous need to be aware of their own personal emotions, aware of others’ emotions,
and use emotions (e.g. empathy) appropriately in decision making and problem
solving, especially in situations of conflict. Leaders with high levels of emotion
management behaviors should therefore be better able to manage team conflict and its
related emotions effectively. Thus, we hypothesize that:

H2a. Emotion management on the part of the leader will result in a less negative (or
more positive) association between task conflict and the workgroup’s
performance and morale.

H2b. Emotion management on the part of the leader will result in a less negative
association between relationship conflict and the workgroup’s performance
and morale.

Transformational leadership behaviors

Transformational leadership has been linked to emotion, which suggests that
transformational leadership behaviors might be valuable for effectively managing
emotion-laden conflicts in teams. Cherulnik et al. (2001) argue that transformational
behaviors flow from the leaders’ level of confidence, enthusiasm, and awareness of the
EDI emotional needs of members, and that transformational leadership impacts the
31,8 affective state of the group by eliciting emotional arousal in group members.
George (2000) argues that transformational leadership is primarily based on emotional
processes, including the ability to appraise others’ emotions as well as effectively
portray emotions (see also, Prati et al., 2003). Given that transformational leadership
involves the management of one’s own and others’ emotions, leaders who engage in
702 transformational behaviors are likely to be able to manage team conflicts in ways that
minimize the negative repercussions of emotional displays and heated exchanges.
Transformational leaders also engage in higher levels of individualized
consideration, inspiration, motivation, and intellectual stimulation in their relations
with their followers (Avolio and Yammarino, 2002; Bass and Steidlmeier, 1999). In
particular, transformational leaders inspire their members to achieve a vision, and
members feel highly motivated and strongly connected to their leader (Bass et al.,
2003). We focus on communication of vision and related leader behaviors. Although
transformational leadership theory does not explicitly consider the management of
team conflicts, the nature of transformational leadership provides team members with
a shared goal, vision, values, and relationship to the leader that can serve as the
foundation of constructive resolution of team conflicts. In this regard, Ayoko and
Callan (2010) show that leader behaviors that involved higher levels of inspiration
and communication of vision by leaders were directly associated with lower levels of
bullying by team members. Specifically, a shared goal or vision for the team’s
mission provides a common purpose against which to assess the different views
expressed during task conflicts. A shared vision also provides the parties with a
commonality of interests, which can motivate them to settle their differences. As
a result of these motivational processes, transformational leadership behaviors
result in enhanced outcomes on measures of employee morale and performance.
Meta-analysis has documented positive links between transformational leadership
and follower job satisfaction (r ¼ 0.58), follower satisfaction with the leader
(r ¼ 0.71), follower motivation (r ¼ 0.53), leader job performance (r ¼ 0.27), leader
effectiveness (r ¼ 0.64), and group or organizational performance (r ¼ 0.26).
Furthermore, the separate dimensions of transformational leadership all show
similarly substantial positive meta-analytic associations with performance (rs from
0.60 to 0.71) (Lowe et al., 1996).
Additionally, transformational leaders are known for their capacity to induce high
degree of excitement and enthusiasm in their followers (Berlew, 1974). This means that
transformational leadership has the potential to improve the followers’ morale (Shamir
et al., 1998). In particular, morale tends to be futuristic and Motowidlo and Borman
(1978) describe morale as linked with satisfaction, motivation, high energy, and
enthusiasm. It is also connected with zest (Peterson et al., 2009) and a sense of collective
purpose and goals (Locke, 1976). According to Shamir et al. (1998), units with high
levels of morale have been linked with high performance (see also Motowidlo and
Borman, 1978). Given the above and the fact that transformational leadership is
interested in meeting the individual team members at his/her point of needs, we
anticipate that in the context of conflict, transformational leaders will be able to
improve the team member’s morale and performance:

H3a. Transformational behaviors on the part of the leader will result in a less
negative (or more positive) association between task conflict and the
workgroup’s performance and morale.
 H3b. Transformational behaviors on the part of the leader will result in a less Leaders’
negative association between relationship conflict and the workgroup’s management
performance and morale.
behaviors
Methodology
Data
Data for this study were collected between 2000 and 2001 from workgroups in eight 703
public service organizations in Australia. Using mailing labels, questionnaires were
mailed to participants. Additionally, the first author and the gatekeeper administered
majority of the questionnaire. Altogether, questionnaires were sent to a total of 1,200
employees resulting in a 55 percent response rate (n ¼ 660 in 122 workgroups). The
above average response rate may be attributed to the fact that, in most cases and after
several reminders, the first author personally went back to collect the completed
surveys in sealed envelopes. The sample consists of groups that were comprised of a
leader and at least four other individuals who identified themselves as a group and
worked on tasks that were interdependent (Brett and Rognes, 1986). We screened data
for outliers, input errors, and missing values (Burns and Burns, 2008). Analysis did not
show a particular fixed pattern of missing value, and since the sample size exceeded
200 participants, all cases with missing data were excluded from further analysis
(Tabachnick and Fiddel, 1996). We also tested data for normality and analysis showed
that the data were normally distributed. Additionally, we excluded teams that identified
more than one leader as this situation does not allow for an accurate assessment of leader
behaviors (i.e. group members may differ in their ratings of leader behaviors because they
are thinking of different focal persons as the leader). We also deleted teams where a leader
was not identified. Overall, 585 group members in 89 groups were fit for analysis.
Altogether, 58.5 percent of the participants were male while 41.5 percent were female.
The majority (31.7 percent) of the participants were 41-50 years old.

Measures
Racioethnic diversity. The sampled employees represented a wide variety of racioethnic
groups, but by far, the largest cultural group was white/Anglo, and 57 of the 89 groups
in the sample were 100 percent white. However, in an average group size of seven to ten
people, there was an average of two to three non-Caucasians in the remaining 32
groups. The sample appears to be representative of the country’s population at the
point of data collection. To examine the impact of the presence of racioethnic diversity
in these workgroups, we created dummy variable indicating groups as 100 percent
white/homogeneous (1) or diverse (0).
Group processes (conflict). Group members reported on the amount of task and
relationship conflict in their workgroups. Task conflict was measured with a three-item
scale adapted from Jehn (1995). We measured task conflict with adapted items from
Jehn (1995) such as “the disagreement in my workgroup is about opinions regarding
the work being done,” “the disagreement in my workgroup is about ideas.” All items
used a five-point scale ranging from “1 ¼ strongly disagree” to “5 ¼ strongly agree.”
Relationship conflict was measured by two items also adapted from Jehn (1995) such as
“ Disagreements often result in emotional outbursts among group members”. Both
items used a five-point scale ranging from “1 ¼ strongly disagree” to “5 ¼ strongly
agree.” Both task and relationship conflict measures were reliable (for task conflict,
a ¼ 0.86; for relationship conflict, a ¼ 0.87). Task and relationship conflict were
measured by aggregating individual scores to the group level.
EDI Leader behaviors. All leader behaviors were assessed by aggregating team
31,8 members’ ratings of their leader. Leader’s conflict management behaviors were
measured by using an adaptation of the six-item Likert type Rahim’s (1983) conflict
management scale. The items on the scale measured leader conflict management
behaviors such as use of power (force), cooperation, use of a third party, providing
privacy and allocation to differing projects for parties in disagreement (a ¼ 0.60).
704 Nunnally and Bernstein (1994) suggest that a co-efficient above 0.60 indicates
reliability between the items in a scale. We measured leader’s emotion management
behaviors by using a five-item Likert subscale of the WEIP Version 5 (Jordan et al.,
2002). The WEIP subscale assessing ability to manage others’ emotions includes items
such as “When I am angry with a member of my team, I can overcome that emotion
quickly.” “I am aware of how others in the team are feeling,” “When I talk to a team
member, I can gauge their reactions from their facial expression,” “When I am angry
with a member of my team, I can overcome that emotion quickly” (a ¼ 0.75).
Finally, we measured leader transformational behaviors using the Project
Leadership Questionnaire (Bain and Mann, 1997; see also, Pirola-Merlo et al., 2002).
The five-item Likert scale based on Bass et al. (2003) concept of transformational
leadership, assesses how well leaders: facilitate positive working relationships among
group members (e.g. “engaging in activities to build relationships within the team”),
and create a sense of vision and pride for the group (e.g. “communicating a vision of the
project’s possibilities”) (a ¼ 0.89).
Group outcomes. Group performance was assessed by the group leader, who
responded to the following three questions, “How well do those people who report
directly to you perform generally as a group?” “How well do those people that
report directly to you perform generally as individuals?”, and “How effective is your
workgroup?” Leaders used five response options ranging from 1 ¼ not at all effective to
5 ¼ very effective (a ¼ 0.78).
Group morale was measured with five items developed by Hart et al. (1996). The
reliability of this index was a ¼ 0.92 (see also, Griffin et al., 2000; Miller et al., 1999; Neal
et al., 2000). Sample items include, “I feel enthusiastic at work,” “I feel cheerful at
work,” and “I feel delighted at work.” All items used a five-point Likert scale ranging
from “1 ¼ strongly disagree” to “5 ¼ strongly agree.” Individual responses were
aggregated to the group level to measure morale. Most of the measurement
instruments used in this study was adapted from pre-existing scales.

Analysis
Factor analysis. Three major steps have been identified for factor analysis: a
correlation matrix is created to determine the appropriateness of the data for factor
analysis, factor extraction is conducted to assess the number of factors present, and
rotation of the factor structure is undertaken to make the results more interpretable
(Coakes and Steed, 2001). In the present study, an initial exploratory factor analysis
was conducted to determine the underlying structure of the data. Principal component
analysis with varimax rotation was used to maximize the variance in the data
(Tabachnick and Fidell, 1996). All data were analyzed using SPSS. Also, factor
loadings were examined across the analyses and final factors were based on the most
consistent factor structure. All items that cross-loaded in the process of decoupling
scales were dropped.
Aggregation of group-level data. Aggregation of group member responses to
create measures of group-level constructs must be justified by examining measures of
within-group agreement, such as ANOVA, rWG(J) (Cohen et al., 2001), ICC(1) and ICC(2) Leaders’
(McGraw and Wong, 1996). A series of one-way ANOVAs showed a greater than management
chance similarity among group members on all group-level constructs ( pso0.01). The
significant ANOVA findings allowed us to proceed with the computation of rWG(J), behaviors
ICC(1), and ICC(2) for the constructs (Bliese, 2000). Findings were as follows:
task conflict (rWG(J) ¼ 0.60, ICC(1) ¼ 0.24, ICC(2) ¼ 0.49), relationship conflict (rWG( J) ¼
0.57, ICC(1) ¼ 0.39, ICC(2) ¼ 0.66), leader conflict management behaviors (rWG( J) ¼ 0.94, 705
ICC(1) ¼ 0.27, ICC(2) ¼ 0.99), leader communication of vision (r WG( J) ¼ 0.69,
ICC(1) ¼ 0.55, ICC(2) ¼ 0.79), leader emotion management (rWG( J) ¼ 0.88, ICC(1) ¼ 0.50,
ICC(2) ¼ 0.55), and group morale (rWG(J) ¼ 0.95, ICC(1) ¼ 0.054, ICC(2) ¼ 0.78). Although
no absolute standard value for aggregation based on rWG( J) and ICC have been
established, an rWG( J) Z0.70 and ICC(1) values exceeding 0.05 are considered sufficient
to warrant aggregation (Bliese, 2000). Glick (1985) suggests an ICC(2) value of 0.60 or
above as a cut-off point to justify aggregation. We note that the rWG( J) or ICC scores for
conflict scales were approaching the cut-off point. This is not uncommon (see Greer
et al., 2008; Tjosvold et al., 2005). Consequently, we follow Greer et al. (2008); Tjosvold
and colleagues (2005) to conclude that the within-team ratings were homogenous
enough to warrant aggregation to the team level. Based on the above results, our
group-level constructs approached, met, or exceeded these standards, justifying the
aggregated measures used in this study.
Control variables. In all analyses, we controlled for group size, gender as well as a set
of dummy variables indicating the group’s organization. We also controlled for gender
and it has no significant impact on the variables of interest in this study.
Analytic strategy. We used hierarchical regression analysis to test the hypotheses
regarding group performance and morale. In Step 1, we entered the control variables
(i.e. organization dummies, and group size). In Step 2, we entered the independent
variable of racioethnic diversity, assessed by a dummy variable where
1 ¼ homogeneous team (100 percent white) and 0 ¼ diverse team (o100 percent
white). In Step 3, we entered either the task conflict or the relationship conflict measure,
as these two measures were correlated to enter into the same prediction equation
(r ¼ 0.68). Finally, in Step 4, we entered the multiplicative interactions between the two
types of conflict and the three leader behaviors to predict the group outcomes. H1a,
H2a, and H3a predicted that leadership would moderate the impact of task conflict on
group performance and morale, and H1b, H2b, and H3b predicted that leadership
would moderate the impact of relationship conflict on group outcomes.
To test mediation and moderation, we followed the procedure outlined by Baron and
Kenny (1986). According to Baron and Kenny, four conditions are critical to the testing
of mediation. First, the independent variable (i.e. racioethnic diversity) must be
significantly related to a mediator (i.e. task and relationship conflict). Second, diversity
must be significantly related to the outcome variables of performance and morale.
Third, task and relationship conflict must be significantly related to performance and
morale, respectively. Finally, the relationship between diversity and the outcomes of
performance and morale must be significantly reduced when task or relationship
conflict is introduced to the regression equations, as assessed by the Sobel test
(MacKinnon and Dwyer, 1993; MacKinnon et al., 1995).
The above procedure is sufficient for testing the diversity-process-outcomes model;
however, our figure depicts a moderated mediation model and requires a more
sophisticated calculation of effects. Moderation is assessed by examining the
significance of the increase in R2 when the multiplicative interaction between the IV
EDI and the moderator is entered into the regression equation. Given a significant increase
31,8 in R2, the form of the interaction must be investigated by calculating and plotting
simple slopes and regions of significance. Moderated mediation takes this process one
step further to calculate the extent to which the moderator influences the strength of a
mediated effect. We used the formulas provided by Preacher et al. (2007) to test for
moderated mediation.
706
Results
Table I presents means, SD, and correlations among the study variables. The
relationships between racioethnic diversity, conflict (task and relationship), and group
morale and group performance were first examined by correlation (see Table I).
Diversity was not significantly correlated with either type of conflict or with either
outcome variable. Task conflict was significantly negatively correlated with both
group performance and group morale, consistent with the findings of De Dreu and
Weingart’s (2003) meta-analysis. Relationship conflict was significantly negatively
correlated with team morale, and non-significantly correlated with team performance.
Regression analyses (Table II) showed that when group size and organization were
controlled, group diversity was a positive predictor of task conflict ( po0.05, using one-
tailed test for directional prediction) but was unrelated to relationship conflict
( p40.20). Hence, the diversity-process-outcomes model is potentially supported for
task conflict, but not for relationship conflict in our data.
Table III shows the regression analyses predicting group performance as assessed
by leaders, and Table IV shows the regression analyses predicting group morale as
reported by group members and aggregated to the group level. Step 1 of the
regressions showed that diversity was not a significant predictor of either group
performance or morale when group size and organization were controlled. Step 2
showed that both task conflict and relationship conflict ( pso0.05, using one-tailed
tests for directional predictions) were significantly negatively associated with both
group performance and morale, supporting the meta-analytic conclusions of De Dreu
and Weingart (2003).

Hypothesis tests
H1a and H1b predicted that active conflict management on the part of the leader would
weaken the negative association of task and relationship conflict, respectively, with

Mean SD 1 2 3 4 5 6 7 8

1.Diversity 0.64 0.48 1.00

2.Team leader conflict management 2.56 0.49 0.14 1.00
3.Transformational leadership 3.69 0.46 0.13 0.16 1.00
4.Team leader emotional management 3.82 0.35 0.04 0.28 0.49 1.00
5.Relationship conflict 1.96 0.60 0.09 0.10 0.19 0.13 1.00
6.Task conflict 2.53 0.56 0.16 0.23 0.40 0.20 0.68 1.00
7.Team performance 3.84 0.68 0.23 0.28 0.48 0.39 0.22 0.36 1.00
8.Team morale 3.41 0.49 0.12 0.13 0.27 0.28 0.29 0.29 0.28 1.00
n 89
Table I.
Means, SDs, and Notes: Correlations 40.276 were significant at the 0.05 level (two-tailed);correlations 40.277 were
correlations significant at the 0.01 level (two-tailed)
 Task conflict Relationship conflict
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Variable b step Final b b step Final b b step Final b b step Final b b step Final b b step Final b

Group size 0.15 0.19*** 0.15 0.20*** 0.15 0.20* 0.11 0.13 0.11 0.13 0.11 0.13
Organization controlled Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
2
DR Step 1 0.16*** 0.16*** 0.16*** 0.26** 0.26** 0.26**
Group diversity (0 ¼ yes, 1 ¼ no) 0.23*** 0.21*** 0.23*** 0.22*** 0.23*** 0.12 0.12 0.12 0.12 0.12 0.12 0.06
DR2 Step 2 0.04*** 0.04*** 0.04*** 0.01 0.01 0.01
Leader conflict management 0.11 0.11 0.05 0.05
Leader emotion management 0.11 0.11 0.00 0.00
Transformational leadership 0.43** 0.43** 0.20*** 0.20***
DR2 Step 3 0.01 0.01 0.16** 0.00 0.00 0.04***
Adjusted R2 0.21* 0.21* 0.28** 0.28** 0.27** 0.22**
Notes: Number of groups ¼ 87. ***po0.10; *p o0.05; **po0.01, two-tailed tests
management

Regressions predicting
Leaders’

members
707

conflict reported by group

Table II.
behaviors
 31,8
EDI

708

Table III.

assessed by leaders
group performance as
Regressions predicting
Moderator
Leader conflict management Leader Emotion management Transformational leadership
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Predictor b step Final b b step Final b b step Final b b step Final b b step Final b b step Final b

Group size 0.06 0.01 0.06 0.04 0.06 0.03 0.06 0.04 0.06 0.06 0.06 0.07
Group diversity (0 ¼ yes, 1 ¼ no) 0.13 0.03 0.13 0.05 0.13 0.03 0.13 0.08 0.13 0.04 0.13 0.02
Organization controlled Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
DR2 Step 1 0.26** 0.26** 0.26** 0.26** 0.26** 0.26**
Task conflict 0.35** 0.63 0.35** 2.01* 0.35** 1.52*
Relationship conflict 0.19*** 0.02 0.19*** 03.29* 0.19*** 1.32*
DR2 Step 2 0.10** 0.03*** 0.10** 0.03*** 0.10** 0.03***
Leader conflict management 0.18*** 0.44 0.23* 0.08
Leader emotion management 0.32** 0.40 0.36** 0.61***
Transformational leadership 0.51** 0.34 0.54** 0.07
DR2 Step 3 0.03*** 0.04* 0.09** 0.12** 0.18** 0.25**
Interaction 0.44 0.44 0.29 0.29 1.82*** 1.82*** 3.23** 3.23** 1.36* 1.36* 1.32*** 1.32***
DR2 Step 4 0.00 0.00 0.02*** 0.06** 0.03* 0.02***
Adjusted R2 0.29** 0.22** 0.39** 0.38** 0.49** 0.48**
Notes: Number of groups ¼ 84. ***po0.10; *po0.05; **po0.01, two-tailed tests
 Moderator
Leader conflict management Leader emotion management Transformational leadership
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Predictor b step Final b b step Final b b step Final b b step Final b b step Final b b step Final b

Group size 0.05 0.08 0.05 0.06 0.05 0.12 0.05 0.04 0.05 0.12 0.05 0.05
Group diversity (0 ¼ yes, 1 ¼ no) 0.11 0.14 0.12 0.13 0.12 0.19 0.12 0.16 0.12 0.22 0.12 0.20
Organization controlled Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
DR2 Step 1 0.15 0.15 0.15 0.15 0.15 0.15
Task conflict 0.29* 1.26*** 0.29* 0.82 0.29* 1.56***
Relationship conflict 0.21*** 1.73* 0.21*** 1.23 0.21*** 0.38
DR2 Step 2 0.07* 0.03*** 0.07* 0.03*** 0.07* 0.03***
Leader conflict management 0.03 0.83 0.08 0.96*
Leader emotion management 0.17 0.06 0.20*** 0.64***
Transformational leadership 0.19 0.62 0.25* 0.49
DR2 Step 3 0.00 0.01 0.03 0.04*** 0.02 0.05*
Interaction 1.41 1.41 1.87* 1.87* 0.56 0.56 1.45 1.45 1.29 1.29 0.55 0.55
DR2 Step 4 0.02 0.05* 0.00 0.02 0.03 0.01
Adjusted R2 0.11*** 0.11*** 0.12* 0.11*** 0.14* 0.11***
Notes: Number of groups ¼ 86. ***po0.10; *po0.05, two-tailed tests
management

Regressions predicting
group morale as reported
Table IV.
Leaders’

by group members
709
behaviors
EDI group performance and morale. Step 4 of the regression equations depicted in
31,8 Tables III and IV indicated that the multiplicative interaction between leader conflict
management and relationship conflict predicted a significant additional amount of
variance in the outcome of group morale. The form of the interaction is shown in
Figure 2, which depicts plots of simple slopes at the sample mean (2.56), one SD below
the mean (2.07) and one SD above the mean (3.05). Calculation of the region of
710 significance indicated that the simple slope of the association between relationship
conflict (x-axis) and morale (y-axis) was negative and significant when the rating of
leader conflict management was o2.67. The simple slope was non-significant when
leader conflict management was rated at 2.67 or higher. Hence, leaders had to score
somewhat above the sample mean of 2.56 in conflict management to prevent
relationship conflict from damaging group morale.
The other three interactions between leader conflict management and task/
relationship conflict did not add significantly to the variance accounted for in
performance or morale. Hence, H1a was not supported, and H1b was partially
supported.
H2a and H2b predicted that leader emotion management would weaken the
negative association of task and relationship conflict, respectively, with group
performance and morale. Step 4 of the regression equations in Tables III and IV
showed that leader emotion management interacted significantly with both task and
relationship conflict to predict group performance, but not morale. The form of the
interaction between leader emotion management and task conflict is shown in Figure 3,
which depicts plots of simple slopes at the sample mean (3.82), one SD below the mean
(3.47) and one SD above the mean (4.17). Calculation of the region of significance
indicated that the simple slope of the association between task conflict (x-axis) and
performance (y-axis) was negative and significant when the rating of leader emotion

3.9

3.8

3.7
Performance

3.6

3.5

3.4
CVz1 (1)
CVz1 (2)
3.3 CVz1 (3)
Figure 2.
Moderating effect of leader 1.4 1.6 1.8 2.0 2.2 2.4 2.6
conflict management on
association between Notes: Relationship conflict – CVz1, low leader conflict management;
relationship conflict and
performance CVz2, mean leader conflict management; CVz3, high leader conflict
management
 4.2 Leaders’
management
4.0 behaviors

3.8
711
Performance

3.6

3.4
CVz1 (1)
CVz1 (2)
3.2
CVz1 (3)

Figure 3.
2.0 2.2 2.4 2.6 2.8 3.0 Form of moderating effect
Notes: Task conflict – CVz1, low leader emotion management; of leader on associations
between conflict and
CVz2, mean leader emotion management; CVz3, high leader performance
emotion management

management was o4.00. The simple slope was non-significant when leader emotion
management was rated at 4.00 or higher. Hence, leaders had to score somewhat above
the sample mean of 3.82 in emotion management to prevent task conflict from
damaging group performance.
The interaction effect of leader emotion management and relationship conflict on
group performance was similar in form to that depicted in Figure 3. Calculation of the
region of significance indicated that the simple slope of the association between
relationship conflict and performance was negative and significant when the rating of
leader emotion management was o3.89. The simple slope was non-significant when
leader emotion management was rated at 3.89 or higher. Hence, leaders had to score
somewhat above the sample mean of 3.82 in emotion management to prevent
relationship conflict from damaging group performance. In sum, the results for group
performance supported H2a and H2b, while the results for group morale were non-
significant.
H3a and H3b predicted that leader transformational behaviors would weaken the
negative association of task and relationship conflict, respectively, with group
performance and morale. Step 4 in the regression equations depicted in Tables III and
IV indicated that the multiplicative interaction between leader transformational
behavior and both task and relationship conflict was a significant predictor of group
performance, but not morale. Both of these interactions were similar in form to
Figure 3. Calculation of the region of significance indicated that the simple slope of the
association between task conflict (x-axis) and performance (y-axis) was negative and
significant when the rating of leader transformational behavior was o3.59. The simple
slope was non-significant when leader transformational behavior was rated at
3.59 or higher. Hence, leaders scoring somewhat below the sample mean of 3.69 in
transformational behavior were able to prevent task conflict from damaging group
performance.
EDI The region of significance showed that the simple slope of the association between
31,8 relationship conflict (x-axis) and performance ( y-axis) was negative and significant
when the rating of leader transformational behavior was o3.22. The simple slope was
non-significant when leader transformational behavior was rated at 3.22 or higher.
Hence, leaders scoring somewhat below the sample mean of 3.69 in technical skill were
able to prevent relationship conflict from damaging group performance. In sum, the
712 results for group performance supported H3a and H3b, while the results for group
morale were non-significant.

Test for moderated mediation

We calculated tests for moderated mediation to determine whether the indirect effect of
diversity on performance via task conflict was moderated by leader behavior. Findings
for leader emotion management provided some support for our conceptual model,
depicted in Figure 1. At a low level of emotion management (one SD below the sample
mean), the indirect effect of diversity on group performance showed a non-significant
negative tendency (z ¼ 1.67, po0.10). The indirect effect of diversity on group
performance was non-significant at the mean level of leader emotion management
(z ¼ 1.63, ns) and at a high level of emotion management (one SD above the mean)
(z ¼ 0.95, ns). None of the other findings supported our prediction of moderated
mediation, probably because diversity was not a significant direct predictor of the
outcome variables.

Discussion
The findings of this study indicate that leadership may be an important contextual
factor affecting the outcomes of conflicts in work teams. Significant moderator
effects indicated that leader emotion management mitigated the negative effect
of relationship conflict on team performance, and leader transformational
behaviors mitigated the negative effects of both task and relationship conflict on
team performance. Leader conflict management eliminated the negative effect of
relationship conflict on team morale. Hence, the findings of this study demonstrate
the value of effective leadership for managing team conflicts, which is a contribution
to prior work showing the value of effective conflict management tactics by team
members (Ayoko et al., 2012; DeChurch and Marks, 2001; Somech et al., 2009;
Tekleab et al., 2009).
A moderated mediation effect was found indicating that leader emotion
management is valuable for reducing the negative impact of task conflict on
performance in diverse teams. Task conflict arising from racioethnic diversity can lead
to negative emotions, due to the difficulties associated with social categorization
processes (van Knippenberg et al., 2004). In particular, research has shown that
ethnicity and race are fundamental to observable heterogeneity, which more often than
not arouse responses in others based on categorization (such as biases, prejudices,
or stereotypes) (Milliken and Martins, 1996) through social identification and
self-categorization. In fact, the study by Meeus et al. (2010) shows that the more people
identify with their in-group members, the more likely they are to view their in-group in
more ethnic terms. This, in turn, can lead them to exhibit more ethnic prejudices. In the
same study, group identification is shown to be positively related to ethnic prejudices,
such that people who identify strongly with their in-group increasingly adopt a more
ethnic identity representation that eventually is positively associated with increases in
ethnic prejudices. Altogether, identification and categorization of individuals into
different groups can provoke hostility or animosity within the workgroup that may Leaders’
trigger negative emotions. management
Additionally, the finding that leader emotion management moderates the negative
impact of task conflicts arising from diversity indicates the critical value of leaders behaviors
who are aware of the potential negative emotional outcomes of task conflict in diverse
teams. This finding supports prior theory arguing that leaders must manage team
members’ emotions during conflicts in order to avoid the development of a negative 713
group emotional history (Kelly and Barsade, 2001) and resulting damage to important
work attitudes driving decisions to work productively, to behave cooperatively, and to
remain with the organization (Ashkanasy et al., 2002).
Recently, other researchers have documented that leadership is important for
generating positive outcomes in diverse teams, such as enhancing performance
(Kearney and Gebert, 2009; Stewart and Johnson, 2009) and reducing turnover
(Nishii and Mayer, 2009). In particular, Kearney and Gebert (2009) find that
transformational leadership moderates the impact of diversity on the elaboration
and effective processing of task-relevant information in teams. Hence, these authors
considered leadership as a moderator of the diversity-process relationship in the
diversity-process-outcomes model, while we considered leadership as a moderator of
the process-outcomes relationship in that model. Our two sets of findings need not
be viewed as contradictory, however, because they were examining the process of
elaboration, while we were examining the processes of task and relationship conflict.
Their elaboration measure assessed whether workers believed that their fellow
team members openly share their knowledge, carefully consider all information
and perspectives, and generate high-quality ideas and solutions. Their findings
showed that when transformational leadership was high, diversity was positively
associated with elaboration of information, and when transformational leadership
was low, diversity was negatively associated with elaboration. Furthermore,
elaboration was positively associated with performance. Hence, leaders who can
enhance the elaboration process in diverse teams can generate higher performance
by doing so.
Our conflict measures, on the other hand, asked workers to report on the extent to
which team members disagreed with each other on task and relationship issues. Team
diversity was a positive predictor of task conflict in our regressions, and task conflict
was a negative predictor of both performance and morale reiterating the findings of De
Dreu and Weingart (2003). Prior theorists have argued, however, that task conflict is
valuable because it provides the team with greater variety in perspectives and
information that can inform more effective and creative decisions (Jehn, 1995; Jehn and
Mannix, 2001; Van de Vliert and De Dreu, 1994). Our findings provided clear support
for the value of leadership behaviors for reducing the negative effects of conflicts on
performance and morale in workgroups. We found less support for the moderated
mediation of leadership in the diversity-conflict-outcomes model, although we do
document that the indirect effect of diversity on performance via task conflict was
moderated by leader emotion management. Hence, leader emotion management in
particular was effective for ensuring that task conflicts did not result in poorer team
performance in diverse teams. In summary, together, our findings show that leadership
can serve to maximize the effectiveness of diverse work teams by both ensuring
that diversity leads to positive elaboration processes (Kearney and Gebert, 2009)
and ensuring that conflicts do not lead to negative performance outcomes (findings of
this study).
EDI Diversity showed the predicted positive association with task conflict in work
31,8 groups, but both task and relationship conflicts were negatively associated with the
outcome variables of group performance and morale. It is possible that the groups
sampled in this study were not diverse enough to generate a diversity advantage,
because in many cases, we were comparing all-white groups to groups with only about
two-three members of other ethno-cultural groups. To have a positive impact on group
714 performance, the perspective of those in the numerical minority must be processed by
the group, and this is only likely to happen if the minority opinion is expressed firmly
and consistently (Nemeth, 1986, 1992). People in the numerical minority in groups are
less likely to speak out with confidence if they are solos or constitute o15 percent of
the group (Kanter, 1977; Sekaquaptewa and Thompson, 2002; Thompson and
Sekaquaptewa, 2002). Studies with a greater range of diversity in groups may be more
likely to demonstrate value from diversity. Additionally, given that the deep-level
diversity indices take more time to emerge in groups (Harrison et al., 1998, 2002; Jehn
et al., 1999) while the surface-level characteristics (e.g. ethnicity, age gender) are more
immediately apparent (Riordan, 2001), there is a possibility that the teams sampled in
this study have not been together enough to get pass the interaction hurdles (posed by
visible dissimilarity) to positive outcomes of diversity.
Although we did not have a strong-moderated mediation effect, leadership did
moderate the negative relationships between the two types of conflict and group
outcomes. In particular, leader emotion management was effective for reducing the
negative impact of both task and relationship conflict on group performance. This
finding extends the growing literature on emotions in organizations (Brockner and
Higgins, 2001) by linking it to the critical process of conflict management. Specifically,
leaders rated as somewhat above the mean on emotion management were able to
mitigate the negative effects of task and relationship conflict so that they did not
damage group performance. Leaders rated lower on emotion management had lower
group performance under conditions of conflict. Hence, our findings show that
leadership can be a powerful tool for dealing with one of the most distressing forms of
organizational behavior – that is, relationship conflicts between organization members
who have to work together.
Leader transformational behaviors were also useful for reducing the negative
impact of conflict on group performance. Leaders rated as near average or higher on
transformational behaviors were able to minimize the negative impact of task and
relationship conflict on group performance. Less skilled leadership resulted in poorer
performance under conditions of conflict. Therefore, we conclude that leadership
development is critically important to organizational performance, and that many of
the group leaders in our sample were insufficiently skilled to handle group conflict
effectively.
Active conflict management strategies undertaken by the leader reduced the
magnitude of the negative association between relationship conflict and employee
morale, as predicted. Leader active conflict management did not moderate the link
between task conflict and employee morale, the link between task conflict and team
performance, or the link between relationship conflict and team performance, however.
These surprising findings may be due to the nature of the active conflict management
strategies included in our measure. We included power (force), cooperation, use of
a third party, providing privacy and allocation to differing projects for parties in
disagreement as components of active conflict management. Some of these strategies,
likely require considerable skill for effective implementation in diverse teams
experiencing conflicts. In the absence of such skill, some of these tactics could have Leaders’
negative repercussions, particularly the use of power or force (Weider-Hatfield and management
Hatfield, 1996). By comparison, less skilled application of emotion management or
transformational leadership is unlikely to create negative outcomes; rather, lack of skill behaviors
in these instances likely has neutral or no impact. As such, the results of active conflict
management strategies may be less consistently positive than the results of emotion
management or transformational leadership. 715
Practical implications
Based on our results, in order to prevent negative emotions from task and relationship
conflict from damaging group performance, leaders of diverse groups can act to
manage those emotions among their group members. Also, because meta-analytic
results show that both task and relationship conflicts can result in poorer performance
(De Dreu and Weingart, 2003) and the complex relationship between task conflict and
performance (de Wit et al., 2011), leaders may wish to reduce conflict in diverse teams.
Based on this thinking, we argue that leaders should not try to diminish the conflicts
arising from team diversity, but rather, employ conflict management strategies to
manage intra-group conflicts effectively to produce positive outcomes. A leader who is
able to manage the conflict effectively may be able to reduce negative emotions and
increase group morale and performance. Finally, our results show that leaders’
transformational behaviors (e.g. communication of vision) to the group members
reduced the effect of conflict on group performance. Altogether, these results have
implications for organizational leadership and managers. For example, leadership
training is implicated. Leadership development programs should include conflict and
emotions management skills as well as ability to provide a vision and direction for
team members. Also, given the success of leadership intervention in the present
research, organizational and team leadership should continue to model leadership
behaviors (e.g. emotions/conflict management) that can assist in shaping team norms
and climate that will be effective in reducing conflict.

Limitations and future research directions

Like all empirical studies, this study has its limitations. A greater amount of variation
in the diversity of work groups included in the sample would have been useful for
overcoming problems of restriction of range, which likely reduced our ability to
observe an association between diversity and group outcomes. The sample is very
rich, however, and utilizes previously published measures of leadership, conflict, and
group outcomes. Every effort was made during data collection to include diverse
workgroups in the eight participating organizations. In the end, only 36 percent of the
sampled groups had non-white member. This limitation is shared by many studies of
racioethnic diversity (Proudford and Nkomo, 2006).
The associations observed between group members’ aggregated ratings of conflict
and morale are threatened by the possibility of common methods bias. Although the
conflict and morale measures are only moderately correlated (rs ¼ 0.29, po0.01), the
possibility exists that those associations are partly due to the fact that the same people
rated both concepts at the same time on the same survey. The findings observed for
group performance are not subject to common methods bias concerns, however.
The predictor, conflict, was provided by group members, while the performance
outcome was provided by group leaders. Most of the findings supporting the
moderating effect of leadership on the association between conflict and group
EDI outcomes were observed for group performance, and as such, common methods bias is
31,8 not a concern for most of the important findings of this study.
Additionally, the reliability score of the conflict management scale in the present study
was on the low side and the statistics justifying aggregation approached the commonly
accepted point. Although, Nunnally and Bernstein (1994) advised that a co-efficient of 0.60
should not be a concern, caution should be taken in generalizing the results related to this
716 variable. Also, we acknowledge that other factors may be contributory in heightening the
influence of task conflict in the study. Overall, the above shows that most managers
and group leaders lack the skills or motivation to address conflict in workgroups.
Conflict management training is therefore indicated. Training enhances both individual
(Wege and Moeller, 1995) and group performance (Firestein and McCowan, 1988; Stout
et al., 1997). While training for conflict management is beyond the scope of this research,
further research should examine the issue.

Conclusion
Leadership is a valuable resource to organizations dealing with conflict in groups.
Although both task and relationship conflict show a negative direct effect on group
performance and morale, effective conflict management, emotion management, and
transformational behaviors on the part of leaders neutralized those negative effects.
Diversity is associated with greater task conflict, which in turn, is linked to poorer
performance and morale outcomes. The positive moderating effect of leadership on the
conflict-outcomes relationship shows the importance of leadership in diverse workplaces.

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About the authors

Oluremi B. Ayoko is a Senior Lecturer in Management at the University of Queensland Business
School. She teaches conflict management, leading and managing people, human resource
management and business research methods. Her research interests include conflict,
emotions, leadership, employee territorial behaviors and workplace diversity. She has
published in journals such as Applied Psychology: An International Review, International
Journal of Conflict Management, International Journal of Organizational Analysis and Small
Group Research. Oluremi B. Ayoko is the corresponding author and can be contacted at:
r.ayoko@business.uq.edu.au
Alison M. Konrad is a Professor of Organizational Behavior at the Richard Ivey School of
Business and holder of the Corus Entertainment Chair in Women in Management. She earned her
PhD in Applied Social Psychology at the Claremont Graduate University. She is a Fellow of the
Eastern Academy of Management and a member of the Women’s Executive Network (WXN)
Advisory Board for Canada’s Most Powerful Women Top 100. Her research interests center on
gender and diversity in organizations.

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