The Effect of Team Diversity on Decision-Making Effectiveness

Abstract

This study examines the dual-pathway effects of top management team (TMT) diversity on strategic decision-making within Sub-Saharan African corporate ecosystems. Using a mixed-methods design, quantitative data from 384 executive members across 64 management teams in Nigeria's high-velocity sectors (FinTech, Banking, Telecommunications) was integrated with 18 qualitative interviews. Hierarchical regression analysis reveals that while diversity directly enhances strategic decision quality, it imposes a social categorization tax by delaying execution speed and eroding team commitment. Interaction models identify psychological safety as a critical boundary condition that neutralizes these coordination penalties, accelerating speed and securing commitment, particularly under high environmental dynamism. Qualitative thematic analysis (intercoder agreement) contextualizes these paths within regional realities, showing how localized generational hierarchies and patriarchal structures activate team faultlines, while the indigenous cultural value of Ubuntu operates as a vital socio-cultural buffer. Given its specific geographical scope, this study moderates claims of universal applicability, demonstrating that micro-behavioral team dynamics remain bounded by macro-societal norms. The findings provide corporate boards in emerging African markets with an actionable blueprint to move beyond tokenistic representation, leveraging psychological safety to transform cultural and cognitive friction into strategic competitive advantage