Teams with strong faultlines often do not achieve their full potential
because their functioning is impaired. We argue that strong diversity beliefs
held by team leaders mitigate the negative impact of socio-demographic
and experience-based faultlines on team functioning. In a heterogeneous
multisource field sample of 217 employees nested in 44 teams and their
leaders, we tested our assumptions. Results of a path-analytic model showed
that socio-demographic faultlines were negatively related to perceived
cohesion and positively related to perceived loafing. The impact of sociodemographic faultlines on team functioning was less detrimental when
leaders held strong diversity beliefs. Against our expectations, we found no
support for an impact of experience-based faultlines on perceived cohesion
or a moderating role of leaders’ diversity beliefs in this context. Potential
explanations for these results and implications for organizations and team
leaders are discussed.