Not all diversity is equally beneficial

Experts from the Higher School of Economics have determined that cultural diversity is beneficial for team performance in eSports, while language and experience diversity negatively affect performance. These results might be of interest to companies of similar industries aiming to maximize profits. The study, entitled ‘Is Diversity Good or Bad? Evidence from eSports Teams Analysis,’ was published in the journal Applied Economics.

Researchers at the HSE International Laboratory of Intangible-driven Economy analysed the results of a Counter-Strike: Global Offensive (CS:GO) game for 2013-2015 for the top 100 teams, made up of representatives from 23 countries.

Several types of diversity were identified: diversity of experience, diversity of culture, and diversity of language. The researchers used characteristics described in the work of Geert Hofstede to measure the cultural aspects of different countries: individualism, uncertainty avoidance, long-term orientation, masculinity, and power distance.

Using regression analysis, the authors of the study determined that the absence of diversity among team members reduces the amount of prize money by an average of 30%. When teams are diversified, profit increases. A representative from an additional country increases the prize money by almost 32%, all else being equal. This applies to typical teams comprised of representatives from two or three countries. Not all aspects of cultural diversity on teams positively impacts performance, however. For example, if a team has representatives of countries with different attitudes towards power distance inequality, productivity drops. While country heterogeneity for individualism and masculinity has a positive effect on team performance, the effect of the second character quality is less than the first. Other aspects do not have a substantial impact on team performance.

The researchers also analysed language diversity and determined that the more homogenous a team is, the better its performance will be. In other words, the best-performing teams are those with representatives of different countries that speak the same language, e.g., English-speaking players from the U.S. and Australia or Russian-speaking players from post-Soviet countries. Language and experience heterogeneity among players does not impact performance or can have a negative effect depending on the approach taken during analysis.

‘We believe that the results obtained from the eSport industry can be used as an example for firms from similar industries. Companies in eSports, like in real business, are focused on results, use the same stimuli, and demonstrate a trend towards digitalisation. Additionally, the intellectual abilities of participants are more important than physical abilities,’ says Petr Parshakov, the Deputy Head of HSE Perm’s International Laboratory of Intangible-driven Economy.

The main result of the study is that companies might benefit from diversity in their workforces, as the absence of diversity reduces performance by 30%. It is important to note, however, that different aspects of diversity affect performance in different ways.