Group negotiations are a fact of managerial life, yet the outcomes of teamwork are highly unpredictable. Sometimes, groups cohere, reaching novel solutions to nagging problems, and sometimes infighting causes them to collapse. How can you predict when conflict will emerge in groups, and what can you do to stop it?

Dora Lau of the Chinese University of Hong Kong and Keith Murnighan of the Kellogg Graduate School of Management at Northwestern University have examined group conflict in terms of fault lines – the cracks that result when groups split into homogenous subgroups according to demographic characteristics.

For instance, in a four-person group made up of two white males in their forties and two African American females in their twenties, a very strong fault line would exist, one clearly defined by age, gender, and race. In a group consisting of one white male, one Asian male, one hispanic female, and one African American female, all in their thirties, fault lines would be less evident.

Recently Katerina Bezrukova of Rutgers University and her colleagues compared the effects of fault lines based on social categories (e.g., age, race, or gender) with those based on information (e.g., education or work experience). They found that groups with strong information-based fault lines perform better than groups with strong demographic-based fault lines.

While the latter create dysfunctional conflict within the group, information-based fault lines provide the diversity of information needed for effective performance – in other words, they provide functional conflict.

These studies provide useful hints on how diversity can be effectively managed. Specifically, when forming teams, avoid obvious demographic fault lines that would allow group members to split into categories. When broader diversity exists, fault lines can simply disappear.