Task difficulty and team diversity on team creativity: Multi-agent simulation approach

•Task difficulty affects the activity of exploration and exploitation as well.•Creativity emerges best in the exploitative activities when task difficulty is low.•Team diversity affects team members’ explorative and exploitative activities.•Medium level of team diversity hinders emergence of creativity most. Organizational structures are complex and vary according to sector, field, and type of business or service. In order to be effective, an organization needs to tailor its activities to the environment in which is it located. Based on contingency perspectives, this study is focused on investigating effective ways to design team diversity and maximize team creativity according to task difficulty levels. Considering the organizational team member as an agent, the study employed a multi-agent simulation method to understand the progress of creative manifestation, by observing the exploration and exploitation activity of team members over certain periods of time. The results first reveal that the level of team diversity influences the amount of creativity manifested by team members’ activities, such as exploration and exploitation. Second, managers have to properly facilitate either exploration or exploitation depending on task difficulty by striking a balance between them.