We advance the literature on faultlines by theorizing about how and why perceived faultlines (i.e., realized subgroupings as perceived by team members) not only influence team characteristics (e.g., decision-making structures), but also change in response to these team characteristics over time. Drawing on current team theories, we reason that strong perceived faultlines lead teams toward a decentralized decision-making structure (i.e., distributed decision-making responsibility), but a decentralized decision-making structure weakens future perceived faultline strength. We also build a theory suggesting a decentralized decision-making structure mitigates the dysfunctional effect of perceived faultlines on team performance. We find support for our theory in a sample of 230 undergraduate students in 48 teams, and we discuss implications for faultline and team research.
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