The objective of this study was to investigate the influences of cultural diversity and group composition on computer‐mediated group decision making for mixed American–Chinese groups. Seventy‐five Chinese and fifty Americans participated in a laboratory experiment. Twenty‐five five‐person groups were formed. Each group performed four preference decision‐making tasks with different levels of impact and complexity. Group‐level measurements of group outcomes and individual‐level measurements of group processes were collected. The results indicated that cultural diversity had both positive and negative effects on group decision making. Culturally heterogeneous groups made better decisions than did culturally homogeneous groups, but took longer to make decisions. Moreover, in terms of improvement of the quality of decisions, groups with a balanced representation from each culture outperformed unbalanced groups. Meanwhile, participants in the balanced groups had greater sensitivity to leader emergence and perceived less conflict. The results of this study also revealed the effects of self‐construal and self‐efficacy in communication on group performance. Implications for intercultural management were provided. © 2012 Wiley Periodicals, Inc.