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Chapter 9
Group Development and Team Building
After reading and studying this chapter, the student should
be able to:
Identify the stages of group development.
Compare the advantages and limitations of groups.
Describe the variables that determine a group’s
effectiveness.
Determine what is involved in team building.
Describe what made team building successful at
Resort Quest.
Describe what made team building successful in the
nonprofit area.
Describe how to work with self-managing work
groups.
Describe what makes team building successful at
SEI.
Brief Outline
Forces Causing Change
External Change Forces
Internal Change Forces
Planned Change
Importance of Work Groups
What Are Groups?
Types of Groups
How Groups Develop
Evaluating Groups
Diffuse Responsibility
Determining Group Effectiveness
Different Approaches to Team
Building
A Nonprofit Approach to Team
World and Team Building
Team Building in the Financial
Sector
Learning Objectives
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Family Dollar
Leon Levine, a 21-year-old entrepreneur with an interest in merchandising became intrigued with the idea
of operating a low-overhead, self-service retail store. He believed he could offer his customers a variety of
high-quality, good-value merchandise for under $2. Because he had grown up in his family’s retail store, he
understood value, quality, and customer satisfaction. In November 1959, Leon Levine opened the first
Family Dollar store in Charlotte, North Carolina, and was on his way to becoming a retailing legend. From
the start, he had a well-developed philosophy of what Family Dollar would be and how it would operate, a
philosophy from which he and his management team have never strayed. The concept is a simple one: “The
customers are the boss, and you need to keep them happy.” He created a general floor plan that he used in
each of his stores that allowed customers to easily shop for their favorite products in any Family Dollar
store. With the stores uniformly laid out and stocked, store managers were able to focus on providing good
customer service. This concept for a self-serve, cash-and-carry neighborhood discount store in low- to
middle-income neighborhoods proved so successful that today Family Dollar is a chain with over 6,600
stores from Maine to Arizona.
I. Forces Causing Change
• Continuously changing forces leading to or causing change originate both outside and within the
organization.
A. External Change Forces
• Management has little control over the strong impact of numerous external change forces—
forces outside the organization that have a great impact on organizational change.
o To survive, an organization depends on and must interact with its external environment.
o Any force that impacts the environment can affect the organization’s operations and brings
about pressures requiring a change response.
• External forces—from technological advancements to consumers’ changing requirements—cause
an organization to alter its goals, structure, and methods of conducting business.
B. Internal change forces
• Change forces also come from within the organization.
o Internal change forces may result from different organization goals or new challenges or
they may be caused by new quality initiatives, changing technologies, or employee
attitudes.
• External and internal forces for change are often interrelated.
Preview
Lecture Outline
CHAPTER NOTES Chapter 9
o At times, this linkage results from the changes in values and attitudes affecting people
within the system.
C. Planned Change
• For management to plan for change, it must first decide what needs to be changed in the
organization.
• Organizational effectiveness is the result of activities that improve the organization’s structure,
technology, and people so it can achieve its objectives.
• The nature of the problem causing the organization to be less than ideally effective determines the
choice of the particular technique used to achieve change.
o Diagnosing the problem includes defining the outcome desired from the change.
o In general, the desired outcome is either improved employee behavior or activities that
results in improved performance.
• Change can be achieved by changing the organization’s structure, technology, and/or people.
o According to the systems concept, a change in one element is likely to affect other
elements.
▪ Changing the organization’s structure involves modifying and rearranging the
internal relationships; this includes such variables as authority–responsibility
relationships, communications systems, work flows, and size and composition of
work groups.
▪ Changing the organization’s technology may require modifying such factors as tools,
equipment, and machinery; research direction and techniques; engineering processes;
and production system, including layout, methods, and procedures.
▪ Changing the organization’s people may include revising recruiting and selection
policies, training and development activities, reward systems, and/or managerial
leadership and communication.
• Supervisors and employees are likely to support change if they perceive the change is directed at
the real cause of the problem, such as being an effective solution, and not affecting them
adversely.
• People who participate in a change process respond entirely different than those merely affected
by it.
II. Importance of Work Groups
• To achieve synergy and gain the most from employees, organizations require groups.
• Synergy means the whole is greater than the sum of the parts.
o This is especially applicable when using teams and ad hoc task forces.
• It is important for supervisors to understand the basic concepts of group or team development
because work groups or teams produce the synergistic effect needed for management to reach its
goals.
A. What Are Groups?
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• Groups are two or more people who communicate and work together regularly in pursuit of one
or more common objectives.
• If a group becomes too large, it is difficult for all members to interact; this leads to the evolution
of smaller groups.
• According to one of the findings of Hawthorne studies, groups can be either supportive of
organizational goals or opposed to them overall.
B. Types of Groups
• Groups in organizations are either formal or informal.
• Formal groups are deliberately formed by management and are often shown on the organization
chart.
o Examples of formal groups include command groups, committees, and taskforces.
• Network groups are dispersed and require collaboration and coordination across different
projects and sometimes from groups outside the organization..
o The idea that groups need to be viewed as part of a network working within an organization
is taking on greater prominence. The reasons for this are as follows:
▪ Many groups are formed and disbanded quickly not allowing for normal group
dynamics to emerge.
▪ Teams are dislocated across cities and countries and composed of members who
work on multiple projects within many different teams.
▪ These groups frequently require collaboration and coordination across different
projects and sometimes from groups outside the organization.
o When groups are viewed as a network, the roles and responsibilities of group members are
based on connections, collaboration, and a targeted expertise.
• Virtuoso groups are composed of top performers who excel in their respective specialties and are
usually focused on important performance issues.
o Virtuoso groups attempt to put together only people who excel in their respective specialties
while disregarding possible managerial skills, diversity of thought, or other relational
considerations.
o It also presents unique challenges.
o Virtuoso groups differ from traditional ones in most dimensions.
▪ They bring in members only for their top skills.
▪ They celebrate the individual egos of team members.
▪ They force members into physical proximity.
▪ They focus on creativity over efficiency.
• A virtual group or team is dislocated—and mostly, if not exclusively, meets online.
o Virtual groups can face the added challenges of different time zones, less frequent verbal
communications, the lack of a physical presence, and any informal interactions that leads to
social ties among more co-located groups.
o Virtual groups provide some advantages such as the ability to tap into more diverse and
talented members, and better cost advantages.
• Self-managing work group have become more common today, partly because of management’s
efforts to sustain competitive advantages through downsizing, increased efficiencies, enhanced
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technologies, etc.
o Even companies that rely on an appointed leader make use of some forms of empowerment,
a key concept of self-managed work groups and teams.
• Informal groups evolve out of employees’ need for social interaction, friendship,
communication, and status.
o The group members might give more allegiance to the informal leader than to the formal
manager.
o Other types of informal groups cross formal work team boundaries and are based on
common interests.
o Another type of informal group is a friendship group; its members also have common
interests, but they are more social in nature.
▪ Such groups could include a running team, a band, or the people who gather to chat
during a break.
o Informal groups provide a valuable service by helping members meet affiliation and social
needs.
▪ Ideally, management tries to create an environment that the needs and objectives of
informal groups are similar to the needs and objectives of the formal organization.
C. How Groups Develop
• B. W. Tuckman developed a model of small-group development that encompasses four stages of
growth.
o A desirable feature of this classical model—that basically has been followed by later
researchers—is it examines the stages in terms of task functions and interpersonal relations,
both essential concerns of any group.
1. Stages of Group Development
• The stages of group development defined by Tuckman are as follows:
o Forming
o Storming
o Norming
o Performing.
• The central concept is a group usually remains in a stage until key issues are resolved before
moving to the next stage.
2. Stage 1: Forming
• Forming is the stage in which members first come together and form initial impressions.
• Members try to determine the task of the group and their role expectations of one another.
• Group members depend on a leader to provide considerable structure in establishing an agenda
and guidelines, since they tend to be unsure of what is expected of them.
3. Stage 2: Storming
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• The storming stage is typically a period of conflict and—ideally—organization.
• Conflicts arise over goals, task behaviors (who is responsible for what), and leadership roles.
• Relationship behaviors emerge because people have strong feelings and express them,
sometimes in a hostile manner.
o It is a mistake to suppress conflict; the key is to manage it.
o If a group gets through stage 2 successfully, it becomes organized and begins
developing norms, rules, and standards.
4. Stage 3: Norming
• Norming is a stage of developing teamwork and group cohesion and creating openness of
communications with information sharing.
• Members feel good about one another and give each other positive feedback.
• The level of trust and cooperation is usually quite high.
5. Stage 4: Performing
• Performing is the stage that the group shows how efficiently and effectively it can operate to
achieve its goals.
• Information exchange has developed develops to the point of joint problem solving, and there
is shared leadership.
• Group development is a continuing process.
D. Evaluating Groups
• Groups, whether formal or informal, are a fact of organizational life.
1. Advantages of Groups
• Major advantages of groups are as follows:
o Provide members with opportunities for needs satisfaction.
o May function more effectively than individuals.
2. Provide Opportunities for Needs Satisfaction
• Group membership provides an opportunity for members to satisfy security and relationship
needs as well as higher-level esteem and self-actualization needs.
3. May Function More Effectively Than Individuals
• Synergy is the concept that two plus two can equal five.
• The combination of members possessing different perspectives, experiences, and job skills can
often work in a team’s favor.
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4. Limitations of Groups
• Following are some of the general limitations of groups:
o They may encourage social loafing.
o They may diffuse responsibility.
o They may be less effective than individuals.
5. Encourage Social Loafing
• Social loafing is the term used to describe “taking a free ride” when working with others as a
team.
o Generally, social loafing occurs because some members genuinely believe their
contributions to the group are not significant or they hope for a free ride.
• Free riders are reinforced when they receive rewards or recognition on an equal basis with
those who have carried the greater load.
6. Diffuse Responsibility
• The diffusion of responsibility among members of a group is somewhat related to social
loafing and is also one of its major causes.
• Because each person may be expected to do only a part of a project, no one person may feel
totally responsible.
• Diffused responsibility may result in groups assuming positions individual members would not
take if held individually accountable.
• The more mundane, routine, and undesirable group tasks may be neglected by individual
members in the hope someone else will complete them.
7. May be Less Effective than Individuals
• As a result of social loafing, diffusion of responsibility, and other factors, groups may not
necessarily be more productive and effective than individuals.
E. Determining Group Effectiveness
• There is a cause-and-effect relationship between the causal variable (leadership), the intervening
variables (group characteristics), and the end result variables.
• Variables affecting group effectiveness are as follows:
o Group size
o Member composition and roles
o Norms
o Group cohesiveness
1. Group Size
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• The size of the work group has an impact on a group’s effectiveness.
• The size of the work group depends on its purpose.
o Organizations can take a contingency approach to determining a manager’s span of
control that influences the size of the natural group.
o With the increasing use of committees, task forces, quality circles, and self-managing
work teams, additional guidelines are needed for determining the size of these types of
groups.
• The ideal size for a problem-solving group is probably five to seven members.
o However, another study found that 14 members is the ideal size for a fact-finding group,
showing that the ideal size depends on the group’s purpose. .
2. Member Composition and Roles
• The more alike members are, the more similarly they will see things.
• For tasks that are relatively simple and require maximum cooperation, homogeneous groups
are superior.
o For complex tasks, groups composed of members with widely differing backgrounds are
superior because a greater number of different ideas would be generated, increasing the
probability of creativity.
• Whatever the group’s composition, key task and maintenance roles must be carried out if the
group is to be effective.
• Members of a problem-solving group and regular work teams, where the formal leader is
skillful in getting everyone to participate, tend to shift back and forth between these roles
naturally.
o Many members may play several task or maintenance roles.
• Some ineffective roles or behaviors, such as domineering, can have a negative impact on group
effectiveness.
• The skill is for the leader to operate so members share the leadership role and ineffective
behaviors are minimized.
• Another way to approach member composition and roles is from a team player or follower
style perspective.
• There are four types or styles of team members. They are as follows:
o Contributors are task-oriented, dependable team members who provide good technical
data, do their homework when requested, push the team to set a high bar for
performance, and use team resources wisely.
o Collaborators are goal-directed, big-picture team members who see the ultimate goal as
overriding, but are flexible and open to new ideas, pitch in when and where necessary,
and share the limelight with other team members.
o Communicators are process-oriented, positive-people team members who are effective
listeners and facilitators of any conflict among team members.
o Challengers are questioning, open, and candid team members who are willing to
disagree, banter, contest assumptions, and encourage the team to take calculated risks
when appropriate.
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• Teams need all four roles to be successful, so small teams need players to assume the role of
multiple styles while larger teams may have members assume one primary role.
• Norms are rules of behavior developed by group members to provide guidance for group
activities.
o In an effective team, norms, standard, and action plans are highly interrelated and
supportive of the organization’s goals.
o Negative norms can develop if a group is not well led.
o The critical role of leadership is especially important in influencing positive norms.
o Business ethics are similar to norms because they provide guides to behavior.
o The top leadership of an organization has significant influence on ethical normative
values of groups as well as individuals.
• Group cohesiveness is the mutual liking and team feeling in a group.
o Size and frequency of communication plays a major part in group cohesiveness.
o Factors preventing group cohesiveness are dysfunctional conflicts, internal power
struggles, and failure to achieve goals.
• Three other concepts for healthy group development are listening, supporting, and differing.
o Listening skills are important for group success.
o It is important to give positive feedback in support of suggestions to create a supportive
group environment for generating ideas.
o Establishing an environment in which people can disagree without being disagreeable is
most important for creativity in a group.
III. Different Approaches to Team Building
• A team is a collection of people who must rely on group cooperation if the team is to experience the
most success possible and thereby achieve its goals.
• A number of teams do not achieve their optimum success and potential because of the following
reasons:
o The team leader’s leadership style is too autocratic or permissive in managing the group.
o Several of the characteristics of an effective team are lacking.
• Teams and organizations may not be successful because they fail at one or more of the following
concepts:
o Effective leadership at the top of the team and/or organization
o Effective recruitment of good and talented people
o The creation of an environment so good that talented people grow and develop
A. A Nonprofit Approach to Team Work and Team Building
• The Providence Hospital and Sacred Heart Hospital Cancer Centers provides a good example of
effective teamwork in every aspect of patient care.
o Dr. Michael Meshad has an excellent reputation as an oncologist with an outstanding
personality and sense of humor.
o Dr. Thadeus Beeker, an expert in stem cell transplants, is on the cutting edge in cancer
research and diagnosis.
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▪ Dr. Beeker facilitates communication between doctors, nurses, and staff concerning
treatment for cancer patients.
o Dr. Nicole Angel joined Dr. Meshad and Dr. Beeker in part because she was attracted by
Dr. Meshad’s reputation and his vision for the center.
o Gail Havard was selected to be Patient Care Manager of the 17 nurses in the Cancer Center
and is well received by her former team members.
▪ She is very supportive in working with the team.
▪ Gail uses a participative style and consults with and involves her nurses in the
decision-making process for new hires.
• Providence Hospital worked with Sacred Heart Hospital in Pensacola, Florida, to develop the
Cancer Center’s treatment program.
• The Cancer Center partnered with M.D. Anderson in Houston to give Mobile patients access and
treatment from the well-known “Andy” Center.
• Within 24 hours of a local patient’s diagnosis, the Cancer Center’s physicians are able to hold a
conference with M. D. Anderson physicians to discuss the diagnosis and treatment.
• The partnership of Ascension Health, M. D. Anderson, Providence Hospital, and the Sacred Heart
Cancer Center team is a giant step toward bringing better diagnosis, timely treatment, and better
care to cancer patients through effective teamwork.
B. Team Building in the Financial Sector
• SEI (NASDAQ:SEIC) is an International provider of asset management, investment processing,
and investment operations software for institutional and wealth management funds.
o The company’s clients include banks, investment advisors and managers, institutional
investors, and affluent individuals.
• SEI has the potential for strong growth as it emerges from the downturn.
o Workplace design is one reason for the optimism.
o This is an organization that is flexible, creative, and ready for constant transformation.
o The company is open and not hierarchical.
o There is no need for an open-door policy because there are no doors.
o Employees are empowered. They can pick up their entire “office” and move to another
location to join another team.
• The workplace design at SEI gives the flexibility and the mindset to transform itself just as
quickly.
o While this might not work for every organization, the buildings and artwork at SEI are
designed to reflect the culture of the organization.
o This environment has helped make SEI a perennial member of Fortune’s list of “Best
Companies to Work for in America.”
VI. Chapter Review
Visual Resources
CHAPTER NOTES Chapter 9
The PowerPoint slides correlated with the Lecture Outline above are available on the Instructors CD-ROM
and on the product support website.
PowerPoint Slide 9-1 Chapter 9 Title
PowerPoint Slide 9-2 Learning Objectives
PowerPoint Slide 9-3 Learning Objectives (cont’d)
PowerPoint Slide 9-4 External and Internal Change Forces (Text Exhibit 9-1)
PowerPoint Slide 9-5 Organizational Effectiveness Results from Changing Structure, Technology,
and/or People (Text Exhibit 9-2)
PowerPoint Slide 9-6 Different Responses to Change (Text Exhibit 9-3)
PowerPoint Slide 9-7 Groups
PowerPoint Slide 9-8 Formal Groups
PowerPoint Slide 9-9 A Manager’s Membership in Different Groups (Text Exhibit 9-4)
PowerPoint Slide 9-10 Informal Groups
PowerPoint Slide 9-11 Stages of Group Development
PowerPoint Slide 9-12 Advantages and Limitations of Groups
PowerPoint Slide 9-13 Model of Group Effectiveness (Text Exhibit 9-6)
PowerPoint Slide 9-14 Possible Effects of Size on Groups (Text Exhibit 9-7)
PowerPoint Slide 9-15 Member Composition and Roles
PowerPoint Slide 9-16 Task and Maintenance Roles in Groups
PowerPoint Slide 9-17 Group Norms and Group Cohesiveness
PowerPoint Slide 9-18 Team Building
PowerPoint Slide 9-19 Characteristics of an Effective Team
PowerPoint Slide 9-20 Providence Hospital and Sacred Heart Hospital Cancer Center’s Effective
Teamwork
PowerPoint Slide 9-21 Providence Hospital and Sacred Heart Hospital Cancer Center’s Effective
Teamwork (cont’d)
PowerPoint Slide 9-22 Successful Teambuilding in SEI
PowerPoint Slide 9-23 Important Terms
1. Is change as pervasive as the authors claim? Explain.
2. What are some of the primary reasons people resist change? What are some of the ways a team leader
can ensure that change is accepted or at least not resisted?
Solutions to the Questions for Review & Discussion
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A team leader can smooth the way for change in a number of ways:
• Condition employees to expect change.
3. What major changes in the last 10 years have had considerable impact on organizations? Do these
changes provide support for or make a case against the use of team building in organizations? Defend
your position.
Students’ answers may vary. Some of the major changes are as follows:
4. Compare and contrast formal groups with informal groups. Explain the importance of leadership in
both types of groups.
Formal groups are those prescribed and/or established by the organization. Formal groups are
communication, and status. Other informal groups cross formal work boundaries and are based on
common interests, such as an informal interest group or a friendship group. Informal groups help
members meet affiliation and social needs.
5. Identify conditions and organizations where self-managing work teams would not be the way to
organize. Then identify conditions and organizations where self-managing work teams would be the
CHAPTER NOTES Chapter 9
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way to organize.
6. If groups have so many limitations, why are they so popular?
Students’ answers may. Groups have many advantages. In addition to providing opportunities for need
7. Of the factors affecting group effectiveness, do you think there is any order of importance? If so, rank
the factors 1 through 4 and explain why you chose to rank them in that order.
Students’ answers may vary. Variables affecting group effectiveness are group size, member
8. How would you deal with an informal leader in a task force who seemed to be totally opposed to the
group’s objectives?
Skill Builder 9.1
Team Scavenger Hunt
Works with SCANS competencies: Interpersonal Skill, Information, Technology, Resources, Systems
Students should think about what it means to be a part of a successful team. What makes one team more
successful than another? What does each team member need to do for their team to be successful? What are
the characteristics of an effective team?
Procedure
Solutions to the Skill Builders
SUPERVISORY MANAGEMENT Instructor’s Manual
Instructor assigns teams. Students will locate listed items in this activity while following the important rules
listed below:
The team with the most items on the list will be declared the most successful team. Then, students reflect on
their team’s experience answering the following questions:
• What did each team member do?
Skill Builder 9.2
Synergy and Social Loafing
Works with SCANS competencies: Systems, Information, Resources
encourages loafing? Ask students the following questions:
• Can you think of other situations where you should have close to a certain number of people on the
Skill Builder 9.3
Virtual Groups
Works with SCANS competency: Information
Ask students if they have ever worked or played on line with someone to accomplish a goal. Ask them what
the goal was, if they have ever met them, and what the experience was like. If they haven’t met them, ask
them if they would like to meet them. What changes after they have actually met and interacted personally
with them?
Then, ask the students if they, as a manger, should encourage the personal interaction of team members?
Specifically, should two people who share a job (each works 20 hours a week), get to know each other?
Why or why not?
CHAPTER NOTES Chapter 9
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Works with SCANS competencies: Interpersonal Skill, Information, Systems
for each round depends on the pattern of choices made in the group. The payoff schedule is given at the
bottom of the scorecard provided.
they may first confer with the other partnerships in their group before making the group’s joint decision.
Case 9-1
The Shift to Team Leadership (Group Activity)
1. Divide the class into teams of three to six students.
2. Each team should brainstorm ways to overcome supervisors’ predicted resistance to developmental
leadership.
3. Each team is to outline an initial training agenda for the developmental leadership program to present
to the plant manager.
4. The teams are to present their analysis and recommendations to the plant manager (represented by the
instructor or a designated class member).
5. Vote with your class to determine which program appears to have the best chance of success.
(Note: Students may not vote for their own team’s program.)
Case 9-2
The AFS Student Organization (Group Activity)
1. Divide the class into teams of three to six students.
2. Each team should brainstorm ways to create an effective team environment in AFS.
3. Each team is to outline an initial plan of action.
4. The teams are to present their analysis and recommendations to the class members.
5. Vote with your class to determine which plan appears to have the best chance of success.
(Note: Students may not vote for their own team’s program.)
In this exercise, students are challenged by a decline in the economy; but the organization is also affected
by a need for the “right” leadership. Members recognize the potential of AFS within the university
community, but the right leadership and teamwork are needed to restore AFS as a prominent member of the
community.
Solutions to the Case
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