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PART THREE – SOCIAL AND GROUP PROCESSES IN
ORGANIZATIONS
Chapter Seven – Groups and Teams
Chapter Overview
In Chapter 1 we noted the pervasiveness of human behavior in organizations and the importance of
interactions among people as critical to achieving important outcomes for organizations. Indeed, a great
deal of all managerial work involves interacting with other people, both directly and indirectly and both
inside and outside the organization. Moreover, much of the work in organizations is accomplished by
people working together in groups and teams. This chapter is the first of four that deal primarily with
interpersonal processes in organizations. The opening pages to this part again present the organizing
framework for this book we developed back in Chapter 1. This will enable you to better understand where
we are in our discussion and what lies ahead.
We begin in this chapter by discussing groups and teams in organizations. In the next three chapters in
this part we focus on decision making and problem solving (Chapter 8), interpersonal communication
(Chapter 9), and conflict and negotiation (Chapter 10).
Learning Outcomes
After studying this chapter, students should be able to:
1. Define groups and teams and identify and describe several types of each.
2. Identify the five core group performance factors and relate them to groups and teams in
organizations.
3. Discuss the stages of group and team development, other team performance factors, and the
implementation process in the context of creating new teams.
4. Identify the primary benefits and costs of teams, how managers can promote effective team
performance, and important team competencies.
5. Describe emerging team opportunities and challenges related to virtual teams and diversity and
multicultural teams.
Real World Challenge: Teamwork at Starbucks
Summary: Coffee giant Starbucks believes that teamwork is essential to its strategic execution and
ultimate success. Reinforcing this belief, Starbucks’ core values include teamwork, diversity and equal
participation.
Real World Challenge: How should Starbucks handle its expansion into South Korea considering the
country’s different national and organizational culture?
Real World Response: Starbucks decided to stay true to its culture and values but to be sensitive to the
cultural needs and expectation of its South Korean employees.
Chapter Outline
I. TYPES OF GROUPS AND TEAMS
There are literally hundreds of definitions of the term group.
We will simply define a group as two or more persons who interact with one another such that each
person influences and is influenced by each other person. Coworkers may work side by side on
related tasks—but if they do not interact, they are not a group.
We should also note that groups and teams are not necessarily the same thing. All teams are groups,
but not all groups are teams.
We will define teams as an interdependent collection of at least two individuals who share a
common goal and share accountability for the team’s as well as their own outcomes.
A key part of this definition is that team members are interdependent with respect to information,
resources, and skills. As tasks become more complex, they require greater coordination among team
members. Communication and collaboration demands also increase dramatically.
So, all teams are groups, but groups are not necessarily teams.
A. Workgroups
Workgroups are formal groups established by the organization to do its work. Workgroups
include command (or functional) groups and affinity groups (as well as teams).
A command group is relatively permanent and is characterized by functional reporting
relationships such as having both a group manager and those who report to the manager.
Command groups are usually included in the organization chart.
Affinity groups are relatively permanent collections of employees from the same level in the
organization who meet on a regular basis to share information, capture emerging opportunities,
and solve problems.
In business organizations, most employees work in command groups, with the size, shape, and
organization of the group can vary considerably. The customer service department is an
example.
Affinity groups are a special type of formal group: They are set up by the organization, yet they
are not really part of the formal organization structure. They are not really command groups
because they are not part of the organizational hierarchy, yet they are not task groups because
they stay in existence longer than any one task.
The members of affinity groups usually have very similar job titles and similar duties but are in
different divisions or departments within the organization.
The greatest benefits of affinity groups are that they cross existing boundaries of the
organization and facilitate better communication among diverse departments and divisions
throughout the organization.
Groups focusing on Chinese culture, or gender issues are examples, or even a book club.
B. Teams
Organizations also use a wide variety of different types of teams. The most common types of
teams are summarized in Table 7.1. Each type of team is composed of different members and
responsible for different types of tasks.
The members of functional teams come from the same department or functional area. A team
of marketing employees and a team of finance employees are examples of functional teams.
Cross-functional teams have members from different departments or functional areas. This is
one of the most common types of work teams.
An example of a cross-functional team is a top management team with members representing
different functions or units of the organization. Cross-functional teams have several strengths.
In addition to getting things done faster, they can increase creativity, improve a firm’s ability to
solve complex problems, and increase employees’ knowledge about other areas of the
organization. Team diversity must be managed in a cross-functional team.
Problem-solving teams are teams established to solve problems and make improvements at
work.
The core strength of problem-solving teams is that because employees are the ones actually
doing the work, they usually know the job best. Problem-solving teams can also increase
employees’ commitment to decisions because they were involved in making them.
Self-directed teams set their own goals and pursue them in ways decided by the team.
Self-directed teams can improve commitment, quality, and efficiency. Cross-trained team
members also help to increase the flexibility of the team during staffing shortages. Self-directed
teams are difficult to implement, however, as they require specific self-management and team
skills that many employees lack.
Venture teams are teams that operate semi-autonomously to create and develop new products
(product development teams), processes (process design teams), or businesses (venture teams).
Separating a team from the formal structure of the rest of the organization can enhance its
innovativeness and speed up cycle time.
Virtual teams are teams of geographically and/or organizationally dispersed coworkers who
communicate using the Internet and other information technologies. You will learn more about
virtual teams later in this chapter.
Global teams have members from different countries. Global teams can be virtual or meet face-
to-face.
C. Informal Groups
Whereas formal groups and teams are established by an organization, informal groups are
formed by their members and consist of friendship groups, which are relatively permanent, and
interest groups, which may be shorter-lived.
Friendship groups arise out of cordial relationships among members and the enjoyment they
get from being together. Interest groups are organized around a common activity or interest,
although friendships may develop among members.
Good examples of interest groups are the networks of working women that have developed
over the last few decades. Many of these groups began as informal social gatherings but soon
developed into interest groups. These groups may be partly responsible for the dramatic
increase in the percentage of women in managerial and administrative jobs.
II. GROUP PERFORMANCE FACTORS
The performance of any group is affected by several factors (in addition to its reasons for forming
and the stages of its development, discussed later).
The five basic group performance factors are composition, size, norms, cohesiveness, and informal
leadership.
A. Group Composition
The composition of a group plays an important role in determining group productivity.
Group composition is most often described in terms of the homogeneity or heterogeneity of the
members. A group is homogeneous if the members are similar in one or several ways that are
critical to the work of the group, such as in age, work experience, education, technical specialty,
or cultural background. In heterogeneous groups, the members differ in one or more ways that
are critical to the work of the group.
Groups with members of different ages and experiences with the group tend to experience
frequent changes in membership.
A homogeneous group is likely to be more productive when the group task is simple,
cooperation is necessary, the group tasks are sequential, or quick action is required.
A heterogeneous group is more likely to be productive when the task is complex, requires a
collective effort, demands creativity, and when speed is less important than thorough
deliberations.
A homogeneous group tends to have less conflict, fewer differences of opinion, smoother
communication, and more interactions. With a heterogeneous group, more discussion and more
conflict are likely, both of which can enhance the group’s decision making.
Group composition becomes especially important as organizations become increasingly more
culturally diverse.
In general, a manager in charge of a culturally diverse group can expect several things. At first,
members will probably distrust one another. Stereotyping will present a problem, and
communication problems will almost certainly arise. Managers may therefore need to spend
more time helping a culturally diverse group through the rough spots as it matures, and they
should allow a longer-than-normal time before expecting it to carry out its assigned task.
B. Group Size
A group can have as few as two members or as many members as can interact and influence
one another. Group size can have an important effect on performance.
Interactions and communication are much more likely to be formalized in larger groups. Also,
the large size may inhibit participation of some people and increase absenteeism; some people
may stop trying to make a meaningful contribution. Large groups present more opportunities
for interpersonal attraction, leading to more social interactions and fewer task interactions.
Social loafing is the tendency of some members of groups not to put forth as much effort in a
group situation as they would be working alone.
The most effective size of a group, therefore, is determined by the group members’ ability to
interact and influence each other effectively.
C. Group Norms
A norm is a standard against which the appropriateness of a behavior is judged.
Group norms usually are established during the second stage of group development and are
carried forward into the maturity stage. Without norms, the activities in a group would be
chaotic.
Norms result from the combination of members’ personality characteristics, the situation, the
task, and the historical traditions of the group.
Norms can be positive or negative for individual and organizational outcomes because group
members tend to follow them even if the consequences are negative. Group norms are
enforced, however, only for actions that are important to group members.
Norms serve four purposes in organizations. First, they help the group survive. Second, they
simplify and make more predictable the behaviors expected of group members. Third, norms
help the group avoid embarrassing situations. And finally, norms express the central values of
the group and identify the group to others.
D. Group Cohesiveness
Group cohesiveness is the extent to which a group is committed to remaining together; it
results from forces acting on the members to remain in the group. The forces that create
cohesiveness are attraction to the group, resistance to leaving the group, and motivation to
remain a member of the group.
As shown in Figure 7.1, group cohesiveness is related to many aspects of group dynamics:
maturity, homogeneity, manageable size, and frequency of interactions.
The figure also shows that group cohesiveness can be increased by competition or by the
presence of an external threat. Either factor can focus members’ attention on a clearly defined
goal and increase their willingness to work together.
Finally, successfully reaching goals often increases the cohesiveness of a group because people
are proud to be identified with a winner and to be thought of as competent and successful.
Highly cohesive groups appear to be more effective at achieving their goals than groups that are
low in cohesiveness, especially in research and development groups in U.S. companies.
However, highly cohesive groups will not necessarily be more productive in an organizational
sense than groups with low cohesiveness.
If a highly cohesive group has the goal of contributing to the good of the organization, it is very
likely to be productive in organizational terms.
Cohesiveness may also be a primary factor in the development of certain problems for some
decision-making groups.
An example is groupthink, which occurs when a group’s overriding concern is a unanimous
decision rather than critical analysis of alternatives.
Finally, there is emerging evidence that the emotional intelligence of group members can
promote cohesiveness. In this context emotional intelligence refers to interpersonal capability
that includes the ability to perceive and express emotions, to understand and use them, and to
manage emotions in oneself and other people.
E. Informal Leadership
The final group performance factor is informal leadership.
Most functional groups and teams have a formal leader—that is, one appointed by the
organization or chosen or elected by the members of the group.
Even when a formal leader is designated, the group or team may also look to others for
leadership.
An informal leader is a person who engages in leadership activities but whose right to do so
has not been formally recognized.
The formal and the informal leader in any group or team may be the same person, or they may
be different people.
Is informal leadership desirable? In many cases informal leaders are quite powerful because
they draw from referent or expert power. When they are working in the best interests of the
organization, they can be a tremendous asset. However, when informal leaders work counter to
the goals of the organization, they can cause significant difficulties.
III. CREATING NEW GROUPS AND TEAMS
Managers frequently have the opportunity to create new groups and teams. In general, if a new
group or team is being created, managers should be aware of the stages that groups and teams go
through, understand how various performance factors should be considered, and be aware of the
formal process experts suggest for implementing teams.
A. Stages of Group and Team Development
Traditional research on small groups has focused on a four-stage development process: (1)
mutual acceptance, (2) communication and decision making, (3) motivation and productivity,
and (4) control and organization.
The stages and the activities that typify them are shown in Figure 7.3.
1. Mutual Acceptance
In the mutual acceptance stage of group development (also called the forming stage), the
group forms, and members get to know one another by sharing information about
themselves.
This stage may be brief, but it is unlikely to be skipped altogether.
As the members get to know one another, discussion may turn to more sensitive issues,
such as the organization’s politics or recent controversial decisions. From the discussion,
members come to understand how similar their beliefs and values are and the extent to
which they can trust one another.
Eventually, the conversation turns to the business of the group. When this discussion
becomes serious, the group is moving to the next stage of development: communication
and decision making.
2. Communication and Decision Making
The group progresses to the communication and decision-making stage (also called
storming stage).
In this stage, members discuss their feelings and opinions more openly, which can increase
conflict.
The membership usually begins to develop norms of behavior during this stage. Members
discuss and eventually agree on the group’s goals. Then they are assigned roles and tasks to
accomplish the goals.
3. Motivation and Productivity
In the next stage, motivation and productivity (also called the norming stage), the emphasis
shifts away from personal concerns and viewpoints to activities that will benefit the group.
Members perform their assigned tasks, cooperate with each other, and help others
accomplish their goals. The members are highly motivated and may carry out their tasks
creatively.
In this stage, the group is accomplishing its work and moving toward the final stage of
development.
4. Control and Organization
In the final stage, control and organization (also called the performing stage), the group
works effectively toward accomplishing its goals.
In a mature group, the members’ activities are relatively spontaneous and flexible rather
than subject to rigid structural restraints. Mature groups evaluate their activities and
potential outcomes and take corrective actions if necessary. The characteristics of
flexibility, spontaneity, and self-correction are very important if the group is to remain
productive over an extended period.
Not all groups, however, go through all four stages. Some groups disband before reaching the
final stage. Others fail to complete a stage before moving on to the next one.
Group productivity depends on successful development at each stage. A group that evolves
fully through the four stages of development usually becomes a mature, effective group. The
process does not take a long time if the group makes a good, solid effort and pays attention to
the processes.
Finally, as working conditions and relationships change, either through a change in membership
or when a task is completed and a new task is begun, groups may need to re-experience one or
more of the stages of development to maintain the cohesiveness and productivity characteristic
of a well-developed group.
Although these stages are not separate and distinct in all groups, many groups make fairly
predictable transitions in activities at about the midpoint of the period available to complete a
task.
The midpoint transition is often accompanied by a burst of concentrated activity, reexamination
of assumptions, dropping old patterns of activity, adopting new perspectives on the work, and
making dramatic progress.
Another transition may occur just before the deadline. At this transition, groups often go into
the completion stage, launching a final burst of activity to finish the job.
B. Understanding Team Performance Factors
People working together in teams have the potential to produce more or higher-quality outputs
than would have resulted if the individual efforts of team members were later combined.
Process gain refers to the performance improvements that occur because people work together
rather than independently.
Process loss occurs when a team of people working in a group or team together performs worse
than the individual members would have if they had worked alone.
Process loss can be reduced by making clear role and task assignments and not tolerating free
riders. The likelihood of process gain can be improved by awareness of several team
performance factors. Some of these relate closely to the group performance factors noted
earlier, while others extend beyond those factors.
One useful technique for promoting process gain is to develop and promote team efficacy.
Team efficacy is a team’s shared belief that it can organize and execute the behaviors necessary
to reach its goals.
Team efficacy is strongly related to team performance, particularly when team interdependence
is high.
Members of a highly cohesive team are motivated to stay in the team, contribute as much as
they can, and conform to team norms. Therefore, managers of new groups and teams should
strive to promote cohesiveness.
Managers should also try to build trust among team members. Trust is our confidence that other
people will honor their commitments, especially when it is difficult to monitor or observe the
other people’s behavior.
Managers should also try to prevent social loafing. Indeed, social loafing is a primary cause of
process loss. Social loafing is less common with very important tasks, and with smaller teams.
An opposite behavior occurs when people actually work harder and are more motivated when
others are present than when they are working alone.
Social facilitation happens when people are motivated to look good to others and want to
maintain a positive self-image. It happens when people are working alone, but in the presence
of an audience.
Keeping team size small, clarifying what the team expects each member to do, and making
individual contributions to the team identifiable can help reduce social loafing and encourage
social facilitation. Letting team members choose which tasks they will be responsible for can
also increase their motivation for getting them done.
In addition, managers should establish clear roles. Roles define the behaviors and tasks each
team member is expected to perform because of the position they hold.
One of the primary outcomes of the process of group and team development is the
establishment of clear roles in the team. Making team roles and expectations clear helps to
reduce process loss.
It is also important to establish positive norms. Team members comply with team norms (1) to
avoid punishments and receive rewards; (2) to imitate team members whom they like and
admire; and (3) because they have internalized the norm and believe it is the appropriate way to
behave.
When possible, managers should create shared team goals and provide feedback. If
performance is lagging, feedback helps the team quickly adjust its behavior and processes to
reach its goals.
Team rewards also motivate effective teamwork behaviors. Tying team rewards to team
performance motivates team members to pursue team goals rather than individual goals.
