Chapter 07 – People, Groups, and Teams
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CHAPTER 7
People, Groups, and Teams
Learning Objectives
After studying this chapter, students will be able to:
2. Discuss development of groups.
4. Define leadership, leadership styles, and types of power.
6. Improve the organizational climate of the workplace.
7. Understand the new organizational or corporate culture.
Key Terms
Authority: The vested power to influence or command within an organization.
Autocratic leaders: Leaders who make all the decisions and use authority and material
rewards to motivate followers.
Charismatic power: Power that is based on the attractiveness a person has to others.
Consultative leaders: Leaders who tend to delegate authority and confer with others in
making decisions.
Culture stories: Stories that illustrate the values of the people who make an organization
work.
Expert power: Power that comes from a person’s knowledge or skill in areas that are
critical to the success of the firm.
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Formal group: A group that is usually governed by the formal structure of the
organization.
Free-rein leaders: Leaders who set performance standards then allow followers to work
creatively to meet the standards.
Group: Two or more people who interact, share common goals, have unspoken or formal
rules or norms, maintain stable role relationships and form subgroups.
Group process: The way group members deal with one another while working on a task.
Leadership: The ability to influence others to work toward the goals of an organization.
Legitimate power: Power based on the position a person holds in an organization that is
effective only when followers believe in the structure that produces this power.
Networking power: Power that is attained by gaining contacts and knowing the right
people.
Norm: A standard of behavior expected of group members.
Organizational climate: The emotional weather within an organization that reflects the
norms and attitudes of the organization’s culture and effects worker moral.
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Power: The ability of one person to influence another.
Psychological contract: An agreement that is not written or spoken but is understood
between people.
Reward power: Power that comes from the user’s ability to control or influence others
with something of value to them.
Status: The rank an individual holds within a group.
Task activity: The assignment of tasks to get a job done.
Lecture Outline
I. People in Groups
A. Why Do People Join Groups?
Groups are composed in different ways, and for different purposes. A formal group is
one that is usually governed by the formal structure of an organization. In these
groups, members don’t necessarily have the final say about whether or not they can
become members, and they often do not have the choice to leave. In contrast, the
People join groups to fulfill needs that can’t be met alone. Those needs and their
fulfillment fit the following categories:
• Affiliation—everyone has a basic need to be with other people and relate to
them.
• Attraction—people are drawn to others who have attitudes, values, personalities,
and economic positions similar to their own.
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Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
• Activities—people join a group because the group is involved in interesting
activities which they would like to pursue.
• Assistance—people join groups because of the advice or assistance the group
can give them in some area of their lives.
• Proximity—people often form groups just because they tend to form close ties
with people they see frequently.
B. What Makes a Group?
All groups have certain qualities in common. A group is defined as two or more
people who interact with other members on either an individual or network basis, and
share common goals. In defining a group, it is important to understand that they are
II. Groups Development
There are usually four distinct stages in group development, all these stages focus on two
behaviors of the group: task activity and group process. Task activity is the assignment
of tasks to get a job done. Group process is the way group members deal with each other
while working on a task.
Following are the four stages of group development:
• Forming—this stage is also called orientation; during this phase, members take a
close look at their task, adjust themselves in terms of what behaviors are expected
of them, and begin accepting one another.
• Redefining—at this point, group members reexamine the task as a group problem;
the greater the differences in the enthusiasm levels, the stronger will be the internal
conflict during this stage of group development.
Chapter 07 – People, Groups, and Teams
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McGraw-Hill Education.
When becoming a member of a newly formed group, these four stages should be kept in
mind. When conflicts begin, they should be considered to be normal parts of the group
development process. Remaining open yet assertive increases the chance that the group
will form and evolve realistically and successfully.
III. Barriers to Group Effectiveness
Many barriers to effectiveness can arise in group interaction, such as the problem of
overconforming known as groupthink, status differences that cause negativity, excessive
conflict among members, lack of creativity, one-member domination, and resistance to
change.
When group norms have been established and status issues have been sorted out,
conformity becomes an issue. Conformity is acting in coordination and agreement with
one’s group. One reason members of groups conform is to avoid pressure or rejection by
Status is the rank an individual holds within a group. It comes from a variety of different
sources, some based on formal factors and others on informal ones. Sources of status
include a person’s formal position in a company, effective interpersonal skills, personal
charm or charisma, educational level, physical appearance, persuasive ability, and other
values shared by the group. Group members with high status will usually have a high
A. Solutions to Group Effectiveness Barriers
Three steps will help improve group effectiveness:
• Changing ineffective norms—the most efficient way of making a group more
effective is by changing its norms.
Chapter 07 – People, Groups, and Teams
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McGraw-Hill Education.
• Identifying problems—problems faced by the group should be identified so as
to help the group members to discuss ways to solve it; the solution arrived at
should utilize the full potential of each group member.
• Improving the composition of the group—group leaders should try to change
the group’s composition, if possible, to make it more effective; the leader
should look for a balance of skills and knowledge to allow the group to be
effective.
B. Hidden Agendas
Hidden agendas are individual members’ secret wishes, hopes, desires, and
assumptions that they don’t want to share with the group, although they will work hard
to accomplish them without being discovered. As with other barriers to group
effectiveness, hidden agendas may be uncovered and reduced through good
communication, good group composition, and creation of norms that discourage them.
IV. Leadership: What It Is and What It Requires
Without effective leadership, groups function poorly or not at all. Leadership is usually
defined as the ability to influence people toward the attainment of goals.
A. Leadership versus Management
The manager who is also a leader is the most effective of managers. Some argue that
leaders are simply born with traits that make them effective. Others argue that leaders
have mastered different sets of skills that nearly anyone can develop. Still others
emphasize the situation in which a leader finds himself or herself.
V. Leadership Styles
The leadership styles are based mostly on the extent to which the leader includes others
in the process of making decisions. They are usually called autocratic, consultative,
participative, and free-rein.
Autocratic leaders make it very clear that they are in charge. The power and authority
autocratic leaders have from their position in the organization are important to them, and
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Consultative leaders will often spend a great deal of time and energy consulting with
followers to get information about what decisions should be made for the good of the
Participative leaders have both concern for people and concern for getting the job done.
This type of leadership invites subordinates to share power with the leader. This style is
Free-rein leaders often have subordinates who don’t complain about the leadership;
however, these leaders are not really leading at all in any strict sense. This approach is
often called laissez-faire leadership. This type of leader usually acts as a representative
A. Leaders and the Use of Power and Authority
The effectiveness of a leader also depends greatly on the leader’s attitude toward
power. Power can be defined as the ability of one person to influence another. This is
not to be confused with authority, which is the power vested in a specific position
within an organization. Some leaders have authority, but little or no power. Other
people—sometimes not even designated leaders—have power despite having very
little authority.
B. Sources of Power
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The way followers respond to power largely determines its effectiveness. How the
leader’s power is received often depends on where the power comes from. Three
power sources are based at least in part on the position of the person using them.
Therefore, they are often seen as different forms of position power. They are as
follows:
• Legitimate power—this source of power is based on the position the person
holds in the organization.
• Coercive power—this source of power depends on the threat of possible
punishments, and is commonly used to enforce policies and regulations.
• Networking power—this source of power is sometimes also called “connection
power;” gaining contacts to help influence others allows a leader to use this
VI. Team Building
A fairly recent use of groups and committees in the organization is known as team
building. Through conscious effort, a manager can build a team of employees who will
function as a unit and achieve group goals. Such a group is known as a work team. In
Work teams actually allow individuals to have more say in their jobs, because they can
discuss ideas with peers rather than just following instructions from a supervisor. Job
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For make a team-building approach work or effective, several guidelines should help.
First, good intentions are not enough. A formal training program should be used,
preferably with a leader who has had some experience with team building elsewhere.
A. Implementation
When a team-building consultant starts working to create a work group, he or she will
need to ask the following questions:
• What do you want from this team? What can your membership in this group do
for you personally, and what do you want it to do for you personally?
• What skills, abilities, or talents do you bring to this team?
These questions will often be asked in writing. From the answers, the team builder can
learn a great deal about the needs and concerns of the people who will make up the
team. The answers to these questions will determine the complexity of the task of
building the team.
B. Trust
Building trust is one of the first steps in creating a team. Without trust, there can be no
team building. Often, a great deal of group interaction must take place for a beginning
C. Goals
The team needs to review and agree upon goals, both individually and collectively.
Establishing and refining goals can be aided by using two questions: “What do you
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VII. Organizational climate: The Weather of the Workplace
The interaction of groups within the workplace aids in the formation of organizational
climate. Climate in the workplace has some qualities in common with climate in the
context of weather. Climate can change rapidly, without warning. A manager with a
negative attitude can change a positive climate to a stressful one just by walking into the
room. Climate in the workplace can be influenced by environmental factors, such as the
color of the room, the noise level, and the way people dress. It also involves the attitudes,
stress levels, and communication of the people in the organization.
A. Major Qualities of Organizational Climate
The way people see things as individuals, their interactions, and the way an
organization is put together produce the climate that all perceive with similar eyes.
Perception is a very important part of organizational climate, as are structure and
interaction. Organizational climate involves the way members of an organization see
B. Maintaining a Climate
The best organizational climate is one that allows the most productivity over the
longest period of time. That type of climate will almost always include qualities such
as high trust levels, a reasonable level of freedom, high standards of fairness, and fair
VIII. Organizational or corporate culture: Shared values
Organizational or corporate culture refers to the collection of deeply held values and
assumptions a group of people share. Climate reflects the day-to-day norms and attitudes
of the organization’s culture. Culture is found in every type of organization—not just
individual companies but also career fields often promote a shared culture.
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Organizational or corporate culture is the network of shared values in an organization.
Values are more deep-seated than attitudes. While every organization has a culture,
sometimes it is difficult to see, especially if you look at it from the outside. Any culture,
be it a corporation, a nation, or a family, is preserved and defined by oral history or
A. The “New” Organizational or Corporate Culture: A Focus on Fairness
These days, many companies are working on developing an organizational or
corporate culture that is more humane, more closely knit, and above all, more
profitable and productive than in the past. The so-called new corporate culture is made
up of a set of new assumptions about how people should be treated. Much of this new
thinking is based on a deeper understanding of the importance of employee self-worth
on the job.
Following are some of the commonly accepted qualities that an organizational or
corporate culture should have; all of them are directly related to human relations and
self-esteem issues:
• Instead of bullying or shouting, or otherwise being autocratic, a manager should
avoid making an employee feel intimidated or overly uncomfortable.
• Among the shared values of the culture, fairness is very high. Managers need to
A strong corporate culture must contain a sense of justice, equality, and balanced
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Trust in the workplace is the main tool for employees’ confidence in management, and
management’s confidence in employees. One’s actions provide a record of
trustworthiness.
Integrity is a way of describing the extent to which managers and others are truly
willing to put the shared values and expectations of a culture into action. It also means
maintaining an ethical code—which is basic to all cultures, as well as to organizations.
Expectations refer to those that come from management. Through their expectations,
managers allow the employees to know exactly what is expected of them both
individually and in groups.
Justice means that the reward must fit the achievement; the punishment must fit the
crime. The two extremes in violation of this quality are overkill (strict zero tolerance,
while looking for infractions to punish) and “looking the other way” by ignoring the
situation when an infraction occurs.
Respect, or a deep sense of high regard for people, is the basis of all fairness. When a
person believes that others truly value him or her, he or she tends to consider their
actions fair.
Chapter 07 – People, Groups, and Teams
Overall fairness means much more than simply treating people nicely. Fairness is a
central issue in the psychological contract between managers and subordinates. This
Review Questions
1. Think of groups you have joined, both formally and informally. What were the
benefits you expected to receive upon joining? Were those expectations fulfilled?
2. Recall a group to which you have belonged and identify the major norms the group
followed. What were the penalties for breaking from a group norm?
Answer: Students’ answers will vary. A group is defined as two or more people who
interact with other members on either an individual or network basis, and share
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3. Recalling groups to which you have belonged, how did they assign status in the
group? Was it easy to see who had higher and lower status in the group? Did you
agree with the statuses that seemed to be assigned within the group? Explain.
Answer: Students’ opinions will vary based on their experience. Status is defined as
the rank an individual holds within a group.
4. Recall a leader whose direction you once followed. Do you recognize that leader’s
style as autocratic, consultative, participative, or free-rein? Provide examples of
behaviors that showed that style. Explain whether you liked or disliked this style of
leadership.
Answer: Students’ answers will vary based on their experience. Autocratic leaders
make it very clear that they are in charge. The power and authority autocratic leaders
have from their position in the organization are important to them, and followers
5. Imagine a leader with whom you have worked using more than one of the styles of
leadership explained in this chapter. Would this improve his or her abilities as a
leader? How can flexibility influence a leader? Are there any drawbacks to
flexibility?
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Answer: Students’ answers will vary based on their experience. However, a leader
can use more than one style of leadership. The effectiveness of the leadership style
6. Think of an ideal version, in your opinion, of a perfect organizational climate. What
characteristics would be included? Why?
7. Fairness is an important quality of a positive, or warm, organizational climate and
culture. What qualities are necessary for a perception of fairness to exist throughout
an organization?
Answer: Students’ answers will vary based on their experience. The following
factors directly influence the perception of fairness throughout the organization:
• Trust
8. Explain the “New Organizational or Corporate Culture.” In your opinion, would this
type of culture lead toward success for America as an international competitor? Why
or why not?
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Answer: Students’ answers will vary. The new type of culture can lead toward
success for America as an international competitor. The trend today is to build a
strong, positive culture that motivates employees to work harder, to feel greater
9. At a national conference attended by one of your authors, a facilitator introduced a
workshop topic as “How to Work in Teams, and Other Raising-Morale Crap.” The
audience’s reaction was one of surprise at the speaker’s negativity toward the
announced topic. Based on information from this chapter, what type of corporate
culture would you guess this facilitator worked in? How well does it fit with the
“new” corporate culture?
Answer: Students’ answer may vary. The facilitator’s negativity toward the
announced may reflect that he or she comes from an organization with a weak
10. Imagine yourself as (a) a ship captain, and (b) a football team player and captain.
How would you describe the advantages and disadvantages of each? Considering
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Answer: Students’ answer may vary. The traditional manager is more like the
dictatorial captain of a ship than the player-captain of a basketball or football team.
Critical Thinking Questions
11. Which of the leadership styles is yours or would most likely be yours? Why did you
choose this particular style? Does your profession of choice match with this style?
How does this leadership style reflect your personality?
Answer: This question is likely to create a lively discussion in the group. Students’
opinions will vary based on their personality and skill level. The leadership styles are
12. Is an organizational or corporate culture necessary? That is, can we all just go to
work and get our tasks done in an organization that does not have a shared culture?
How important is it for an organization to have a shared corporate culture? Why is
this such a common—practically universal—phenomenon? Think about an
organization that has no corporate culture: What would that be like? Would people
get as much accomplished?
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Answer: This question is likely to create a lively discussion in the group. Students’
Case Studies
Case Study 7.1: Mariko’s Promotion
Mariko Koide’s initial enthusiasm and positive feeling in the new office where she was
promoted to soon gave way to despair. The different “feeling” of the office was
complaints between colleagues because one thought of another as a “jerk”, the numerous
complaints resulting from resentment against overtime, and the mocking of voluntary
extended working hours. Mariko recalled the late hours spent on “idea creation” which
was always a positive and upbeat experience in her earlier office. Mariko’s increasing
frustration had her planning a strategy to return there.
Questions
1. If you knew Mariko as a friend, what would you advise her to do at this point?
2. Is Mariko helpless in her new position? If you don’t think so, suggest some courses
of action she could take.
Suggested Answer: Students’ opinions will vary. To increase the effectiveness of
this group Mariko can take following steps:
Chapter 07 – People, Groups, and Teams
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McGraw-Hill Education.
• Identify problems—once the specific problem is identified, group members or
the group leader can create a solution to address the specific problem; the
solution should be designed such that it uses the full potential of each group
member.
• Improve the composition of the group—Mariko should try to change the
group’s composition, if possible, to make it more effective.
3. Evaluate Mariko’s situation in terms of norms and status.
Suggested Answer: Norm is a standard of behavior expected from group members.
The group Mariko is leading has different set of norms than the one she belonged to
Case Study 7.2: Through the Ranks
The president of the company decides that one way to reduce the conflict between the
administrative and nonadministrative staff members, which had led to low morale and
high employee turnover, was to create a position that directly reports to Daura, the
supervisory manager. Daura, having been promoted through the ranks, decides to
interview the top three of the seven applicants for the new position she created. When her
assistant suggests at least a “courtesy interview” to all seven to douse the resentment
amongst the applicants, Daura snaps back challenging the disgruntled employees to stand
up against her, and proclaims her authority to decide the outcome of the interview.
Questions
1. What leadership style does Daura seem to be using?
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McGraw-Hill Education.
Suggested Answer: Daura seems to be using an autocratic leadership style.
Autocratic leaders make all the decisions and use authority and material rewards to
motivate followers. Followers usually have little or no freedom to disagree or to
disobey.
2. What are Daura’s sources of power? Are these the most appropriate ones she should
be using in this situation?
Suggested Answer: As an autocratic leader Daura is using the position power. There
are three types of position power:
• Legitimate power
3. If you were Daura’s manager, would you try to change behaviors in her leadership
methods? Which ones? Why?
Suggested Answer: This question will create a likely discussion in the group.
Students’ opinions will vary.