Chapter Seven
Groups and Teams
Chapter Overview …………………………………………………….. Error! Bookmark not defined.
Learning Outcomes …………………………………………………………………………………………. 1
Real-World Challenge: Teamwork at Starbucks ………………………………………………… 2
Chapter Outline ………………………………………………………………………………………………. 2
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.
(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.
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.
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.
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.
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.
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.
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.
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.
A group with many members has more resources available and may be able to complete a large
number of relatively independent tasks. Groups with more members tend to produce more
ideas. Beyond a certain point, the greater complexity of interactions and communication may
make it more difficult for a large group to achieve agreement.
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
(communication and decision making) and are carried forward into the maturity stage. Without
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.
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.
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.
2. Communication and Decision Making
The group progresses to the communication and decision-making stage (also called the
storming stage).
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.
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
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.
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 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.
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.
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.
C. The Implementation Process
Implementing teams across an organization is not easy; it takes a lot of hard work, time,
training, and patience. Changing from a traditional organizational structure to a team-based
structure is a major organizational change and calls for a complete cultural change for the
organization.
However, many organizations need to be able to react quickly to a dynamic environment.
In this section we present several essential elements peculiar to an organizational change to a
team-based situation. This process is shown in Figure 7.4.
1. Phase 1: Start-Up
In phase 1, team members are selected and prepared to work in teams. Much of the initial
training is informational or “awareness” training that sends the message that top
2. Phase 2: Reality and Unrest
After perhaps six to nine months, team members and managers report frustration and
confusion about the ambiguities of the new situation. For employees, unfamiliar tasks,
more responsibility, and worry about job security replace hope for the opportunities
3. Phase 3: Leader-Centered Teams
Members are learning about self-direction and leadership from within the team and usually
start to focus on a single leader in the team. In addition, the team begins to think of itself as
a unit as members learn to manage themselves.
4. Phase 4: Tightly Formed Teams
In the fourth phase of team implementation, teams become tightly formed to the point that
their internal focus can become detrimental to other teams and to the organization as a
whole.
5. Phase 5: Self-Managing Teams
Phase 5 is the end result of the months or years of planning and implementation. Mature
teams are meeting or exceeding their performance goals. Team members are taking
responsibility for team-related leadership functions. Managers and supervisors have
withdrawn from the daily operations and are planning and providing counseling for teams.
IV. MANAGING TEAMS
The ongoing management of teams requires additional insights. These include understanding the
benefits and costs of teams, promoting effective performance in teams, and identifying and
developing teamwork competencies.
A. Understanding Benefits and Costs of Teams
The reason for a company to create teams should be that teams make sense for that particular
organization.
The best reason to start teams in any organization is to achieve the positive benefits that can
result from a team-based environment: enhanced performance, employee benefits, reduced
costs, and organizational enhancements.
Four categories of benefits and some examples are shown in Table 7.2.
1. Enhanced Performance
Enhanced performance can come in many forms, including improved productivity, quality,
and customer service.
2. Reduced Costs
As empowered teams reduce scrap, make fewer errors, file fewer worker compensation
3. Other Organizational Benefits
Other improvements in organizations that result from moving from a hierarchically based,