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Chapter 15

Effective Groups and Teams

This chapter examines in detail groups and teams, how they can contribute to increased organizational

effectiveness, and the various factors that influence the level of group and team productivity. Different kinds of

groups and teams are described, and the group dynamics that influence the functioning and effectiveness of

groups are outlined. The chapter also discusses how managers can motivate group members to achieve

organizational goals and how social loafing in groups and teams can be reduced.

I. GROUPS, TEAMS, AND ORGANIZATIONAL EFFECTIVENESS

A. Managers in all kinds of companies are using groups and teams to enhance performance, increase

responsiveness to customers, spur innovation, and motivate employees.

1. A group may be defined as two or more people who interact with each other to accomplish

certain goals or meet certain needs.

2. A team is a group whose members work intensely with each other to achieve a specific common

goal or objective.

a. All teams are groups, but not all groups are teams.

b. The two characteristics that distinguish teams from groups are the intensity with which team

members work together and the presence of a specific, overriding team goal or objective.

3. In this chapter, the term group refers to both groups and teams.

4. Because members of teams do work intensely together, teams can be difficult to form, and it may

take time for team members to learn how to effectively work together.

5. Groups and teams can help an organization gain a competitive advantage by:

a. enhancing organizational performance

b. increasing responsiveness to customers

c. increasing innovation

d. increasing levels of employee motivation and job satisfaction.

B. Groups and Teams as Performance Enhancers: One of the main advantages of using groups is the

opportunity to obtain synergy.

1. People working in a group are able to produce more than would have been produced if each

person had worked separately.

a. Synergy is described by statement: ‘the whole is more than the sum of its parts.’

b. To take advantage of the potential for synergy in groups, managers need to make sure that

groups are composed of members who have complementary skills and knowledge.

c. To promote synergy, managers need to empower their subordinates and be coaches, guides,

and resources for groups, while refraining from playing a directive or supervisory role.

d. When tasks are complex and involve highly sophisticated and rapidly changing technologies,

achieving synergies in teams often hinges on having the appropriate mix of backgrounds and

areas of expertise represented on the team.

C. Groups, Teams, and Responsiveness to Customers: Being responsive to customers often requires

the wide variety of skills found in different departments.

1. In a cross-functional team, the expertise and knowledge of different organizational departments

are brought together into a team environment in order to enhance responsiveness to customers.

D. Teams and Innovation: Innovation, the creative development of new products, new services, or even

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new organizational structures, can be better managed by creating teams of diverse individuals who

together have the necessary knowledge for innovation.

1. In addition, team members can often uncover each other’s errors or false assumptions, critique

each other’s approaches, and complement each other’s strengths while compensating for

weaknesses.

2. To further promote innovation, managers should empower teams by making their members fully

responsible and accountable for the innovation process.

3. To speed innovation, managers must form teams in which each member brings a unique resource

to the team.

4. Successful innovation sometimes requires that managers form teams with members from different

countries and cultures.

E. Groups and Teams as Motivators: Members of groups and teams are likely to be more highly

motivated and satisfied than they would have been if they were working on their own.

1. This is because working alongside other highly charged people can be stimulating, which allows

team members to more readily see how their efforts contribute to achievement of organizational

goals.

2. This increased motivation and satisfaction can also lead to other outcomes, such as lower

turnover, satisfaction of team members’ need for social interaction, and improved ability of team

members to cope with work stress.

3. Effectively managed groups and teams can help managers in their quest for high performance,

responsiveness to customers, and employee motivation.

II. TYPES OF GROUPS AND TEAMS

A. To achieve their goals, managers can form various types of groups and teams.

1. Formal groups are groups that managers establish to achieve organizational goals.

2. Cross-functional teams are formal groups composed of members from different departments and

of members from different cultures or countries.

3. Sometimes organization members form informal groups on their own because they feel that it

helps them achieve their personal goals or needs.

B. The Top-Management Team : A central concern of the CEO and president of a company is to form

a top management team to help the company achieve its mission and goals.

1. This team is responsible for developing the strategies that result in an organization’s competitive

advantage.

2. Most top-management teams have between five and seven members and many are also cross-

functional.

3. Diversity within the top management team helps guard against groupthink, a faulty group decision

making process that results when group members strive for agreement at the expense of an

accurate assessment of the situation.

C. Research and Development Teams: Managers in high-tech industries often create research and

development teams to develop new products.

1. Managers select R&D team members on the basis of their expertise and experience in a certain

area.

2. Sometimes R&D teams are cross-functional teams with members from many departments.

D. Command Groups: A command group is a group composed of subordinates who report to the

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same supervisor.

1. Often they are called a department or unit. When top managers design an organization’s structure

and establish reporting relationships and a chain of command, they are creating command groups.

E. Task Forces: Managers often form task forces to solve a specific problem or accomplish specific

goals within a certain period of time.

1. Task forces are also called ad hoc committees.

2. Once the task force accomplishes its goal or resolves its problem, it usually disbands.

3. They can be a valuable tool for busy managers who do not have the time to explore an important

issue in depth.

4. Task forces that are relatively permanent are often referred to as standing committees.

a. Membership in standing committees changes over time.

b. Managers often form and maintain standing committees to make sure that important issues

continue to be addressed.

F. Self-Managed Work Teams: Self-managed work teams are teams in which team members are

empowered with the responsibility and autonomy to complete identifiable pieces of work.

1. Team members decide what the team will do, how it will do it, and which team members will

perform which specific tasks.

2. Managers provide teams with overall goals but let team members decide how to meet those goals.

3. Managers usually form self-managed work teams to improve quality, increase motivation and

satisfaction, and lower costs.

4. Managers can take a number of steps to ensure that self-managed work teams are effective and

help an organization gain a competitive advantage:

a. Give teams enough responsibility and autonomy to be truly self-managing.

i. Refrain from telling team members what to do or solving problems for them, even if you

as manager know what should be done.

b. Make sure that a team’s work is sufficiently complex so that it entails a number of different

steps or procedures that must be performed and results in some kind of finished end product.

c. Carefully select members of self managed work teams.

i. Team members should have the diversity of skills needed to complete the team’s work,

have the ability to work with others and want to be part of a team.

d. As a manager, realize that your role vis-à-vis self-managed work teams calls for guidance,

coaching, and support, not supervision.

i. You are a resource for teams to turn to when needed.

e. Analyze what type of training team members need and provide it.

i. Working in a self-managed work team often requires that employees have more extensive

technical and interpersonal skills.

f. Self-managed teams can run into trouble if members are reluctant to discipline one another.

G. Virtual Teams: Virtual teams are composed of members who rarely or never meet face-to-face and

interact by using various forms of information technology.

1. As organizations are becoming increasingly global, virtual teams allow employees to solve

problems and explore opportunities without being limited by geographic location.

2. Virtual teams might even include members who are not part of the organization, but who are part

of an organization used for outsourcing.

3. Virtual teams rely on two forms of information technology: synchronous and asynchronous

technology.

a. Synchronous technology enables virtual team members to communicate and interact with each

other in real time and simultaneously through videoconferencing, teleconferencing, and

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electronic meetings.

b. Asynchronous technologies delay communication, as with e-mail or Internet websites.

4. One of the challenges virtual team members face is building a sense of camaraderie and trust

among each other.

a. To address this challenge, some organizations schedule opportunities for virtual team

members to meet.

b. Research suggests that while some virtual teams can be as effective as traditional teams,

virtual team members might be less satisfied with teamwork efforts and have fewer feelings of

camaraderie or cohesion.

c. Research also suggests that it is important for managers to keep track of virtual teams and

intervene when necessary.

H. Friendship Groups: Friendship groups are informal groups composed of employees who enjoy

each other’s company and socialize with each other. 1. Friendship groups help satisfy employees’ needs for interpersonal interaction and can provide

social support in times of stress.

2. The informal relationship that managers build in these groups can often help them solve work-

related problems.

I. Interest Groups: Employees form informal interest groups when they seek to achieve a common

goal related to their membership in an organization.

1. Interest groups can provide managers with insights into the issues and concerns that are important

to employees.

2. These groups can also signal the need for change.

III. GROUP DYNAMICS

A. The ways in which a group functions depend upon a number of group characteristics and processes

known as group dynamics.

B. Group Size, Tasks, and Roles - Five key group dynamics will be discussed: group size and roles,

group leadership, group development, group norms, and group cohesiveness.

1. Group Size : The number of members in a group can be an important determinant of members’

motivation and commitment, as well as overall group performance.

a. Members of small groups, between two and nine members, tend to interact more with each

other, find it easier to coordinate their efforts, and tend to be more motivated, satisfied, and

committed.

b. They also find it easier to share information and to see the importance of their personal

contributions for group success.

c. A disadvantage of small versus large groups is that members of small groups have fewer

resources available to accomplish their goals.

d. Large groups with ten or more members offer some advantages.

i. They have more resources at their disposal to achieve group goals, such as the knowledge,

experience, skills, and abilities of group members.

ii. They can also capitalize upon the advantages that stem from the division of labor.

e. The disadvantages of large groups include problems of communication and coordination and

lower levels of motivation, satisfaction, and commitment.

f. When deciding upon the appropriate size for any group, managers should attempt to gain the

advantages of small group size while also forming groups with sufficient resources to

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accomplish their goal.

i. As a general rule, groups should have no more members than necessary to achieve the

required division of labor.

ii. In R&D teams, group size is too large when: 1) members spend more time communicating

what they know to others than applying what they know to solve problems and create new

products, 2) individual productivity decreases, and 3) group performance suffers.

2. Group Tasks

a. Task interdependence, the degree to which the work performed by one member of a group

influences the work performed by other members, affects group performance.

b. As task interdependence increases, group members need to interact more frequently and

intensely, and their efforts have to be more closely coordinated if they are to perform at a high

level.

c. Pooled task interdependence exists when group members make separate and independent

contributions to the group’s performance and overall group performance is the sum of the

performance of the individual members.

i. The size of groups with pooled interdependence should be determined by the amount of

work to be done.

ii. Motivation will be highest when managers reward group members based on individual

performance.

d. Sequential task interdependence exists when group members must perform specific tasks in

a predetermined order and what one worker does affects the work of others.

i. In this type of group, group size is usually dictated by the needs of the production process.

ii. Because it is difficult to identify individual performance, managers should consider

rewarding group members based upon group performance.

e. Reciprocal task interdependence characterizes the operations of teams rather than other

kinds of groups.

i. It exists when the work performed by each group member is fully dependent on the work

performed by other group members.

ii. In this type of situation, group size should remain relatively small to ease communication

and coordination.

iii. Group members should be rewarded based upon group performance.

3. Group Roles: A group role is a set of behaviors and tasks that a member of a group is expected

to perform because of his or her position in the group.

a. Members of cross-functional teams are expected to perform roles relevant to their special

areas of expertise.

b. Managers need to clearly communicate to group members the expectations for their role in the

group, what is expected of them, and how the different roles in the group fit together.

c. Managers should encourage role making, taking the initiative to modify an assigned role by

assuming additional responsibilities.

d. In self-managed work teams, group members themselves are responsible for creating roles.

C. Group Leadership: All groups and teams need leadership.

1. Sometimes managers assume the leadership role or appoint a member of a group.

2. In other cases, group or team members may choose their own leaders, or a leader may emerge

naturally.

3. Sometimes self-managed work teams rotate the leadership role among members.

D. Group Development over Time: It sometimes takes a self-managed work team two or three years to

perform up to its true capabilities.

1. What a group is capable of achieving depends in part upon its stage of development.

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2. Researchers have identified five stages of group development that many groups seem to pass

through.

a. In the first stage, forming, members try to get to know each other and reach a common

understanding.

b. In the second stage, storming, group members experience conflict and disagreements.

c. During the third stage, norming, close ties between group members develop.

d. In the fourth stage, performing, the real work of the group gets accomplished.

e. The last stage, adjourning, applies only to groups that eventually are disbanded.

E. Group Norms: Group norms are shared guidelines or rules for behavior that most group members

follow.

1. Groups develop norms concerning a wide variety of behaviors, including work hours, sharing

information, how tasks are performed, and how members should dress.

2. Managers should encourage members to develop norms that contribute to group performance and

the attainment of group goals.

3. Conformity and Deviance: Group members conform to norms because:

a. They want to obtain rewards and avoid punishments.

b. They want to imitate group members whom they like and admire.

c. They have internalized the norms and believe that they are the right and proper way to behave.

d. Failure to conform, or deviance, occurs when a member of a group violates a group norm.

i. Deviance signals that the group is not controlling its members’ behaviors.

e. Groups generally respond to members who behave defiantly in one of three ways:

i. the group might try to get the member to change his or her deviant ways and conform

ii. the group might expel the member

iii. the group might change the norm so that it is consistent with the member’s behavior.

f. The last alternative suggests that some deviant behavior can be functional for a group.

Deviance is functional when it causes group members to stop and evaluate norms that may be

dysfunctional but taken for granted.

4. Encouraging a Balance of Conformity and Deviance: In order for groups and teams to be

effective, they need to have the right balance of conformity and deviance.

a. A group needs a certain level of conformity to control members’ behavior.

b. A group also needs a certain level of deviance to ensure that dysfunctional norms are

discarded.

c. Managers can take steps to ensure that there is some tolerance of deviance in groups. They

can:

i. be role models for the group

ii. let employees know that there are always ways to improve group processes

iii. encourage members of groups and teams to assess existing norms.

F. Group Cohesiveness: Group cohesiveness is the degree to which members are attracted or loyal to

their group.

1. When group cohesiveness is high, individuals strongly value their group membership. When

group cohesiveness is low, group members have little desire to retain their group membership.

Research indicates that managers should strive to have a moderate level of cohesiveness in the

groups.

2. Consequences of Group Cohesiveness: There are three major consequences of group

cohesiveness: levels of participation within the group may change, levels of conformity to group

norms may change, and emphasis on group goal accomplishment may change.

a. Level of Participation Within a Group: As group cohesiveness increases, the extent of group

members’ participation within the group increases. A moderate level of group cohesiveness

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helps to ensure that group members actively participate in the group. Too much cohesiveness

can reduce efficiency.

b. Level of Conformity to Group Norms: Increasing levels of group cohesiveness result in

increasing levels of conformity to norms. Too much conformity may result in conforming to

norms even when they are dysfunctional. Low cohesiveness can result in too much deviance

and can undermine group control.

c. Emphasis on Group Goal Accomplishment: As group cohesiveness increases, emphasis on

group goal accomplishment increases within the group. For an organization to be effective, the

different groups need to cooperate with each other and to be motivated to achieve

organizational goals. A moderate level of cohesiveness motivates group members to

accomplish both group and organizational goals.

3. Factors Leading to Group Cohesiveness: Four factors contribute to the level of group

cohesiveness. These determinants of group cohesiveness are group size, effectively managed

diversity, group identity, and healthy competition and success.

a. Group Size: Members of small groups tend to be more motivated and committed. To promote

cohesiveness in groups, managers should form groups that are small to medium in size.

b. Effectively Managed Diversity: Although people tend to like and get along with others who

are similar to them, diversity in groups, teams, and organizations can help an organization

gain a competitive advantage. Diverse groups often come up with more innovative and

creative ideas.

c. Group Identity and Healthy Competition: Managers can increase group cohesion by

encouraging groups to develop their own identities and engage in healthy competition.

Healthy competition among groups is promoted by displaying measures of each team’s

performance and the extent to which they have met their goals to others. Conversely,

managers can decrease cohesiveness by promoting organizational identity rather than group

identity, reducing or eliminating competition between groups, and rewarding cooperation

between groups.

d. Success: As groups become more successful, their cohesiveness tends to increase. Managers

can increase cohesiveness by making sure that a group can achieve some visible success.

IV. MANAGING GROUPS AND TEAMS FOR HIGH PERFORMANCE

A. Managers striving to have top performing groups and teams need to: 1) motivate group members to

work toward the achievement of organizational goals, 2) reduce social loafing, and 3) help groups to

manage conflict effectively.

B. Motivating Group Members to Achieve Organizational Goals: When work is difficult, tedious, or

requires a high level of commitment, managers cannot assume that group members will always be

motivated to work toward the organizational goals.

1. Managers can motivate members by making sure that the members themselves benefit when the

group or team performs highly.

2. Managers often rely on some combination of individual and group-based incentives to motivate

members of groups.

a. A major challenge is to develop a fair pay system that will lead to high individual motivation

and high group performance.

3. Other benefits that managers can use include providing extra resources, bestowing awards and

recognition, and offering a choice of future work assignments.

C. Reducing Social Loafing in Groups: Social loafing is the tendency of individuals to put forth less

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effort when they work in groups than when they work alone. It can result in lower group performance

and may even prevent the group from attaining its goals.

1. To reduce or eliminate social loafing, managers can:

a. Make individual contributions to a group identifiable.

i. Group members should perceive that low and high levels of effort will be noticed and

individual contributions evaluated.

ii. Managers can assign specific tasks to group members and hold them accountable for their

completion.

iii. Sometimes the members of a group can cooperate to eliminate social loafing by making

individual contributions identifiable.

iv. However, in some teams, individual contributions cannot be made identifiable.

b. Emphasize the valuable contributions of individual members. i. People sometimes think that their efforts are unnecessary or unimportant when they work

in a group.

ii. When managers form groups, they should assign individuals to groups on the basis of the

valuable contributions that each person can make.

c. Keep group size at an appropriate level. i. As size increases, members are increasingly likely to think that their individual

contributions are not important.

ii. Managers should form groups with no more members than are needed to accomplish

group goals.

D. Helping Groups to Manage Conflict Effectively: Practically all groups experience either intragroup

or intergroup conflict. The effective management of conflict is discussed in Chapter 16.

Learning Objectives

LO15-1. Explain why groups and teams are key contributors to organizational effectiveness.

LO15-2. Identify the different types of groups and teams that help managers and organizations achieve their

goals.

LO15-3. Explain how different elements of group dynamics influence the functioning and effectiveness of

groups and teams.

LO15-4. Explain why it is important for groups and teams to have a balance of conformity and deviance and

a moderate level of cohesiveness.

LO15-5. Describe how managers can motivate group members to achieve organizational goals and reduce

social loafing in groups and teams.

Key Definitions/Terms

command group: A group composed of subordinates who report to the same supervisor; also called

department or unit.

division of labor: Splitting the work to be performed into particular tasks and assigning tasks to individual

workers.

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formal group: A group that managers establish to achieve organizational goals.

friendship group: An informal group composed of employees who enjoy one another’s company and socialize

with one another.

group cohesiveness: The degree to which members are attracted to or loyal to their group.

group norms: Shared guidelines or rules for behavior that most group members follow.

group role: A set of behaviors and tasks that a member of a group is expected to perform because of his or her

position in the group

group: Two or more people who interact with each other to accomplish certain goals or meet certain needs.

informal group: A group that managers or nonmanagerial employees form to help achieve their own goals or

meet their own needs.

interest group: An informal group composed of employees seeking to achieve a common goal related to their

membership in an organization.

pooled task interdependence: The task interdependence that exists when group members make separate and

independent contributions to group performance.

reciprocal task interdependence: The task interdependence that exists when the work performed by each

group member is fully dependent on the work performed by other group members.

research and development team: A team whose members have the expertise and experience needed to

develop new products.

role making: Taking the initiative to modify an assigned role by assuming additional responsibilities.

self-managed work team: A group of employees who supervise their own activities and monitor the quality of

the goods and services they provide.

sequential task interdependence: The task interdependence that exists when group members must perform

specific tasks in a predetermined order.

social loafing: The tendency of individuals to put forth less effort when they work in groups than when they

work alone.

synergy: Performance gains that result when individuals and departments coordinate their actions.

task force: A committee of managers or nonmanagerial employees from various departments or divisions who

meet to solve a specific, mutual problem; also called ad hoc committee.

task interdependence: The degree to which the work performed by one member of a group influences the

work performed by other members.

team: A group whose members work intensely with one another to achieve a specific common goal or

objective.

top-management team: A group composed of the CEO, the president, and the heads of the most important

departments.

virtual team: A team whose members rarely or never meet face-to-face but, rather, interact by using various

forms of information technology such as e-mail, computer networks, telephone, fax, and

videoconferences.