HBO Chapter 7

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Organizational Behavior Managing People and Organizations

by Ricky W. Griffin, Jean M. Phillips, Stanley M. Gully, 13ed
Chapter 7
Organizational Behavior (Yerevan University of Management and Information
Technology)
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CHAPTER
GROUPS AND TEAMS

7
Real-World Challenge: Teamwork Understanding Team Performance
at Starbucks Factors
TYPES OF GROUPS AND TEAMS The Implementation Process
CHAPTER Workgroups MANAGING TEAMS
OUTLINE Teams Understanding Benefits and Costs
Informal Groups of Teams
GROUP PERFORMANCE FACTORS Case Study: Teamwork at IDEO
Improve Your Skills: Diagnosing Team Promoting Effective Performance
Problems Teamwork Competencies
Group Composition EMERGING TEAM OPPORTUNITIES
Group Size AND CHALLENGES
Group Norms Virtual Teams
Group Cohesiveness Diversity and Multicultural Teams
Understand Yourself: Are You Emotionally Global Issues: Increasing the Effectiveness of
Intelligent? Multicultural Teams
Informal Leadership SUMMARY AND APPLICATION
CREATING NEW GROUPS AND TEAMS Real-World Response: Teamwork
Stages of Group and Team Development at Starbucks
After studying this chapter, you should be able to:
1 Define groups and teams and identify and describe several types of each.
LEARNING 2 Identify the five core group performance factors and relate them to groups and teams in
OUTCOMES 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.

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REAL-WORLD CHALLENGE
TEAMWORK AT STARBUCKS
Coffee giant Starbucks believes that teamwork is essential to its strategic execution and ulti-
mate success.1 Reinforcing this belief, Starbucks’ core values include teamwork, diversity,
and equal participation. Employees are called by their first names and are referred to as
“partners” rather than by hierarchical titles. Teamwork is seen as so important to the com-
pany’s success that new hires spend several days learning how to be part of the Starbucks
team. Employees also work together on the front line, eliminating the distance between
different jobs of different status.2
When Starbucks started planning for its expansion into South Korea, it realized that
the country’s culture valued hierarchical relationships and power distance, which were
inconsistent with the company’s equality and teamwork values. Starbucks had to decide
if it wanted to change its organizational structure in South Korea to better fit the country’s
national culture, or stay the same to maintain its core values.3
Imagine that Starbucks asks for your advice on how it should handle its expansion into
South Korea. After reading this chapter, you should have some good ideas.
MICHELLE GILDERS/ALAMY STOCK PHOTO

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240 PART 3 | Social and Group Processes in Organizations
In Chapter 1 we noted the pervasiveness of human behavior in organizations

and the importance of interactions among people as critical to achieving import-
ant 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 organiza-
tions 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 solv-
ing (Chapter 8), interpersonal communication (Chapter 9), and conflict and
negotiation (Chapter 10).
TYPES OF GROUPS AND TEAMS

group There are literally hundreds of definitions of the term group. Groups have been
Two or more people defined in terms of perceptions, motivation, organization, interdependencies,
who interact with one interactions, and myriad other elements. We will simply define a group as two
another such that each
person influences and is
or more persons who interact with one another such that each person influences
influenced by each other and is influenced by each other person.4 Two people who are physically near each
person other are not a group unless they interact and have some influence on each other.
Coworkers may work side by side on related tasks—but if they do not interact,
team they are not a group.
An interdependent We should also note that groups and teams are not necessarily the same
collection of at least two
individuals who share a thing. All teams are groups, but not all groups are teams. We will define teams
common goal and share as an interdependent collection of at least two individuals who share a common
accountability for the goal and share accountability for the teams as well as their own outcomes.5 A key
team’s as well as their part of this definition is that team members are interdependent with respect to
own outcomes information, resources, and skills. As tasks become more complex, they require
greater coordination among team members. Team members’ roles become inter-
dependent, increasing the need for teamwork, reciprocal com-
munication, and feedback. Communication
and collaboration demands also
increase dramatically.6 So all teams
are groups, but groups are not neces-
sarily teams. For the sake of simplicity,
LTURA/
we will generally use terms “groups”

and “teams” interchangeably in this
GETTY RAKUSEN/CU
discussion.
IMAGES
MONTY
Groups are prevalent throughout most

organizations. A variety of different kinds of
workgroups and teams like this one perform many
different kinds of functions and play a number of
different roles.

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CHAPTER 7 | Groups and Teams 241
Workgroups
Workgroups are formal groups established by the organization to do its work. workgroup
Workgroups include command (or functional) groups and affinity groups (as A formal group formed
well as teams). A command group is relatively permanent and is character- by an organization to do
ized by functional reporting relationships such as having both a group manager its work
and those who report to the manager. Command groups are usually included in command group
the organization chart. Affinity groups are relatively permanent collections of A relatively permanent,
employees from the same level in the organization who meet on a regular basis formal group with
to share information, capture emerging opportunities, and solve problems.7 functional reporting
relationships and is
In business organizations, most employees work in command groups, as usually included in the
typically specified on an official organization chart. The size, shape, and organi- organization chart
zation of a company’s command group can vary considerably. Typical command
groups in organizations include the quality-assurance department, the customer affinity groups
service department, the cost-accounting department, and the human resource Collections of employees
from the same level in
department. Other types of command groups include work teams organized as in the organization who
the Japanese style of management, in which subsections of manufacturing and meet on a regular basis
assembly processes are each assigned to a team of workers. The team members to share information,
decide among themselves who will perform each task. capture emerging
Affinity groups are a special type of formal group: They are set up by the opportunities, and solve
problems
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 organi-
zational hierarchy, yet they are not task groups because they stay in existence
longer than any one task. Affinity groups are groups of employees who share
roles, responsibilities, duties, and interests, and which represent horizontal slices
of the normal organizational hierarchy. Because the members share important
characteristics such as roles, duties, and levels, they are said to have an affinity
for one another. The members of affinity groups usually have very similar job
titles and similar duties but are in different divisions or departments within the
organization.
Affinity groups meet regularly, and members have assigned roles such as
recorder, reporter, facilitator, and meeting organizer. Members
follow simple rules such as communicating
openly and honestly, listening actively,
respecting confidentiality, honoring
time agreements, being prepared, stay-
OTOS
ing focused, being individually account-

able, and being supportive of each other
OSIT PH
and the group. The greatest benefits of

affinity groups are that they cross exist-
EL/DEP
ing boundaries of the organization and

facilitate better communication among
RAWPIX
Groups composition plays a big role in how a group

functions and performs. For example, the group on the
left includes people who, on the surface at least, seem
very different from one another along several obvious
dimensions. The group on the right, though, is comprised
of people who appear to be very similar to one another.
These differences and similarities will affect how the
groups members interact and the outcomes they are able
to achieve.

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diverse departments and divisions throughout the organization. For instance,

the Eli Lilly Company formally recognizes eight affinity groups within its orga-
nization. One focuses on Chinese Culture. Its members, including both Chinese
and non-Chinese employees, meet regularly to help bridge cultural differences.
Another group at Eli Lilly is called the Women’s Network and focuses on gender
issues. Employees in some companies form book clubs and meet regularly to dis-
cuss books of common interest.
Teams
Organizations also use a wide variety of different types of teams. The most com-
mon types of teams are summarized in Table 7.1. There are many different types
of teams. Each type of team is composed of different members and responsible for
functional team different types of tasks. The members of functional teams come from the same
A team whose members department or functional area. A team of marketing employees and a team of
come from the same finance employees are examples of functional teams.
department or function Cross-functional teams have members from different departments or func-
area
tional areas. This is one of the most common types of work teams. An example of
cross-functional team a cross-functional team is a top-management team with members representing
A team whose members different functions or units of the organization. Some organizations are organized
come from different such that the company’s core work is done in cross-functional teams. For exam-
departments or functional
areas
ple, IDEO, a product innovation and design company, believes that interdisciplin-
ary teamwork boosts innovation and creativity.8 Teams share and improve ideas,
building on their members’ skills and providing more opportunities for problem
solving. Steelcase, IDEO, Hammel, Green, and Abrahamson, and the Mayo Clinic
all use cross-functional teams composed of employees with different expertise to
enhance creativity and team performance.9
Cross-functional teams have several strengths. In addition to getting things
done faster, particularly customer service and new product development, they can
increase creativity. Cross-functional teams also improve a firm’s ability to solve com-
plex problems by bringing different skill sets, perceptions, and experiences together.
Because they bring diverse people from different functional areas together, they
also increase employees’ knowledge about other areas of the organization. The same
diversity that can be a strength for cross-functional teams can also be a weakness
if this diversity is not properly managed and conflicts are not effectively handled.
Table 7.1
Types of Teams
Functional teams members come from the same department or functional area
Cross-functional teams members come from different departments or functional areas
Problem-solving teams teams created to solve problems and make improvements
Self-directed teams set their own goals and pursue them in ways defined by the team
Venture teams teams that operate semi-autonomously to create and develop new
products, processes, or businesses
Virtual teams teams of geographically and/or organizationally dispersed coworkers
who communicate using telecommunications and information technologies
Global teams face-to-face or virtual teams whose members are from different countries

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Problem-solving teams are teams established to solve problems and make problem-solving teams
improvements at work. The core strength of problem-solving teams is that Teams established to
because employees are the ones actually doing the work, they usually know the solve problems and make
job best. Putting employees on teams responsible for solving problems puts this improvements at work
expertise to work. For example, Colgate and JM Huber, a raw material supplier,
jointly assembled a multidisciplinary team to identify ways to reduce costs. The
team ultimately realized savings of hundreds of thousands of dollars.10 Quality
circles can exist for long periods whereas suggestion teams are short-lived and
assembled to address specific issues. Problem-solving teams can also increase
employees’ commitment to decisions because they were involved in making
them. Organizations are increasingly turning to outside teams to help them solve
important problems. When Netflix sponsored a contest to improve the accuracy self-directed teams
of its movie recommendation system, more than 40,000 teams from 186 countries Teams that set their own
formed to vie for the million-dollar prize.11 goals and pursue them
Self-directed teams set their own goals and pursue them in ways decided in ways decided by the
by the team. Team members are responsible for tasks typically reserved for team team
leaders or managers, including scheduling work and vacations, ordering supplies,
and evaluating their performance. At 3M (makers of Post-It Notes, Scotch Tape, venture teams
and myriad other products), self-directed work teams have made improvements Teams that operate
semi-autonomously to
in products, services, and processes while increasing customer responsiveness, create and develop
lowering operating costs, increasing productivity, and decreasing cycle times. new products (product
Self-directed teams can improve commitment, quality, and efficiency. Cross- development teams),
trained team members also help to increase the flexibility of the team during processes (process design
staffing shortages. Self-directed teams are difficult to implement, however, as teams), or businesses
(venture teams)
they require specific self-management and team skills that many employees lack.
Venture teams are teams that operate semi-autonomously to create and virtual teams
develop new products (product development teams), processes (process design Teams of geographically
teams), or businesses (venture teams). 12 Separating a team from the formal and/or organizationally
structure of the rest of the organization can enhance its innovativeness and dispersed coworkers
who communicate using
speed up cycle time. the Internet and other
Virtual teams are teams of geographically and/or organizationally dis- information technologies
persed coworkers who communicate using the Internet and other information
technologies. 13 Some virtual team members may never see each
other face-to-face. Many organizations use virtual
teams to accomplish a variety of goals.
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For example, PricewaterhouseCoopers,

one of the world’s largest accounting
TTERST
firms, with more than 236,000 employ-

ees in 158 countries, uses virtual teams
NS/SHU
to bring employees from around the globe

“together” for a week or two to prepare
UCTIO
work for a particular client. The Whirlpool

Corporation used a virtual team composed
A PROD
of experts from the United States, Brazil,

SYD
Virtual teams are becoming increasingly common

in organizations. New forms of technology, coupled
with pressures to reduce travel costs, make it easy
for colleagues who are geographically dispersed to
interact in ways that mirror face-to-face interactions.
Of course, they may also have a reduced personal
connection with their colleagues when meeting this way.

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and Italy during a two-year project to develop a chlorofluorocarbon-free refriger-

ator.14 You will learn more about virtual teams later in this chapter.
global teams Global teams have members from different countries. Global teams can be
Teams with members from virtual or meet face-to-face. Procter & Gamble, a multinational manufacturer
different countries of family, personal, and household care products, uses global teams to allow
employees at its Cincinnati headquarters to collaborate with employees and
suppliers all over the world. Bosch und Siemens Hausgeräte GmbH (BSH) is a
global company that operates forty-eight production sites and forty-one facto-
ries in fifty countries across Europe, Asia, the United States, and Latin America.
The company sells household appliances under brand names including Bosch
and Siemens and uses global teams of employees from Spain, China, and Latin
America to develop technologies and concepts for new products.
Informal Groups
informal group Whereas formal groups and teams are established by an organization, informal
Is established by its groups are formed by their members and consist of friendship groups, which are
members relatively permanent, and interest groups, which may be shorter-lived. Friendship
friendship group groups arise out of cordial personal relationships among members and the enjoy-
Is relatively permanent ment they get from being together. Interest groups are organized around a com-
and informal and draws mon activity or interest, although friendships may also develop among members.
its benefits from the social Good examples of interest groups are the networks of working women that have
relationships among its developed over the last several years. Many of these groups began as informal social
members
gatherings of women who wanted to meet with other women working in male-dom-
interest group inated organizations, but they soon developed into interest groups whose benefits
Is relatively temporary went far beyond their initial social purposes. The networks became information sys-
and informal and is tems for counseling, job placement, and management training. Some networks were
organized around a eventually established as formal, permanent associations; some remained informal
common activity or
interest of its members groups based more on social relationships than on any specific interest; and oth-
ers eventually dissolved. These groups may be partly responsible for the continued
increase in the percentage of women in managerial and administrative jobs.
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).
In a high-performing group, a group synergy often develops in which the
group’s performance is more than the sum of the individual contributions of
its members. Several additional factors may account for this accelerated per-
formance. 15 The five basic group performance factors are composition, size,
norms, cohesiveness, and informal leadership. If you are part of a group or
team that is not performing effectively, the Improve Your Skills feature might
be a useful diagnostic tool.
group composition
The degree of similarity
or difference among Group Composition
group members on
factors important to the The composition of a group plays an important role in determining group
group’s work productivity. 16 Group composition is most often described in terms of the

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IMPROVE YOUR SKILLS

DIAGNOSING TEAM PROBLEMS
Here are some questions you can ask in diagnosing team 5. Authority to manage the work
issues. • How to meet client demands
1. Clear direction • Which actions to take, and when
• Can each of the team members articulate the pur- • Whether to change their work strategies when they
pose that the team exists to achieve? deem necessary
2. A real team task • Do team members have the authority to decide the fol-
• Is the team assigned collective responsibility for all lowing without first receiving special authorization?
of its customers and major outputs? 6. Team goals
• Does the team make collective decisions about work • Can team members articulate specific and shared
strategies (rather than leaving it to individuals)? team goals?
• Are team members willing and able to help one 7. Improvement norms
another? • Do team members encourage one another to detect
• Does the team get team-level feedback about its and solve problems?
performance? • Do members openly discuss differences in what
3. Team rewards members have to contribute to the team?
• Are more than 80 percent of all rewards available • Do members encourage experimentation with new
to teams only, and not to individuals? ways of operating?
4. Basic material resources • Does the team actively seek to learn from other
• Does the team have its own meeting space? teams?
• Can the team easily get the basic materials it needs Source: Wageman, R. (1997, Summer). Critical Success Factors for Creating
to do its work? Superb Self-Managing Teams. Organizational Dynamics, 26(1), 59.
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 cul-
tural background. In heterogeneous groups, the members differ in one or more
ways that are critical to the work of the group. Homogeneous groups often are
created in organizations when people are assigned to command groups based
on a similar technical specialty. Although the people who work in such com-
mand groups may differ in some ways, such as in age or work experience, they
are homogeneous in terms of a critical work performance variable: technical
specialty.17
A substantial amount of research has explored the relationship between
a group’s composition and its productivity. The group’s heterogeneity in terms
of age and tenure with the group has been shown to be related to turnover:
Groups with members of different ages and experiences tend to experience
frequent changes in membership.18 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 (that is, each member does a different task, and the sum of these efforts
constitutes the group output), and demands creativity, and when speed is less
important than thorough deliberations. For example, a group asked to generate

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The size of a group may impact the ability of its members

to interact with one another. This group, for instance, is
probably too large to function effectively as a single entity. In
all likelihood the group members will form smaller sub-groups,
which some of them seem to be doing.
ideas for marketing a new product probably needs
M
OCK.CO
to be heterogeneous to develop as many different
ideas as possible.
TTERST
The link between group composition and type of
task is explained by the interactions typical of homo-
EL/SHU
geneous and heterogeneous groups. A homogeneous
group tends to have less conflict, fewer differences
RAWPIX
of opinion, smoother communication, and more inter-
actions. When a task requires cooperation and speed,
a homogeneous group is therefore more desirable. If,
however, the task requires complex analysis of information and creativity to
arrive at the best possible solution, a heterogeneous group may be more appro-
priate because it generates a wide range of viewpoints. 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. 19 Cultures differ in the importance
they place on group membership and in how they view authority, uncertainty,
and other important factors. Increasing attention is being focused on how to
deal with groups made up of people from different cultures.20 In general, a
manager in charge of a culturally diverse group can expect several things.
First, members will probably distrust one another. Stereotyping will present
a problem, and communication problems will almost certainly arise. Thus,
managers need to recognize that such groups will seldom function smoothly,
at least at first. 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.
Group Size
A group—the number of people in the group—can
PHOTO IA/
have as few as two members or as many members

S
ED
as can interact and influence one another. Group

REAKM
size can have an important effect on performance.

DEPOSIT
A group with many members has more resources

WAVEB
Social loafing occurs when one or more members of a group put forth
less effort than others and let other members of the group pick up the
slack. This man, for example, is distracted and not paying attention to
what his team members are doing. But he may end up getting just as
much credit as they do when their project is completed.

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available and may be able to complete a large number of relatively indepen-

dent tasks. In groups established to generate ideas, those with more members
tend to produce more ideas, although the rate of increase in the number of ideas
diminishes rapidly as the group grows. 21 Beyond a certain point, the greater
complexity of interactions and communication may make it more difficult for a
large group to achieve agreement.
Interactions and communication are much more likely to be formalized in
larger groups. Large groups tend to set agendas for meetings and to follow a pro-
tocol or parliamentary procedure to control discussion. As a result, time that oth-
erwise might be available to work on tasks is taken up in administrative duties
such as organizing and structuring the interactions and communications within
the group. Also, the large size may inhibit participation of some people and
increase absenteeism; some people may stop trying to make a meaningful contri-
bution and may even stop coming to group meetings if their repeated attempts to
contribute or participate are thwarted by the sheer number of similar efforts by
other members. Furthermore, large groups present more opportunities for inter-
personal attraction, leading to more social interactions and fewer task interac-
tions. Social loafing is the tendency of some members of groups not to put forth social loafing
as much effort in a group situation as they would working alone. Social loafing The tendency of some
often results from the assumption by some members that if they do not work members of groups to put
hard, other members will pick up the slack. How much of a problem this becomes forth less effort in a group
than they would when
depends on the nature of the task, the characteristics of the people involved, and working alone
the ability of the group leadership to be aware of the potential problem and do
something about it.
The most effective size of a group, therefore, is determined by the group
members’ ability to interact and influence one another effectively. The need for
interaction is affected by the maturity of the group, the tasks of the group, the
maturity of individual members, and the ability of the group leader or manager
to manage the communication, potential conflicts, and task activities. In some
situations, the most effective group size is three or four; other groups can func-
tion effectively with fifteen or more members.
Group Norms
A norm is a standard against which the appropriateness of a behavior is judged. norm
Thus, norms determine the behavior expected in a certain situation. Group norms A standard against which
usually are established during the second stage of group development (communi- the appropriateness of a
cation and decision making) and are carried forward into the maturity stage. By behavior is judged
providing a basis for predicting others’ behaviors, norms enable people to behave
in a manner consistent with and acceptable to the group. Without norms, the
activities in a group would be chaotic.
Norms result from the combination of members’ personality character-
istics, the situation, the task, and the historical traditions of the group. 22
Norms can be positive or negative for individual and organizational outcomes
because group members tend to follow them even if the consequences are neg-
ative. Lack of conformity to group norms may result in attempts to correct the
deviant behavior, verbal abuse, physical threats, ostracism, or even ejection
from the group. Group norms are enforced, however, only for actions that are
important to group members. For example, if the office norm is for employees
to wear suits to convey a professional image to clients, a staff member who

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wears jeans and a sweatshirt violates the group norm and will hear about it
quickly. But if the norm is that dress is unimportant because little contact
with clients occurs in the office, the fact that someone wears blue jeans may
not even be noticed.
Norms serve four purposes in organizations. First, they help the group
survive. Groups tend to reject deviant behavior that does not help meet group
goals or contribute to the survival of the group if it is threatened. Accordingly,
a successful group that is not under threat may be more tolerant of deviant
behavior. Second, they simplify and make more predictable the behaviors
expected of group members. Because they are familiar with norms, members
do not have to analyze each behavior and decide on a response. Members can
anticipate the actions of others on the basis of group norms, usually resulting
in increased productivity and goal attainment. Third, norms help the group
avoid embarrassing situations. Group members often want to avoid damaging
other members’ self-images and are likely to avoid certain subjects that might
hurt a member’s feelings. And finally, norms express the central values of the
group and identify the group to others. Certain clothes, mannerisms, or behav-
iors in particular situations may be a rallying point for members and may sig-
nify to others the nature of the group.23
Group Cohesiveness
group cohesiveness Group cohesiveness is the extent to which a group is committed to remain-
The extent to which a ing together; it results from forces acting on the members to remain in the
group is committed to group. The forces that create cohesiveness are attraction to the group, resis-
staying together tance to leaving the group, and motivation to remain a member of the group.24
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 compe-
tition or by the presence of an external threat. Either factor can focus mem-
bers’ 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. This may be one reason behind the pop-
ular expression “Success breeds success.” A group that is successful may become
more cohesive and hence possibly even more successful. Of course, other factors
can get in the way of continued success, such as personal differences, egos, and
the lure of more individual success in other activities.
Research on group performance factors has focused on the relationship
between cohesiveness and group productivity. 25 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. 26 However, highly cohesive groups will not necessarily be more
productive in an organizational sense than groups with low cohesiveness. As
Figure 7.2 illustrates, when a group’s goals are compatible with the organi-
zational goals, a cohesive group probably will be more productive than one
that is not cohesive. In other words, 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. If such a group decides on a goal that has little to do
with the business of the organization, it will probably work to achieve its own

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Figure 7.1
Factors That Affect Group Cohesiveness and Consequences of Group The factors that
Cohesiveness increase and decrease
cohesiveness and the
Factors That Increase Consequences of High consequences of high
Cohesiveness Cohesiveness and low cohesiveness
indicate that although it is
Homogeneous Composition Goal Accomplishment often preferable to have a
Mature Development Personal Satisfaction of highly cohesive group, in
Relatively Small Size Members some situations the effects
Frequent Interactions Increased Quantity and of a highly cohesive
Clear Goals (Competition or Quality of Interactions group can be negative
External Threat) Groupthink for the organization.
Success
Factors That Decrease Consequences of Low

Cohesiveness Cohesiveness
Heterogeneous Composition Difficulty in Achieving Goals

Recent Formation Increased Likelihood of
Large Size Disbanding
Physical Dispersion Fewer Interactions
Ambiguous Goals Individual Orientation
Failure Lower Commitment to Group
Goals
goal even at the expense of any organizational goals that might be compro- groupthink
mised by the group’s efforts. Occurs when a group’s
overriding concern is
Cohesiveness may also be a primary factor in the development of certain a unanimous decision
problems for some decision-making groups. An example is groupthink, which rather than a critical
occurs when a group’s overriding concern is a unanimous decision rather than analysis of alternatives
Figure 7.2
Group Cohesiveness, Goals, and Productivity This figure shows that the
best combination is for
the group to be cohesive
High Group goals congruent
and for the group’s goals
with organizational goals
to be congruent with the
Organizational Productivity
Group goals not congruent organization’s goals. The

with organizational goals lowest potential group
performance also occurs
with highly cohesive
groups when the group’s
goals are not consistent
with the organization’s
goals.
Low
Low High
Group Cohesiveness

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critical analysis of alternatives.27 (We will discuss groupthink in Chapter 8.)

These problems, together with the evidence regarding group cohesiveness and
productivity, mean that a manager must carefully weigh the pros and cons of
fostering highly cohesive groups.
Finally, there is emerging evidence that the emotional intelligence of
group members can promote cohesiveness. In this context, emotional intelli-
gence refers to interpersonal capability that includes the ability to perceive
and express emotions, to understand and use them, and to manage emo-
tions in oneself and other people.28 Groups with less well-defined emotional
intelligence climates experience increased task and relationship conflict and
increased conflict intensity. 29 The U.S. Air Force and L’Oreal use emotional
intelligence training to improve team performance. This chapter’s Understand
Yourself feature will help you to evaluate and understand your emotional
intelligence skills.
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. Because friendship and interest
U N D E R S TA N D Y O U R S E L F
ARE YOU EMOTIONALLY INTELLIGENT?
Emotional intelligence will help you to be a more effective ___ 5. I am good at sensing what others are feeling.
group and team member, and increase your effectiveness in ___ 6. I know what to say to make people feel good.
many other areas as well. The following questions will help
Scoring and Interpretation: Each score is out of a maximum
you to assess yourself on four aspects of emotional intelli-
score of 28. The accuracy and usefulness of your score
gence. Please answer each question honestly using the follow-
depends on the accuracy of your self-perceptions.
ing scale. Write the number from 1 to 7 that corresponds to
A score above 30 reflects high self-emotion appraisal and
your answer on the scale in the space to the left of each item
means that you have a good understanding of your own and
number.
others’ emotions. Being sensitive to what others are feeling
and using your emotions to drive positive behavior is import-
strongly slightly slightly strongly ant in both your work and personal lives. Reflect on each of
disagree neutral agree
disagree disagree agree agree
the items you scored lower and think about what you might
do to improve in these areas. It is important to remember that
the usefulness of your scores depend on the accuracy of your
1 2 3 4 5 6 7
self-perceptions.
Source: The International Personality Pool representation of the items from

___ 1. I am able to fit into any situation. Peterson, C., & Seligman, M. E. P. (2004). Character strengths and vir-
___ 2. I have the ability to make others feel interesting. tues: A handbook and classification. New York: Oxford University Press
and Washington, DC: American Psychological Association. International
___ 3. I know what makes others tick.
Personality Item Pool Social/Personal/Emotional Intelligence, IPIP.org, https://
___ 4. I get along well with people I have just met. ipip.ori.org/newVIAKey.htm#Soc_Pers_Emot_Intelligence.

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An informal leader is someone who

engages in leadership activities without
the formal authority to do so. Take these
construction supervisors, for instance. The
project manager may be away handling
other responsibilities and one of the two
supervisors in the center is taking charge
during the manager’s absence. This super-
visor, then, is emerging as an informal
leader by taking on a larger role than
OM
has been actually granted to them by the
STOCK.C
company.
UTTER
DIO/SH
groups are formed by the members
IG STU
themselves, however, any formal
leader must be elected or designated
ITTLE P
by the members. Although some

groups do designate such a leader (a
L
softball team may elect a captain, for

example), many do not. Moreover, 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 informal leader
but whose right to do so has not been formally recognized. The formal and the A person who engages
informal leader in any group or team may be the same person, or they may be in leadership activities
different people. For example, most groups and teams need people to play both but whose right to do so
has not been formally
task and socioemotional roles. An informal leader is likely to be a person capable recognized by the
of carrying out both roles effectively. If the formal leader can fulfill one role but organization or group
not the other, an informal leader often emerges to supplement the formal leader’s
functions. If the formal leader can fill neither role, one or more informal leaders
may emerge to carry out both sets of functions.
Is informal leadership desirable? In many cases, informal leaders are quite
powerful because they draw from referent or expert power. When they are work-
ing in the best interests of the organization, they can be a tremendous asset.
Notable athletes like Tom Brady, LeBron James, and Abby Wambach are excel-
lent examples of informal leaders. However, when informal leaders work counter
to the goals of the organization, they can cause significant difficulties. Such
leaders may lower performance norms, instigate walkouts or wildcat strikes, or
otherwise disrupt the organization.
CREATING NEW GROUPS AND TEAMS

Managers frequently have the opportunity to create new groups and teams.
Given the significant roles that groups and teams can play in organizational
effectiveness, it is clearly important that this process be approached logically and
rationally. 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 vari-
ous performance factors should be considered, and be aware of the formal process
experts suggest for implementing teams.

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Stages of Group and Team Development

Groups are not static, and when a new group or team is created it generally
goes through some “growing pains” before it becomes fully functional. Traditional
research on small groups per se (as opposed to teams) 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.30 The
stages and the activities that typify them are shown in Figure 7.3. We will dis-
cuss the stages as separate and distinct. It is difficult to pinpoint exactly when
a group moves from one stage to another, however, because the activities in the
phases tend to overlap.
Mutual Acceptance
mutual acceptance stage In the mutual acceptance stage of group development (also called the forming
Characterized by stage), the group forms, and members get to know one another by sharing infor-
members’ sharing mation about themselves. They often test one another’s opinions by discussing
information about subjects that have little to do with the group, such as the weather, politics, sports,
themselves and getting to
know one another or recent events within the organization. Some aspects of the group’s task, such
as its formal objectives, may also be discussed at this stage. However, such dis-
Figure 7.3
Stages of Group Development
New Group
Formation
Mutual
Acceptance
New Task
New Members Making Acquaintances
Sharing Information
Discussing Subjects
Unrelated to Task
Control and Testing One Another Communication and
Organization Being Defensive, Decision Making
Quibbling
Working Interdependently Expressing Attitudes
Assigning Tasks Based Establishing Norms
on Ability Establishing Goals
Acting Spontaneously Openly Discussing
Motivation and
Being Flexible Tasks
Productivity
Self-Correcting
Cooperating
Working Actively on
Tasks
Being Creative
This figure shows the stages of evolution from a newly formed group to a mature group. Note that as new members are added or an
existing group gets a new task, the group needs to go through the stages again.

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cussion probably will not be very productive because the members are unfamiliar
with one another and do not know how to evaluate one another’s comments. If
the members do happen to know one another already, this stage may be brief,
but it is unlikely to be skipped altogether because this is a new group with a new
purpose. Besides, there are likely to be a few members whom the others do not
know well or at all.
As the members get to know one another, discussion may turn to more sensi-
tive issues, such as the organization’s politics or recent controversial decisions. At
this stage, members may have minor arguments and feud a bit as they explore one
another’s views on various issues and learn about each other’s reactions, knowl-
edge, and expertise. From the discussion, members come to understand how simi-
lar their beliefs and values are and the extent to which they can trust one another.
Members may discuss their expectations about the group’s activities in terms of
their previous group and organizational experience.31 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.
Communication and Decision Making

The group progresses to the communication and decision-making stage communication and
(also called storming stage) once group members have begun to accept one decision-making stage
another. In this stage, members discuss their feelings and opinions more openly, Members discuss their
which can increase conflict; they may show more tolerance for opposing view- feelings more openly and
agree on group goals
points and explore different ideas to bring about a reasonable solution or deci- and individual roles in the
sion. The membership usually begins to develop norms of behavior during this group
stage. Members discuss and eventually agree on the group’s goals. Then they are
assigned roles and tasks to accomplish the goals.
Motivation and Productivity

In the next stage, motivation and productivity stage (also called the norm- motivation and
ing stage), the emphasis shifts away from personal concerns and viewpoints to productivity stage
activities that will benefit the group. Members perform their assigned tasks, Members cooperate, help
cooperate with one another, and help one another accomplish their goals. The one another, and work
toward accomplishing
members are highly motivated and may carry out their tasks creatively. In this tasks
stage, the group is accomplishing its work and moving toward the final stage of
development.
Control and Organization

In the final stage, control and organization stage (also called the perform- control and organization
ing stage), the group works effectively toward accomplishing its goals. Tasks are stage
assigned by mutual agreement and according to ability. In a mature group, the The group is mature;
members’ activities are relatively spontaneous and flexible rather than subject to members work
together and are
rigid structural restraints. Mature groups evaluate their activities and potential flexible, adaptive, and
outcomes and take corrective actions if necessary. The characteristics of flexibil- self-correcting
ity, 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. Rather than spend the time necessary to get to know one another
and build trust, for example, a group may cut short the first stage of development
because of pressure from its leader, from deadlines, or from an outside threat
(such as the boss).32 If members are forced into activities typical of a later stage

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while the work of an earlier stage remains incomplete, they are likely to become
frustrated: The group may not develop completely and may be less productive
than it could be.33 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.34 Its members are interdependent, coordi-
nated, cooperative, competent at their jobs, motivated to do them, self-correcting,
and in active communication with one another.35 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. The San Francisco Forty-Niners, for example, once returned from an NFL
players strike to an uncomfortable and apprehension-filled period. Their coach
conducted rigorous practices but also allowed time for players to get together
to air their feelings. Slowly, team unity returned, and players began joking and
socializing again as they prepared for the rest of the season.36 Their redevelop-
ment as a mature group resulted in two subsequent Super Bowl victories.
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.37 A group may begin with its own dis-
tinctive approach to the problem and maintain it until about halfway through
the allotted time. 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.
Following these midpoint activities, the new patterns of activity may be main-
tained until close to the end of the period allotted for the activity. Another tran-
sition 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.
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
process gain members were later combined. Process gain refers to the performance improve-
Performance ments that occur because people work together rather than independently.
improvements that occur Process gain is the goal of working in teams—people working together doing
because people work more and doing it better than would be possible working alone.
together rather than
independently Unfortunately, many teams do not realize process gain and instead experi-
ence process loss. Process loss occurs when a team of people working in a group
process loss or team together performs worse than the individual members would have if they
Performance decrements had worked alone. Process loss can be reduced by making clear role and task
that occur when a team
performs worse than
assignments and not tolerating free riders. Free riders do not contribute because
the individual members they rely on the work of others. Paying attention to how a team does its work can
would have if they had help you to identify and remedy many of the factors contributing to process loss.
worked alone The likelihood of process gain can be improved by awareness of several team per-
formance factors. Some of these relate closely to the group performance factors
team efficacy noted earlier, while others extend beyond those factors.
A team’s shared belief One useful technique for promoting process gain is to develop and promote
that it can organize and
execute the behaviors team efficacy. Team efficacy is a team’s shared belief that it can organize and
necessary to reach its execute the behaviors necessary to reach its goals.38 Team efficacy is strongly
goals related to team performance, particularly when team interdependence is high.39

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Team efficacy can be enhanced by ensuring that at least some members of a team
have strong self-efficacy themselves, that team members are given appropriate
support and training, and by expressing confidence in and providing encourage-
ment to the team.
As we noted earlier, members of a highly cohesive team are motivated to
stay in the team, contribute as much as they can, and conform to team norms.
Because members of teams that lack cohesiveness are not strongly committed
to the team or its goals and do not contribute to their full potential, team perfor-
mance is compromised.40 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 trust
confidence that other people will honor their commitments, especially when it is Confidence that other
difficult to monitor or observe the other people’s behavior.41 Teams build trust people will honor their
through repeated positive experiences, commitment to shared goals, and an under- commitments, especially
when it is difficult to
standing of team members’ needs, motives, and ideas. Because the lack of trust in monitor or observe the
a team can undermine any team activity, building trust is an important manage- other people’s behavior
rial task. Giving frequent task feedback and interpersonal contact can help diverse
teams utilize their diversity to their advantage and create process gain.42
Managers should also try to prevent social loafing. Indeed, social loafing is
a primary cause of process loss. Research has documented the common practice
of social loafing,43 particularly for trivial to moderately important tasks. Social
loafing is less common with very important tasks,44 and with smaller teams.45
Social loafing often occurs because team members feel that their individual con-
tributions will not be evaluated or because they expect others in the team to do
tasks so they choose not to do them.46
An opposite behavior occurs when people actually work harder and are more
motivated when others are present than when they are working alone. Social Social facilitation
facilitation happens when people are motivated to look good to others and want Happens when people
to maintain a positive self-image. It happens when people are working alone, are motivated to look
but in the presence of an audience. People sometimes increase their effort when good to others and want
to maintain a positive
working in a group simply because others are present47 or because of evaluation self-image
apprehension.48
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.49 For example, giving a team
member the responsibility for ensuring that meeting notes are shared with the
team within two days of a meeting makes it more likely that notes will be taken
and distributed. Letting team members choose which tasks they will be responsi-
ble for can also increase their motivation for getting them done.
In addition, managers should establish clear roles. Roles define the behav- roles
iors and tasks each team member is expected to perform because of the posi- Define the behaviors and
tion they hold. One of the primary outcomes of the process of group and team tasks each team member
development is the establishment of clear roles in the team. Understanding what is expected to perform
because of the position
your teammates expect you to do and what you can expect your teammates to do they hold
reduces conflict and enables smooth team performance. Making team roles and
expectations clear helps to reduce process loss.
It is also important to establish positive norms. By helping team members
know what to expect from one another, norms help to ensure high performance.
An example of a positive team norm is arriving to meetings prepared and on
time, and participating fully. 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.50

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When possible, managers should create shared team goals and provide feed-
back. High-performing teams have clear and challenging goals that all team
members are committed to and create sub-goals and milestones against which
they measure themselves. If performance is lagging, feedback helps the team
quickly adjust its behavior and processes to reach its goals.51 As featured in this
chapter’s Real-World Response, in South Korea, Starbucks created shared team
goals around tasks typically performed by females to encourage its male employ-
ees to perform these tasks as well.52
Team rewards also motivate effective teamwork behaviors. Tying team
rewards to team performance motivates team members to pursue team goals
rather than individual goals.53 Teams require firms to shift the emphasis of
their compensation and rewards programs from individual to team rewards. Any
remaining individual rewards should acknowledge people who are effective team
players—people who freely share their expertise, help when needed, and chal-
lenge their teams to improve. A “star” system that rewards only individual per-
formance undermines team effectiveness.
Some individual rewards may be appropriate for those who make particu-
larly critical individual contributions to the team, but the bulk of rewards need
to be made at the team level. Managers should remember the importance of inte-
grating new team members. Team member turnover compromises team effective-
ness as new members must be proactively integrated and socialized.54 Leaders
are critical to this newcomer integration and socialization process. New team
member integration involves motivating all team members by promoting shared
goal commitment, positive affect, and shaping team processes. Team socialization
creates affective bonds that connect members to the team and its mission and
helps build trust and a sense of community. If current team members do not take
the time to incorporate new members into the fabric of the team, the team will be
less cohesive, new members will not be able to contribute to their full potential,
and new members are likely to be less committed to the team.
The Implementation Process

Implementing teams across an organization is not easy; it takes a lot of hard
work, time, training, and patience. Indeed, changing from a traditional organiza-
tional structure to a team-based structure is a major organizational change and
calls for a complete cultural change for the organization. Typically, the organiza-
tion is hierarchically designed to provide clear direction and control. However,
many organizations need to be able to react quickly to a dynamic environment.
Team procedures artificially imposed on existing processes are a recipe for disas-
ter. In this section, we present several essential elements peculiar to an organi-
zational change to a team-based situation. This process is shown in Figure 7.4.
Phase 1: Start-Up
In phase 1, team members are selected and prepared to work in teams so that
the teams have the best possible chance of success. Much of the initial training
is informational or “awareness” training that sends the message that top man-
agement is firmly committed to teams and that teams are not experimental. The
steering committee usually starts the training at the top, and the training and
information are passed down the chain to the team members. Training covers
the rationale for moving to a team-based organization, how teams were selected,
how they work, the roles and responsibilities of teams, compensation, and job

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Figure 7.4
Phases of Team Implementations Implementation of teams
in organizations is a long
and arduous process.
Phase 5: After the decision is
Self-Managing made to initiate teams,
Teams the steering committee
develops the plans for
the design team, which
plans the entire process.
Phase 4: The goal is for teams to
Tightly Formed become self-managing.
Teams The time it takes for each
stage varies with the
organization.
Phase 3:
Leader-Centered
Teams
Phase 2:
Reality & Unrest
Phase 1:
Start-Up
Plan the
Implementation
Make the Decision
security. In general, training covers the technical skills necessary to do the work
of the team, the administrative skills necessary for the team to function within
the organization, and the interpersonal skills necessary to work with people in
the team and throughout the organization. Sometimes the interpersonal skills
are important. Perhaps most important is establishing the idea that teams are
not “unmanaged” but are “differently managed.” The difference is that the new
teams manage themselves. Team boundaries are also identified, and the pre-
liminary plan is adjusted to fit the particular team situations. Employees typ-
ically feel that much is changing during the first few months; enthusiasm runs
high, and the anticipation of employees is quite positive. Performance by teams
increases at start-up because of this initial enthusiasm for the change.
Phase 2: Reality and Unrest

After perhaps six to nine months, team members and managers report frustra-
tion and confusion about the ambiguities of the new situation. For employees,
unfamiliar tasks, more responsibility, and worry about job security replace hope

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for the opportunities presented by the new approach. All of the training and
preparation, as important as it is, is never enough to prepare for the storm and
backlash. The Cummins Engine Company held numerous “prediction workshops”
in an effort to prepare employees and managers for the difficulties that lay
ahead, all to no avail. Its employees reported the same problems that employees
of other companies did. The best advice is to perform phase 1 very well and then
make managers very visible, continue to work to clarify the roles and responsi-
bilities of everyone involved, and reinforce the positive behaviors that do occur.
Some managers make the mistake of staying completely away from the
newly formed teams, thinking that the whole idea is to let teams manage them-
selves. In reality, managers need to be visible to provide encouragement, to mon-
itor team performance, to act as intermediaries between teams, to help teams
acquire needed resources, to foster the right type of communication, and some-
times to protect teams from those who want to see them fail. Managers, too, feel
the unrest and confusion. The change they supported results in more work for
them. In addition, there is the real threat, at least initially, that work will not
get done, projects may not get finished, or orders will not get shipped on time
and that they will be blamed for the problems.55 Managers also report that they
still have to intervene and solve problems for the teams because the teams do not
know what they are doing.
Phase 3: Leader-Centered Teams

As the discomfort and frustrations of the previous phase peak, teams usually
long for a system that resembles the old manager-center organizational structure
(see Figure 7.4). However, members are learning about self-direction and leader-
ship 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. Managers begin to get a sense of the positive possibilities of
organizing in teams and begin to withdraw slowly from the daily operation of the
unit to begin focusing on standards, regulations, systems, and resources for the
team.56 This phase is not a setback to team development—although it may seem
like one—because development of and reliance on one internal leader is a move
away from focusing on the old hierarchy and traditional lines of authority.
The design and steering committees need to be sure that two things happen
during this phase. First, they need to encourage the rise of strong internal team
leaders. The new leaders can either be company appointed or team appointed. Top
management sometimes prefers the additional control they get from appointing
the team leaders, assuming that production will continue through the team tran-
sition. On the other hand, if the company-appointed leaders are the former man-
agers, team members have trouble believing that anything has really changed.
Team-appointed leaders can be a problem if the leaders are not trained properly
and oriented toward team goals.
If the team-appointed leader is ineffective, the team usually recognizes the
problem and makes the adjustments necessary to get the team back on track.
Another possibility for team leadership is a rotating system in which the posi-
tion changes every quarter, month, week, or even day. A rotating system fosters
professional growth of all members of the team and reinforces the strength of the
team’s self-management.
The second important issue for this phase is to help each team develop its
own sense of identity. Visits to observe mature teams in action can be a good
step for newly formed teams. Recognizing teams and individuals for good per-
formance is always powerful, especially when the teams choose the recipients.

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Continued training in problem-solving steps, tools, and techniques is impera-

tive. Managers need to push as many problem-solving opportunities as possi-
ble down to the team level. Finally, as team identity develops, teams develop
social activities and display T-shirts, team names, logos, and other items that
show off their identity. All of these are a sure sign that the team is moving into
phase 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. Such teams are usually extremely confident of their
ability to do everything. They are solving problems, managing their schedule and
resources, and resolving internal conflicts. However, communication with exter-
nal teams begins to diminish, the team covers up for underperforming members,
and interteam rivalries can turn sour, leading to unhealthy competition.
To avoid the dangers of the intense team loyalty and isolation inherent in
phase 4, managers need to make sure that teams continue to do the things that
have enabled them to prosper thus far. First, teams need to keep the communica-
tion channels with other teams open through councils of rotating team represen-
tatives who meet regularly to discuss what works and what does not; teams who
communicate and cooperate with other teams should be rewarded. At the Digital
Equipment plant in Connecticut, team representatives meet weekly to share suc-
cesses and failures so that all can avoid problems and improve the ways their
teams operate.57 Second, management needs to provide performance feedback
through computer terminals in the work area that give up-to-date information
on performance, or via regular feedback meetings. At TRW plants, management
introduced peer performance appraisal at this stage of the team implementation
process. It found that in phase 4, teams were ready to take on this administra-
tive task but needed significant training in how to perform and communicate
appraisals. Third, teams need to follow the previously developed plan to transfer
authority and responsibility to the teams and to be sure that all team members
have followed the plan to get training in all of the skills necessary to do the work
of the team. By the end of phase 4, the team should be ready to take responsibil-
ity for managing itself.
Phase 5: Self-Managing Teams

Phase 5 is the end result of the months or years of planning and implemen-
tation. Mature teams are meeting or exceeding their performance goals.
Team members are taking responsibility for team-related leadership func-
tions. Managers and supervisors have withdrawn from the daily operations
and are planning and providing counseling for teams. Probably most import-
ant, mature teams are flexible—taking on new ideas for improvement; mak-
ing changes as needed to membership, roles, and tasks; and doing whatever it
takes to meet the strategic objectives of the organization. Although the teams
are mature and functioning quite well, several things need to be done to keep
them on track. First and foremost, individuals and teams need to continue
their training in job skills and team and interpersonal skills. Second, support
systems need to be constantly improved to facilitate team development and
productivity. Third, teams always need to improve their internal customer and
supplier relationships within the organization. Partnerships among teams
throughout the organization can help the internal teams continue to meet the
needs of external customers.

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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.
Understanding Benefits and Costs of Teams

With the popularity of teams increasingly so rapidly around the world, it is
possible that some organizations are starting to use teams simply because
everyone else is doing it—which is obviously the wrong reason. 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 enhance-
ments. Four categories of benefits and some examples are shown in Table 7.2.
Our Case Study profiles another example.
Enhanced Performance
Enhanced performance can come in many forms, including improved productiv-
ity, quality, and customer service. Working in teams enables workers to avoid
wasted effort, reduce errors, and react better to customers, resulting in more out-
put for each unit of employee input. Such enhancements result from pooling of
individual efforts in new ways and from continuously striving to improve for the
benefit of the team.61 For example, a General Electric plant in North Carolina
experienced a 20 percent increase in productivity after team implementation.62
K Shoes reported a 19 percent increase in productivity and significant reductions
in rejects in the manufacturing process after it started using teams.
Table 7.2
Benefits of Teams in Organizations
Type of Benefit Specific Benefit Organizational Examples
ENHANCED Increased productivity Ampex: On-time customer delivery rose by 98 percent
PERFORMANCE Improved quality K Shoes: Rejects per million dropped from 5,000 to 250
Improved customer service Eastman: Productivity rose by 70 percent
EMPLOYEE BENEFITS Quality of work life Lower Milwaukee Mutual: Employee assistance program
stress usage dropped to 40 percent below industry average
REDUCED COSTS Lower turnover, Absenteeism, Kodak: Reduced turnover by 50 percent
Fewer injuries Texas Instruments: Reduced costs by more than 50 percent
Westinghouse: Costs down by 60 percent
ORGANIZATIONAL Increased innovation, flexibility IDS Mutual Fund Operations: Improved flexibility to
ENHANCEMENTS handle fluctuations in market activity
Hewlett-Packard: Innovative order processing system
Sources: Examples derived from Katzenbach, J., & Eisenhardt, K. (2013). HBR’s 10 Must Reads on Teams. Boston: Harvard Business School Press; Gustafson,
P., & Liff, S. (2014). A Team of Leaders: Empowering Every Member to Take Ownership. Develop Initiative, and Take Ownership. New York: AMACOM; and
McChrysal, S., & Collins, T. (2015). Team of Teams: New Rules of Engagement for a Complex World. New York: John Wiley and Sons.

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CASE STUDY Teamwork at IDEO

IDEO is a global award-winning design firm. 58 and experiences, then they observe people using
Every year teams of people including psychologists, them. The teams then visualize, evaluate, refine,
mechanical engineers, biologists, and industrial and implement innovative solutions to their clients’
designers work on projects ranging from Apple’s first problems drawing from their research and obser-
computer mouse to heart defibrillators to the Neat vations. IDEO team members lack status or for-
Squeeze toothpaste tube. mal titles, and every team member is given equal
IDEO’s corporate philosophy is that teamwork respect.60
improves innovation and creativity. Group brainstorm-
Questions:
ing is used to spark a lot of new ideas at once. Project
teams share and improve ideas by leveraging mem- 1. How does teamwork influence innovation at
bers’ skills and solving problems together. The com- IDEO?
pany believes that the diversity of interdisciplinary 2. How does diversity influence the effectiveness of
teams allows higher quality, faster innovation.59 teamwork at IDEO?
Regardless of the project, IDEO teams use the 3. What characteristics would you look for in staffing
same process. First they identify similar products a project team at IDEO?
Reduced Costs
As empowered teams reduce scrap, make fewer errors, file fewer worker compen-
sation claims, and reduce absenteeism and turnover, organizations based on teams
are showing significant cost reductions. Team members feel that they have a stake
in the outcomes, want to make contributions because they are valued, and are com-
mitted to their team and do not want to let it down. Wilson Sporting Goods reported
saving $10 million per year for five years; thanks to its teams. Colgate-Palmolive
reported that technician turnover was extremely low—more than 90 percent of tech-
nicians were retained after five years—once it changed to a team-based approach.
Other Organizational Benefits

Other improvements in organizations that result from moving from a hierarchically
based, directive culture to a team-based culture include increased innovation, cre-
ativity, and flexibility.63 Use of teams can eliminate redundant layers of bureaucracy
and flatten the hierarchy in large organizations. Employees feel closer and more in
touch with top management. Employees who think their efforts are important are
more likely to make significant contributions. In addition, the team environment
constantly challenges teams to innovate and solve problems creatively. If the “same
old way” does not work, empowered teams are free to throw it out and develop a
new way. With increasing global competition, organizations must constantly adapt
to keep abreast of changes. Teams provide the flexibility to react quickly. One of
Motorola’s earliest teams challenged a long-standing top-management policy
regarding supplier inspections in an effort to reduce the cycle times and improve
delivery of crucial parts.64 After several attempts, management finally allowed the
team to change the system and consequently reaped the expected benefits.
Employee Benefits
Employees tend to benefit as much as organizations in a team environment.
Much attention has been focused on the differences between the baby-boom

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generation and the “postboomers” in their attitudes toward work, its importance
to their lives, and what they want from it. In general, younger workers tend to
be less satisfied with their work and the organization, tend to have lower respect
for authority and supervision, and tend to want more than a paycheck every
week. Teams can provide the sense of self-control, human dignity, identification
with work, and sense of self-worth and self-fulfillment for which current work-
ers seem to strive. Rather than relying on the traditional, hierarchical, manag-
er-based system, teams give employees the freedom to grow and to gain respect
and dignity by managing themselves, making decisions about their work, and
really making a difference in the world around them.65 As a result, employees
have a better work life, face less stress at work, and make less use of employee
assistance programs.
Costs of Teams
The costs of teams are usually expressed in terms of the difficulty of changing
to a team-based organization. Managers have expressed frustration and confu-
sion about their new roles as coaches and facilitators, especially if they developed
their managerial skills under the traditional hierarchical management philoso-
phy. Some managers have felt as if they were working themselves out of a job as
they turned over more and more of their directing duties to a team.66
Employees may also feel like losers during the change to a team culture.
Some traditional staff groups, such as technical advisory staffs, may feel that
their jobs are in jeopardy as teams do more and more of the technical work for-
merly done by technicians. New roles and pay scales may need to be developed for
the technical staff in these situations. Often, technical people have been assigned
to a team or a small group of teams and become members who fully participate
in team activities.
Another cost associated with teams is the slowness of the process of full team
development. As discussed elsewhere in this chapter, it takes a long time for
teams to go through the full development cycle and become mature, efficient, and
effective. Productivity may fall before the positive effects of the new team system
kick in. If top management is impatient with the slow progress, teams may be
disbanded, returning the organization to its original hierarchical form with sig-
nificant losses for employees, managers, and the organization.
Probably the most dangerous cost is premature abandonment of the change
to a team-based organization. If top management gets impatient with the team
change process and cuts it short, never allowing teams to develop fully and real-
ize benefits, all the hard work of employees, middle managers, and supervisors is
lost. As a result, employee confidence in management in general and in the deci-
sion makers in particular may suffer for a long time.67 The losses in productivity
and efficiency will be very difficult to recoup. Management must therefore be
fully committed before initiating a change to a team-based organization.
Promoting Effective Performance

This chapter has described the many benefits of teams and the process of changing
to a team-based organization. Teams can be utilized in small and large organiza-
tions, on the shop floor and in offices, and in countries around the world. Teams
must be initiated for performance-based business reasons, and proper planning and
implementation strategies must be used. In this section, we discuss three essential
issues that cannot be overlooked when moving to a team-based organization.

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Top-Management Support
The question of where to start in team implementation is really no issue at all.
Change starts at the top in every successful team implementation. Top manage-
ment has three important roles to play. First, top management must decide to go
to a team-based organization for sound business performance-related reasons.
A major cultural change cannot be made because it is the fad, because the boss
went to a seminar on teams, or because a quick fix is needed. Second, top manage-
ment is instrumental in communicating the reasons for the change to the rest of
the organization. Third, top management has to support the change effort during
the difficult periods. As discussed previously, performance usually goes down in
the early phases of team implementation. Top-management support may involve
verbal encouragement of team members, but organizational support systems for
the teams are also needed. Examples of support systems for teams include more
efficient inventory and scheduling systems, better hiring and selection systems,
improved information systems, and appropriate compensation systems.
Understanding Time Frames

Organizations often expect too much too soon when they implement teams. In
fact, things often get worse before they get better.68 Figure 7.5 shows how, shortly
after implementation, team performance often declines and then rebounds to rise
to the original levels and above. Management at Investors Diversified Services,
a financial services firm in Minneapolis, Minnesota (and now a part of American
Express), expected planning for team start-up to take three or four months. The
actual planning took eight and a half months.69 It often takes a year or more
before performance levels return to at least their before-team levels. If teams are
implemented without proper planning, their performance may never return to
prior levels. The long lead time for improving performance can be discouraging
to managers who reacted to the fad for teams and expected immediate returns.
Figure 7.5
Performance and Implementation of Teams The team performance
curve shows that
performance initially
drops as reality sets
in, and team members
experience frustration
Self-Managing
and unrest. However,
Teams
performance soon
Team Performance
increases and rises to

record levels as the teams
Tightly Formed Teams mature and become
self-managing.
Start-Up
Leader-Centered Teams
Reality and Unrest
Time
Source: From Katzenbach, J. R., & Smith, D. K. (1993). The Wisdom of Teams: Creating the High Performance
Organization (p. 84). Boston, MA: Harvard Business School Press.

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The phases of implementation discussed in the previous sections correspond

to key points on the team performance curve. At the start-up, performance is at
its normal levels, although sometimes the anticipation of, and enthusiasm for,
teams cause a slight increase in performance. In phase 2, reality and unrest,
teams are often confused and frustrated with the training and lack of direction
from top management, to the point that actual performance may decline. In
phase 3, leader-centered teams become more comfortable with the team idea
and refocus on the work of the team. They once again have established lead-
ership, although it is with an internal leader rather than an external man-
ager or supervisor. Thus, their performance usually returns to at least their
former levels. In phase 4, teams are beginning to experience the real potential
of teamwork and are producing above their prior levels. Finally, in phase 5,
self-managing teams are mature, flexible, and usually setting new records for
performance.
Organizations changing to a team-based arrangement need to recognize
the time and effort involved in making such a change. Hopes for immediate,
positive results can lead to disappointment. The most rapid increases in perfor-
mance occur between the leader-centered phase and the team-centered phase
because teams have managed to get past the difficult, low-performance stages,
have had a lot of training, and are ready to utilize their independence and
freedom to make decisions about their own work. Team members are deeply
committed to each other and to the success of the team. In phase 5, manage-
ment needs to make sure that teams are focused on the strategic goals of the
organization.
Changing Organizational Rewards

How employees are rewarded is vital to the long-term success of an organiza-
tion. The traditional reward and compensation systems suitable for individual
motivation are simply not appropriate in a team-based organization. In conven-
tional settings, employees are usually rewarded on the basis of their individual
performance, their seniority, or their job classification. In a team-based situation,
however, team members are generally
rewarded for mastering a range of
skills needed to meet team perfor-
mance goals, and rewards are some-
times based on team performance.
Such a pay system tends to promote
.COM
the flexibility that teams need to be

RSTOCK
responsive to changing environmental

factors. Three types of reward systems
HUTTE
are common in a team environment:

skill-based pay, gain-sharing systems,
RYLOV/S
and team bonus plans.

ALEX B
Organizations that increase their use of teams will

likely need to change their reward systems. This
organization, for example, is recognizing and
rewarding high performance by work teams. In the
past, the organization focused more on individual
performance.

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1. Skill-Based Pay: Skill-based pay systems require team members to acquire a

set of the core skills needed for their particular team plus additional special
skills, depending on career tracks or team needs. Some programs require all
members to acquire the core skills before any member receives additional
pay. Usually employees can increase their base compensation by some fixed
amount, say $0.50 per hour for each additional skill acquired, up to some
fixed maximum. Companies using skill-based pay systems include Eastman
Chemical Company, Colgate-Palmolive, and Pfizer.
2. Gain-Sharing Systems: Gain-sharing systems usually reward all team mem-
bers from all teams based on the performance of the organization, division, or
plant. Such a system requires a baseline performance that must be exceeded
for team members to receive some share of the gain over the baseline mea-
sure. Westinghouse gives equal one-time, lump-sum bonuses to everyone in
the plant based on improvements in productivity, cost, and quality. Employee
reaction is usually positive because when employees work harder to help
the company, they share in the profits they helped generate. On the other
hand, when business conditions or other factors beyond their control make
it impossible to generate improvements over the preset baseline, employees
may feel disappointed and even disillusioned with the process.
3. Team Bonus Plans: Team bonus plans are similar to gain-sharing plans
except that the unit of performance and pay is the team rather than a plant,
a division, or the entire organization. Each team must have specific perfor-
mance targets or baseline measures that the team considers realistic for the
plan to be effective. Companies using team bonus plans include Milwaukee
Insurance Company, Colgate-Palmolive, and Harris Corporation.
Changes in an organizational compensation system can be traumatic and
threatening to most employees. However, matching the reward system to the way
that work is organized and accomplished can have very positive benefits. The
three types of team-based reward systems presented can be used in isolation for
simplicity or in some combination to address different types of issues for each
organization.
Teamwork Competencies
One of the foundations of an effective team is the nature of the people chosen to
be in the team. Staffing teams with people who have the interpersonal skills and
competencies to contribute to task performance but who are also able to work
well in team settings is critical. Some of the teamwork abilities you should look
for are:70
1. Conflict resolution abilities
• The ability to recognize and encourage desirable and discourage undesir-
able team conflict
• The ability to recognize the type and source of conflict confronting the
team and implement an appropriate resolution strategy
• The ability to employ an integrative (win–win) negotiation strategy,
rather than the traditional distributive (win–lose) strategy
2. Collaborative problem-solving abilities
• The ability to identify situations requiring participative group problem
solving and to utilize the proper degree and type of participation
• The ability to recognize the obstacles to collaborative group problem solv-
ing and implement appropriate corrective actions

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3. Communication abilities
• The ability to communicate openly and supportively
• The ability to listen objectively and to appropriately use active listening
techniques
• The ability to maximize the congruence between nonverbal and ver-
bal messages and to recognize and interpret the nonverbal messages of
others
• The ability to engage in small talk and ritual greetings and a recognition
of their importance
4. Goal-setting and self-management abilities
• The ability to help establish specific, challenging, and accepted team goals
• The ability to provide constructive feedback
5. Planning and task coordination abilities
• The ability to coordinate and synchronize activities, information, and
tasks among team members
• The ability to help establish task and role assignments for individual
team members and ensure proper balancing of workload
Teamwork competencies also include an understanding of ethical behavior
in teams. The more frequently and intensely we interact with peers, the stronger
their influence on our own behavior.71 Other people’s ethical behavior influences
our own ethical behavior.72 This is particularly true for managers, highlighting
the importance of consistently setting a good example as a manager.73 Four ethi-
cal issues are especially important in teams:
1. How do teams fairly distribute work?
2. How do teams assign blame and award credit?
3. How do teams ensure participation, resolve conflict, and make decisions?
4. How do teams avoid deception and corruption?
team contract A team contract is a written agreement among team members establishing
A written agreement ground rules about the team’s processes, roles, and accountabilities. Team mem-
among team members bers must communicate and negotiate in order to identify the quality of work
establishing ground they all wish to achieve, how decisions will be made, and the level of participa-
rules about the team’s
processes, roles, and tion and individual accountability they all feel comfortable with. Team contracts
accountabilities help to reduce the potential for team conflict stemming from an unequal divi-
sion of resources and deter free riding. By enhancing personal accountability and
creating clear rules and expectations, team contracts can promote ethical team
behavior and improve team performance and team member satisfaction.
EMERGING TEAM OPPORTUNITIES

AND CHALLENGES
As teams become increasingly common in organizations, two additional sets of
opportunities and challenges must be addressed. These involve virtual teams
and diversity and multicultural teams.
Virtual Teams
Managing virtual teams can be difficult.74 Virtual team members are frequently
separated by both geographic space and time, increasing the challenges of work-
ing together effectively. In such environments, team members are often isolated
from one another and find it difficult to feel connected to their team. 75 It is hard

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enough to lead teams who see one another and whose members share common
language and culture, but these challenges multiply when teams “go virtual” and
communication is via technology and involves team members with far different
cultures and life experiences.76
Virtual teams allow organizations to access the most qualified individuals
for a particular job regardless of their location, enable organizations to respond
faster to increased competition, and provide greater flexibility to individuals
working from home or on the road. In some cases, some members of the team
may be free agents or alliance partners and not be employees of the organization.
In some teams, members may never even meet face-to-face. Many virtual teams
operate within a particular organization, but increasingly they cross organiza-
tional boundaries as well.77 Hewlett-Packard, Motorola, and Bank of Boston rely
on virtual teams to execute their strategies.78
Virtual Team Leadership Skills

The effective leadership of teams whose members are linked by technology and
whose members often do not see each other requires unique skills and behaviors
compared to managing and leading teams located in the same place.79 Working
from different locations introduces challenges with communication, collaboration,
and the integration of the team members with the rest of the team and the broader
organization. When team members rarely see one another or other employees, it
can be difficult for them to feel part of the team and organizational community.
One of the most important things a virtual team leader can do is to estab-
lish a communication climate that is characterized by openness, trust, support,
mutual respect, and risk-taking. This helps the team establish positive working
relationships, share information openly, reduce the formation of in-groups and
out-groups, and avoid misinterpreting communications.80
One expert identified five categories of important leadership skills in virtual
project team or distance management situations:81
1. Communicating effectively and matching technology to the situation:

Collaborative online tools help virtual teams manage files, meetings, and
task assignments.
2. Building community among team members based on mutual trust, respect,
affiliation, and fairness: Effective leaders solicit and value the contributions
of all team members, and consistently treat all team members with respect
and fairness.
3. Establishing a clear and motivating shared vision, team purpose, goals, and
expectations: Subtle messages, such as quietly reminding someone not to
attack ideas during a brainstorming session, are powerful tools in shaping
virtual team norms.
4. Leading by example and focusing on measurable results: Effective virtual
leaders set clear goals and make clear task assignments. The leaders then
hold team members accountable for them.
5. Coordinating and collaborating across organizational boundaries: Virtual
team leaders need to work effectively with people in multiple organizations
and with free agents and alliance partners who are not employees of the
leader’s organization.
Leader Behaviors
The lack of face-to-face contact with virtual team members makes it difficult
for leaders to monitor team member performance and to implement solutions
to work problems. It is also difficult for virtual team leaders to perform typical

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mentoring, coaching, and development functions. The challenge for virtual team
leaders is that these tasks must be accomplished by empowering the team to per-
form these functions itself without the leader being physically present.82
For example, members of virtual teams are usually chosen for their expertise
and competence and for their prior virtual team experience. They are expected to
have the technical knowledge, skills, abilities, and other attributes to be able to
contribute to team effectiveness and to operate effectively in a virtual environ-
ment. Thus, the need for virtual team leaders to monitor or develop team mem-
bers may not be as crucial. In addition, virtual team leaders can distribute aspects
of these functions to the team itself, making it more of a self-managing team.83
Virtual team leaders need to provide a clear, engaging direction for the
team84 along with specific individual goals. Clear direction and goals allow team
members to monitor and evaluate their own performance.85 Although this is rel-
evant in all teams, virtual team leaders need to be more proactive and structur-
ing. Virtual team leaders need to develop team processes that become the way
the team naturally behaves.
One way virtual team leaders can do this is by developing appropriate rou-
tines and procedures early on in the team’s lifecycle. 86 Routines create consis-
tent patterns of behavior that occur even in the leader’s absence. Leaders can
define desired routines (e.g., standard operating procedures), train members in
them, and provide motivational incentives sufficient to ensure compliance with
them. Leaders can also establish rules and guidelines that specify appropriate
team member behavior. For example, computer-mediated communication tends
to lead to more uninhibited individual behavior, such as strong and inflamma-
tory expressions.87 Therefore, virtual team leaders may need to develop standard
operating procedures that specify appropriate and inappropriate computer-
mediated communication. Because virtual team members are more detached
from the overall team environment, it is also important for leaders to monitor
the environment and inform team members of any important changes.88
Groupware and Group Decision Support Systems

Synchronous and asynchronous information technologies support members of
virtual teams.89 Synchronous technologies such as videoconferencing, instant
messaging, electronic meetings, and even conference calls allow real-time com-
munication and interaction. Asynchronous technologies such as email, wikis, and
some electronic meetings delay the communication of the message. Many virtual
teams rely on both types of information technology and use the one best suited
to the message being communicated and task being performed. Bausch & Lomb
found that a web-based collaboration tool increased synergy by decreasing the
number of meetings, giving people more free work time to get things done.90
Many team meetings are poorly run, take too long, and accomplish too little.
Meeting management software, electronic whiteboards, and collaborative docu-
ment editors facilitate meetings by allowing team members to contribute ideas,
to view other people’s ideas anonymously, and to comment and vote on them.
Computer-mediated communication enhances team performance by helping
team members communicate more effectively with each other.
The right technology is critical to making virtual teams work. Office fur-
niture maker Steelcase relies on its cross-functional, cross-office, and even
cross-company virtual teams to do business every day.91 To reduce travel costs
and to increase team productivity and efficiency, the company uses software to
support its virtual teams and enable them to work together as if they were in the
same location. The collaboration software connects virtual teams with members
in locations around the world and helps structure the meeting process. Teams

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can share files, manage projects, and coordinate business processes by marking
up documents and showing PowerPoint presentations within secure workspaces
synchronized across all team members’ PCs. Team members communicate via
instant messaging, chat, or voiceover-IP using the virtual meeting tool. A meet-
ing wizard facilitates the process of creating a meeting and inviting team mem-
bers. Once a meeting is created, any participant can easily add agenda topics,
create action items, attach files, and record minutes.92
Diversity and Multicultural Teams

Diversity can both help and hinder team effectiveness. Diversity can be a source
of creativity and innovation that can create a competitive advantage93 and
improve a team’s decision making.94 Innovative companies intentionally use het-
erogeneous teams to solve problems.95
Despite its potential for improving team performance, diversity can be a two-
edged sword.101 Diversity can create misunderstandings and conflict that can lead
to absenteeism, poor quality, low morale, and loss of competitiveness102 as well as
lowered workgroup cohesiveness.103 Diverse groups are less able to provide for all
of their members’ needs and tend to have less integration and communication and
more conflict than do homogeneous groups.104
GLOBAL ISSUES
INCREASING THE EFFECTIVENESS OF MULTICULTURAL TEAMS
What should you do to increase the effectiveness of multi- because he or she was technically the best person for the
cultural teams? The best solution seems to be to make minor job, so get over the accents.97
concessions on process—learn to adjust to and even respect
4. Exit: removing a team member when other options have
another approach to decision making. For example, global
failed. If emotions get too high and too much face has
American managers have learned to keep impatient bosses
been lost, it can be almost impossible to get a team to
away from team meetings and give them frequent updates.
work together effectively again.98
A comparable lesson for managers from other cultures is to
be explicit about what they need—saying, for example, “We As one expert says:
have to see the big picture before we will be ready to talk
about details.”96 The most fundamental thing is to be a role model for
Four strategies for dealing with the challenges of multicul- respect. It rubs off on the other members of the team.
tural teams are: Helping team members see that problems are due to cul-
tural differences and not personality helps a lot. And if
1. Adaptation: seeing a problem as a cultural difference you’re able to help the team see that the behavior that’s
and not a personality issue. This works when team mem- so frustrating and annoying is due to culture, then peo-
bers are willing and able to identify and acknowledge ple get curious: How do they get anything done in that
their cultural differences and to assume responsibility for culture? And when you unleash curiosity, that inspires
figuring out how to live with them. learning. The last thing is, don’t intervene too swiftly. If
2. Structural intervention: changing the shape of the team. they can always bring a problem to your door and you
Social interaction and working can be structured to solve it, they don’t learn to solve it themselves.99
engage everyone on the team.
3. Managerial intervention: setting norms early or bringing Managers and multicultural team members must find
in a higher-level manager. This usually works best early ways to utilize each member’s strengths while minimizing
in a team’s life. In one case, a manager set norms of coordination losses resulting from communication prob-
respect by telling his new team that no one had been lems, language differences, var ying work styles, and
chosen for English skills; each member was chosen misunderstandings.100

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Just as diversity is becoming more common in organizations,

so too are groups and teams also becoming more diverse.
This group, for instance, reflects several different forms of
diversity. Group and team diversity can promote creativity and
innovation. Unfortunately it can also be a source of conflict.
Informational diversity, or diversity in knowl-

edge and experience, has a positive impact on
team performance. Because team members’
K.COM AGES/
unique knowledge enlarges the team’s knowledge
SHUTT Y BUSINESS IM
resources and can enhance the options it is able
to consider, it can enhance creativity and problem
ERSTOC
solving. Demographic diversity, on the other hand,
often has a negative impact on performance. Team
MONKE
conflict tends to increase and teams tend to per-
form lower as they become more demographically
diverse. 105 Increasing demographic diversity can
result in work teams having more difficulty utilizing
their informational diversity because team members are not able to work effec-
tively with different others. When this happens, the potential for demographi-
cally diverse work teams to perform more effectively is lost.106
To leverage the potential benefits of diversity, many companies take steps to
proactively staff their teams with informational diversity and with people who
are comfortable with diversity and with teamwork. Effectively managing diver-
sity in teams has as much to do with the attitudes of team members toward
diversity as it does with the diversity of the team itself.
Multicultural teams can create frustrating dilemmas for managers. Cultural
differences can create substantial obstacles to effective teamwork, but they may
be difficult to recognize until significant damage has been done.107 It is easy to
assume that challenges in multicultural teams are just due to differing commu-
nication styles, but differing attitudes toward hierarchy and authority and con-
flicting norms for decision making can also create barriers to a multicultural
team’s ultimate success.108 We next elaborate on all three of these factors.
Direct versus Indirect Communication

Communication in Western cultures is typically direct and explicit, and a listener
does not have to know much about the context or the speaker to interpret it. In
many other cultures, meaning is embedded in the way the message is presented.
For example, people in the West obtain information about other people’s preferences
and priorities by asking direct questions, such as “Do you prefer option A or option
B?” In cultures using indirect communication, people often have to infer preferences
and priorities from changes, or the lack of them, in the other person’s counterpro-
posal. In cross-cultural settings, the non-Westerner can easily understand the direct
communications of the Westerner, but the Westerner often has difficulty under-
standing the indirect communication of the non-Westerner.109 Communication
challenges create barriers to effective teamwork by reducing information sharing,
creating interpersonal conflict, or both. Because accepted communication patterns
differ across cultures, it is a good idea to familiarize yourself with the communica-
tion patterns and norms of any other cultures with which you will be interacting.
Differing Attitudes toward Hierarchy and Authority

By design, teams have a rather flat structure. But team members from cultures in
which people are treated differently according to their status in an organization

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are often uncomfortable on flat teams. If they defer to higher status team mem-
bers, their behavior will be seen as appropriate by team members from hierarchi-
cal cultures, but they may damage their credibility if most of the team comes from
egalitarian cultures. For example, in multicultural teams, engineers from India
are typically not culturally comfortable arguing with the team leader or with
older people.110 This decreases the ability of the team to secure everyone’s input.
Conflicting Decision-Making Norms

Cultures differ substantially when it comes to how quickly decisions should be
made and how much analysis is required. Compared with managers from other
countries, U.S. managers like to make decisions very quickly and with relatively
little analysis. A Brazilian manager at an American company made these com-
ments about a negotiation, “On the first day, we agreed on three points, and on
the second day, the company wanted to start with point four. But the Koreans
wanted to go back and rediscuss points one through three. My boss almost had
an attack.”111
SUMMARY AND APPLICATION

A group is two or more persons who interact with one another such that each
person influences and is influenced by each other person. Teams are an interde-
pendent collection of at least two individuals who share a common goal and share
accountability for the team’s as well as their own outcomes. Groups and teams
are not necessarily the same thing. All teams are groups, but not all groups are
teams. Common kinds of groups in organizations include workgroups, teams, and
informal groups.
The performance of any group is affected by several factors other than its rea-
sons for forming and the stages of its development. The five basic group perfor-
mance factors are composition, size, norms, cohesiveness, and informal leadership.
Group composition is most often described in terms of the homogeneity or heteroge-
neity of the members. Group size can also have an important effect on performance.
A norm is a standard against which the appropriateness of a behavior is judged and
determines the behavior expected in a certain situation. 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 final group performance factor
is informal leadership: the emergence of an individual who engages in leadership
activities but whose right to do so has not been formally recognized.
When a new group or team is formed, it typically goes through several stages of
development. Traditional research on small groups per se (as opposed to teams) has
focused on a four-stage development process: (1) mutual acceptance, (2) communica-
tion and decision making, (3) motivation and productivity, and (4) control and orga-
nization. In terms of teamwork, other factors that contribute to performance include
process gain or loss, team efficacy, trust, social facilitation, and roles. The process of
implementation of teams should be approached as would be the case for any major
organizational change.
Managers need to have a clear understanding of the potential benefits and costs
of using teams. They should also know what they need to do to promote effective
team performance, including providing top-management support, understanding
time frames, and planning for the likely need to change rewards. Working to develop
teamwork competencies is also important.
Virtual teams and multicultural teams are important emerging areas of team-
work that are relevant to most organizations today. Managers should strive to
understand how to most effectively use these two kinds of teams.

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REAL-WOR LD R E S PO N S E
TEAMWORK AT STARBUCKS
Starbucks’ expansion into South Korea posed a using first names while preserving Starbucks’ equality
challenge. Should the company change its team- values.112
work and equality culture to better fit South Korea’s Another teamwork issue emerged because South
hierarchical natural culture that valued hierarchi- Korean men typically do not do “housework” chores
cal distance between employees or should it stay including washing dishes and cleaning toilets. However,
the same and reinforce its own values in South this type of work is expected of everyone in Starbucks’
Korea? stores. To help its male employees overcome the psy-
Starbucks decided to stay true to its culture and chological barrier to cleaning, Starbucks leveraged
values, but to be sensitive to the cultural needs and the South Korean cultural affinity for imitating leaders’
expectations of its South Korean employees. Because behaviors. The international director for Starbucks’
South Korean employees were uncomfortable calling headquarters personally did all of the cleaning activ-
each other by their first names rather than by tradi- ities and even hung a picture of him cleaning the toi-
tional hierarchical titles, Starbucks’ managers gave let. Because lower-level employees imitate the behavior
every South Korean employee an English name to of top leaders, this helped them overcome this cultural
use at work. This made employees more comfortable obstacle to teamwork.113
DISCUSSION QUESTIONS
1. Identify several different groups that you belong to and classify them as one
of the group types discussed in this chapter.
2. Think about an effective team you have been on. What made it effective?
Think about an underperforming team you have been on. Why was it
underperforming?
3. Are any of the groups to which you belong too large or too small to get their work
done? If so, what can the leader or the members do to alleviate the problem?
4. List two norms each for two of the groups to which you belong. How are these
norms enforced?
5. Discuss the following statement: “Group cohesiveness is the good, warm feel-
ing we get from working in groups and is something that all group leaders
should strive to develop in the groups they lead.”
6. Some say that changing to a team-based arrangement “just makes sense” for
organizations. What are the four primary reasons why this might be so?

lOMoARcPSD|14105063
7. Do you think a team contract would improve the effectiveness of teams? Why
or why not?
8. Which do you feel is more important to team performance: informational diver-
sity or demographic diversity? Why? Do multicultural teams increase this type of
diversity? If so, how?
UNDERSTAND YOURSELF EXERCISE

How Well Do You Add up as a Team Member?
Think about a group or team that you’ve been a part of. Answer the following ques-
tions about the nature of your participation by selecting the option that’s most accu-
rate. There are no right or wrong answers. You may have to be “hypothetical” in
responding to a few items, and in some cases, you might have to rely on “composite”
answers reflecting your experience in more than one group or teamwork setting.
1. I offer information and opinions
a. Very frequently d. Rarely
b. Frequently e. Never
c. Sometimes
2. I summarize what’s happening in the group
c. Sometimes
3. When there’s a problem, I try to identify what’s happening
c. Sometimes
4. I start the group working
c. Sometimes
5. I suggest directions that the group can take
c. Sometimes
6. I listen actively
c. Sometimes
7. I give positive feedback to other members of the group
c. Sometimes
8. I compromise
c. Sometimes
9. I help relieve tension
c. Sometimes

lOMoARcPSD|14105063
10. I talk
c. Sometimes
11. I help to ensure that meeting times and places are arranged
c. Sometimes
12. I try to observe what’s happening in the group
c. Sometimes
13. I try to help solve problems
c. Sometimes
14. I take responsibility for ensuring that tasks are completed
c. Sometimes
15. I like the group to be having a good time
c. Sometimes
How to score: Award yourself points according to the values shown in the follow-
ing table. An answer of “b” on Question 5, for example, is worth 1 point, while a
“b” on Question 6 is worth 3 points. To get your total score, add up the numbers
in your “Score” column.
Question a b c d e Score
1 1 2 3 2 1
2 1 2 3 2 1
3 1 2 3 2 1
4 2 2 3 1 0
5 0 1 3 1 0
6 3 3 2 1 0
7 3 3 2 1 0
8 2 3 3 1 0
9 1 2 3 1 0
10 0 0 3 2 1
11 2 3 3 1 0
12 3 3 2 1 0
13 2 3 3 1 0
14 2 2 3 1 0
15 1 1 2 1 1
TOTAL
41245 5 Very effective team person

35240 5 Effective team person
Under 35 5 Person who probably needs to work on his or her teamwork skills
Source: Adapted from University of South Australia, “Test Your Effectiveness as a Team Member.” Working in
Teams’ Online Workshop. Handout: “Teamwork Skills Questionnaire.”

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GROUP EXERCISE
1. Working alone, write the letters of the alphabet in a vertical column down
the left side of a sheet of paper: A–Z.
2. Your instructor will randomly select a sentence from any written document
and read out loud the first twenty-six letters in that sentence. Write these
letters in a vertical column immediately to the right of the alphabet column.
Everyone should have an identical set of twenty-six two-letter combinations.
3. Working alone, think of a famous person whose initials correspond to each
pair of letters, and write the name next to the letters—for example, “MT
Mark Twain.” You will have ten minutes. Only one name per set is allowed.
One point is awarded for each legitimate name, so the maximum score is
twenty-six points.
4. After time expires, exchange your paper with another member of the class
and score each other’s work. Disputes about the legitimacy of names will be
settled by the instructor. Keep your score for use later in the exercise.
Your instructor will divide the class into groups of five to ten people. All groups
should have approximately the same number of members. Each group now follows
the procedure given in Part 1. Again write the letters of the alphabet down the
left side of the sheet of paper, this time in reverse order: Z—A. Your instructor will
dictate a new set of letters for the second column. The time limit and scoring proce-
dure are the same. The only difference is that the groups will generate the names.
Each team identifies the group member who came up with the most names.
The instructor places these “best” students into one group. Then all groups repeat
Part 2, but this time, the letters from the reading will be in the first column and
the alphabet letters will be in the second column.
Each team calculates the average individual score of its members on Part 1
and compares it with the team score from Parts 2 and 3, kept separately. Your
instructor will put the average individual score and team scores from each part
of each group on the board.
Follow-up Questions
1. Are there differences in the average individual scores and the team scores?
What are the reasons for the differences, if any?
2. Although the team scores in this exercise usually are higher than the aver-
age individual scores, under what conditions might individual averages
exceed group scores?
Source: Adapted from Jones, J. J., & Pfeiffer, J. W. (eds.). The Handbook for Group Facilitators
(pp. 19–20). Copyright © 1979 Pfeiffer.

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Organizational Behavior Managing People and Organizations

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GROUPS AND TEAMS

After studying this chapter, you should be able to:

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240 PART 3 | Social and Group Processes in Organizations

In Chapter 1 we noted the pervasiveness of human behavior in organizations

TYPES OF GROUPS AND TEAMS

we will generally use terms “groups”

Groups are prevalent throughout most

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CHAPTER 7 | Groups and Teams 241

ing focused, being individually account-

and the group. The greatest benefits of

ing boundaries of the organization and

Groups composition plays a big role in how a group

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242 PART 3 | Social and Group Processes in Organizations

diverse departments and divisions throughout the organization. For instance,

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CHAPTER 7 | Groups and Teams 243

For example, PricewaterhouseCoopers,

firms, with more than 236,000 employ-

to bring employees from around the globe

work for a particular client. The Whirlpool

of experts from the United States, Brazil,

Virtual teams are becoming increasingly common

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244 PART 3 | Social and Group Processes in Organizations

and Italy during a two-year project to develop a chlorofluorocarbon-free refriger-

GROUP PERFORMANCE FACTORS

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CHAPTER 7 | Groups and Teams 245

IMPROVE YOUR SKILLS

homogeneity or heterogeneity of the members. A group is homogeneous if the

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246 PART 3 | Social and Group Processes in Organizations

The size of a group may impact the ability of its members

ideas for marketing a new product probably needs

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

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CHAPTER 7 | Groups and Teams 247

available and may be able to complete a large number of relatively indepen-

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248 PART 3 | Social and Group Processes in Organizations

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CHAPTER 7 | Groups and Teams 249

Factors That Decrease Consequences of Low

Heterogeneous Composition Difficulty in Achieving Goals

Group goals not congruent organization’s goals. The

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250 PART 3 | Social and Group Processes in Organizations

critical analysis of alternatives.27 (We will discuss groupthink in Chapter 8.)

Source: The International Personality Pool representation of the items from