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Chapter 8

BUS 272 Chapter Notes - Chapter 8: Alex Faickney Osborn, Production Blocking, Liquid Oxygen

Business Administration
Course Code
BUS 272

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Ch8$Team Dynamics 
1. Teams and Informal Groups
Teams Groups of two or more people who interact and influence each other, are mutually
accountable for achieving common goals associated with organizational objectives, and perceive
themselves as a social entity within an organization.
This definition has a few important components worth repeating.
1. First, all teams exist to fulfill some purpose, such as repairing electric power lines, assembling a
product, designing a new social welfare program, or making an important decision. 
2. Second, team members are held together by their interdependence and need for collaboration to
achieve common goals. All teams require some form of communication so that members can
coordinate and share common objectives. 
3. Third, team members influence each other, although some members may be more influential
than others regarding the team’s goals and activities. 
4. Finally, a team exists when its members perceive themselves to be a team. 
EXHIBIT 8.1 Types of Teams in Organizations 
Task force (project) teams 
Usually multiskilled, temporary teams whose assignment is to solve a problem, realize an
opportunity, or design a product or service.
This chapter mostly focuses on formal teams, but employees also belong to informal groups.
All teams are groups, but many groups do not satisfy our definition of teams. 
Groups include people assembled together, whether or not they have any interdependence or
organizationally focused objective.
The friends you meet for lunch are an informal group, but they wouldn’t be called a team because
they have little or no interdependence (each person could just as easily eat lunch alone)
and no organizationally mandated purpose. Instead, they exist primarily for the
benefit of their members.
Any temporary team that investigates a
particular problem and typically disbands
when the decision is made

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Fourth Pass
Chapter Eight Team Dynamics 191
Types of Teams in Organizations
Team type Description Permanence Skill
differentiation Authority
Teams that consist of employees who have similar
or complementary skills and are located in the
same unit of a functional structure; usually mini-
mal task interdependence because each person
works with employees in other departments.
High Low to
Typically multiskilled (employees have diverse
competencies), team members collectively pro-
duce a common product/service or make ongoing
High Medium to
Similar to production/service teams except (1)
they are organized around work processes
that complete an entire piece of work requiring
several interdependent tasks and (2) they have
substantial autonomy over the execution of those
tasks (i.e., they usually control inputs, flow, and
outputs with little or no supervision).
High Medium to
Task force
Usually multiskilled, temporary teams whose
assignment is to solve a problem, realize an
opportunity, or design a product or service.
Low Medium Medium
Similar to task forces, these highly skilled teams
are formed for a short duration and given consid-
erable autonomy to resolve an urgent problem
or opportunity, such as solving an emergency or
Low Medium Low
Teams that provide recommendations to decision
makers; include committees, advisory councils,
work councils, and review panels; may be tem-
porary, but often permanent, some with frequent
rotation of members.
Low to
Medium to
Skunkworks Multiskilled teams that are usually located away
from the organization and are relatively free of
its hierarchy; often initiated by an entrepreneurial
team leader who borrows people and resources
(bootlegging) to design a product or service.
Medium Medium to
Teams whose members operate across space,
time, and organizational boundaries and are
linked through information technologies to
achieve organizational tasks; may be a temporary
task force or permanent service team.
Varies Medium to
of practice
Teams (but often informal groups) bound together
by shared expertise and passion for a particular
activity or interest; main purpose is to share infor-
mation; often rely on information technologies as
the main source of interaction.
Medium Low to
mcs30539_ch08_189-217.indd 191mcs30539_ch08_189-217.indd 191 02/08/14 2:10 pm02/08/14 2:10 pm

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Why do informal groups exist?
One reason is that human beings are social animals. Our drive to bond is hardwired through
evolutionary development, creating a need to belong to informal groups. 
A second reason why people join informal groups is provided by social identity theory, which states
that individuals define themselves by their group affiliations. 
A third reason why informal groups exist is that they accomplish personal objectives that cannot be
achieved by individuals working alone. 
A fourth explanation for informal groups is that we are comforted by the mere presence of other
people and are therefore motivated to be near them in stressful situations. 
This social support minimizes stress by providing emotional and/or informational support to buffer
the stress experience.
Informal Groups and Organizational Outcomes
Informal groups are not created to serve organizational objectives. 
Informal groups potentially minimize employee stress because, as mentioned above, group
members provide emotional and informational social support.
This stress-reducing capability of informal groups improves employee well-being, thereby improving
organizational effectiveness. Informal groups are also the backbone of social networks, which are
important sources of trust building, information sharing, power, influence, and employee well-being
in the workplace.
2. Advantages and Disadvantages of Teams
Under the right conditions, teams make better decisions, develop better products and services, and
create a more engaged workforce than do employees working alone. 14 Similarly, team members
can quickly share information and coordinate tasks.
In many situations, people are potentially more motivated when working in teams than when working
1. One reason for this motivation is that, employees have a drive to bond and are motivated to fulfill
the goals of groups to which they belong. 
2. Second, people are more motivated in teams because they are accountable to fellow team
members, who monitor performance more closely than a traditional supervisor. 
3. Third, under some circumstances, performance improves when employees work near others
because coworkers become benchmarks of comparison.
The main problem is that teams have additional costs called process losses 
—resources (including time and energy) expended towards team development and maintenance
rather than the task.
The problems of adding people to a team: Brooks’s law says that adding more people to a late
software project only makes it later!
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