*Groups, group dynamics, and intergroup processes are

inevitable and critical aspects of organizations and

their management. This chapter builds upon premises
that emphasize the inevitability of groups in
organizations. Those premises view groups as having
both good and bad effects for organizations and their
members. The chapter also examines the growing use
of virtual groups and self-managing teams.1
A group is an interdependent set of people doing
a task or trying to reach a common goal. Group
members regularly interact with each other and
depend on each other to do their tasks. Job and
organizational design can affect the degree of mutual
dependence. A group is a complex, adaptive system
that can change its membership, goals, and structure
over time.2
Groups can powerfully affect peoples behavior.*
Knowledge of how and why groups form, and an
understanding of their dynamics, can help you
function better within a group or manage group
activities. The following classic statement captures
this chapters orientation toward groups in
organizations: [G]roups exist; they are inevitable
and ubiquitous; they mobilize powerful forces having
profound effects upon individuals; these effects may
be good or bad; and through a knowledge of group
dynamics there lies the possibility of maximizing
their good value.3
FORMAL AND INFORMAL GROUPS
*Formal groups are either functional groups within
an organization or task groups.4 Functional groups
are clusters of people formed by the organizations
design, such as divisions, departments, sections, and
work units. They are a product of the organizations
division of labor, the way the organization has divided its total work to reach
its goals. Such groups are often permanent, but can change if the organization
redesigns its structure. *
Organizations form task groups as temporary groups to carry out specific
duties, usually special projects.5 Committees, project teams, and task forces are
examples of task groups. Other examples from quality management are processaction
teams and continuous-improvement teams. Temporary task groups do not
have the enduring qualities of permanent groups, because they usually disband
when they finish their assignment.
Virtual groups and self-managing teams are emerging types of formal groups.6
Networked computers and workstations link members of virtual groups. Selfmanaging
teams typically have high internal autonomy and decision authority
about work scheduling, team member assignments, and the choice of a team
leader. Later sections examine both virtual groups and self-managing teams in
detail.
Interaction patterns within organizations can affect the formation of informal

groups within and across formal groups.7 Informal groups can form along
interest lines, such as the task specialization of individuals, hobbies, or other
concerns. They might be friendship groups whose members associate with each
other both at work and away from work. Outsiders and newcomers cannot readily
see informal groups, which are part of an organizations background.* These
informal groups form a shadow organization that applies good and bad
powerful forces to the organization.8
BASIC CONCEPTS FOR UNDERSTANDING GROUPS
IN ORGANIZATIONS
*Several basic concepts will help you understand the dynamics of groups in
organizations.9 Group members take on specific roles within the group. A role
is a set of activities, duties, responsibilities, and required behaviors. It is also a
set of shared expectations about how a person ought to behave in a group. Both
the organization and the group help define a persons role.
Group norms are unwritten rules that define acceptable role behavior of group
members. Norms include performance levels valued by the group, teamwork
within the group, and relationships with managers and other aspects of the formal
organization.10 New members learn a groups norms from its socialization
process, a process described in the later section Workgroup Socialization.
A cohesive group has members who are attracted to the groups task, to its
prestige, and to other members of the group. Members of cohesive groups like
to be together, care about each other, and typically know each other well. A
cohesive group can also pressure a new member to conform to its norms. Some
research suggests that cohesive groups can perform better than noncohesive
groups.11
Two types of conformity to group norms are possible: compliance and
personal acceptance.12 Compliance means a person goes along with the groups
norms but does not accept them. A person might comply to help the group appear
united to outsiders or to prevent conflict within the group. Personal acceptance
means an individuals beliefs and attitudes are congruent with group norms.
Personal acceptance is the more powerful of the two types of conformity.
A person might strongly defend the groups norms and try to socialize
new members to them, because she has internalized those norms. Conformity
to group norms is not necessarily bad; it can bring order to a groups activities. 13
Because members know what to expect from each other and share performance
expectations, conformity often leads to more effective group performance.*
A later section in the chapter discusses the dysfunctions of excessive
conformity.
Behavior in groups falls into two major classes: required and emergent.
Required behavior is what a person must do because of organization membership
and as part of the persons role in the formal group. Required behaviors include
being at work at a specific time, performing job duties in a certain way, and
interacting with specific people in another department to complete a task. 14
Emergent behavior grows out of the interactions among group members. Such
behavior can focus on work tasks or be purely social.15 The norms of a group
can define emergent behavior. Organizations do not prescribe emergent behaviors
and often do not formally acknowledge that such behavior happens. The
newcomer to an existing cohesive group will not immediately understand the
function and meaning of many emergent behaviors.
FUNCTIONS OF GROUPS IN ORGANIZATIONS

Groups have several functional effects on organizations. As described in

Chapter 6, Organizational Socialization, groups can be an important source
of socialization of organization members. Whether the result of the socialization
will be functional for the organization depends on the groups orientation to
management.
Groups can be a source of rewards for members, serving as an important
motivational system. Praise and other rewards offered by the group can reinforce
member behavior. Groups also provide support for their members while they
work. This function of groups is especially important to those doing hazardous
work, where the cooperation of all members of the group is necessary to do a
job safely.
Cohesive groups with norms supportive of management can have several other
functional results.16 If tasks are interdependent, the cooperative behavior of cohesive
group members helps them complete tasks. A cohesive group can produce
innovative work behavior that has value for the organization. Cohesive groups are
self-policing and can stamp out deviant behavior. Control over individual behavior
in cohesive groups is more immediate than controls used by managers.17

1. Major sources for this chapter include:

Argote, L., and J. E. McGrath. 1993. Group Processes in Organizations: Continuity
and Change. In International Review of Industrial and Organizational Psychology,
Vol. 8, ed. C. L. Cooper and I. T. Robertson. Chichester, UK: John Wiley & Sons,
pp. 33389.
Arrow, H., J. E. McGrath, and J. L. Berdahl. 2000. Small Groups as Complex
Systems: Formation, Coordination, Development, and Adaptation. Thousand Oaks,
Calif.: Sage Publications.
Bettenhausen, K. L. 1991. Five Years of Group Research: What We Have Learned
and What Needs to be Addressed. Journal of Management 17: 34581.
Cartwright, D., and R. Lippitt. 1957. Group Dynamics and the Individual.
International Journal of Group Psychotherapy 7: 86102.
Kozlowski, S. W. J., and B. S. Bell. 2003. Work Groups and Teams in Organizations.
In Comprehensive Handbook of Psychology, Vol. 12: Industrial and Organizational
Psychology, ed. W. C. Borman, D. R. Ilgen, and R. J. Klimoski. New York: John
Wiley & Sons, Chap. 14.
Levine, J. M., and R. L. Moreland. 1990. Progress in Small Group Research. In
Annual Review of Psychology, Vol. 41, ed. M. R. Rosenzweig and L. W. Porter.
Palo Alto, Calif.: Annual Reviews, pp. 585634.
Levine, J. M., and R. L. Moreland. 1998. Small Groups. In Handbook of Social
Psychology, Vol. 2, ed. D. T. Gilbert, S. T. Fiske, and G. Lindzey. New York:
McGraw-Hill, Chap. 26.
McGrath, J. E. 1984. Groups: Interaction and Performance. Englewood Cliffs, N.J.:
Prentice Hall.
McGrath, J. E., and L. Argote. 2003. Group Processes in Organizational Contexts.
In Blackwell Handbook of Social Psychology: Group Processes, ed. M. A. Hogg
and R. S. Tindale. London: Blackwell Publishers, pp. 60327.
Moreland, R. L., and J. M. Levine. 1992. The Composition of Small Groups. In
Advances in Group Processes: A Research Annual, ed. E. J. Lawler, B. Markovsky,
C. Ridgeway, and H. A. Walker, pp. 23780. Greenwich, Conn.: JAI Press.
Shaw, M. E. 1981. Group Dynamics: The Psychology of Small Group Behavior,
3rd edn. New York: McGraw-Hill.
2. McGrath, J. E., H. Arrow, and J. L. Berdahl. 2000. The Study of Groups: Past,
Present, and Future. Personality and Social Psychology Review 4: 95105.
3. Cartwright and Lippitt, Group Dynamics and the Individual, p. 90.
4. Cartwright, D., and A. Zander. 1960. Group Dynamics: Research and Theory. New

York: Harper & Row, pp. 3638.

Hare, A. P. 1992. Groups, Teams, and Social Interaction: Theories and Applications.
New York: Praeger Publishers.
5. Argote and McGrath, Group Processes in Organizations, pp. 33940.
6. McLeod, P. L. 1999. A Literary Examination of Electronic Meeting System Use in
Everyday Organizational Life. Journal of Applied Behavioral Science 35: 188206.
Stewart, G. L., C. C. Manz, and H. P. Sims, Jr. 1999. Team Work and Group
Dynamics. New York: John Wiley & Sons.
Yeatts, D. E., and C. Hyten. 1998. High-Performing Self-Managed Work Teams:
A Comparison of Theory and Practice. Thousand Oaks, Calif.: Sage Publications.
7. Krackhardt, D., and J. R. Hanson. 1993. Informal Networks: The Company behind
the Chart. Harvard Business Review 71 (JulyAugust): 10411.
8. Allen, R. F., and S. Pilnick. 1973. Confronting the Shadow Organization: How to
Detect and Defeat Negative Norms. Organizational Dynamics 1 (Spring): 610.
9. Developed from Bettenhausen, Five Years of Group Research, pp. 36164.
Homans, G. C. 1950. The Human Group. New York: Harcourt, Brace & World.
Homans, G. C. 1961. Social Behavior: Its Elementary Forms. New York: Harcourt,
Brace & World.
Lembke, S., and M. G. Wilson. 1998. Putting the Team into Teamwork:
Alternative Theoretical Contributions for Contemporary Management Practice.
Human Relations 51: 92744.
Levine and Moreland, Progress in Small Group Research, pp. 60001, 60305.
10. Allen and Pilnick, Confronting the Shadow Organization.
11. Casey-Campbell, M., and M. L. Martens. 2009. Sticking It All Together: A Critical
Assessment of the Group CohesionPerformance Literature. International Journal
of Management Reviews 11: 22346.
Evans, C. R., and K. L. Dion. 1991. Group Cohesion and Performance: A MetaAnalysis. Small Group Research 22: 17586.
Friedkin, N. E. 2004. Social Cohesion. Annual Review of Sociology 30: 40925.
Kerr, N. L., and R. S. Tindale. 2004. Group Performance and Decision Making.
Annual Review of Psychology 55: 62355. See pp. 62527 for a discussion of group
cohesiveness and performance.
Kozlowski, S. W. J., and D. R. Ilgen. 2006. Enhancing the Effectiveness of Work
Groups and Teams. Psychological Science in the Public Interest 7: 77124. The
discussion of group cohesiveness appears on pp. 8789.
Mullen, B., and C. Copper. 1994. The Relation between Group Cohesiveness and
Performance: An Integration. Psychological Bulletin 115: 22027.
12. Kent, M. V. 1994. Conformity. In Small Group Research: A Handbook, ed. A. P.
Hare, H. H. Blumberg, M. F. Davies, and M. V. Kent. Norwood, N.J.: Ablex
Publishing Corporation, Chap. 4.
Kiesler, C. A., and S. B. Kiesler. 1969. Conformity. Reading, Mass.: AddisonWesley.
13. Shaw, Group Dynamics, pp. 28990.
14. Dubin, R. 1958. The World of Work. New York: Prentice Hall, Chap. 4.
15. Ibid., pp. 6176.
16. Ibid., Chap. 6.
17. Barker, J. 1993. Tightening the Iron Cage: Concertive Control in Self-Managing
Teams. Administrative Science Quarterly 38: 40837.

Differences Between Groups and Teams

1. This section is based on J. R. Katzenbach and D. K. Smith,

The Wisdom of Teams (Cambridge, MA: Harvard University
Press, 1993), pp. 21, 45, 85; and D. C. Kinlaw, Developing
Superior Work Teams (Lexington, MA: Lexington Books,
1991), pp. 321.

Groups and teams are not the same thing. In this section, we define and clarify the
difference
between work groups and work teams.1
In Chapter 9, we defined a group as two or more individuals, interacting and interdependent,
who have come together to achieve particular objectives. A work group is a
collective of any size that interacts primarily to share information and make decisions to
help each member perform within his area of responsibility. *
Work groups have no need or opportunity to engage in collaborative work that requires
joint effort. So their performance is merely the summation of each group members
individual contribution. There is no positive synergy that would create an overall level of
performance greater than the sum of the inputs.
A work team, on the other hand, generates positive synergy through coordinated
effort. The individual efforts result in a level of performance greater than the sum
of those individual inputs. With both work groups and work teams, there are often
behavioral expectations of members, collective normalization efforts, active group
dynamics,
and some level of decision making (even if just informally about the scope
of membership). *Both work groups and work teams may be called upon to generate
ideas, pool resources, or coordinate logistics such as work schedules; for the work
group, however, this will be limited to information gathering for decision makers outside
the group (not team actionable).
Whereas a work team may be thought of as a subset of a work group, the team
is constructed to be purposeful (symbiotic) in its member interaction. The distinction
should be kept even when the terms are mentioned interchangeably in differing contexts.
Exhibit 10-1 highlights the differences between work groups and work teams.
These definitions help clarify why so many organizations have recently restructured
work processes around teams. Management is looking for positive synergy that
will allow the organizations to increase performance. The extensive use of teams creates
the potential for an organization to generate greater outputs with no increase in inputs.
Notice, however, we said potential. There is nothing inherently magical that ensures the
achievement of positive synergy in the creation of teams. Merely calling a group a team
doesnt automatically improve its performance. As we show later in this chapter, effective
teams have certain common characteristics. If management hopes to gain increases
in organizational performance through the use of teams, its teams must possess these.