How Are Groups Turned into Effective Teams?

  1. 10-3 Discuss how groups are turned into effective teams.

When companies like W. L. Gore, Volvo, and Kraft Foods introduced teams into their production processes, it made news because no one else was doing it. Today, it’s just the opposite—the organization that doesn’t use teams would be newsworthy. It’s estimated that some 80 percent of Fortune 500 companies have at least half of their employees on teams. In fact, more than 70 percent of U.S. manufacturers use work teams.13 Teams are likely to continue to be popular. Why? Research suggests that teams typically outperform individuals when the tasks being done require multiple skills, judgment, and experience.14 Organizations are using team-based structures because they’ve found that teams are more flexible and responsive to changing events than are traditional departments or other permanent work groups. Teams have the ability to quickly assemble, deploy, refocus, and disband. In this section, we’ll discuss what a work team is, the different types of teams that organizations might use, and how to develop and manage work teams.

Are Work Groups and Work Teams the Same?

At this point, you may be asking yourself: Are teams and groups the same thing? No. In this section, we clarify the difference between a work group and a work team.15

Most of you are probably familiar with teams especially if you’ve watched or participated in organized sports events. Work teams do differ from work groups and have their own unique traits (see Exhibit 10–5). Work groups interact primarily to share information and to make decisions to help each member do his or her job more efficiently and effectively. There’s no need or opportunity for work groups to engage in collective work that requires joint effort. On the other hand, work teams are groups whose members work intensely on a specific, common goal using their positive synergy, individual and mutual accountability, and complementary skills.

Exhibit 10–5

Groups versus Teams

A figure compares the characteristics of work groups and work teams.

These descriptions should help clarify why so many organizations have restructured work processes around teams. Managers are looking for that positive synergy that will help the organization improve its performance.16 The extensive use of teams creates the potential for an organization to generate greater outputs with no increase in (or even fewer) inputs. For example, until the economic downturn hit, investment teams at Wachovia’s Asset Management Division (which is now a part of Wells Fargo & Company) were able to significantly improve investment performance. As a result, these teams helped the bank improve its Morningstar financial rating.17

Recognize, however, that such increases are simply “potential.” Nothing inherently magical in the creation of work teams guarantees that this positive synergy and its accompanying productivity will occur. Accordingly, merely calling a group a team doesn’t automatically increase its performance.18 As we show later in this chapter, successful or high-performing work teams have certain common characteristics. If managers hope to gain increases in organizational performance, they will need to ensure that the teams possess those characteristics.

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