9.1 Groups and Teams


A group is a collection of individuals who interact with each other such that one person’s actions have an impact on the others. In organizations, most work is done within groups. How groups function has important implications for organizational productivity. Groups where people get along, feel the desire to contribute to the team, and are capable of coordinating their efforts may have high performance levels, whereas teams characterized by extreme levels of conflict or hostility may demoralize members of the workforce.

Types of Groups

There are two primary types of groups: formal and informal. Moreover, within these two types, groups can be further differentiated on the basis of their relative degree of permanence. The resulting four types are shown in Table 9.1.

Table 9.1 Types of Groups

  Relatively Permanent Relatively Temporary
Formal Command group Task group
Informal Friendship group Interest group
Source: Organizational Behavior.

Formal groups are work units that are prescribed by the organization. Examples of formal groups include sections of departments (such as the accounts receivable section of the accounting department), committees, or special project task forces. These groups are set up by management on either a temporary or permanent basis to accomplish prescribed tasks. When the group is permanent, it is usually called a command group or functional group. An example would be the sales department in a company. When the group is less permanent, it is usually referred to as a task group. An example here would be a corporate-sponsored task force on improving affirmative action efforts. In both cases, the groups are formal in that they are both officially established by the company to carry out some aspect of the business.

In addition to formal groups, all organizations have a myriad of informal groups. These groups evolve naturally out of individual and collective self-interest among the members of an organization and are not the result of deliberate organizational design. People join informal groups because of common interests, social needs, or simply friendship. Informal groups typically develop their own norms and roles and establish unwritten rules for their members. Studies in social psychology have clearly documented the important role of these informal groups in facilitating (or inhibiting) performance and organizational effectiveness. Again, on the basis of their relative degree of permanence, informal groups can be divided into friendship groups (people you like to be around) and interest groups (e.g., a network of working women or minority managers). Friendship groups tend to be long-lasting, whereas interest groups often dissolve as people’s interests change.
One of the more interesting aspects of group processes in organizations is the interaction between informal and formal groups. Both groups establish norms and roles and goals and objectives, and both demand loyalty from their members. When an individual is a member of many groups—both formal and informal—a wide array of potentially conflicting situations emerges that has an impact upon behavior in organizations.

Consider This

Reasons for Joining Groups

People join groups for many reasons. Often, joining a group serves several purposes at once. In general, at least six reasons can be identified for joining groups:

  • Security. Most people have a basic need for protection from external threats, real or imagined. These threats include the possibility of being fired or intimidated by the boss, the possibility of being embarrassed in a new situation, or simply the anxiety of being alone. Groups can be a primary source of security against such threats. We have often heard that there is “safety in numbers.”
  • Social Needs. In addition, as discussed in previous chapters, basic theories of personality and motivation emphasize that most individuals have relatively strong social needs. They need to interact with other people and develop meaningful relationships. People are clearly social creatures. Groups provide structured environments in which individuals can pursue friendships.
  • Self-Esteem. Similarly, membership in groups can assist individuals in developing self-esteem. People often take pride in being associated with prestigious groups; note such examples as professors elected to membership in the National Academy of Sciences or salespeople who qualify for a million dollar club as a reward for sales performance.
  • Economic Self-Interest. People often associate with groups to pursue their own economic self-interest. Labor unions are a prime example of this phenomenon, as are various professional and accrediting agencies, such as the American Bar Association. These organizations often attempt to limit the supply of tradespeople or professionals in order to maintain employment and salaries.
  • Mutual Interest. Some groups are formed to pursue goals that are of mutual interest to group members. Included here are bridge clubs, company-sponsored baseball teams, and literary clubs. By joining together, individuals can pursue group goals that are typically not feasible alone.
  • Physical Proximity. Finally, many groups form simply because people are located in close physical proximity to one another. In fact, office architecture and layout can have considerable influence over the development of social networks and groups. Consider, for example, two floors in the same building. On the first floor, all the managers have private offices arranged in a long row, with their assistants arranged in a similar row in front of them. This horizontal pattern of offices does not allow for frequent interaction between either the managers or the secretaries, and as a result group formation may be slowed. On the second floor, however, suppose all the managers’ offices are arranged in a cluster surrounding a similar cluster of assistants. The result would be more frequent social interaction among employees. This is not to say that one arrangement is superior to the other; rather, it is simply to point out how variations in office arrangements can have an impact on group formation.


You probably described a team as a group of some kind. However, a team is more than just a group. When you think of all the groups that you belong to, you will probably find that very few of them are really teams. Some of them will be family or friendship groups that are formed to meet a wide range of needs such as affection, security, support, esteem, belonging, or identity. Some may be committees whose members represent different interest groups and who meet to discuss their differing perspectives on issues of interest.

In this reading the term ‘work group’ (or ‘group’) is often used interchangeably with the word ‘team,’ although a team may be thought of as a particularly cohesive and purposeful type of work group. We can distinguish work groups or teams from more casual groupings of people by using the following set of criteria (Adair, 1983).

Defining a Work Grow or Team

A collection of people can be defined as a work group or team if it shows most, if not all, of the following characteristics:

  • A definable membership: a collection of three or more people identifiable by name or type;
  • A group consciousness or identity: the members think of themselves as a group;
  • A sense of shared purpose: the members share some common task or goals or interests;
  • Interdependence: the members need the help of one another to accomplish the purpose for which they joined the group;
  • Interaction: the members communicate with one another, influence one another, react to one another;
  • Sustainability: the team members periodically review the team’s effectiveness;
  • An ability to act together.

Usually, the tasks and goals set by teams cannot be achieved by individuals working alone because of constraints on time and resources, and because few individuals possess all the relevant competences and expertise. Sports teams or orchestras clearly fit these criteria.

Is a Team or Group Really Needed?

There may be times when group working – or simply working alone – is more appropriate and more effective. For example, decision-making in groups and teams is usually slower than individual decision-making because of the need for communication and consensus. In addition, groups and teams may produce conventional rather than innovative responses to problems, because decisions may regress towards the average, with the more innovative decision options being rejected (Makin et al., 1989).

In general, the greater the ‘task uncertainty’, that is to say the less obvious and more complex the task to be addressed, the more important it will be to work in a group or team rather than individually. This is because there will be a greater need for different skills and perspectives, especially if it is necessary to represent the different perspectives of the different stakeholders involved.

Table 9.2 lists some occasions when it will be appropriate to work in teams, in groups or alone.

Table 9.2 When to Work Alone, In Groups, Or In Teams

When to work alone or in groups When to build teams
For simple tasks or problems For highly-complex tasks or problems
When cooperation is sufficient When decisions by consensus are essential
When minimum discretion is required When there is a high level of choice and uncertainty
When fast decisions are needed When high commitment is needed
When few competences are required When a broad range of competences and different skills are required
When members’ interests are different or in conflict When members’ objectives can be brought together towards a common purpose
When an organization credits individuals for operational outputs When an organization rewards team results for strategy and vision building
When innovative responses are sought When balanced views are sought
Source: Defining Teams and Groups

Virtual Teams

Increasingly, virtual team are common. A virtual team is one whose primary means of communicating is electronic, with only occasional phone and face-to-face communication, if at all. Table 9.3 contains a summary of benefits virtual groups provide to organizations and individuals, as well as the potential challenges and disadvantages associated with virtual groups.

Table 9.3 Team Benefits

Teams have organizational and individual benefits, as well as possible challenges and disadvantages

The Organization Benefits The Individual Benefits Possible Challenges and Disadvantages
People can be hired with the skills and competences needed regardless of location People can work from anywhere at any time Communicating effectively across distances
In some cases, working across different time zones can extend the working day Physical location is not a recruitment issue; relocation is unnecessary Management lacks the planning necessary for a virtual group
It can enable products to be developed more quickly Travelling expenses and commuting time are cut Technology is complicated and/or unfamiliar to some or all members
Expenses associated with travel and relocation can be cut; Carbon emissions can be reduced. People can work from anywhere at any time Difficult to coordinate times and hard to squeeze all the information into a more narrow time slot
Source: Defining Teams and Groups


This section is adapted from:

5.2 Group Dynamics in NSCC Organizational Behaviour by NSCC which is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

9.1 Work Groups: Basic Considerations in Organizational Behaviour by Rice University, Open Stax  which is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

1. Defining Teams and Groups by Cameron W. Piercy, Ph.D. is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

Adair, J. (1983). Effective leadership. Gower.

Makin, P., Cooper, C., & Cox, C. (1989). Managing people at work. The British Psychological Society and Routledge.


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Psychology, Communication, and the Canadian Workplace Copyright © 2022 by Laura Westmaas, BA, MSc is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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