Section 10: Managing Groups and Teams

Describe the study and theories of group and teamwork

A photograph of three people looking at sticky notes on a wall. One woman is picking up a sticky note to move it.Self-managed teams are often high-performing, but found only in certain situations within organizations. They’re not that common.

More often than not, leaders are called upon to lead their groups and teams to goal fulfillment. How is that done? How can one leader walk into a group situation and see which steps are necessary to make that group a high-performing team?


Learning Outcomes

  • Differentiate among early team management theories
  • Differentiate among modern team management theories
  • Discuss strategies for managing teams today

Early Management Theories

Once you have a group of people (or a team of people), they will need to achieve goals and objectives. We know how the group came together, how they will function effectively and how they will become a team. So let’s talk now about how the group will be managed.

Management of people didn’t really become a subject of scientific study until the turn of the twentieth century, when researchers began to understand that there was more to the motivation and hard work of an employee than just a paycheck. Before that . . . well, managing people wasn’t exactly an art.

During the industrial revolution at the turn of the 19th century, the United States entered a phase where significant changes occurred in the areas of transportation, agriculture and manufacturing, allowing us to produce goods quickly and efficiently. James Watt invented the steam engine, which shortened transportation times and allowed us to move goods faster. Eli Whitney invented the cotton gin, opening the door to quicker, more efficient cotton harvesting.

But even as Francis Cabot Lowell invented his water-powered mill, it wasn’t to lessen the burden of his laborers. Women would work in his plant 12 to 14 hours a day, and they were paid better than ladies at other textile manufacturers . . . for a while. But when Lowell wanted to increase his profits and meet customer demands, he cut his employees’ pay and lengthened their hours. Because of that, trade unions formed, strikes occurred and the Lowell Female Labor Reform Association was created.

We were a long way from the “take care of your employees and they’ll take care of you” notion.

There were still management problems, though, and they presented problems for these new factory owners. Large numbers of people had to be managed, trained, controlled, and motivated. Materials and tools needed to be supplied. Managers looked to handle these issues scientifically.

Scientific Management

A headshot of Frederick Winslow TaylorFrederick Winslow Taylor was an engineer for Bethlehem Steel in 1889, when he decided to analyze the issue of soldiering, which is when workers are deliberately working under capacity.

He observed workers unloading iron off of rail cars and loading steel onto them. Taylor studied the movements, tools, and processes of the workers and determined that, while they were currently loading about 12.5 tons a day, they were clearly capable of loading 47.5 tons a day. He recommended that workers be provided incentives in the form of wage increases to meet new loading goals. These recommendations, when followed, led to increased production for Bethlehem Steel.

The process that Taylor laid out was a template for other organizations:

  1. Each task should be studied scientifically to determine the best way to perform it.
  2. Workers should be carefully selected and trained to perform the tasks.
  3. Managers and workers should cooperate to ensure efficient production.
  4. Managers should plan, and workers should be responsible for implementing those plans.

Bureaucratic Management Approach

Rather than concentrate on increasing worker productivity and efficiency, the administrative approach to scientific management focused on helping managers coordinate organizational duties.

Portrait of Max Weber from 1894Max Weber developed a bureaucratic approach to management. A German citizen, Weber was interested in industrial capitalism, particularly how it was successful in some areas and not in others. Weber traveled to the United States to observe industrial capitalism, and determined that the U.S. used professional managers, business and economic relationships, whereas in Germany people were given positions of authority based on social standings and connections, and businesses were highly linked to family.

In order to help eliminate the practice of social privilege and favoritism prevalent in family-owned businesses, Weber proposed the bureaucratic approach. Bureaucracies have a negative connotation today, but in the true definition of the word bureaucracies are impersonal structures based on clear authority, responsibility, formal procedures and separation of management and ownership.

In his approach, Weber proposed:

  • Hierarchal management structure.
  • Division of labor.
  • Formal selection process for new employees.
  • Career orientation.
  • Formal rules and regulations.
  • Impersonality.

Weber didn’t anticipate the problems that would come from his approach (division of labor leading to boredom, formal rules leading to “red tape”), his bureaucratic method is in practice among many organizations today, and his idea that hiring and promotion should be based on capability and not social standing is written into US labor laws.

Administrative Management Approach

Photograph of Henri FayolIn his administrative management approach, theorist Henri Fayol proposed five basic management functions that are still an important part of management practice today. In his 1916 book General and Industrial Management, he talked about those functions:

  • Foresight: an organizational plan for the future.
  • Organization: implementation of the plan.
  • Command: select and lead workers.
  • Coordinate: make sure all activities are coordinated and helping to reach goal.
  • Control: ensure activities are going as planned.

French-born Fayol came to some of these basic concepts when he witnessed the shutdown of a mine. A horse had broken its leg, and the mine had to be shut down because no one had the authority to purchase a new one. Seeing this as a failure of management to provide the right resources, he began his studies of management structures.

Fayol’s studies also produced fourteen principles that could guide management behavior, but felt that they weren’t rigid or exhaustive. Five of those principles still exist in current management theory and practice:

  • Unity of command.
  • Fairness and equity.
  • Discipline and order.
  • Scalar chain of command.
  • Teamwork and subordination of individual interests.

Weber’s bureaucracy approach informs most organizations today and Fayol’s approach helps us understand the basics of management no matter what the industry or situation. Now let’s look at some studies and research that bring in the human relations approach.

Humanistic Viewpoint

A headshot of Mary Parker FollettMary Parker Follett’s teachings, many of which were published as articles in well-known women’s magazines, were popular with businesspeople during her lifetime. But she was virtually ignored by the male-dominated academic establishment, even though she attended Radcliffe University and Yale and was asked to address the London School of Economics. In recent years her writings have been “rediscovered” by American management academics, and she is now considered the “Mother of Modern Management.”

Follett developed many concepts that she applied to business and management, including the following:

  • A better understanding of lateral processes within organizational hierarchies. These concepts were applied by DuPont Chemical Company in the 1920s in the first matrix-style organization. A matrix organizational structure uses a grid rather than a pyramidal system to illustrate reporting paths. An individual may report both to a functional manager (such as sales or finance) and to a product manager.
  • The importance of informal processes within organizations. This is related to the idea of authority deriving from expertise rather than position or status. For example, an informal group may form in an organization (during or outside of official work hours) to socialize, form a union, or discuss work processes without management overhearing.
  • Noncoercive power sharing, which she called integration, to describe how power operates in an effective organization. She wrote about the “group principle” that characterized the whole of the organization, describing how workers and managers have equal importance and make equal contributions.
  • Coining the term “win-win” to describe cooperation between managers and workers. She also talked about empowerment and facilitation rather than control.
  • Promoting conflict resolution in a group based on constructive consultation of equals rather than compromise, submission, or struggle. This is known as the constructive conflict concept.

Follett devoted her life’s work to the idea that social cooperation is better than individual competition. In her 1924 book Creative Experience, Follett wrote “Labor and [management] can never be reconciled as long as labor persists in thinking that there is a [management] point of view and [management] thinks there is a labor point of view. These are imaginary wholes which must be broken up before [management] and labor can cooperate.”

We’ve talked before about Elton Mayo, Fritz Roethlisberger, and the Hawthorne Studies. They visited the Western Electric Hawthorne Works to determine the affects of lighting on productivity. As we know, they learned much more about the workers than just whether they did better in a well-lit atmosphere. They learned that their observation alone increased worker productivity, that workers value their social relationships and rely on group norms to restrict their productivity output.

There were several different flaws in the Hawthorne studies and their methodologies, but it spurred on studies by Abraham Maslow, Douglas McGregor, Frederick Herzberg and David McClelland, all approaching their research from the source of motivation of the worker and how that can be manipulated to increase productivity.

Practice Question

Modern Management Theories

These early scientific and humanistic approaches to managing people gave way to more studies on how to achieve more productivity, efficiency and profit. Those theories and findings became the basis for further learning.

Systems View

The systems view of management suggests that organizations are a complex collection of interrelated parts, working toward a common purpose.

Close up photograph of gearsIn the systems view, a system is defined in two ways: externally, by its purpose and internally, by its subsystems and internal functions.

Externally, the concept dictates that each system has a role to play in the system at the next level up. For instance, a company that makes boxed macaroni and cheese creates its product for the system at the next level, the boxed macaroni and cheese market. The boxed macaroni and cheese market impacts the next level systems, like the food industry.

Internally, the system view looks at subsystems and internal functions. Each of these systems interrelates and contributes to the overall purpose of the parent system. So, the accounts receivable and accounts payable departments contribute to the overall purpose of the finance department, which contributes to the overall purpose of the organization and so on.

Managerially speaking, an organization looks to the system above it in the hierarchy to define its purpose, and then organizes its subsystems to serve that purpose. A manager’s duty is to operate the systems in his charge to support the larger systems.

Contingency View

The contingency view of management suggests that the effective management of an organization depends on various contingency factors, so if a manager is going to be successful he or she must understand the different aspects of an organization and the factors that can affect performance.

What kinds of variables affect the performance of an organization and its workers?

For one, an organization’s size is a contingency factor. Small organizations can behave informally and are often more flexible than larger organizations. They can make decisions faster, and managers have direct control over processes. Large organizations require indirect control mechanisms, and they can’t change direction quickly the way a smaller organization can. But they can have divisional structures with workers that are highly specialized, and this may not be appropriate for a smaller organization.

Environmental change and uncertainty also impact the way an organization is managed. A organization with centralized processes works best with a stable environment. Certainty and predictability allow an organization to create policies, rules and procedures to fit the way they do business. An organization with decentralized processes is an advantage when there’s a unstable environment. Organizations in an unstable environment need to be able to respond quickly to changes, thus they require specialization for non-routine tasks and problems.

Work technologies have an impact on organizations as well. The technology to do the work impacts the type of worker that needs to be hired, the span of management to manage those workers, and so on.

What about customer diversity? Globalization? A business must adjust for all of these contingencies as well. The contingency view is based on the idea that there’s no one best way to manage an organization, and that managers should be ready to adjust to different situations as they present themselves. Conversely, researchers suggests that managers themselves perform differently in different situations, and their success is as much situational as it is based on their talents and behaviors. We’ll talk more about that in a future module.

Chaos View

Chaos theory is a scientific principle that describes the unpredictability of systems, such as weather patterns, water flows and, if you’re a Spielberg fan, the actions of human-engineered dinosaurs. Although they appear to be chaotic behaviors, they can be defined by mathematical formulas and are not as random as one might think.

Chaos management views pick up where contingency views leave off. In the early 1980s, Tom Peters, management guru, wrote a handbook explaining the Chaos Theory, specifically intended for managers. In it, he emphasizes that managers must be prepared for a constantly changing environment.

According to Peters, changing global environments and technology are evidence of chaos, and businesses should not just observe them without response. Peters suggests that the permanently installed hierarchal structure is a cause of inflexibility in organizations that’s damaging. Not only should organizations be flexible with their structures, but they should be prepared to achieve their organizational results in a variety of ways.

The secret to capitalizing on the chaos view is a customer-responsive approach. Peters suggests that organizations review their vision and mission, and be open to and willing to embrace change.

PRactice Question

Managing Teams Today

Now that we understand some basic approaches and views to managing people, both individually and in team settings, we can use some of these concepts to understand the ways that teams are incorporated into organizations today.

Think about Max Weber’s bureaucratic approach to management versus what Tom Peters proposes in his chaos view of management. On one end of the spectrum, you have a highly- controlled, traditional organization, and on the other, you have a very flexible, unstructured organization.

An arrow indicating that there is a spectrum between traditional structured organizations and highly flexible organizations.

On one end, Weber’s end, of the spectrum, there is high management control, and on the chaos end, that’s less so. Peters recommended we do away with the rigidity of the hierarchical structure to increase flexibility and focus on delivering to customers. So . . . is his suggestion a more team-based organization, with high employee involvement and control? Maybe.

Today’s organizations tend to be more middle-of-the-road in their use of teams. They’ve kept some of their managerial control and traditional structure, and use teams to accomplish work on specific tasks.

An arrow indicating that there is a spectrum between traditional structured organizations and highly flexible organizations. There is a second arrow indicating that the occasional use of teams and employee participation falls in the center of this spectrum.

As organizations move to more team-based structures, the control shifts from management to employees. Upper management still sets the general direction, vision, mission, goals and objectives. But then employees, with that understanding, make decisions and control their own activities. If an organization is going to see a team succeed, they need to:

  • Provide a clear standard of high performance expectations. Management can set expectations—preferably challenging expectations, as we learned earlier—and then teams decide how to accomplish those goals on their own.
  • Provide organizational support. The organization’s structure and culture must support the success of the team. Organizations that forego an all-individual reward system and remove other cultural barriers are more likely to see their teams succeed.
  • Adjust internal and external leadership. Team leaders should guide groups but not necessarily dictate what has to be done.

Researchers like Taylor, Weber and Fayol never got to the point where they could conceive of a team in a working environment. But those concepts that still exist in management principles studied today certainly don’t exclude the use of teams, do they? Teams undoubtedly look for the most efficient way to perform, they reward their members based on achievement and experience, they understand the importance of management decision makers and resource managers in their numbers. Those principles are still at work every day.

Consider the structural elements of an organization as they conceived them and how they change (but don’t disappear) in a team-based organization.

Traditional Organization Team-Based Organization
Formalization All activities and procedures are clearly described in formal written documents Activities and procedures depend on team goals and are not necessarily formally written.
Specialization Individuals and departments specialize in a particular task/function Individuals/teams learn as many skills to perform tasks to do their jobs.
Hierarchy Clear reporting lines with managers having few direct reports Organization is flat, more lateral relationships and only a few levels.
Centralization of decision making Decisions made by managers and passed down to employees Decision is made by a team and coordinated with other teams
Differentiation Departments and their functions are clearly different from one another Differentiation is based on project and not function
Integration Activities are coordinated by managers of different departments Each team is responsible for coordinating with other teams

In spite of all those traditional organizational elements being in place for team-based organizations, there are a lot of growing pains and changes needed if an organization is going to go from a traditional one to one based on teams. What would make an organization do that?

Practice Question

Organizations like Goldman Sachs, American Airlines and Kellogg’s do fine with a traditional organizational structure, with teams used to tackle particular tasks and issues. But some organizations, like Lucent Technologies, have adopted a team-based structure throughout several of their areas.

SEI Investments

SEI Investments in Pennsylvania adopted a team-based organizational structure when its CEO realized that the company lacked competitive advantage. SEI declared their new strategy: Become more responsive to customers than other firms in the industry. The decision to restructure as a team-based organization was the result of that strategy.

SEI decided to form teams specifically to handle a client problem. Once that problem was handled, the team disbanded, and then another one was created to address the next client. As a result, SEI became more profitable, realizing their strategy of becoming more responsive to customers than other companies in the industry.

SEI’s teams were tied to their strategy, and organizations that don’t get specific in attaching team goals to strategy are setting themselves up for failure. When teams aren’t clear on how they’re furthering organizational strategy, they lose focus and motivation. In most cases, those teams won’t live up to expectations. Jon Katzenbach, director at McKinney & Co and team-based organizational expert, points out that it’s not about the numbers for teams. “Teams aren’t motivated by numbers—even big numbers,” he explained. “They’re motivated by something to do in the marketplace, like beating a competitor.

Pre-industrial revolution, our economy was based on the textile merchant, the grocer, and all the individual business owners that made their towns go. But once the industrial revolution found its way to the United States, managers were suddenly faced with the task of managing many workers and ensuring that they reached some level of productivity. Science and research improved efficiency, and as the world changed, new views emerged to help managers adapt.

Teams and team-based organizations are not an entirely new concept, but as we continue to innovate and realize what teams can do to help organizations realize their goals, we will continue to use these management approaches to help us move forward.

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  • Theories of Group and Teamwork. Authored by: Freedom Learning Group. Provided by: Lumen Learning. License: CC BY: Attribution
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