The importance of teams to organizations

Over the passing years, the increasing focus for organizations has been around the nature of incorporating teams into business, and have become a popular feature which increased dramatically over the past decade (Lafasto & Larson, 2001, Thompson, 2000). During much of the 1960’s and 1970’s, automobile manufactures Volvo and Toyota enforced a team structured method at a time when centralised and departmentalised mechanistic structures were considered the norm. (Robbins, 1998). During the 1980’s, the introduction of teams became popular amongst a number of rising private and public organizations. An example of this is the Australian Tax office, in an attempt to stray from the ways of bureaucracy, implemented teams to a range of areas of their operation. (Harvey, Millet and Smith, 1998). In the 1990’s, the utilisation of teams spread rapidly. Many organizations today are attempting to improve performance through the use of teams and thus management consultants propose organisational restructuring to facilitate team work, directors make policy statements about the importance of teams to organizations and senior managers exhort their junior staff to encourage team working in their departments. It can therefore be established that the notion of teams in organizations has become accepted as a basic building block of working life.

A team is classed to be a minute number of people with skills that would complement one another, whose commitment is to a purpose of commonality and to the performance of goals and approach for which they are mutually accountable. (Katzenbach & Smith, 1993). This differs from a group, who are made up of individuals and consider themselves as a social entity. The soul of a team is entwined in its commitment and without this, groups carry out tasks as individuals, therefore an effective team is always seen as being valuable to its organization. Taking this into account, teams are an important asset to the future of organizations, as they have discovered that the diversification leaning towards a team based structure has had more reaching efforts (Hayes, 2007).

Organizations have reported benefits associated with using teams, and research in organization effectiveness has repeatedly supported the view that teams are valuable to an organization. These include increase individual performance, better value, fewer absenteeism and substantial improvements in production cycle (Harris, 1992). In today’s modern economy, teams are considered of importance for organizational success, characterised by the need for exchanging information swiftly and responding to the consumer’s needs (Cohen & Bailey, 1997). However teams can be done right or they can be done wrong. While the uses of teams appear to be advantageous, teams may not be fitting for all organizations. When done well, teams can bring a lot of good things to an organization, and the chances of an organization profiting by utilizing teams can significantly increase. However if profit is reduced this may cause effect on the cost connected with the creating and utilizing of teams. Thus, ineffective teams weaken the future of an organization. This essay therefore will aim to establish as to why organizations use teams and whether there are benefits and weaknesses for the establishment of teams in organizations.

Mainstream management theory suggested that when teams are introduced in the right way and nurtured as part of a wider organizational philosophy and strategy, they outperform individuals and collaborative groupings. Many authors attempted to identify factors that intervened in heightening team performance. Authors such as Cohen, Ledford and Spreitzer (1996) and West (2004), set forth to explain exactly in what sense were teams important for organizational success. Katzenbach & Smith (1993) perceived the connection between teams and organizational success was a result of performance. They viewed that teams should be understood as discrete units of performance and not only as examples of positive organizational values such as sharing, collaborating or listening to others. On the contrary, they proposed that importance and impact of teams at work was dependent on how much they were not a simple label attached by senior managers to old ways of working.

Teams and teamwork’s are popular in organization these days and although cynics might dismiss teams as just another fad or gimmick, a closer look reveals a more profound and durable trend (Buelens et al, 2006). Following the economic recession the eighties, American and European companies did some introspection. Work redesign projects in work teams like Volvo were the result. Also errors of high visibility like airline accidents revealed a lack of teamwork (Buelens et al, 2006). Moreover, the general consensus towards flatter structures of organization and reducing layers of middle management increased the empowerment of employees and stressed the importance of effective teamwork. Teams became a solution to respond to the increased diversity in the marketplace. Manfred Kets De Vries (2000 Cited in Buelens et al, 2006) suggested that “successful organizations are good at building teams and exploiting teamwork. People tend to be able to work in teams; they need to subordinate their own agenda to the well being of the group” (pg 371).

The attraction of teamwork originates from the rationale of why teams are put into action. A vast amount of authors argued that the implementing of a large number of teams was due as a reaction to the rising of global competition (Heap, 1996). While increased competitiveness may be taking place, it insinuates that there is a growing need to supply for niche markets.

Manufacturers and service providers must not only compete on cost, but compete on how innovative they can be in creating services and products that are unique, which cannot be created by other organizations.

Where companies cannot rely on mass production a problem arises for organizations. The usage of teams by organizations thus comes with the perceiving that teams are the answer to such problems. As employees have greater autonomy, growing participation and rights regarding decisions, organizational innovation can be fully maximised by teams. In addition to escalating innovation, teams endow organizations with further sources that may be appealing which they operate.

Utilizing teams in organizations can be beneficial, and the method by which work is accomplished, it is thought that through the interdependency of the parts, greater productivity is achieved. Tasks that would be administered individually at a certain time, are now being governed using teams, and so the team approach has become very important in helping manage organizations (Masciarelli, 1998, cited in Buelens et al, 2006). It was suggested by Van Velso & Leslie (1995) that teams may be the essence for the progression of an organization, and because of this, many organizations have discovered the benefits brought about by the implementation of team based work,

Many of the benefits of employing teams in organizations include better solutions, an increased motivation of members and increased knowledge.

Organizations use teams, as groups of individuals brought together to solve a business problem would be much more inclined to arrive with a better result than an individual working alone. This would accumulate a lot of time and resources for organizations with this concept that the collective brain power of a team would frequently outmatch the single brain power of an individual (IRS Employment Review, 1995). This intricacy for the organization however means that managers can no longer know everything about every phase of how the organization operates.

Therefore the instalment for teams in organization is essential in order for knowledge and skills of the workforce to be utilised. Many managers are not trained or reinforced for making the workplace a sociologically and psychologically health experience, and therefore misunderstood its importance in the creation of a good team. The motivation of a team therefore benefits an organization immensely as the social interaction in a well run team for its members, would be positive.

Furthermore, having increased knowledge is vital for organizations using teams. Teams provide all members with connections that can lead to new opportunities, opportunities that may be beneficial for an organization who perhaps may want to launch a new product into market, advertising strategies and allowing for better usage of resources. Today’s market is increasing rapidly with competition being fierce and so a key source of competitive advantage for organizations would be waste reduction. Thus, teams offer many benefits to organizations as teams are frequently a cost effective method of reducing resource costs. This could be achieved through sharing human material and financial resources.

Within organizations the formulation of teams has served many organizations to face many dissimilar challenges. A helpful way of getting things sorted is to consider a typology of work teams developed by Eric Sunderstrom and colleagues (1990) who referred to four general types of work teams. These were advice, production, project and design and action teams. According to Sundstrom et al (1990) each of these identified a basic purpose in which the organization could benefit.

Teams providing organizational advice and decision making are highly desirable for the success of organizations. High level management teams are the classic example, also including specialist advising teams such as personnel or financing planning teams. Although not necessarily at high level in some organizations, this category could also include quality control circles, as they facilitate suggestions for the quality improvement from volunteer production or service workers. The introduction of problem solving teams in an aluminium plant was studied by Moses and Stahelski (1999) throughout its production base. The comparison of productivity before, during and after the usage of teams was founded, in which they also took into consideration the controlling of other possible variables such as technological improvements.

Taking these variables into consideration, problems solving teams proved to be essential in terms of continuous growth in productivity (Hayes, 2007). Production teams within organizations allow for the responsibility for performing day-to-day operations. This is beneficial for an organization as minimal training accounts for the low degree of technical specialisation and co-ordination is high because work continues to flow. This is essential for organizations as it allows for the constant flow of information, thus being more time efficient and allowing for the increase of productivity. Product development teams, research teams and project teams form a third type of team. These teams tend to operate across a much longer time span. These teams help support the organizations it accounts for creative problem solving, which therefore often involves the application of specialised knowledge, as not everyone in an organization is capable of having specialised knowledge. The last type of team is best exemplified by sports teams, airline cockpit crews, hospital surgery teams among others. They face the unique challenge of illustrating peak performance on demand.

Hayes (2007) put forth that in industry, directors reported that both production levels and profits increased and that companies improved its sales and marketing strategies when a team was put together in the organization. This was further supported by Recardo et al (1996) who emphasised that in organizations with a long history of implanting teams, their rate of success were considerably higher and consequently productivity increased more swiftly with fewer failures. Batt and Applebaum (1995) looked at two industries being telecommunications and apparel manufacturing. They found organizations making use of teams in this field had a significant and positive reaction on workers perceptions of the quality of work done by their teams. In the public sector, Hayes (2007) reported that tasks were performed more methodically and ably and jobs became more enriched, due to more direct contact with clients. This resulted in team members to offer one another support in difficult situations. Whether public or private, it can be seen that in all types of organizations, the use of equipping teams into organizations enables the notion that team working improves self morale and decreases staff turnover.

Teams are not themselves a panacea (Dunphy and Bryant, 1996) and are not flawless (Plunkeet and Fournier, 1991), and so the empirical evidence of the value of teams in organizations is decidedly mixed (Thompson, 2000). A study by A.T Kearney found that 7 out of 10 teams failed to deliver desired results (cited in Naquin and Tynn, 2003). Team scholars are guarded around the efficiency of teams, claiming that it is make believe to consider that organizations using teams are in a better position compared to those who do not (Thompson, 2000). The scholarly literature makes note that by the implementing of teams, decision making can be less planned and that the performance of a team can become problematic, resorting to less than the performance of members working individually (Steiner, 1972). For example, teams may be prone to social loafing, a decrease in profit due to a lack of communication and co-ordination, conflict as well being biased when making decisions.

Managers and supervisors may tend to be threatened by teams because they have to surrender some of their traditional power to the team. An issue for some individuals working in teams may be that other members of the team may not agree with an individual who may have put forth a solution or identified a problem.

Thus in order for teams to work and benefit the organization, a consensus among inconsistent opinions must be forged and acted upon as a team.

Roles and responsibilities of managers and employees may change due to the implement of teams and for much change may feel uncomfortable. Employees gain power to influence work and are required to assume more responsibilities and be more proactive than they were previously. If a bad decision is made which would affect the organization, employees would be held accountable as them and not their bosses would be held responsible for key outputs. Hence to many employees and managers, this shift in roles is disconcerting, particularly if not enough training has been received to take on new responsibilities.

When team implementation lacks necessary planning and foresight, the chances of the organization benefiting and profiting by the use of teams is severely reduced. However what is not reduced is the cost associated with using teams. Increased training costs and lost productivity can be expected. These cost exist when teams are successful, however a whole new set of cost exists when teams fail. These include opportunity cost associated with what employees could have accomplished, had the sue of teams never been attempted, organizational inefficiencies that occur when teams founders, possible loss of customer good will and negatively impacted employee-management relationship.

Teams can be a bad idea when not needed, and the reason for team failure and inefficiency in organizations are many and varied. If employees are encouraged to think solo, the team dynamic will ultimately fail, which has no benefits for organizations. Nevertheless, becoming aware of the possibility that they may be misdiagnosing team failure because of lack of sufficient knowledge of dynamics at a team level may also provide managers the motivation to acquire more knowledge about team dynamics. It may be that teams cannot be adequately managed, yet the wave of support for team based initiatives continues to grow, regardless of being oblivious to the potential problems of giving a task to a team. Although teams may fail, there is no question that they can be beneficial for organizations and that “team work is widely considered to be the best way to deliver high performance in a hypercompetitive market” (Naquin and Tynan, 2003, pg 332). Teams can be the heart of an organization, being extremely productive and profitable enabling the best means of integrating the unique skills of individuals to produce better performance, showing no signs of abating and likely to continue for further decades to pass.