A group is formally defined as a collection of two or more people who work with one another regularly to achieve one or more common goals. Organisations today are finding more and better ways to tap the full potential of their groups. Groups exist in several forms in organisations, both formal and informal. Work units, production teams and task forces are official groups that are designated formal authority to serve a specific purpose in the organisation. These groups can be permanent or temporary. The latter are created for specific purposes and are disbanded once that purpose is accomplished. Informal groups, such as friendship groups or interest groups, emerge unofficially in the organisation.

Organisations, whether formally established by the organisation or unofficially emerging, meet organisational and individual needs. For organisations, formal groups engage in particular workplace tasks. Within them, workplace skills and knowledge are shared, performance expectations are communicated, and individuals socially learn from each other. Individuals within groups influence each other’s attitudes and beliefs. Groups help individuals to find social satisfaction, security and identification. Thus, groups have the potential to benefit both organisations and individuals, though this is not always so. Organisations may find particular value from groups that can foster innovation and creativity, or that can enable better decision making than that of individuals.

Managers should be concerned with the task performance of their groups as they may provide a number of advantages or disadvantages. It is beneficial to have groups that can achieve synergy by the creation of a whole that is greater than the sum of its parts. Groups can also lead to negative synergy too, often due to phenomena such as social loafing or disruptive behaviours. Social loafing occurs when some people fail to work hard because their performance is less visible in the group. Disruptive behaviours can include being overly aggressive to each other, refusing to cooperate or withdrawing from participation, playing around instead of working, using the group as a forum for self-confession, talking about irrelevant matters, or trying to compete for attention and recognition.

Within groups, individual behaviour is guided by norms and roles. Group norms are the standards of behaviour that group members are expected to display. Roles can relate to a person’s position in the group or with the functioning of the group. Group position roles are the sets of behaviours expected by the managers of the organisation and the group members for the holder of a particular position. Group function roles are behaviours in groups that support individual, group or task functions. In essence, these relate to whether a person is helping or hindering the operation of the group.

Members of groups fulfil many roles, related to both their tasks and their maintenance of the group as a system. Task activities are concerned with the group’s production purpose. Maintenance activities support the preservation of the group. Members are loyal to each other, supportive of group activities, and communicate well on an ongoing basis.

Groups can be conceptualised as open systems transforming resource inputs into outputs. Such a group also contributes to the performance of other components of the organisation — with the group openly interacting with the wider environment of the organisation. In this conceptualisation, the inputs to the group system are the initial givens that set the stage for all group processes. These act as foundations of group effectiveness. The group processes, including group dynamics, are the forces operating within the group that transform inputs into group outputs. The outputs of the group are performance of group tasks and maintenance of the group as a system. These elements of the group as an open system are expanded upon in the remainder of the chapter.

The foundations to group effectiveness, or inputs, are: (1) organisational setting — goals and reward systems, cultures and structures; (2) nature of the group task — different tasks place different demands on the group; (3) general membership characteristics — such as interpersonal compatibilities and homogeneity/heterogeneity; (4) group size and (5) emotions in groups. Thus the characteristics of the group are related to its task, its setting, and the number and mix of individuals within the group.

Group dynamics are the forces that operate in groups to impact upon group performance and member satisfaction in the groups. Since group processes are the forces operating in groups that affect task performance and human resource maintenance, the two terms are typically interchangeable and are concerned with the internal operations of groups. A range of phenomena can be considered to occur within groups as group processes or group dynamics. These include required and emergent behaviours, stages of group development, communication and decision making.

Required behaviours are those that the organisation formally requests of group members as the basis for continued affiliation and support. Emergent behaviours are those that group members do in additional to what is formally being asked of them by the organisation.

There are four stages of group development. They are: the forming stage (managing individual entry); the storming stage (managing group norm development); the initial integration stage (managing group cohesion); and the total integration stage (managing decision making). A fifth stage, the adjourning stage, is sometimes required if the group must disband when its work is accomplished.

The way group members communicate and relate to one another is key to their long-term effectiveness. Communication networks can be described in terms of being interacting, coacting or counteracting, and in terms of being decentralised or centralised. Members of interacting groups are highly interdependent, use decentralised communication, and work best at complex tasks. Members of coacting groups work individually, use a centralised communication network and work best at simple tasks. Members of counteracting groups tend to have disagreeing sub-groups polarise or disrupt communication.

One of a group’s most important functions is decision-making. Edgar Schein observed the following methods by which groups make decisions: lack of response; authority rule; minority or majority rule; consensus; and unanimity. Decision-making by groups has both assets and liabilities. Group members can bring a greater total knowledge and more approaches to a problem, and better understand and accept a final decision. However, they can also be handicapped by social pressure to conform, individual domination and time loss. Another potentially negative tendency, especially of highly cohesive groups, is ‘groupthink’, or an overemphasis on concurrence. Groups with this tendency lose their critical, evaluative capabilities. Managers can counteract groupthink with brainstorming sessions, nominal group technique and the Delphi technique.

The outputs that emerge from groups (from the group inputs and group processes) are important. The two key outputs are achievement of the group’s task performance goals through task activities, and group maintenance to support the emotional life of the group. Effective groups have task activities such as initiation of new ideas or solutions, information seeking, information giving, clarifying and summarising. Important group maintenance activities include encouraging, harmonising, compromising, gatekeeping, setting standards and following.

While interaction within groups is important, so, too, is intergroup dynamics, or the relations between different groups. Work-flow interdependencies (pooled, sequential and reciprocal) and structural factors (such as time and goal orientations, reward systems and varying resources) can put groups in competition with one another, as opposed to working together for the organisation. Managers can help to reduce the negatives of intergroup competition by approaches such as appealing to common goals, training employees in group skills, stimulating interaction between groups and emphasising the sharing of resources.