The traditional workplace, with its emphasis on internal competition and individual star performers, is undergoing a transformation. In U.S. businesses, a strong movement toward the use of teams is occurring. Management experts and researchers suggest that a successful organization is characterized by effective teamwork and leadership rather than management. Organizations are realizing the importance of developing teams that can work in a coordinated, efficient, and creative manner.

As a result, managers are responsible for creating, developing, and supporting the cooperative efforts of individuals under their influence. Compiling honest, clear-eyed evaluations of how these individuals interact is a critical first step to building cohesive, long-term working relationships. Interactions among employees can be characterized in three ways


A group exists almost anywhere two or more people interact or coexist. A group does not have a unified purpose. Many people mistakenly expect that simply working in close proximity to others is enough to allow an effective team to emerge. Not so. Although individuals may be close physically, don’t assume that their thought processes or levels of commitment are in sync. Remember that an individual may work simply for a paycheck and exhibit a lack of concern for the organization, its activities, its mission, and its people that is obvious to even the most casual observer. These individuals do just enough to get by, but not enough to make a difference.


Unlike groups, mobs have a unified purpose. Mobs of employees often form with the focused intent to challenge, malign, or even sabotage the established order. Although many people think of mobs as chaotic, disorganized, and unstructured, they are actually very purposeful in their actions.


Teams share a common goal. A team is composed of two or more people who interact regularly and coordinate their work to accomplish a mutual objective. Some management experts believe that highest productivity results only when groups become teams.

The major difference between groups and teams centers around how work gets done. Workgroups emphasize individual work products, individual accountability, and even individual-centered leadership. In contrast, work teams share leadership roles, have both individual and mutual accountability, and create collective work products. In other words, a work group’s performance is a function of what its members do as individuals, while a team’s performance is based on collective results—what two or more workers accomplish jointly.


Types of Teams

The development of teams and teamwork has grown dramatically in all types of organizations for one simple reason: No one person has the ability to deliver the kinds of products and services required in today’s highly competitive marketplace. Organizations must depend on the cooperative nature of many teams to create successful ventures and outcomes.

Teams can be vertical (functional), horizontal (cross-functional), or self-directed (self-managed) and can be used to create new products, complete specific projects, ensure quality, or replace operating departments.


Functional teams

Perform specific organizational functions and include members from several vertical levels of the hierarchy. In other words, a functional team is composed of a manager and his or her subordinates for a particular functional area. Accounting, personnel, and purchasing departments are examples of functional teams.

Functional teams advantages disadvantages

Advantages Disadvantages
Specialization: The most obvious advantage of a functional organization is that grouping employees by specialization ensures a dependable level of departmental competence. Segregation: Having departments populated by employees specializing in specific work areas means that teams become siloed. Employees in different teams do not get the opportunity to meet and share perspectives, which can be harmful for the progress of the business in the long run.
Operational Speed: A related benefit of this kind of organizational specialization is operational speed Weakening of Common Bonds: Having a common organizational purpose improves employee morale and performance and is an important predictor of organizational success. When each group of specialists in a functional organization is relatively isolated, the common bond that emphasizes a single overarching organizational purpose is almost inevitably weaker than in an organization where different kinds of employees regularly interact.
Operational Clarity: Segregating the workforce according to function clarifies organizational responsibility and allocation of tasks.

Lack of Coordination: In a perfect functional organization, each group’s tasks would require no input from other functional groups, but this is often not the case. As communication becomes increasingly dominant in organizations, isolated groups may underperform or even fail because they have no institutionally recognized way of communicating needs and issues to other functional groups that might have helped.

In some instances, managers of other functional groups may not respond helpfully or in a timely way because “it’s not our problem.” By the time the need for cooperation has been established, the moment when cooperation would have been most effective may already have passed.

Territorial Disputes: A further disadvantage of a functional organization closely related to the failure of functional groups to cooperate with one another is the possibility of territorial disputes. These disputes may have to do with disagreements over goals, budgetary competition or any number of issues that stem from a clash of egos that occur when each department has its own separate functional structure or where a strong sense of a common purpose is lacking.

Cross-functional teams

Cross-functional teams are made up of experts in various specialties (or functions) working together on various organizational tasks. Team members come from such departments as research and development, design, engineering, marketing, and distribution. These teams are often empowered to make decisions without the approval of management. For example, when Nabisco’s executives concluded that the company needed to improve its relationship with customers and better satisfy customers’ needs, they created cross-functional teams whose assignments were to find ways to do just that. Although functional teams are usually permanent, cross-functional teams are often temporary, lasting for as little as a few months or as long as several years, depending on the group tasks being performed.

Cross-functional teams advantages and disadvantages


Advantages Disadvantages
Gain a better insight: To bring a gulp of creative ideas, cross-functional collaboration is a great choice. Creativity is a group process.  Misaligned Goals and Priorities. Employees focus on things that impact how they are measured and rewarded
Engaged employees: With a strong leader handling a cross-functional team will help in combating silo mentality and bridge the gap between team members. Too Much or Too Little Communication
Spurring innovative ideas:  It is a great way to boost creative minds to pool ideas together that separates businesses from their competitors. When different minds playing different roles are brought together, they think outside of the box to substantially bring better results. When people think in new ways, it helps them make smart mistakes, take better risks and spur innovation and creativity. Lack of Trust
Exercising communication skills: Having a cross-functional team means bringing in a diverse group of people who can develop their struggles and strengths of communicating by discussing constructive feedback and understanding diversity issues. No Method for Measuring Impact.
Developing management skills: When the teams are put together, your management skills will really be put to the test. You will need to develop special skill sets to work with diverse backgrounds and work styles and effectively lead a cross-functional team going through unique challenges. Technology Disconnect: It is not uncommon for different departments to rely on different technologies for collaboration and information management. This can impede the progress of cross functional teams and make working together unnecessarily difficult.
You get to be in leadership roles: Well, when you are working together with teams from different departments, you get the chance of being the boss or maybe leading the way for your team. The manager can give chance to other folks in the team to lead the project so they learn to be in the leadership role and can pump new life into the project.

 Break stereotype and benefit from diversity

Self-directed work teams

Self-managed teams, operate without managers and are responsible for complete work processes or segments that deliver products or services to external or internal customers. Self-directed work teams (SDWTs) are designed to give employees a feeling of “ownership” of a whole job. For example, at Tennessee Eastman, a division of Eastman Kodak Company, teams are responsible for whole product lines—including processing, lab work, and packaging. With shared team responsibilities for work outcomes, team members often have broader job assignments and cross-train to master other jobs. This cross-training permits greater team flexibility.

Self-directed work teams Advantages and Disadvantages

Advantages Disadvantages
Greater employee responsibility and accountability More meetings
A greater sense of accomplishment and satisfaction among employees Longer decision-making process
Greater freedom for team innovation A dip in productivity before it takes off in a positive direction
More effective use of individual team members’ skills Chaos – infrastructure and support is needed by teams to accomplish their work
Greater “ownership” of project results by team members who have a stake in the project’s outcome
Greater empowerment, which leads to higher employee morale

No matter what type of team is formed, the benefits of teamwork are many, including synergy and increased skills, knowledge, productivity, flexibility, and commitment. Among the other benefits are increased job satisfaction, employee empowerment, and improved quality and organizational effectiveness.

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