Function of Groups in Business

In an age when global economics is a household term and corporations span continents, the importance of understanding group dynamics is paramount to economic success. Group dynamics is the social science that focuses on advancing knowledge about the nature of group life. In studying group dynamics you are about to look at the behavior of group and how the group develops. Businesses today have decreased their workforce and achieved higher productivity from small groups. The effectiveness of small groups has influenced how businesses design and launch products, conduct research and training, and communicate with other departments in the company. Equally important is to understand how the group interacts with other groups and larger entities.

This is a key component in the business world as it can give you direct insight to your target audience. One example of how businesses research group dynamics is product testing. After a product has been developed, businesses begin testing that product in various markets. These markets are strategically chosen by the groups and classes that operate inside it. Fast food restaurants use this method exclusively when deciding to add new menu items. McDonald’s is one of the leading forces in this area of product development. When introducing the chicken biscuit to their breakfast menu, they began the process of market research.

While researching markets, they sought out geographic locations for limited introductions. Implementing knowledge of group dynamics gave them direct insight to optimum demographic locations for the items positive acceptance. Some of the questions and issues to be addressed were the overall desire for poultry, the various items individuals and groups eat for breakfast, and if the customer base has described a need or desire for the item in their market. Once these and other questions are answered, McDonald’s compiled all the data and made a decision of releasing the chicken biscuit for a limited time. This menu item was released during the summer months in southern states, on the east coast, and also the upper Midwestern states (Clifford, 2008).

After a period of months McDonald’s removed the item from the menu in those locations and chose another set of locations to introduce the product. After a nationwide introduction the company decided to make the chicken biscuit a permanent menu item in certain demographic locations. They chose the locations to place the product directly using their information gathered from groups and their understanding of the dynamics within those groups. Positive interdependence is extremely vital to groups achieving their mutual goals.

Positive interdependence, as defined by our text, is “when a situation is structured so individuals’ goal achievements are positively correlated, individuals perceive that they can reach their goals if and only if the others in the group also reach their goals” (Johnson & Johnson, 2009, p 91). It is, simply put, cooperation from members of a specific group to continually work towards their individual goals. In doing this the team members believe that every individual must meet his goals for group to be successful. When all team members are focused on achieving the goals of the group, their individual actions will be directed toward a successful outcome.

Group research, although widely used and accepted, is not always an accurate or valid research tool. The first reason it is not always valid is the total number groups or customers polled or questioned in reference to the product. When conducting market research companies can only select a small portion of their potential customers for feedback. Companies attempt to capture a cross-sectional sample (Kotler & Armstrong, 2010), consisting of a diverse mix of consumers, but the system is not infallible and may consist of less than 1% of their potential customer base.

The second reason market research is not always a valid and relevant tool is the views or opinions of those questioned do not represent the views and opinions of the entire customer base. Market research is simply an educated guess about consumer behavior and acceptance based on data compiled from a small group. Although both groups and individuals are important to business success, groups are more effective in work environments.

Groups enable companies to disperse their desired goals throughout the workforce. It is much easier for a company to achieve its overall goals by creating groups than to rely solely on individual productivity. Individuals are very important to the company because they must achieve their goals in order for the group to succeed, but groups have been proven to out-produce individuals consistently. A great example of this is displayed by car manufacturers. Companies such as Nissan, Ford, Chevrolet, and Toyota rely on various groups to produce an automobile.

Factory workers are not capable of putting an automobile together individually. Each worker is performs a specific task which contributes to the overall quality and ultimate completion of the product. If automakers were to change the production methods to allow individuals to complete cars independently, product would plummet. This is proved by high-end auto makers such as Lamborghini that hand makes cars, with each unit being handled by a select few employees.

On assembly lines individuals in groups work together to produce engines, transmissions, suspensions, and interiors. These groups working together assist auto manufacturers to produce a constant supply of vehicles for the population to purchase. Group cohesion is the mutual attraction among members of a group and the resulting desire to remain in the group (Johnson & Johnson, 2009, p 100).

Group cohesiveness is very important because it has a direct positive correlation towards the group’s performance. When cohesion improves, negative forces that may hinder the group’s performance decrease. Negative forces such absenteeism, lack of member commitment, group turnover, and lack of morale decrease the effectiveness of work groups. Group cohesive forces directly impact group processes. When you have overall group cohesion you have more flexibility in the ways you can accomplish your goals. Without overall cohesion you must alter your plan consistently, taking away opportunities for success.

Members of a group who are not cohesive partners will begin to degrade the morale and sabotage the group’s success and forward progress. A unit must be a cohesive entity working towards a single goal or end state in order to be successful. Team building and increasing cohesiveness are two things each company continually implements into their business. Companies use multiple approaches and techniques to improve cohesion. Some companies plan picnics, holiday parties, departmental functions, motivational speakers and elaborate trips to build their teams.

Those are great ideas; however, the most effective method of building good teams is to have strong leadership in place. A leader is “a person who can influence others to be more effective in working to achieve their mutual goals and maintain effective working relationships among members” (Johnson & Johnson, 2009, p 168).

An effective leader will know what members to place into a group, how to maximize individual skills and communicate effectively. Providing direction and motivation to your group always has a positive effect on cohesion. In today’s society social influence/interaction directly affects decision-making. Individuals consistently seek approval from society and at times are prone to make decisions based on societal pressures and desires. Social interactions shape core values which are constantly referred to in the decision-making processes.

Throughout history, the power of social influence has altered the decisions of many leaders. One historical example of social influence would be the issue of slavery during The Civil War. The influences from outspoken citizens of all races and the social climate of the northern states swayed President Abraham to sign the Emancipation Proclamation which abolished slavery in the United States. Positive and negative feedback and reinforcement are tools that can be used in group settings. Allowing your team members to voice their opinions and give suggestions on things that will affect them is a basic method of gaining their approval, trust, and respect.

Trust and respect are two invaluable items that a leader or organization must obtain from their team members. There are various ways to discourage a team’s acceptance of a proposal in the workplace. This practice is not something that is suggested as it will destroy cohesion, cooperation, and the trust you have built with your team. Companies fall victim to this business pitfall simply by not listening to their team members. When the ideas and concerns of subordinates are not taken into consideration, employees oftentimes become discouraged with the organization very quickly.

These feelings then lead to the feeling of neglect and lack of compassion from the organization towards its team members. If a team member feels insignificant, job performance is likely to suffer. Ostracizing your team members or directing company failures upon any one individual again will prevent you from gaining their approval to your suggestions. Leaders are a vital aspect of groups. A leader is someone in a group who exerts the greatest influence on the other members. Leaders provide purpose, motivation, and direction to groups while guiding them toward the achievement of stated goals.

A group without a leader can be likened to a flock of sheep without its sheppard; the group will likely lack structure and guidance. In a group setting, leaders may be chosen using invalid criteria such as age, seniority, and physical appearance. These attributes may not necessarily qualify someone as a good leader and may lead to an underproductive work group. Under these circumstances, leadership is realigned and leaders normally emerge from group membership and ascend into a leadership role. During these times the leader’s sound decision making, leadership style, ideas, demeanor, and persona become very evident to the others in the group. Also a good leader will not sit by and watch their group fail without interjecting his or her ideas to complete the mission.

During times of panic, crisis, and despair, good leaders emerge to rally their members. A group’s perception about its leader has a direct effect on the group’s success or failure. If the group perceives its leader to be weak, ignorant, inexperienced, careless or self-absorbed the group likely will not succeed. These traits will cause the group not to believe in its leadership. The group at that moment will lose cohesion and begin to function as individuals and not as a unit. Conversely, the group must perceive its leader to be honest, trustworthy, knowledgeable, intelligent and fully capable to achieve greatness.

Positive group perception of its leader is a key component in the success of its mission. When groups feel this way towards their leadership it becomes very easy for the team members to accept proposals and their responsibilities. Groups with strong and positive perceptions about its leadership normally display feelings of pride toward their group, company, and organization.

Strong leadership fosters positive reinforcement among subordinates, who return those feelings with loyalty, dedication, hard work and a desire to go the extra mile for their leader. Good leadership is a founding business principle and the stepping stone to business and group success. Although work groups are vital business tools, in certain areas teams are a more productive choice. Teams are more desirable in certain aspects because each member of the team has a clearly defined role. In a team each member’s responsibility is clearly described and mapped out to the members.

Each team member understands that for the mission to be successful the team member must focus on his/her job and complete it. In work groups, members often share the same responsibilities and work on projects simultaneously. The greatest examples of teams working better than groups would be in the world of sports. In a variety of professional sports such as football, basketball, and baseball you see examples of teams and groups. In professional football each team is comprised of 53 players.

These players are known as teammates and are broken down to play on one of three teams. Those teams are: offense, defense, and special teams. Each of these three teams is made up of 11 players. These11 players are given precise and detailed instructions known as a playbook which describes their responsibilities for each situation which may arise. If any player does not do his job, that team will not be successful. As a team, the offense’s job is to score touchdowns by either running or passing the football.

The defensive team’s job is to stop the opposing offensive team from scoring a touchdown. The special team’s job is to kick the football, or to block the opposition from kicking the football. Although this description is very rudimentary, each teammate’s assignment on a play can be an intricate sequence of moves that must be completed in mere seconds.

A football team is needed to score touchdowns and win football games. The exact nature and detailed responsibilities are a great example of why a work group would be unsuccessful in this situation on the field. In the football organization a work group is present and provides a needed service to and for the team. The work group in an organization is the administrative offices. The administrative section includes the owners, upper level managers, and staff who are responsible for the overall day-to-day operations of the team. These individuals form a group just like the CEO’s, COO’s, CFO’s, upper level managers, and staff in a fortune 500 company, whose job responsibilities may at time overlap.

References Clifford, S (2008) The New York Times, http://www.cnbc.com/id/24776721/site/14081545 retrieved 20Nov 2010 Johnson, D. & Johnson, F. (2009) Joining Together. Upper Saddle River, NJ Pearson Education, Inc. Kotler, P., & Armstrong, G. (2010). Principles of marketing (13th Ed.). Upper Saddle River, New Jersey: Prentice Hall