Groups – Group Dynamics

Organizational Behavior Revision Article Series


The group is an important sociological unit of analysis in the subject of organizational behavior.

Types of Groups

Simplest group is a two person group (dyad)

Small groups and primary groups: Small group has the criterion of small size such that there is face-to-face interaction and communication among all members of the group. Primary group is a small group with the additional criteria that there is a comradeship, loyalty, and common sense of values among members. An example of primary group is family. The work group of a person is also a primary group.

All primary groups are small groups. But all small groups are not primary groups.

Coalition: Coalition is a group of interacting individuals and is formed by members for a specific purpose. But it does not have a formal internal structure. Still its members act as a group for the specific purpose for which it is formed.

Membership groups and Reference groups: A person is a member in the membership group. The group in which he wants to be a member is a reference group to him. Many times persons want to display the values of their reference groups.

Group Dynamics

Luthans made the statement, studying groups is especially valuable when the dynamics are analyzed. In this context it is important to know  the meaning of the term group dynamics. 
One view is that group dynamics describes how a group should be organized and conducted.
Another view is that group dynamics as a topic consists of techniques. In this view, role playing, brainstorming, focus groups, leaderless groups, group therapy, sensitivity training, team building, transactional analysis, and Johari window are techniques related to groups and they form the content of group dynamics.
A third view is that group dynamics includes the areas related to the internal nature of groups, the process of formation of groups, the structure of the group, internal processes of the group, the functioning of the group and the effect of the group on its members, other groups and organization. Luthans supported the third view and developed his chapter accordingly.
Group formation, types, and processes; the dynamics of informal roles and organization; and the dysfunctions of work groups and teams are all of particular relevance to the study of organizational behavior.

Groups represent an important dynamic in the study and application of organizational behavior.
Group formation, types, and processes; the dynamics of informal roles and organization; and the dysfunctions of work groups and teams are all of particular relevance to the study of organizational behavior. 

Why Do Inviduals Form Groups?

The most basic idea is propinquity. According to it, individuals affiliate with one another because of spatial or geographical proximity.

A more comprehensive theory is that of George Homans. It is based on activities, interactions, and sentiments. The more activities the persons share, the more numerous will be their interactions and the stronger will be their sentiments. It is not physical proximity alone but shared activity and interaction and positive sentiment that lead to formation of groups.

Theodore Newcomb’s Balance Theory: According to this theory, persons are attracted to one another on the basis of similar attitudes toward commonly relevant objects and goals. Once the relationship is formed, a balance is maintained between the attraction and the common attitudes. If an imbalance occurs, there is an attempt to restore the balance, and if the balance cannot be restored, the relationship dissolves.

Exchange Theory of Group Formation: An interaction between two or more persons has rewards and costs. Rewards from interactions gratify needs. Cost is incurred due to anxiety, frustration, embarrassment, and fatigue.
Participants in an organization also form into groups for very practical economic, security, and social reasons. Many different types of groups are found in modern organizations. Conceptually, there are primary groups, coalitions, and others such as membership and reference groups. Groups have been researched over the years, and findings from classic social psychology studies, such as the one conducted by Schachter, have implications for organizational behavior.

Stages in Group Formation

1. Forming : Period of uncertainty. Purpose, structure, task, leadership are not clear.
2. Storming: Structure evolves out of discussions, disagreements, confrontation and conflicts may arise.
3. Norming:  The norms of the group are established. Member settle into state of  cooperation and collaboration. We feeling is established and group identity is also established.
4. Performing: Group is fully functioning for the accomplishment of group objectives
5. Adjourning: The liquidation of the group. More common in project establishments (formal groups)
The Schater Study on Group Productivity
A highly cohesive group with positive leadership will have high productivity.

Group Effectiveness

In formal organizations, group effectiveness can be increased by the following actions
1. Organizing work around intact groups.
2. Let the group select, train, and reward its members.
3. Use the group only to enforce norms for behavior both on the job as well as off the job.
4. Distributing rewards on a group basis.
5. Allowing intergroup competition

Informal Groups in Organizations

The last half of the chapter (Luthans) discusses and analyzes the dynamics of informal groups.  Informal norms and roles and the informal organization are very relevant to and often represent the real organization. Informal structure coexists with every formal structure. Traditionally, only the dysfunctional aspects of informal organization have been emphasized. More recently, the functional aspects have also been recognized.
The dynamics of the dysfunctions of groups were examined in terms of norm violation resulting in antisocial behaviors, role ambiguity/conflict, group think conformity, the risky shift phenomenon, and social loafing.


The remainder of the chapter focused on teams per se. Initially, most publicity was given to quality circles, but now self-managed teams are in the spotlight. Self-managed teams are beginning to become an established form of doing work to meet the high-tech, quality challenges facing both manufacturing and service organizations. To date, self-managed teams have a quite successful track record. In addition to self-managed teams, cross-functional and virtual teams are examples of new team forms that have also achieved success. Global teams in a multicultural environment have experienced some problems, but helpful solutions are forthcoming. Whether global or domestic, building effective teams requires long-standing principles regarding the creation of the proper environment in which support, commitment, rewards, communication, physical space, group size, membership, and cohesion are emphasized. Then, team effectiveness may be enhanced using team-building programs, collaboration, and effective leadership and by accounting for functional, demographic, or cultural diversity and global issues when teams are formed.

Luthans, Fred, Organizational Behavior, 9th Edition, McGraw Hill,.New York, 2002.

Originally posted in Knol, Number 166

Updated on 23 May 2019, 8 December 2011