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Organizational Psychology – Team Structure

Answers the Question

What the pros and cons of the four types of interdependence in teams?

How it Began

Individuals have their own identity, but they are interdependent when working within a team, which means that the team itself is has a holistic identity of its own, this creates a ‘ground paradox’.  Weick, 1976 developed the concept of loosely structure systems which has lead to literature exploring the operationalization of four specific dimensions of structural interdependence a) Task Allocation Structure b) Decision Making Structure c) Reward Structure d) Communication Structure.


Key Terminology

  • Interdependence –  A dependence on 2 or more people, things, events or entities on each other.
  • Team Structure – Organized individuals that constitute unity, composed of correlated elements
  • Decision Making – Deciding between alternatives.

In Brief

Task Allocation Structure (Horizontal interdependence)

Where task allocation structures are team based often where jobs are complex and have fairly high levels of autonomy, high level of cognitive ability are needed.  In these situations Ellis et al (2004) discovered that decentralized team members who have authority to make individual decisions, increase their ease of learning and adapting, are more innovative and is conducive to demands for speed or learning.  In functional structures, where roles are fragmented and there are high levels of interdependence, coordination becomes very important which is supported by team members with an agreeable personality trait.  Ellis et al (2004) found that a designated leader with a degree of authority is required in these situations to ensure coordination.  Where the organizational structure is misaligned high levels of stress or conflict may occur increasing the need for emotional stability.

Decision-Making Structure (Vertical Interdependence)

Jundt et al, (2004) found structural contingencies on both horizontal and vertical dimensions impact team performance and the costs and benefits of both type of structure are similar.  They concluded that Horizontal and vertical structures compliment each other.

Reward Structure (Outcome Interdependence)

Bamberger and Levi (2009) investigated reward structure based on norms of equity, equality or some combination of the two and incentive intensity.  Their findings indicated that relative to equity-oriented group-based pay structures, equality-oriented pay structures are found to result in both significantly more help giving in general by team members and the type of help being offered leading to a higher likelihood of enhanced group-level competencies (i.e. autonomous help).  Incentive intensity strengthens the effects of reward allocation on the amount (but not the type) of help giving within teams.  Rosenbaum et al (1980) demonstrated that even a modicum of competitive reward led to lowered efficiency and productivity.

Beersma et al (2003) concluded that in regards to a teams external fit, competitive reward structures enhance speed but decrease accuracy whereas cooperative reward structures enhance accuracy and decrease speed.  In regards to internal fit extroverted and agreeable people are best suited for cooperative reward structures whereas introverted and disagreeable people are best suited for competitive reward structures.

Communication Structure (Spatial Interdependence)

The set of individual differences that predict team performance in a changing situation may be quite distinct from those that predict performance in more routine situations therefore the effective team composition is required if the team is likely to experience unexpected change.

What does this mean for Organisational Development?

To achieve its objectives, an organisation needs to operate within a structure best suited to its purposes. Traditionally large businesses divide the organisation up into functional areas, with a hierarchical top down power structure.  However, depending on the type of organisation and the interdependencies required within teams, as well as the personalities of the team members the traditional pyramid structure may not be suitable for effective performance.

For innovative, fast moving organizations and those which often deliver products and services via project teams bought together for that purpose, a more flexible matrix organizational structure is more suitable.

Some organizations have gone further in their pursuit of collaborative ‘soulful’ organizational structures, with remarkable results.  Laloux in his book Reinventing Organizations argues that the way organizations are managed is increasingly out of date and more enlightened organizational structures and practices are needed.