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Work-teams: why do they often fail?

Why do so many teams fail? If good teamwork promotes productivity and quality improvement, then why are productivity and quality levels sometimes lower in a team environment? Although a few companies have embraced the use of teams and utilized them successfully, a significant number have failed miserably. In fact, even performance between teams in the same company can vary by as much as 100% (Scott and Townsend, 1994). Nahavandi and Aranda (1994) discovered that many employees believe working in a team environment is a waste of productive time because too much time is routinely spent on building trust and agreement. While this is commendable, it often does not translate into higher productivity or increased creativity (Allender, 1993). For example, Florida Power & Light Company reduced worker participation after employees complained that too many team meetings were hurting their performance (Zemke, 1993).

Both managers and subordinates have expressed dissatisfaction, anger, and exasperation over a team's frequent ineptitude and inability to generate good decisions. One reason for these frustrations is that people in a team commonly feel that other team members decrease their chances for "personal success." This is especially true with high performers who may frown on teams because their individual work ethic is often less noticed in a group. As a result, many team members hold back their effort and instead concentrate their energy on individual goals (Bartol and Hagmann, 1992). Another reason for employee frustration is that lower managers often do not provide the support needed for their teams because many of them do not know how to properly use the team concept (Schilder, 1992; Geber, 1994).

In spite of these problems and others, research shows that most companies strongly believe in the team concept and want it embedded in their operations (Nahavandi and Aranda, 1994). In fact, one in five companies has or will soon implement self-directed work teams (Hitchcock and Willard, 1995). If this is true, then what is needed to make teams genuinely successful?

This article discusses the reservations of management and employees concerning the long-term success of teams, and offers concrete recommendations on implementing them properly and troubleshooting common problems. The areas addressed are: (1) essentials for making the change to a team environment, (2) presenting the team concept to employees, (3) handling lower management resistance, and (4) the training required to form successful teams. These areas were chosen to point out the most commonly believed reasons for team failures. However, too few empirical studies have been completed to affirm any of the currently recommended team implementation strategies (Scott and Townsend, 1994). Given such circumstances, it is no surprise that many consultants and team experts assert that half of all teams eventually fail (Vogt and Hunt, 1988; Hitchcock and Willard, 1995).

Essentials for Making the Change to a Team Environment

For managers and employees, switching from "individual work" to "team work" is not an easy task (Allender, 1993). Both want to increase productivity and efficiency, but both also want to maintain job security and their current position status. As a result, the decision to design work around teams is not always accepted by employees at any level. The initial presentation by top management is crucial. A company should develop the team concept with the full cooperation, decision making, and involvement of all employees. If a company is really interested in and believes in the team approach, it should set an immediate example by using it when moving to a team environment. If a union is involved, for example, labor and management should work together to organize and develop the new team structure. This may sound basic, but it is often ignored (Wasilisin, 1993; Bluestone and Bluestone, 1992).

Most change is naturally resisted. Before carrying out a movement to teams, precise goals should always be established, understood, and supported by management and employees (Scott and Townsend, 1994). A lack of preparation, especially during such a major company transformation such as this one, can sometimes permanently damage productivity. For example, top management can force lower management to structure their sections into teams, but the odds of success are slim if these managers do not buy into the reorganization, or if they feel insecure with the new group leadership concept (Geber, 1994). As a result, any effort to switch to teams is essentially doomed from the start.

Once managers and employees agree to change to a team structure, the company must try to create employee loyalty and commitment to the new groups. This adjustment is difficult, because almost everyone is used to the unspoken old method of trying to defeat his or her peers to get ahead. Thus, it is imperative to have initial and continuous team building to persuade employees to think in terms of the group (Scott and Townsend, 1994). Every organization must look critically at its current system to find what formal or informal rules will affect the ultimate success of the team process. Cooperation within the team must replace competition between members, with competition directed instead toward other companies (Spencer, 1994).

Remember, the old organizational structure was created to work best in an individualistic work environment and will not likely give support to a team work design (Geber, 1994). For example, the new teams may need different communication channels, free time to attend meetings with their groups, and new job titles to replace the traditional ones. The company must try to eliminate as many barriers as possible between employees and management. For instance, even the decision-making process should be examined as well as the compensation system that should now reward team efforts, not just individual efforts. In the most successful team-managed companies, visitors often remark that it is difficult to differentiate the managers from the subordinates.

Often intentions to change are good; nevertheless, success is difficult in companies that have rarely solicited employee participation (Allender, 1993). An effective transition will require major changes in management and subordinate philosophy. For example, all employees must realize how their career aspirations can be reached using the new team structure. When switching to a team-based organization, management must make sure that employees are taught new ways to belong, feel challenged, gain recognition, and express talents in their groups (Bjorkquist and Lewis, 1994).

These human motivational factors, which are frequently considered something that can be worked out later, will greatly influence team formations. As a result, these areas must be identified, examined, and continually monitored during the transition or the outcome will be ineffective or counterproductive (Bjorkquist and Lewis, 1994).

Teams are typically hard to cultivate during these uncertain business times because workers are aware that new technologies and increased competition have resulted in layoffs in many firms. In other words, employees may view teams as another method to reduce jobs. Employees will not be committed to the team approach if they are simultaneously worrying about job security (Vogt and Hunt, 1988). Some companies have presented the new team concept as a way to save jobs instead of eliminate them.

Presenting the Team Concept to Employees

The typical employee initially mistrusts teams. Often in the past, especially when computers became commonplace more efficiency meant fewer jobs. As a result, management and labor distrust teams at first because they are frequently linked with increased efficiency (Ettorre, 1994). Organizations should not start a team approach if layoffs are expected in the immediate future, since workers may connect job losses with the new teams. Therefore, companies should seriously think about future employment levels if teams dramatically improve operations. If widespread layoffs are not considered likely and most excess workers would receive new assignments, companies should make their employees aware of these optimistic intentions.

The switch to teams will have a greater chance of success if workers realize that their employment is secure. However, if employees know that layoffs are inevitable because of a company's history, the company can still benefit by linking retention to contribution to the team approach. Managers should let employees know that if productivity results in job losses, the company will pay for retraining, attempt to place employees in other areas, and offer an outplacement program. In other words, managers should try to make winners (not losers), out of those employees who eventually lose their jobs during this time of major organizational change. Firms that take care of those who are let go will better maintain the morale of those who remain on the job (Brockner, 1992).

The company should also create fresh intrinsic rewards that management can provide employees, so employees will not see more work and responsibility without recognition (Allender, 1993; Scott and Townsend, 1994). For example, an organization can start workers in teams with low-risk decisions and attainable goals with some guidance, so they can build confidence to accept greater challenges. Teams that are initially exposed to major high-risk problems usually feel frustrated and may not overcome obstacles that would have stopped even the best. A lower level manager who is afraid of losing job security may intentionally give such a task to a team to prove to upper management that teams do not work. The company should watch the assignments given to teams to make sure they build confidence in the new process. In other words, a few quick wins using teams will go a long way toward building determination when teams make some mistakes in the future. This way, initial positive reinforcement among the team members exists, motivating them to do a better job.

* The Issue of Job Security and Employee Politics

Some employees undermine teams because of the fear that their jobs may become expendable. They not only refuse to cooperate with other team members but also hoard critical information (Harris, 1993). They believe that this will allow them to retain their particular expertise in what they do and remain indispensable (Odiorne, 1991). Often a few workers have secretly accomplished little for years, remained skillful at looking busy, and now fear the truth may come out. Politically minded employees have survived, obtained position, power, and perhaps high salaries by gaining the ear of important people involved in decision making. However, because decision making is not as centralized in a team environment, personal and political strategies are more difficult to manipulate. Politically minded employees will likely feel extremely threatened by a change to a team organizational structure.

Companies must help all employees move beyond their traditional job descriptions and personal agendas, and, simultaneously, they must discourage elitism and territorialism. If teams are eventually expected to make inventive and critical decisions, every member must have equal access to information and equal involvement in the process (Eisman, 1992). To obtain the best cooperation and productivity among employees, all levels of management should make sure that each team participant knows how his or her actions contribute to both personal objectives and company goals.

* Pay Considerations and Other Rewards

Another problem to work out with employees is that many expect more pay for increased responsibility (Kaeter, 1993). Accordingly, managers must sometimes deal with new feelings of pay inequity in the workforce. One way to raise pay equity and support the new team structure is to add performance-based compensation, which should be linked directly to meeting company goals through teams. For example, adding skill-based pay can reduce resistance to change, support continuous learning, encourage job rotation, and also increase the knowledge base of cross-departmental team members. In addition, adding profit-sharing or gainsharing plans can strongly encourage teams to find better ways to increase efficiency, effectiveness, and quality (Bartol and Hagmann, 1992).

The 3M corporation has a 25% rule, in which 25% of products must come from new products every five years (Schermerhorn, Hunt, and Osborn, 1994). Saturn places 10% of its employees' compensation at risk, which team members can earn back through team performance excellence (Overman, 1995). Whatever the solution, firms must work with the human resource department early in the change process to create a complete incentive system. These new incentives should also include nonmonetary formal recognition for a team's quick response to market or technological changes, process innovations, and quality improvements.

One advantage of companies now considering a team orientation is that reward structures are now better developed for team environments. In fact, a supportive compensation system is one of the best ways to encourage a new team-oriented culture (Sisco, 1992). In other words, the bureaucratic pay model which is based on the "boss" making all of the decisions is not appropriate here. Unfortunately, a survey completed on 4,500 teams in 500 organizations found that 80% of the respondents did not consider team performance as part of employee compensation (Wilson Learning Corporation, 1993).

Handling Lower Management Resistance

Top management must realize that lower management levels may resist a movement toward a team-based organization. This is a natural response to a perceived threat to power and job security, and companies should not assume that their managers are enthusiastic about the initial proposal (Odiorne, 1991). These managers know that their jobs and position are potentially threatened, because successful teams require less supervision and more decision-making in groups (Allender, 1993). In the past, executive layers were reduced with the introduction and expansion of computer technology, which allowed the elimination of many administrative functions.

Today, the team approach is perceived as a similar threat to lower managers, who see their supervisor roles threatened. Some decisions that were once historically made by formal authority figures will now be made by a team of workers. These managers would also like to claim the responsibility for the results of their teams instead of the team getting credit. These supervisors often try to treat the team as just another department. The concept of teams without formal managers is difficult to understand and adjust to after so many years of hierarchic leadership. This is especially true for managers with large egos. As a result, some managers do not view the concept as a necessary or even logical reason to give away their power and may treat the new teams as a group brought together to discuss issues but with no authority. As Schilder (1992) asserts, "first line managers . . . may fear losing their jobs as teams can take on traditional managerial responsibilities"(69). Tasks that were once the managers' are now spread to several workers on the team or the team as a whole. In effect, many managers do lose power, face reduced job descriptions, and may eventually lose their positions. Sara Lee Knit Products in Mexico is a team-based organization with 900 employees but only four formal managers (DeWitt, 1995).

Companies should make every effort to make sure that managers are given as smooth and as fair a transition as possible to their new roles (Schilder, 1992). For example, companies should immediately and clearly define managements' new tasks, show how career progress is still possible, and should consider a temporary bonus system linked to team success benchmarks. If management terminations are inevitable, companies should make it clear from the beginning that the managers who keep their jobs will be those most effective with teams. Some companies send their supervisors on site visits to other team-structured companies, so they can observe and share concerns with their own peers (Hitchcock and Willard, 1995).

These suggested transitions are necessary in trying to retain the loyalty and morale of all management levels and are required to gain their cooperation and support during the transformation. Any organization must recognize that the cooperation of the leaders is crucial for the future success of the teams (Geber, 1994). Without management support, employees will intensely resist the proposed new environment.

It is naive to think that all managers will buy into these organizational innovations. Managers who cling to the past should be counseled, trained, and assisted during the transition. If rewards and encouragement fail, then reprimands or terminations should be used. The company should make it clear that the team-based approach is not considered as an experiment in the organization and that the teams will become permanent once in place. However, managerial loyalty and at least some consensus with the other employees should be obtained before any major reorganization. A problem with some managers is that they sometimes put one foot in the team approach while keeping their other in the traditional boss-worker supervisor mode. To make the teams successful, all layers of management must jump into the new system with both feet.

As mentioned, many companies have embraced the team approach, yet some have failed miserably. Nahavandi and Aranda (1994) believe that the number of truly successful teams is relatively small. Many companies have not been able to create a team environment because personal agendas destroy the process. These companies have failed to create a new system in which personal goals can be reached only through group efforts. One reason is that they try to change only half way, which frequently reduces productivity. For example, instead of having important meetings with the teams to discuss ideas on how to improve the company, executives continue to use meetings just to set agendas, preach new policies or goals, and to answer questions. A quick test is for executives to ask where most of the utilized suggestions come from in the organization. If most of the ideas are coming from the top, then management is not truly listening to its employees.

Training Required to Form Successful Teams

Even with careful planning, employees who are expected to perform in a team-based environment will need extensive training. In fact, the company may never conduct training that is so important to the future success of the organization. This is not the type of training that employees can attend and then not actually use in their work environment. This training must teach employees the skills they need to operate effectively in the new structure, so the relevance and comprehensiveness of the training are essential. Companies must relay to employees not only the long-term objectives of the teams but how to reach them. In addition, companies must teach employees how to reach personal goals through this proposed new organizational design. In other words, "What is in it for me?"

* A Need for Extensive Training

Why extensive training? Most employees do not know how to gain all the benefits and advantages of a team-based atmosphere. Many are uncomfortable about making decisions without a formal supervisor and are relieved if an informal leader takes control of the group. Others may fight for control, even though one of the main purposes of the transformation is to add creativity and productivity through group decision-making. Employees will revert to a hierarchical structure within their teams unless management trains them differently.

For instance, employees can find working with peers more difficult than working in a supervisor-subordinate relationship, where they knew where they stood with each other. Interpersonal skills, although important, were not as crucial because employees acted according to their status in the company.

For example, most of us have known a "jerk" supervisor whose subordinates praised him to his face, laughed at his insulting jokes, and ignored his sometimes incompetence. The interpersonal skills used by employees here included restraint, deception, and brown-nosing, which for some reason comes naturally and does not need formal training. In teams, however, each employee has the same rank, and what sometimes comes naturally with equality are power struggles, criticism, poor listening, sarcasm, and sometimes even yelling.

As a result, workers desperately need training in gaining cooperation and consensus without using formal power. In addition, this training is helpful for preventing the best employees from artificially supporting those that intentionally apply less effort on team projects. This phenomenon, referred to as "social loafing," has been studied for a number of years in a variety of settings (Weldon and Gargano, 1985) and is one of the major weaknesses of group work. Fortunately, the benefits of well developed teams have more than offset this drawback.

* Time and Effort for Training

Management often underestimates the amount of time and effort needed to train successful teams. Management should make sure that the training is aligned with specific company objectives rather than just offer basic courses in team building. Like physical exercise, time is more important than intensity. One-shot training for two weeks may not be as effective as four hours with reinforcements and follow-ups.

It is also an excellent idea to bring in an outside team training consultant, who is blind to the corporate system and not subject to the biases of the company culture. An external consultant will see changes that must be made that the company may not. The best consultants will not only design custom team-oriented training programs but will also suggest how to better structure the organization to make the groups more effective. A company, however, should rigorously critique any recommended changes or training programs before moving forward. This is not the time to settle for an inferior consulting plan. If the suggested strategy appears inadequate, the company should just pay the consultant for their initial work and hire another firm. When using an outsider for preliminary guidance, a company should expect and accept only the best. Ideally, the consulting firm can instruct internal personnel how to perform some of the required team-based training.

* Training Pitfalls

Companies should avoid taking the bottomless pit approach to team-oriented training (Allender, 1993). A well-intentioned manager or human resource advocate can always find a training need. The key, however, is to train employees only in the areas that will have the greatest impact to avoid unnecessary expenses and time away from work. Although most of the transition training should be required, the most effective way to achieve the most beneficial post-transition training is to allow employees some flexibility in deciding training needs. Employees despise going to what they feel are worthless training seminars and will typically request only those that will best assist them in their teams. An extra benefit is more effective on-going training, because employees genuinely want to learn what they feel they need to know. Some of the best training, no matter what the topic, also tries to improve either a group's interpersonal skills, decision-making, team-building, or problem-solving.

Another training pitfall is relying too heavily on the lecture method (Sims and Sims, 1991). Although lectures are sometimes efficient for some topics such as for relaying company objectives and incentive systems, team behavioral skills are not often increased significantly this way. From our experience, role playing is one of the most effective techniques. Role-playing works for small or even large groups, is often based on a previous or potential real-life company event, and is especially helpful if the employees that need the most help participate. Allowing employees to visually see what is expected, as well as what works and what does not, is a powerful method for helping employees better work in teams.

* How much Training is Enough?

Ames Rubber uses more than 17,000 training hours for its 445 team members in areas such as increasing communication skills, quality improvement, and problem solving (Sandelands, 1994; Bemowski, 1994). As a result, Ames reduced one of its defect rates from 30,000 parts per million to only 11 for one of its biggest customers - the Xerox Company (Sandelands, 1994). In addition, the productivity at Ames Rubber increased 43% in the last three years, and employee ideas have produced savings of over $3 million (Bemowski, 1994), or about $2,700 per employee (Sandelands, 1994). Their mission of becoming the best supplier of elastomeric products in the world is emphasized in all of their training (Sandlelands, 1994).

In another example, Saturn used over 800,000 training hours in 1990 alone in the education of 150 teams with about 15 workers in each. Because the teams are self-directed, training included areas such as quality control, purchasing, budgeting, consensus decision-making, and member recruitment. Each team has the additional responsibility of creating specific training schedules based on current needs for each of its members (Solomon, 1991). All employees at Saturn spend 5% of their time in training every year (Geber, 1992). Today, Saturn is well known for its quality and customer service (Bluestone & Bluestone, 1992).

Training requirements will vary for each company and the amount is not always the best indicator of success. Some companies have used more training hours than Saturn, but eventually ended their attempt at teams after spending millions of dollars trying to make them work (Forbes, 1994). Others have created outstanding team training programs but never gave their employees enough time to learn the necessary skills. One way to gauge the effectiveness of the training as well as make future adjustments is to regularly survey and observe workers on their progress in the team environment.

Workforce training is thought to have contributed more to the success of many companies than modern technology or formal education (Plott, 1993). The apparent key is to link all training to an actual payback, such as specific quality improvements, instead of just requiring it to increase knowledge that may not be used regularly and will be forgotten when needed (Allender, 1993). For comparison purposes, the average amount of training in 20 successful team-oriented companies ranged from 8 to 180 hours per employee in the first transitional year, from 20 to 40 hours in the second year, and tended to continue at the same or higher rate in future years (Wellins, Byhan, and Dixon, 1994).

* Creating Effective Teams

Companies should routinely survey their teams to test for training success and group commitment. Pre- and post-measures are essential to evaluate progress and the effect of internal changes (Pine and Tingley, 1993; Cole and Hales, 1992). Comparisons with similar measures from other successful companies can sometimes provide relevant external benchmarks. Without assessments, it is much like playing a sport without keeping score, and keeping score - knowing which teams are succeeding or failing - is important to know how to best use company resources. For example, companies with strong team commitment may want to concentrate their training on maintaining the team process and further supporting the group efforts. On the other hand, companies with low team commitment should reevaluate their training and try to find out why employees are directing their energies elsewhere.

For instance, do managers actually give their team members any authority? One easy check is to ask the following question: if the team were eliminated today, what decision-making tasks would management have to assume to keep the organization going? If the answer is none, then the teams do not have any real authority to make significant decisions.

* Keeping Employees Informed

Training should also involve opportunities to obtain a more thorough awareness of company operations (Eisman, 1992). For team effectiveness, each member must know how each department and division fits into the general corporate objective. In addition, each member must know how to remain current on organizational changes and how to gain additional information important to the team. Such information is often learned initially through planned presentations, but must be maintained through follow-ups such as newsletters, e-mail, job rotations, and future expositions.

Some companies hesitate to fully share information that may be sensitive or to allow team members enough time away from their regular jobs to learn what other members do. Every effort should be made to encourage the exchange of any knowledge that a team feels is necessary to do their work (Odiorne, 1991). For example, managers must be comfortable with giving out information to teams that do not have big titles or hierarchical power (Geber, 1994). Drucker implies that management should look for gaps in the knowledge of teams and should take some responsibility for providing the needed information (Harris, 1993).

Teams should not be expected to make the best decisions if complete details are missing or if members do not understand the vocabulary of other members. Experts from different areas that make up a team often use terminology related just to their field. As an illustration, Eskimos have eight expressions for the word snow while most of us only have one (Clampitt, 1991). Teams must be able to understand each other and to have complete company information to function at a high level. Deming (1993) asserts that an organization can have the best workforce in the world, but if employees and the company are not able to work together, a well-run team-oriented competitor will ultimately win out even if their employees are less qualified.


In a team structured environment, all companies must learn how to treat their employees as assets instead of liabilities. Even during tough times, companies must maintain the "we are all in this together" mentality rather than "the workers are to be seen and not heard" or "everyone is expendable" approach (Mishra, Ishak, and Mishra, 1994; Odiorne, 1991). If the latter are the company's perspectives, then teams will be almost impossible to motivate. Using teams effectively means employee involvement. To be blunt, management must give up some power and responsibility, and workers must take on more power and responsibility. True teams are not just for letting off steam or complaining about the company, although these are good starting places for finding solutions to problems.

Companies must understand that managers and their workers will naturally resist major corporate changes. One of the first essential steps is to create a new monetary and nonmonetary reward system that supports the entire team transition process. All employees from the top to the bottom must know how a team environment will benefit them personally. The presentation of the transformation to a team environment and the participation and training of the workforce are critical to a company's long-term success with teams. Companies that do it right will reap the greatest benefits.


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Dr. Tudor is the research manager for the Virginia Labor Studies Center at V.C.U. and has been involved in numerous training programs in the private sector; he worked previously for the Dept. of the Navy and IBM. Dr. Trumble directs V.C.U.'s Virginia Labor Studies Center, has consulted widely in the U.S. and abroad, and worked previously at both the National Science Foundation and the National Institutes of Health. Johanna Diaz, a senior research analyst at the Virginia Labor Studies Center, specializes in integrated journal article information and survey data and edits publications.
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Author:Tudor, Thomas R.; Trumble, Robert R.; Diaz, Johanna J.
Publication:SAM Advanced Management Journal
Date:Sep 22, 1996
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