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team structureEmployees are the most important asset of an organization and teams are the building blocks of its success. A person’s quality to be a good team player and leader determines how well he or she can contribute to achieving the company’s objectives. To compete effectively in today’s markets, organizations have turned their focus on building self-motivated and efficient teams so as to maximize the use of their resources and employee talents. Businesses across industry verticals are giving increasing importance to put in place flexible teams that are more responsive to changing environments. The importance of a team comes into play when business processes need a coordinated and collective effort from the employees, which in turn creates a positive impact on the entire organization.  Check out this course on the theory of team development to learn more about the impact of team structure, on an organization.

As a small business owner or entrepreneur, you must concentrate your efforts towards building high-performing teams that can create a positive synergy around them. This not only helps increase the collective achievements of your company but also gives you the perfect platform to strategize for business development. Here in our discussion today, we will bring to you the concepts of team structure and the other related facets of team development and management.

Types of Team Structures

As against traditional organizational structures wherein they had different departments for each business function, today the day-to-day activities of a firm revolve around teams. Whether it’s a sales and marketing team or research and development team, teams are flexible and can build products, negotiate prices and strike deals, coordinate projects and provide services etc. There are four important kinds of teams that one would commonly find:

  1. Problem-Solving Teams – This kind of team basically comprises of a few members, ideally from 5 to 12, belonging to a particular department coming together on a weekly basis to discuss and solve problems of their department functioning. Members give their individual suggestions for process improvement and after enough deliberation, present their advice to the higher management for further implementation. For example, Merrill Lynch, in the earlier days had created a problem-solving team to figure out a way to reduce the time taken to open a new cash management account.
  2. Self-Managed Teams – While problem-solving teams were effective in recommending solutions, they didn’t have the power to implement them. Self-managed teams were built to address this challenge and apart from discussing issues, they were responsible for implementing the solutions and taking responsibilities for their outcomes. From making operational decisions to interacting with customers, self-managed teams are highly effective provided the members are motivated and driven to bring about positive change.
  3. Cross-Functional Teams – When employees from different business functions but belonging to a similar hierarchical level come together to achieve a common task, the team is called a cross-functional team. The members bring their individual expertise from their respective work area and exchange information for a common cause. Whether it is finding solution to a development fault or coordinating complex projects, cross-functional teams are very effective if managed well. For example, the Boeing Company created a cross-functional team of employees from various departments like production, quality, and design engineering, tooling and information systems to automate shims on the C-17 program. Since the members belonged to diverse backgrounds, they were able to give different perspectives to arrive at the best solution. The team’s suggestions helped reduce the cycle time and cost, as well as greatly improved the quality of the program. While cross-functional teams are highly effective, they need good management skills to build trust and teamwork amongst the members and manage the diverse nature of the team.
  4. Virtual Teams – In today’s world of internet and mobile technologies, it’s easier to manage physically dispersed members with the concept of building virtual teams. Members collaborate online, participate in video-conferences and discuss in real-time to realize a common objective. While virtual teams are easily manageable, the members sometime lack the motivation to find solutions or fail to trust each other due to absence of any direct interaction. These challenges must be addressed by monitoring the efforts of the members and recognizing their individual contributions. Learn more about managing and hiring virtual teams with this course.
  5. Bureaucratic – Teams are built around highly routine tasks with formalized rules and regulations. Decision making follows a certain chain of command and tasks are highly specialized in nature.
  6. Matrix Structure – Most companies follow this structure to build their teams and it basically combines the functional as well as product departmentalization. Employees in a matrix normally report to two bosses – one who is their functional department manager and the other a product manager. This creates a dual chain of command that is highly effective for complex and interdependent activities. For example, a professor teaching accounting to undergraduate students, may report to the director of undergraduate programs as well as the head of the accounting department.

Factors for Team Success

A team’s effectiveness depends on various factors such as context, composition, work design and process. Apart from team performance, managers must also measure member satisfaction levels to find out the productivity of the teams. There are numerous ways to increase the success of teams such as:

While team development is critical for organizational growth, managing teams is more challenging because of the highly diverse backgrounds that the members come from. This course can give you some insights on how to better coach and develop your team’s skills. As a business manager, you must learn the art of turning individuals into team players and motivating them to collectively achieve business goals. This course on how to hire and manage great teams will open us new possibilities for your team’s growth.

Page Last Updated: February 2020

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