See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/252316177

Teambuilding and Corporate Performance— Does It Pay to Play?

Article · August 2003

CITATIONS READS
0 373

1 author:

Jennifer van Stelle

Actionable Insights, LLC
5 PUBLICATIONS 3 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Dissertation View project

All content following this page was uploaded by Jennifer van Stelle on 21 May 2014.

The user has requested enhancement of the downloaded file.

Teambuilding and Corporate Performance—
Does It Pay to Play?
By Jennifer van Stelle

Several months ago, Dave Blum and I were discussing the positive impact of
teambuilding on organizations. I’m an organizational sociologist—I study how
organizations work (or don’t work), how people inside companies relate to each other,
and how organizations themselves relate to other organizations. Dave claimed that
teambuilding can improve a company’s financial performance. Of course my response,
as an academic, was, “But has this been measured? Where are the studies?” In the
end, I was intrigued enough by the topic that I offered to research and write an article
about it for a subsequent issue of his newsletter. Here, then, are the results of my
research—from a sociologist’s standpoint.

The Short Answer

The short answer to the question, “Does teambuilding measurably improve corporate
performance?” is, “It depends.” “On what?” you ask. Well, that’s part of the long
answer! In brief, the research I’ve reviewed indicates that teambuilding by itself can
provide short-term improvement, while the long-term benefits of teambuilding to
corporate performance generally only attend upon management’s commitment to
broader changes in the corporate structure and culture.

Evidence: Short-Term Benefits

One of the difficulties I discovered in researching teambuilding and corporate

performance is that, up until the 1990s, few people had directly studied the topic. In a
rare report from 1989, Wolfe, et al. scrutinized the scant literature of the time and found
that highly cohesive teams did seem to achieve better economic results than less-
cohesive teams. No study to date, however, had shown teambuilding to have a
significant impact on a company’s financial performance. Fortunately, Wolfe et al.
present their own study, in which they carefully test hypotheses directly related to
teambuilding and economic performance.

The Wolfe Study

Wolfe et al.’s 1989 study observed teams of MBAs participating in a complex,

interactive, business decision-making simulation. Performance in the simulation was
assessed solely by financial metrics. Earlier studies had shown that increased team
cohesion leads to improved economic performance. (Cohesion can be thought of as a
measure of the relationship among the team members [Vinokur-Kaplan 1995:312].)
Wolfe et al.’s approach was to subject participants to a teambuilding training aimed at
increasing trust, cooperation, and cohesiveness among team members (1980:393).

-73-
These aims were in fact achieved—the researchers write that participants in teams that
had received teambuilding training were more open with each other and were better
communicators than the teams that had not received the training.

The result? The researchers state: “Team building created initially more cohesive
teams that obtained superior economic performance during the early stages. . . . Their
superiority was later challenged, but not surpassed, as several of the ... untreated firms
[teams] became more cohesive over their natural life course. . . . Those not receiving
the team-building effort obtained slightly lower overall economic results” (Wolfe et al.
1989:405). While Wolfe and his colleagues opine that the marginally higher results did
not seem to be worth the time involved, they also note that “the quarterly performance
of the ‘untreated’ teams [i.e., those that did not receive teambuilding] was far more
variable, thus categorizing them as a less desirable investment risk” (ibid.).

What does all this mean? The Wolfe et al. study suggests that teambuilding training
can provide short-term benefits. Higher cohesiveness, at least initially, improves team
performance. Nevertheless, teambuilding by itself does not substantially increase long-
term results. Somewhat dismaying, yes. But we’re not done yet: still to be examined is
the role the organization plays in team performance.

Evidence: Long-Term Benefits

Enter Guzzo & Dickson (1996), who set about the task of reviewing the entire literature
of performance and team effectiveness in organizational contexts. In their
comprehensive review, they discuss researchers Macy & Izumi (1993), who themselves
analyzed over 125 studies to understand the role of teams and organizational change.
Macy & Izumi find that of all organizational interventions, those in the area of team
development have the largest effect on measures of financial performance. Moreover,
as Guzzo & Dickson (1996:324) report in their review of Macy & Izumi’s analysis,
“indicators of financial performance show the greatest improvements when multiple
changes are simultaneously made in aspects of organizational structure, human
resource management practices, and technology.”

The intrepid Guzzo & Dickson (1996:326) also discuss research by sociologists
Kalleberg & Moody (1994), who found that “organizations adopting sets of practices that
included teams as an important element of organizational design tended to excel on
several performance dimensions.” Further, Guzzo & Dickson describe the research of
Levine & D’Andrea Tyson (1990:203), which asserts that “participation usually leads to
small, short-run improvements in performance and sometimes leads to significant, long-
lasting improvements in performance.” Levine & D’Andrea Tyson’s conclusion: High-
level employee participation “is the form most likely to result in significant, long-lasting
increases in productivity, and work teams are the primary means by which [such]
substantive participation is attained” (cited in Guzzo & Dickson, ibid.).

-74-
The Vinokur-Kaplan Study

An examination of this topic would not be complete without a visit with social scientist
Diane Vinokur-Kaplan. Her research on interdisciplinary medical treatment (1995:314)
found that the norm of “‘permission’ to influence other team members” in work planning
and production was the antecedent to two very important variables, group
interdependence and group collaboration. Vinokur-Kaplan found that greater group
interdependence and group collaboration contribute separately to increase
overall performance.

Interdependence describes a team’s ability to depend upon (trust) each other and to do
their work competently—the ability to “appreciate and use the expertise of other[s]”
(Vinokur-Kaplan 1995:312). The researcher finds that the level of interdependence
varies with the supportiveness of the organizational context. Interdependence has its
effect on performance through delivery of work product to specified standards.

Collaboration is a group process that reflects a team’s ability to work together in a

participative fashion, each contributing equally—though differently, as befits their skills
and knowledge—to the group’s work product. Collaboration has both a direct effect
on improved performance measures, as well as an indirect effect on performance
through the variable of group cohesion.

The significant impact of both organizational context and group processes to

performance outcomes prompts Vinokur-Kaplan to state that employees “need more
than didactic training...; they also need to learn productive group strategies ... and
receive organizational support and consultation that facilitate the development and
implementation of the team’s product” (1995:323). She also cites Hackman (1990:9),
who suggests that “those who create and lead work groups might most appropriately
focus their efforts on the creation of conditions that support effective team performance
[as opposed to] attempting to manage group behavior in real time.”

Conclusion

So where does all this scholarly gobbledygook leave us? Essentially, the literature
indicates that teambuilding can definitely help increase groups’ performance. Whether
this effect is sustainable, however, depends on whether the training is backed up by
organizational support. When that’s the case—when teambuilding is one of a number
of elements adopted to improve organizational performance—it can, in fact, greatly
impact the company’s bottom line over the long term.

References Cited

Hackman, J.R. (Ed.). 1990. Groups That Work (and Those That Don’t): Creating Conditions for Effective
Teamwork. San Francisco, CA: Jossey-Bass.

-75-
 Guzzo, Richard A. and Marcus W. Dickson. 1996. “Teams in Organizations: Recent Research on
Performance and Effectiveness.” Annual Review of Psychology, 47:307-338.

Kalleberg, Arne L. and James W. Moody. 1994. “Human Resource Management and Organizational
Performance.” American Behavioral Science, 37:948-962.

Levine, D.I., and L. D’Andrea Tyson. 1990. “Participation, Productivity, and the Firm’s Environment”;. In
Paying for Productivity, ed. A.S. Blinder, pp. 183-237.

Macy, B.A. and H. Izumi. 1993. “Organizational Change, Design, and Work Innovation: A Meta-analysis
of 131 North American Field Studies—1961–1991.” In Research in Organizational Change and
Development, ed. W. Passmore, R. Woodman, 7:235-313. Greenwich, CT: JAI.

Vinokur-Kaplan, Diane. 1995. “Treatment Teams That Work (and Those That Don’t): An Application of
Hackman’s Group Effectiveness Model to Interdisciplinary Teams in Psychiatric Hospitals.” Journal of
Applied Behavioral Science, 31(3):303-327.

Wolfe, Joseph, Donald D. Bowen, and C. Richard Roberts. 1989. “Team-Building Effects on Company
Performance: A Business Game-Based Study.” Simulation and Games, 20(4):388-408.

This article was originally published in the August 2003 Dr. Clue Teambuilding Newsletter.
About the author: Jennifer van Stelle, M.A., has been writing (and participating in) treasure hunts for
over 20 years. In addition to being part of the Dr. Clue creative team, Jen is currently a Ph.D. candidate
at Stanford University in Palo Alto, California, where she studies social networks, the venture capital
industry, regional economies, and organizational sociology. Find some of her work on the web at
http://www.stanford.edu/group/esrg/siliconvalley/home.htm.

-76-

View publication stats