Why Does 1 Management Team Work And Another Clash? Some Answers

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It's no secret that a solid, productive management team can have a profound effect upon a credit union's bottom line. But what is it that makes some management teams successful, while others fail? That question is at the heart of new research from the Filene Research Institute here that explored the working of management teams. Filene said it asked research groups from the University of Iowa and the University of Notre Dame to examine the structures inherent in teams and provide information on how these teams can achieve optimum performance.

The resulting study, authored by Murray Barrick and Amy Kristof-Brown, both professors at the University of Iowa, and Amy Colber, a professor at the University of Notre Dame, is entitled "Enhancing the Performance of Senior Credit Union Management Teams." The study measured four group processes within these teams: communication, personal conflict, task conflict, and cohesion.

Filene said other questions measured the degree of interdependence within the team and the extent to which the team is mutually accountable for organizational goals. The most commonly cited goal of CEO's in the group is return on assets, which was used as a measure of organizational performance.

Barrick found that "true teams" are highly interdependent, while teams whose members are accountable more for individual goals are more accurately referred to as "working groups."

"For highly interdependent or true teams, enhanced communication and cohesion are the most important processes to improve team performance," the authors stated. "True teams with high levels of communication have performance scores 23% higher than those with low levels of communication."

The study found that for teams with low levels of interdependence, or "working groups," cohesion is the most important influence on group performance, with communication a close second. Highly cohesive working groups have performance scores 12% higher than working groups with low cohesion, the authors said.

The study also found that while more communication, greater cohesion, and less personal conflict lead to higher team scores, they do not necessarily mean higher organizational performance, using ROA as a measure. The outcome depends on the degree of team interdependence.

Highly interdependent teams with high levels of communication have a 59% higher ROA than those with low levels of communication, and those with high levels of cohesion have 65% higher ROA than those with low cohesion, the study concluded. In working groups, or teams with low interdependence, the influences of team dynamics are reversed. For example, working groups with low levels of communication have 27% higher ROA than those with high levels of communication.

Basis For Survey

Survey data for the study comes from 94 credit unions who participated in the study. A total of 517 executives returned surveys. The average senior management team had 6.4 members including the CEO, and an average of 5.5 responded for a response rate of 86%.

"In a nutshell this research advises credit union management teams to be yourself," says George Hofheimer, Filene's Director of Research. "Both true teams and working groups perform best when they follow their natural organizational dynamics. Teams with low levels of interdependence, for example, should not dwell on increasing communications, building cohesion, or reducing conflict. These team building activities take time and resources which could be spent more effectively working on individual goals. This research illustrates organizational success depends, in part, on matching group processes to the executive team's level of interdependence."

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