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Developing Effective Self-Managing Work Teams in Service Organizations

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Submitted By nformal99
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A large body of research has emerged on the effective implementation of self-managing work teams (SMWTs). However, virtually all of the research has been conducted in manufacturing settings. This article draws upon the authors’ research on SMWTs in two service organizations: an insurance operation and a telecommunications company. The authors focused on two research questions: First, they examined the relationships among different dimensions of
SMWT effectiveness. Second, the authors explored the key success factors for SMWTs in a service context. They found that the different dimensions of SMWTs’effectiveness do not reinforce one another and are largely unrelated, and that creating an employee involvement (EI) context, work design, and team characteristics were important predictors of SMWT effectiveness. Surprisingly, team leadership was not important for SMWT effectiveness; in fact, sometimes, team leadership was negatively related to effectiveness.
Self-managing work teams (SMWTs) are groups of interdependent individuals that can self-regulate their behavior on relatively whole tasks (Goodman,
Devadas, & Hughson, 1988). The adoption of SMWTs has soared as companies respond to competitive challenges in the current business environment.
Organizations are replacing whole layers of management, with
SMWTs implemented as a substitute for hierarchy. The Center for Effective
Organization’s study of Fortune 1000 companies found that 27% of firms in
1987, 47% in 1990, and 69% in 1993 used SMWTs with at least some percentage of their employees. Most organizations which use SMWTs report them to be successful and plan to expand their use in the coming years
(Lawler, Mohrman, & Ledford, 1995).
Many books and articles have been written recently about SMWTs (e.g.,
Fisher, 1994; Manz & Sims, 1989; Wellins, Byham, & Wilson, 1991), focusing on a number of subjects, including how SMWTs should be implemented, how tasks for SMWTs should be designed, how SMWTs can develop effective group processes, how the supervisory role must change, and what the organization needs to do to support teams. While our knowledge base on
SMWTs is expanding, the evidence overwhelmingly comes from manufacturing settings (for exceptions, see Batt & Appelbaum, 1995; Hackman,
1990; Wageman, 1997). Manufacturing firms eager for productivity improvements and cost control have championed the implementation of
SMWTs. Yet, we do not have a clear idea about the extent to which these prescriptions are generalizable to SMWTs in a service context.
However, an increasing number of service firms have adopted SMWTs as well. Unpublished data from the Fortune 1000 study indicate that 52% of service firms used SMWTs in 1993, up from 22% in 1987. To learn more about SMWT effectiveness in service contexts, we studied SMWTs in two service organizations: Aid Association for Lutherans (AAL), a fraternal benefits society that operates a large insurance business, and Pacific Telesis
(PacBell), a large telecommunications company.
TWO RESEARCH QUESTIONS
We sought answers to the following two research questions: (a) Do the dimensions of SMWT effectiveness reinforce one another? (b) What are the key success factors for SMWT effectiveness in a service context? We outline the logic underlying these two research questions in the following paragraphs. RELATIONSHIPS AMONG
DIMENSIONS OF SMWT EFFECTIVENESS
Most organizations recognize, at least implicitly, the multidimensional nature of effectiveness (Cameron, 1986). The dimensions of effectiveness are often defined in terms of three sets of stakeholders: owners, customers, and employees. Financial performance metrics are most relevant to owners. From an owner perspective, SMWTs can reduce the need for hierarchy and supervision, thus reducing labor costs. SMWTs can also boost performance through better problem solving and more integrated working relationships.

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