To deal with groups appropriately, managers must have a thorough understanding of the nature of groups in organizations.2 As used in management-related discussions, a group is not simply a gathering of people. Rather, it is “any number of people who (1) interact with one another, (2) are psychologically aware of one another, and (3) perceive themselves to be a group.”3 Groups are characterized by frequent communication among members over time and a small enough size to permit each member to communicate with all other members on a face-to-face basis. As a result of this communication, each group member influences and is influenced by all other group members.

The study of groups should be important to managers because the most common ingredient of all organizations is people, and the most common technique for accomplishing work through people is dividing them into work groups. In a classic article, Cartwright and Lippitt list four additional reasons why managers should study groups:4

1. Groups exist in all kinds of organizations.

2. Groups inevitably form in all facets of organizational existence.

3. Groups can cause either desirable or undesirable consequences within the organization.

4. An understanding of groups can help managers increase the probability that the groups with which they work will cause desirable consequences within the organization.5