MBA 540 Discussion 16
Running head: ANALYZING MANAGERIAL DECISIONS
Analyzing Managerial Decisions: Why Teams Fail
MBA 540
June 29, 2014
Dr. Patrick Murphy
Analyzing Managerial Decisions: Why Teams Fail
In some way or another, all firms use teams in order to complete tasks that need collaboration between individuals. Brickley, Smith & Zimmerman (2009), note that “teams are formed because they are more successful at assembling specialized knowledge for decision making than are alternative methods that might be used to pass the knowledge through the traditional hierarchy” (p.504). While working in teams can be a great way to get tasks and goals completed more efficiently, if not managed correctly, teams can become dysfunctional. Some of the main reasons that teams fail is due to misaligned reward and performance evaluation systems, lack of setting performance benchmarks or setting erroneous performance benchmarks, and poor performance evaluation systems.
One of the main reasons why teams fail is because there are misalignments between the reward and performance evaluation systems, and also the decision making process. Brickley, Smith & Zimmerman (2009), note that “team production effects make evaluating the performance of individual team members quite complicated” (p.506). When firms fail to align their performance evaluation systems with the rewards structure, teams can become dysfunctional. For example, a team may be paid 100 per cent of their bonus based on the total number of units of a particular product that the team, as a whole, produces. While this is a typical structure in many firms, if a firm fails to align the performance evaluation system with the rewards system, several issues such as free-rider problems can arise.
The second reason why teams may fail in an organization is because of the lack of setting performance benchmarks or setting erroneous performance benchmarks. If teams and individuals do not have a performance
Analyzing Managerial Decisions: Why Teams Fail
MBA 540
June 29, 2014
Dr. Patrick Murphy
Analyzing Managerial Decisions: Why Teams Fail
In some way or another, all firms use teams in order to complete tasks that need collaboration between individuals. Brickley, Smith & Zimmerman (2009), note that “teams are formed because they are more successful at assembling specialized knowledge for decision making than are alternative methods that might be used to pass the knowledge through the traditional hierarchy” (p.504). While working in teams can be a great way to get tasks and goals completed more efficiently, if not managed correctly, teams can become dysfunctional. Some of the main reasons that teams fail is due to misaligned reward and performance evaluation systems, lack of setting performance benchmarks or setting erroneous performance benchmarks, and poor performance evaluation systems.
One of the main reasons why teams fail is because there are misalignments between the reward and performance evaluation systems, and also the decision making process. Brickley, Smith & Zimmerman (2009), note that “team production effects make evaluating the performance of individual team members quite complicated” (p.506). When firms fail to align their performance evaluation systems with the rewards structure, teams can become dysfunctional. For example, a team may be paid 100 per cent of their bonus based on the total number of units of a particular product that the team, as a whole, produces. While this is a typical structure in many firms, if a firm fails to align the performance evaluation system with the rewards system, several issues such as free-rider problems can arise.
The second reason why teams may fail in an organization is because of the lack of setting performance benchmarks or setting erroneous performance benchmarks. If teams and individuals do not have a performance