Coordination in Teams: Evidence from a Simulated Management Game

Most research examining the influence of coordination on team performance has not distinguished between coordinating (the processes by which teams attempt to manage interdependencies among individuals) and the resultant state of coordination (the degree to which interdependencies are managed well). Similarly, most research has not distinguished between the state of coordination and the performance outcomes that are often influenced by coordination. We demonstrate the usefulness of these distinctions in a study of 50 teams engaged in a realistic 14-week management simulation. Results using a panel design show that two processes for coordinating (use of shared cognition about the distribution of expertise within the team, and working together for a longer time period) improved coordination. Shared cognition seemed to compensate for low levels of communication and lack of working together. The resulting coordination, in turn, directly influenced teams’ financial performance and external evaluations. All effects of the coordination processes, however, were indirect, and operated by helping the teams achieve a more coordinated state. Coordination in teams Page 3 Coordination in Teams: Evidence from Simulated Management Teams Groups are inherently different from individuals performing similar tasks because group members need to coordinate. Whenever the work of individuals is interdependent, they must manage these interdependencies to achieve success (Van de Ven et al., 1976). Malone and Crowston (1994) defined the process of coordination as the extra work individuals must complete when working in concert to accomplish some goal, over and above what they would need to do to accomplish the goal individually. To work together effectively, team members must coordinate their efforts in both broad and detailed ways. At the broad level, for example, a group developing a new product rollout must align goals. If the marketing manager is positioning a product as a prestige item, the engineering manager cannot skimp on quality. At a more detailed level, the team must assign tasks to the people most capable of doing them, hand off work products when others need them, and build components so that they interoperate, for example. Although coordination has long been assumed by group and organizational scholars to be a component of group effectiveness, as Argote and McGrath (1993) note, there has been little systematic research examining the methods teams use to achieve coordination or the effects of coordination on performance. Recent research has started to fill this gap (Gittell, 2001, 2002; Hoegl & Gemuenden, 2001; Lewis, 2003), but this work has not clearly distinguished between two distinct aspects of coordination—the processes teams use to become coordinated and the resultant state of coordination. In addition, some work has failed to distinguish these two dimensions of coordination from the effects that the state of coordination has on team Coordination in Teams Page 4 performance and cohesion. This confusion may arise from the simple fact that the noun “coordination” is used in the vernacular to mean both “the act or action of coordinating” and “the harmonious function of parts for effective results” (Merriam-Webster Online, 2005), which often leads to misinterpretation in both reading and writing research about coordination. These distinctions are important from a managerial point of view, because coordination processes are the levers teams can directly and indirectly manipulate in their attempts to improve coordination. Because coordination processes can be costly, teams should invest in them only if the resulting coordination results in higher performance. For example, in the management simulation we describe below, most teams met three to six hours per week to exchange analyses individual workers had conducted, plan work for the upcoming week, and set broad directions. These lengthy group meetings took time away from individuals’ analyses and writing, but the teams invested in them because they believed that they needed the resulting coordination to have coherent plans and presentations. If managers and organizational scholars do not distinguish among coordination processes, coordination as a state, and the production outcomes, they cannot make informed judgments about the types of investments that are valuable in setting up workgroups nor trace the mechanisms through which managerial decisions have their impact on production. In this paper we attempt to clarify these distinctions, both conceptually and through confirmatory factor analyses. We then empirically examine several processes that teams in a managerial simulation used to achieve the state of coordination, concentrating on team communication, shared cognition, and tradeoffs between them. We show empirically that coordination as a state directly influences teams’ performance outcomes and that shared cognition can substitute for communication and experience working together in achieving Coordination in Teams Page 5 successful coordination. Distinguishing coordination as a process, coordination as a state, and performance outcomes Coordination as a process When individuals are working together in a group, certain tasks can be carried out independently and therefore don’t need to be coordinated with those performed by other members. Other tasks are interdependent with the activities of other members, so teams must employ various coordination processes to manage these interdependencies (Malone et al., 1999). Managers and self-managed groups can avail themselves of a wide range of coordination processes when trying to manage interdependencies. Some, like the use of configuration management systems in software engineering or the employment of assembly lines in automotive manufacturing, are highly industryand task-specific. Others, like communication and use of shared cognition, are quite general and can potentially be applied to many different types of groups performing different tasks. In this paper, we emphasize communication and shared cognition because of their generality. All teams use them in varying degrees to coordinate. In terms of March and Simon’s classic distinction between mechanistic coordinating through planning and organic coordinating through mutual adjustment, unstructured interpersonal communication is an example of an organic coordination process (March & Simon, 1958). Individuals exchange information about their current states and adjust their behavior to others’ goals and actions (Thompson, 1967). When a bicyclist extends an arm to signal a left turn and catches a motorist’s eye to insure the signal was understood, they are coordinating through interpersonal communication. Groups can directly control how much they use Coordination in Teams Page 6 interpersonal communication as a coordination process. To increase interpersonal communication, they can schedule regular group meetings, locate team members in the same area to foster ad hoc meetings, and invest in telecommunication technology for communication at a distance (Olson & Olson, 2000). In contrast, shared cognition is on the mechanistic end of the March and Simon continuum. Shared cognition is a belief held in common among members of a team about how each will behave. Like standard operating procedures and other pre-formed courses of action, shared cognition is a mechanism that allows members of a group to coordinate without explicit communication. Shared cognition is regularly used to coordinate in daily life. For example, motorists can move smoothly through an intersection with four-way stop signs if they all defer to the motorist on their right and believe that the others will do so as well. Similarly, visitors to Grand Central Station in New York can rendezvous with friends at the Biltmore clock without making explicit plans, if they believe the clock is a sensible landmark for meeting and think that their friends will believe this as well. Managers cannot mandate shared cognition in the same way that they can schedule group meetings. They can, however, make decisions to increase the likelihood that shared cognition will be available in a group, or to increase the degree to which it will develop. For example, they can select members with a common background (O'Leary et al., 2002; Ouchi, 1980), adopt personnel policies that discourage turnover (Katz, 1982), or invest in training regimes designed to foster common views, such as group training (Moreland et al., 1998) or cross-training (Volpe et al., 1996). Coordination as a state Although managers have some control over the coordination processes used in their organizations, they have less control over the resultant state of coordination—that is, the extent Coordination in Teams Page 7 to which members in their organization have successfully managed interdependencies. Coordination can be more or less successfully achieved. For example, in concurrent development projects, failures of coordination can consume up to 50% of the engineering capacity and up to one-third of the development budget (Terwiesch et al., 2002). One can think of coordination in this sense as an index of group efficiency. When coordination is high, a unit of individual work translates into more or better team output. In contrast, when coordination is low, the same quality and quantity of individual work results in less or poorer group output, because of what Steiner (1972) terms process losses. Failures of coordination are characterized by redundant work, delays in production, and incompatibilities between intermediate outputs that will need to be redone before they can be integrated. Research from the classic contingency theory tradition in organizational behavior demonstrates that identical coordination mechanisms can have different consequences depending upon the uncertainty of the task to which they are applied (Katz & Tushman, 1979). Although most of the early conti