LITERATURE REVIEW - Measuring the Effect of Team Characteristics, Team Effectiveness on Organiz

This chapter provided a review of the previous literature relevant to this research.

First, the backgrounds and challenges of Indonesian NGOs would be observed. This was to find the role of teamwork in NGOs. Second, YCAB Foundation was introduced. Third, the idea of team was then elaborated; followed by four main topics of team characteristics, team effectiveness, organizational performance, and organizational survival and competitiveness.

Each of variables mentioned were conceptualized, their dimensions and empirical studies were also reviewed.

Indonesian Non-Governmental Sector: Background and Challenges

NGOs are private, non-profit, professional organizations, with a distinctive legal character, concerned with public welfare goals (Boli & Thomas, 1999). In Indonesia, NGOs have become a sizeable and highly dynamic component of Indonesian society, active participants in almost every social endeavor (Saidi, 2001). However, this does not mean they do not face various challenges. In fact, NGOs face serious problems such as political legitimacy, legal accountability, financial sustainability, and professional competency (Saidi, 2001).

Due to the Asia financial crisis in 1998, NGOs also experience the great impact from it. It is harder for them to receive the aids and also the aids they received are not sustainable.

It is stated by Backwell (2004) in his article that, the process for providing developmental assistance by foreign aids lacks long-term sustainability because funding priorities are not always in accord with local needs and programming cycles. The insecurity of Indonesian NGOs pressures them to become more competitive in the sector. They have to compete with other NGOs to get the trusts from donators.

As a result, to increase their competitive advantage, NGOs have to raise their professional competency, which is a challenge that faced by most NGOs. One way to improve this is through the teamwork. Since NGOs rely heavily on teams to complete their tasks, NGOs have to ensure the teams they have are strong and effective. By increasing reliability and competency, NGOs may be able to secure their foreign assistances and be able to continue with their programs in the long-run.

YCAB Foundation

YCAB Foundation is a local NGO which focuses in the area of youth development. It was established by Veronica Colondam on August 13, 1999. The name of YCAB Foundation is translated to “Loving the Nation’s Children Foundation“. Their slogan is “We enable youth to be independent through educational provisions and welfare creation for a better and sustainable future”.

Basically, YCAB Foundation has three main programs, which usually called three pillars of support, such as:

1. Healthy Lifestyle Promotion (HeLP)

It is the primary prevention of risky behavior including drug abuse and HIV/AIDS through education and the adoption of a positive lifestyle. The program takes form of seminars and workshops to schools and universities, as well as counseling program for youth about drugs and sex.

2. House of Learning and Development (HoLD)

Affordable education for underprivileged and school dropout youths, providing Basic Education, Digital Inclusion, and English Literacy courses. The program takes form of building schools (Rumah Belajar) for underprivileged kids with very cheap school fees, around NTD 30 per month.

3. Hands-on Operation for Entrepreneurship/Economic (HOpE)

Welfare creation to HoLD graduates through seed capital and economic empowerment to low-income women entrepreneurs through microloans.

YCAB Foundation was started off with only six staff members on the payroll and five advisers and a pool of expert volunteers. By 2012, YCAB Foundation has grown with 229 staff members on payroll, not to mention the support they get from more than 3000 young volunteers every year. In terms of the program’s growth, YCAB Foundation has reached out to over than two million youth by 2012. YCAB Foundation also has evolved from being a non-profit organization which supported by donations to becoming a sustainable social enterprise. It invests in its business units and education-linked microloans to cover its operational and administration cost. In early 2013, YCAB Foundation is ranked as number 74 of 100 top NGOs in the world by the Global Journal. It was also granted of UN-ECOSOC Special Consultative Status and has achieved ISO 9001:2008 certification.

YCAB Foundation tries to spread out their influence internationally for the future.

One way is to improve their organizational performance in order to gain more financial support from international company and organizations. Improving team effectiveness is within their agenda for the next five years and many strategies are exercised in order to build their team effectiveness, for example, team building program.

Team

The definition of team was only established by Dyer (1984) who suggested that a team consisted of “two or more people, a common goal, specific role assignment, and interdependence”. Since then, many social scientists followed similar definition. Teams have become a preferred way for employees to take greater initiative and become involved (Ezzamel, Lilley, Wilkinson, & Willmott, 1996). Since people are not working alone, the big tasks are easier to be handled and managed; therefore the pressures for team members also become smaller. The idea leads to explain the strength of working in teams which is employees pull together to achieve organizational goals.

There is another comprehensive definition of the term, team is:

“A collection of individuals who are interdependent in their tasks, who share responsibility for outcomes, who see themselves and who are seen by others as an intact social entity embedded in one or more large social systems ... and who manage their relationships across organizational boundaries (Cohen & Bailey, 1997, p 241).”

From the definitions above, some characteristics of teams are concluded. All of these will be analyzed further as the team characteristics that compose the effective team. They are interdependent which can be identified by the contextual aspect of team, collective work which can be identified by the composition of the team, as well as common goal and shared responsibility which can be identified in the process of the team work.

Team Characteristics Dimensions of Team Characteristics

As team become more popular in 1980s, many researchers have focused to study on documenting value of team for organizations by identifying the structures and conditions that can make team successful and effective. Models that relate about group structure, organizational context, group process, and group effectiveness were developed.

The first and most influential model of team performance was introduced by McGrath (1964). He used an input-process-output model to organize factors he identified from his review of previous studies of work teams (Yeatts & Hyten, 1998). In 1984, Gladstein established the first empirical examinations of SMWT performance. She brought attention to the input and process criteria of the team work for the first time. Pearce and Ravlin (1987), Hackman (1987), Sundstrom, et al. (1990), Tannenbaum, Beard & Salas (1992), Salas, Dickinson, Converse, & Tannenbaum (1992), Campion, et al. (1993), and Cohen (1994) also presented array of theoretical models of SMWT performance.

These models have used different terms and categorized variables into different components, but behind these differences, there is a great deal of consensus on the variables as mentioned above (Goodman, 1986). These models share many similarities. Specifically, the dimensions of variables that are contained within each model overlap significantly. Even though, these models also have differences in how team characteristics and team effectiveness are defined, team composition, team processes, organizational context, and team effectiveness are the primary dimensions shared by the models reviewed. Table 2.1 showed several models in previous studies that allocated these dimensions into their models.

This showed how these models shared the great amount of similarities of team knowledge even though different terms are used to explain the meaning.

13 Table 2.1

Dimensions in Prior Team Effectiveness Models

No Models Year

Organizational Context

Team

Composition Team Process Team Effectiveness

Note. A= Adequate Resources; L= Leadership; CT= Climate of Trust; RS= Reward Systems;

AM= Abilities of Members; P= Personality; AR= Allocating Roles; D= Diversity; CP=

Common Purpose and Specific Goals; TE= Team Efficacy; CL= Conflict Levels; SL= Social Loafing; TP= Team Productivity; MS= Member Satisfaction.

For this study, the concept of team characteristics of effective teams was adopted from the latest model of teamwork mentioned in Organizational Behavior book by Robbins and Judge (2013), in which effective team characteristics are divided into three general categories. They are the contextual factor, team’s composition factor, and process factor.

Below figure summarizes the factors and following discussion will be based on the figure.

Figure 2.1 Team effectiveness model. Adapted from “Organizational Behavior” by S. P.

Context.

Organizational context and resources are considered in the models of team effectiveness. Sundstrom, et al (1990), define organizational context as the "relevant features of the organization external to the work team" (p. 121). Gladstein (1984) refers it as organizational level resources, Hackman (1987) considers it as organizational context, and Shea and Guzzo (1992) refer it as contextual influences.

The variables within context vary from one model to another. Hyatt and Ruddy (1997) described three variables, such as training, managerial support, and organizational support for communications and cooperation between groups, as critical elements of organizational context. Hackman (1998) described four critical organizational variables, as such reward systems, educational systems, information systems, and material resources, such as money, equipment, space, and personnel. Robbins and Judge (2013) model of team effectiveness do not differ far from those two models in terms of context. The elements consist of adequate resources, leadership, climate of trust, performance evaluation and reward systems.

Process

- Common Purpose - Specific Goals - Team Efficacy - Conflict Levels - Social Loafing Composition

- Abilities of Members - Personality

- Allocating Roles - Diversity

- Size of Teams - Member Preferences

Team Effectiveness Context

- Adequate Resources - Leadership

- Climate of Trust

- Performance evaluation and Reward Systems

15 Adequate resources.

Teams are part of organization system. Since, organization has controls over materials and immaterial resources which are required to support and mobilize team (Shea & Guzzo, 1987), it is a common sense that organization support is the most important key for effective team. Hyatt and Ruddy (1997) found that ensuring that teams had access to the necessary material resources was critical to the overall success of the team. In fact, Wheelan (2013) also stated that, organization plays a key role in facilitating or inhibiting the development of high performance of teams. This role is very important but usually receives little attention from the organization. The reason is simple: it is easier to only focus on results of the team rather than to address organizational problems that inhibiting the team’s performance. Robbins and Judge (2013) also agreed that a scarcity of resources can directly reduce the ability of a team to perform job effectively and achieve the goals. Every team relies on organization to sustain it. Therefore, in order to have effective teams, organization members, especially in upper management, have to fully support and encourage the team (Wheelan, 2013; Sundstrom et al., 1990). This support includes timely information, proper equipment, adequate staffing, encouragement, and administrative assistance (Robbins & Judge, 2013).

Leadership.

Leadership is a process in which an individual influences the progress of other group members towards the attainment of a goal (Levi, 2001). There are many ways for a team to assign leadership roles. Organization can assign the leader itself, or the leadership roles can be distributed among the team members. There is no definitive answer for which one is the best leadership style. It is depends on the readiness level of the team. However, in effective teams, leaders have to empower teams by delegating responsibility to them. In here, leaders play the role of facilitator to make sure the teams work together rather than against one another (Robbins & Judge, 2013). The idea is supported by Wheelan (2013) who stated that the leader’s role must become less directive and more consultative. By becoming facilitator, leader can help teams to focus on the task at hand, point out team process issues that may impede progress and, in general, keep things moving forward toward the desired goal.

Therefore, leaders as facilitators is often an effective way for organizations to improve the internal functioning and performance outcomes teams as mentioned by Schwartz (1994). In short, Hersey and Blanchard (1993) stated that the ability and motivational levels of a group are the key determinants of group effectiveness.

16 Climate of trust.

In most definitions, trust is related to specific individual attributions regarding some other people’s intentions and reasons of their particular behavior. These attributions are developed by general beliefs and expectations of individuals about the treatment they will receive from others (Mayer, Davis & Schoorman, 1995). These are closely linked to the engagement, or the willingness to engage in cooperative behaviors when interacting with others (Costa, 2003). In the relations with teams, trust is the expression of confidence in the relationship, which is the confidence one has that other team members will honor their commitments (Thompson, 2000). In fact, the most effective teams trust each other and also they trust their leaders (Robbins & Judge, 2013). He further stated that interpersonal trust among team members is the foundation of cooperation, reduces the need to monitor each other’s behavior, and bound members around the belief that others will not take advantage of them. If the team members trust each other, then they will be willing to open up and state their viewpoints and feelings about team’s issues. Team members are also more likely to take risks and expose vulnerabilities when they trust each other. In other hand, the absence of trust can destroy the ability of team to operate which resulted in decreased communication, less cooperation, and more conflicts (Levi, 2001). Then it is concluded that trust among team members and team leaders are the foundation of the team to work together and achieve the team’s goal.

Performance evaluation and reward systems.

Organization’s reward system is an important way in which to encourage a team to improve how it operates. Janz, Colquitt, and Noe (1997) hypothesized that, for knowledge workers, the need for frequent feedback is especially critical. They found that frequent feedback was able to compensate for poor team processes and could lead to improved team effectiveness. It is stated by Robbins and Judge (2013) that, group-based appraisals, profit sharing, gain sharing, small-group incentives, and other system modifications can reinforce team effort and commitment. Rewarding teamwork is important because rewards have the potential to influence the motivation of individual team members, the amount of interdependence and coordination within the team, and the quality of the group process (Levi, 2001). All of these factors affect team effectiveness. Van Aken and Kleiner (1997) also found that group-level recognition and reward systems are related at a team level to performance.

Because of this more organizations began to use some type of team-based pay plan (DeMatteo, Eby & Sundstrom, 1998). However, there are some disadvantages too in using

team rewards. There is a fact that people behavior is more sensitive to individual rewards rather than group rewards. It may reduce people’s motivation if the reward system is not perceived as fair (Levi, 2001). Fairness problems can arise from social loafing. This of course can reduce the expected motivating impact for team rewards. Therefore Robbins and Judge suggested that organization should reflect on team performance and focus on hybrid systems that recognize individual members for their exceptional contributions and reward the entire group for positive outcomes. However, it is no doubt that performance evaluation and rewards system can be affect the team effectiveness.

Composition.

The composition of the team is a consensus in all the models of team effectiveness.

Gladstein (1984) and Shea and Guzzo (1992) refers it directly as group composition, and Hackman (1987) refers it under group design. Hackman (1990) defined composition with two variables which are group composition and amount of knowledge and skill. Gladstein (1984) described four variables such as adequate skills, heterogeneity, organizational and job tenure, and size. Sundstrom, et al (1990) described it as roles. In here, team composition mainly consists of abilities and personality of members, allocating roles, diversity, size of teams, member flexibility, as well as member preferences. However, the last two factors will not be included as variables to be measured in this research. It will be explained further in the following.

Abilities of team members.

Robbins and Judge (2013) mentioned that part of a team’s performance depends on knowledge, skills and abilities (KSAs) of its individual members. Stewart, Manz, and Sims (1999) agreed that team members cannot provide task and social inputs unless they have the necessary KSAs. In fact, KSAs and experience that team members bring to the task help define the maximum level of team performance (Steiner, 1972). The collective knowledge and skills of a team will impact the team’s ability to carry out its task (Martins, Gilson, &

Maynard, 2004). Robbins and Judge (2013) added that it is true that a team’s performance is not merely the summation of its individual members’ capabilities. However, the abilities they possess set limits on what they can do and how effectively they can perform on a team. He also stated that research found that high-ability teams can do better than lower-ability teams, especially when the workload distributed evenly. High-ability teams are also more adaptable to changing situations, as they can more effectively apply existing knowledge to new

problems. There are ways to obtain or improve member’s capability, either through effective selection or training and development (Stewart et al., 1999). Many times it is easier to select members who already possess the capability rather than try to train them once they are in the team. However, in this era of fast changing globalization, organization has to be aware to keep their team members’ capability advanced. Tziner and Eden (1985) found that increase in both ability and motivation of the individuals significantly improved their performance.

Therefore, it is concluded that individual KSAs and experience are undoubtedly important to the team success and team performance.

Personality of team members.

As every individual team member bring various attitudes, personality characteristics, traits, and mental models to the team (Fleishman & Zaccaro, 1992), it is necessary to put personality as one important factor to study as effective team characteristics. It is stated that one way to increase the likelihood of team effectiveness is to make sure that all team members have group-facilitating personality traits such as agreeableness and emotional stability. Robbins and Judge (2013) confirmed that teams whose ratings are higher in level of conscientiousness and openness to experience tend to perform better. This is because conscientious people are good at backing up other team members. According to Driskell, Hogan, and Salas (1987), personality variables such as sociability, adjustment, and likability may be related to team performance. Moreover, some personal characteristics such as conflict resolution, collaborative problem solving, and communication skills (Stewart et al., 1999;

Wheelan, 2013) are also necessary for the effectiveness of the team. By assigning each member roles compatible with their personalities and skills, it can ensure the right level of expertise and experience (Yeh, Smith, Jennings, & Castro, 2006). According to Belbin (1981), by integrating a spread of personalities helps to build foundation for bridging different team role capabilities and improves the tendency for high performance (Partington

& Harris, 1999).

19 Allocation of roles.

Every member of the team has a role to play within the team. This is to ensure there is no overlapping job and duty. Belbin (1981) has the opinion that team roles can clarify the team members’ individual responsibilities and highlight the common goals and purposes of

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