Measuring the Effect of Team Characteristics, Team Effectiveness on Organizational Performance, Organizational Survival and Competitiveness of an Indonesian NGO, Yayasan Cinta Anak Bangsa

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(1)Measuring the Effect of Team Characteristics, Team Effectiveness on Organizational Performance, Organizational Survival and Competitiveness of an Indonesian NGO, Yayasan Cinta Anak Bangsa. by Dian Utami Putri. A Thesis Submitted to the Graduate Faculty in Partial Fulfilment of the Requirement for the Degree of. MASTER OF BUSINESS ADMINISTRATION Major: International Human Resource Development. Advisor: Cheng-Ping Shih, Ph. D.. National Taiwan Normal University Taipei, Taiwan January, 2014.

(2) ACKNOWLEDGEMENT Praise the Lord for His Almighty’s blessings and love. Thank you so much God for giving the unforgettable moments and lessons in every pace during the completion of this thesis. This thesis has been a wonderful experience and a good teacher for the hard work, dedication, endurance, and perseverance. Without the blessings from God and guidance, assistance and prayers from various parties, this thesis would not be able to be completed in time. Thus using this opportunity to express the greatest gratitude to all parties who were involved in the completion of this final project, to name them: 1) Dr. Tony Cheng-Ping Shih as the most encouraging advisor and inspiring life-teacher. It is been a real fortunate and an honor to have him as my advisor. ‘Thank you’ will not be enough to express my gratitude towards him. I really appreciate and my warmest thanks to you sir! 2) Dr. Vera Chang, Dr. Pai-Po Lee, Dr. Steven Lai, thank you very much for the helpful suggestions and supports for the completion of this thesis. 3) Dr. Jane Lin, Dr. Rosa Yeh, Dr. Ted Tsai, thank you very much for your instructions during my study at National Taiwan Normal University. 4) My parents and family who always been supportive in every single pace of my life. Thank you so much! I love you. 5) My two best friends, Agnes Natalia and Ines Kusumawardini, thank you for everything. Love you! 6) My compatriots, Linh, Mother Ampi, Louis, who had been doing thesis together, thank you for your help and total support. Wish you the best for your future endeavors! 7) All of my friends who supported me during my work. I will go crazy without you guys. Thank you..

(3) ABSTRACT Teamwork was already presented since the beginning of human history and will continue to be the essence of human living and development. Pressure of global competition, the need to align business models with complex environments and the urgency in continuous innovation have led to the critical use of teams as a key element of organizational design. In the context of NGOs, many have exercised teams as their central management to carry out projects. However, since the Asia financial crisis occurred in 1998, the competition to attract donators becomes heightened among NGOs. Many donators inquire the organizational performance as part of the requirement, which consequently determine their survival. One way to improve NGOs’ competitive advantage is none other than to enhance their teamwork performance. The purpose of this research is to explore the relations between team characteristics, team effectiveness, organizational performance, and organizational survival and competitiveness in the NGOs context. A Team Effectiveness, Organizational Performance, Organizational Survival and Competitiveness (TEPS) Model developed by Shih and Putri, was analyzed by using Partial Least Squares (PLS) method. 152 samples were obtained in an Indonesian NGO, Yayasan Cinta Anak Bangsa (YCAB Foundation) for this study. The result indicated that team characteristics indeed had a positive and significant effect towards team effectiveness; in which team effectiveness also had positive and significant effect towards innovation, customer’s satisfaction, and financial performance, as well as organizational survival and competitiveness of YCAB. Practical implications and suggestions were also proposed in order to improve the teamwork performance in YCAB Foundation. Keywords: team characteristics, team effectiveness, organizational performance, organizational survival and competitiveness, Indonesian NGO. I.

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(5) TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT……………………………………………………………………………….. I TABLE OF CONTENTS………………………………………………………………...... III LIST OF TABLES ……………………………………………………………………........ V LIST OF FIGURES …………………………………………………………….…………. VII CHAPTER I INTRODUCTION……………………………………………………........... 1 Background of the Study…………………………………………………………... 1 Purposes of the Study……………………………………………………………… 3 Significance of the Study………………………..………………………………… 4 Delimitations and Limitations………………………………………………………5 Definition of Key Terms…………………………………………………………… 6 CHAPTER II LITERATURE REVIEW………………………………………………….. 9 Indonesian Non Governmental Sector: Background and Challenges …………….. 9 YCAB Foundation………………………………………………………………..... 10 Team ………………………………………………………………………………. 11 Team Characteristics …………………………………………………………….... 12 Team Effectiveness ……………………………………………………………..… 25 Organizational Performance …………………………………………………….... 26 Organizational Survival and Competitiveness…………………………………..… 29 CHAPTER III METHODOLOGY.…………………………………………………….…. 31 Research Framework …………………………………………………………...…. 31 Research Procedure ……………………………………………………………..… 32 Data Collection Method….. ………………………………………………………. 33 Instrumentation …………………………………………………………………..... 34 Data Analysis Method...........…………………………………………………….... 37 CHAPTER IV DESCRIPTIVE STATISTICS AND PILOT STUDY FINDINGS…….….41 Sample Characteristics……………………………………………………………... 41 Descriptive Statistics Analysis…………………………………………………….. 42 Pilot Study…………………………………………………………………………. 47. III.

(6) CHAPTER V MAIN STUDY FINDINGS…….………………………………………….. 57 Correlations Analysis …………………………………………………………..…. 57 Validity and Reliability Analysis………………………………….…………….… 59 Partial Least Square (PLS) Analysis………………………………………………. 60 CHAPTER VI CONCLUSION AND RECOMMENDATIONS…………………………. 73 Research Conclusion………………………………………………………………. 73 Recommendations for YCAB Foundation…………………………………………. 76 Recommendations for Future Research …………………………………………… 78 REFERENCES ……………………………………………………………………………. 81 APPENDIX A: QUESTIONNAIRE ITEMS SOURCES…………………………………. 89 APPENDIX B: QUESTIONNAIRE (ENGLISH)…………………………......................... 95 APPENDIX C: QUESTIONNAIRE (INDONESIAN)…………………………….……… 101 APPENDIX D: CODING………………………………………………………….………. 107 APPENDIX E: PLS RESULTS……………………………………………………………. 111. IV.

(7) LIST OF TABLES. Table 2.1 Dimensions in Prior Team Effectiveness Models………………………………..13 Table 2.2 Empirical Studies of Team Characteristics to Team Effectiveness…………….. 24 Table 3.1 Reliability of Instrument……………………………………………………..…. 35 Table 3.2 Validity of Instrument …………………………………………………………... 35 Table 4.1 Sample Characteristics Based on Demographic Variables (N=152)……….…… 42 Table 4.2 Team Characteristics - Context by Mean and Standard Deviation ……………... 43 Table 4.3 Team Characteristics - Composition by Mean and Standard Deviation………... 44 Table 4.4 Team Characteristics - Process by Mean and Standard Deviation………............ 44 Table 4.5 Team Effectiveness by Mean and Standard Deviation………………………….. 45 Table 4.6 Organizational Performance by Mean and Standard Deviation………….……... 46 Table 4.7 Organizational Survival and Competitiveness by Mean and Standard Deviation…………………………………………………………………….…. 46 Table 4.8 KMO and Bartlett’s Test of Sphericity Values (Pilot Test-Before)…………….. 48 Table 4.9 KMO and Bartlett’s Test of Sphericity Values (Pilot Test-After)………………. 48 Table 4.10 EFA: Factor Loadings (Pilot Test, N=32)…………………………….…..…… 49 Table 4.11 Reliability Test (Pilot Test, N=32)…………………...…………………….….. 51 Table 4.12 Reasons for Dropping Items…………………………………………………… 52 Table 4.13 PLS Path Analysis Result (Pilot Study, N=32)………………………………... 54 Table 4.14 PLS Loadings (Pilot Study, N=32)………………………………………..…… 54 Table 5.1 Correlation Analysis (Main Study, N=152)……………………………………... 58 Table 5.2 KMO and Bartlett’s Test of Sphericity Values (Main Study N=152)…………... 59 Table 5.3 Reliability Test (Main Study N=152)………………………………………...…. 59 Table 5.4 Measurement Model Results (Main Study N=152)……………………………... 61 Table 5.5 PLS Loadings (Main Study, N=152)…………………………………………..... 61 Table 5.6 PLS Path Analysis Results (Main Study N=15)……………………………..…. 62 Table 5.7 Research Hypotheses Results…………………………………………………… 64 Table 5.8 PLS Path Analysis Result (Inside Jakarta, N=111)……………………………... 66 Table 5.9 PLS Loadings (Inside Jakarta, N=111)………………………………………….. 66 Table 5.10 PLS Path Analysis Result (Outside Jakarta, N=41)…………………………… 68 Table 5.11 PLS Loadings (Outside Jakarta, N=41)……………………………................... 68. V.

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(9) LIST OF FIGURES Figure 2.1 Team effectiveness model…………………………..…………………….……. 14 Figure 2.2 Survival and competitiveness model……………………………………..…….. 29 Figure 3.1 TEPS model……………………………………………………………………. 31 Figure 3.2 Research process…………………………………………………………….…. 32 Figure 4.1 PLS structural model (pilot study, N=32)…………………………………..….. 55 Figure 5.1 PLS structural model (main study, N=152)……………………………………. 63 Figure 5.2 PLS structural model (inside Jakarta, N=111)……………………………...….. 67 Figure 5.3 PLS structural model (outside Jakarta, N=41)………………………………..... 69. VII.

(10) It’s easy to get good players. Getting them to play together – that’s the hard part. Casey Stengel.

(11) CHAPTER I INTRODUCTION This chapter offered an insight of the research groundwork which included six sections. In the beginning, the research background, purposes, questions, as well as research significance were elaborated. It was then followed by listing the delimitations and limitations of the research, along with definitions key terms. All of these were to provide a comprehensive focal point of the entire research.. Background of the Study Teamwork was already presented since the beginning of human history and will continue to be the essence of human living and development. People have been working together to achieve a common goal. According to Forsyth (1990), there are reasons why people form a team. First, it is for a functional perspective which suggests that people join team because teams are able to accomplish things that individuals cannot complete when they work alone. The second is more interpersonal in nature that by joining teams, it helps people to fulfill social needs. In the 20th century when the industrial revolution was begun to give impacts in workplace, a traditional approach called scientific management was used to organize people to perform tasks (Yeatts & Hyten, 1998). The task was then divided into small activity units and performed by individuals who worked separately to complete entire task, which in recent years, we called this activity as group work. By focusing on productivity while ignoring the quality and customer service concern, scientific management indeed had resulted in efficiently producing standardized products in mass amount, which was the goal of the organizations of that time. However, the shortcoming of the management was the group work could neither quickly adapt to changes in the environment nor satisfy many of social needs of workers. As a result of globalization, advance in technology and education, organizational management and system had to be shifted accordingly. They have certainly changed the characteristics of people and jobs (Levi, 2001). As people demanded more meaningful work, and jobs became more complex and interdependent, these made organizations to realize that they needed to be more flexible. A new system was developed along that corner, where selfmanaged work teams (SMWT) were introduced in order to respond to those emerging needs. A SMWT is a group of employees who are responsible for managing and performing technical tasks that result in a product or service being delivered to an internal and external 1.

(12) customer (Yeatts & Hyten, 1998). Unlike the group work in which all of those responsibilities are reserved for higher-level manager, the member of teams are typically manage themselves, assign jobs, plan and schedule work, make decisions, and take actions on problems (Wellins, Wilson, Katz, Laughlin, Day, & Price, 1990). SMWTs were so popular among the United States private sectors in the late 20th century. The use of teams among US companies had expanded rapidly as studies suggested that 85% of companies with 100 or more employees used some type of work teams (Cohen & Bailey, 1997). Moreover, some companies were using teams as a central system in order to integrate various parts of the organizations (Mohrman, Cohen, & Mohrman, 1995). Companies have stated that they use work teams in order to improve productivity, quality, morale, and to reduce costs (Cotton, Vollrath, Froggatt, Lengnick-Hall, & Jennings, 1988; Lawler, 1986; Lawler, Mohrman, & Ledford, 1992; Macy, Peterson, & Norton, 1989; Wellins, Byham, & Dixon, 1994). Prior statistical academic researches were also conducted to find out the relations of teamwork on performance. Researches have shown that there was a strong link between teamwork and job satisfaction (Cohen & Ledford, 1994; Wall, Kemp, Jackson, & Clegg, 1986) and organizational commitment (Corderey, Mueller, & Smith, 1991; Pearson, 1992). These reasons support the reasoning before that indeed team have brought the tasks to new level and fulfilled the social needs of people. Today, SMWT is also popular not only in United States but have already become a common system used by organizations all over the world, either profit companies or nonprofit organizations. This is because the pressure of global competition, the need to align business models with complex environments, and the urgency in continuous innovation have led to the critical use of teams as a key element of basic organizational design (Kozlowski & Bell, 2003). There are many leading companies across industries that have shown a remarkable achievement for the use of work teams. For example, Motorola, Southwest Airlines, Timberland, Levi’s, Google, P&G, GE, Ford, AT&T, Federal Express, W.L. Gore & Associates, Johnson & Johnson, 3M, Apple, and many others. By this, it is can be concluded how teamwork becomes so important over the years and the popularity of teamwork is still rising as the foundation of the organization system. In the context of NGOs, many have exercised teams as their central management to carry out projects. Some NGOs that have been employing teamwork as the fundamental of the organization’s system and process are Greenpeace, World Wide Fund, Tzu-Chi Foundation, Yayasan Cinta Anak Bangsa (YCAB Foundation), etc. However, even though mentioned above all the advantages of teamwork, not all teams are effective. Less constraints 2.

(13) and pressures compared to the profit organizations, NGOs usually lack of team management therefore unable to fully utilize the teams’ capabilities. Since the Asia economic crisis in 1998, many private companies became extra conscious of their financial, cutting down those extra budgets especially for charity and donors. Many NGOs were affected by this since their finance was depended on the donations. NGOs were competing with each other in order to win the aids from limited donators. These challenges forced the non-governmental sector to improve their competitive advantage. NGOs need to change and adopt the private sector’s management in order to develop their competitive advantage and to secure their survivals. One way is to increase the effectiveness of their teams. By having effective teams, NGOs can show remarkable assets, capabilities and achievement which are parts of the requirements for donators to make contribution in those NGOs. Further studies about teamwork in NGOs are then necessary to provide investigation for significant factors that influence their organizational performance and survival. YCAB Foundation realized the effectiveness of their teams as the big issue for their survival and has agreed to participate in this study for further analysis and to contribute academically for the holistic knowledge of teamwork in the non-governmental sector.. Purposes of the Study The purposes of this research were as follows: 1.. Examined and analyzed the effect of team characteristics on team effectiveness.. 2.. Examined and analyzed the effect of team effectiveness on organizational performance.. 3.. Examined and analyzed the effect of team effectiveness on an organizational survival and competitiveness.. 4.. Examined and analyzed the effect of organizational performance on an organizational survival and competitiveness.. 3.

(14) Significance of the Study This present study was significant for both practitioners and academics. There were five primary points of significance for this study. First, it added to the existing teamwork knowledge more a complete picture on the relationship between team effectiveness to the organizational performance and survival and competitiveness of an organization. The study of teamwork has begun since 1980s. Within three decades, hundreds of studies have been investigated and contributed to the holistic knowledge of teamwork. Many models of teamwork have presented to see the characteristics of team that can enhance the team effectiveness. However, not many studies have investigated the big picture of relations of team effectiveness and the organizational performance and organizational survival and competitiveness. The present study tried to link the three variables and explore the relations. Therefore the present study was significant for the academics as it provided the new perspectives of team effectiveness, organizational performance, and organizational survival and competitiveness. Second, it added to the existing teamwork knowledge the relationship between team effectiveness to the organizational performance in the context of NGOs. Many studies have conducted the relations between team effectiveness and organizational performance, in which organizational performance was only measured by job satisfaction, organizational commitment, and productivity. However, limited empirical study has been found to examine the relations between team effectiveness and organizational performance, which was based on the Balance Scorecard with indicators of customer satisfaction, innovativeness, and financial performance. These three measurements for organizational performance were specifically requested by the YCAB Foundation as they were the critical points where benefactors stressed on. Therefore, the present study was significant for the academics as it provided the specific study of relationship between team effectiveness and organizational performance within the NGOs context. Third, it added to the existing teamwork knowledge the relationship between team effectiveness to the organizational survival and competitiveness in the context of NGOs. Since the Asia financial crisis occurred in 1998, the competition to attract donators became heightened among NGOs. Many donators inquired the organizational performance as their requirement to bequeath their money for NGOs. Winning benefactors was necessary for the survival and competitiveness of the NGOs. Therefore, the new concept of survival and competitiveness of an organization from knowledge management theory was used as it was. 4.

(15) seen as important to study on. The present study tried to measure the relevant of team effectiveness to the survival and competitiveness of the organization. Teamwork, as part of organizational learning criteria, was seen as one of the significant factors that might affect the survival and competitiveness of an organization. Therefore, the present study was significant for the academics as it provided the specific study of relationship between team effectiveness and organizational survival and competitiveness from knowledge management theory within the NGOs context. Fourth, this integrated model of team effectiveness was proposed particularly to the NGOs context, where there was a deficiency of researches involving these variables in nongovernmental sector in Indonesia. The present study was significant for the academics as it added to the existing knowledge of teamwork in focus of Indonesia NGOs. Fifth, the model helped to provide significant variables that point out the major factors that contributed to the team effectiveness, and subsequently the organizational performance and survival. These factors helped the practitioners for their strategies development, in which they could put emphasize on dominant factors that improved effectiveness. The findings of this study also have the potential to assist and investigate team effectiveness within NGO, and hence gave reliable feedback about the teamwork inside the organization. Therefore, the present study was significant for the practitioners in relations of teamwork.. Delimitations and Limitations Delimitations of the study are the scope of the investigation in order to make research feasible; while limitations are barriers of the study including restrictions of time and resources.. Delimitations There were some delimitations of this study. First, it was delimited to Indonesia. Second, it was delimited to Yayasan Cinta Anak Bangsa (YCAB Foundation). Third, this study only explored the relationship among variables of team characteristics, team effectiveness, organizational performance, and organizational survival and competitiveness.. 5.

(16) Limitations The sample only included employees of the YCAB Foundation; therefore the results could not be generalized to all non-governmental organizations or even profit organizations. However, given the amount of time and resources available, a single case study helped to narrow down the scope of the research in order to facilitate a more manageable research process and provide a detail observation.. Definition of Key Terms Team Characteristics Team characteristics referred to teams’ distinguishing traits, qualities, or properties (Kwak, 2004). Team characteristics were measured using 12 variables adapted from Robbins and Judge (2013), include the following: adequate resources, leadership, climate of trust, reward systems, abilities of members, personality, allocating roles, diversity, common purpose and specific goals, team efficacy, conflict levels, and social loafing. These variables were divided into three categories, contextual factor, team composition factor, and team process factor.. Team Effectiveness Team effectiveness referred to the output production of the team, which should meet or exceed the performance standard, and the work that should maintain or enhance the capability of team members to work together (Hackman, 1987). The assessment of team effectiveness consisted of the criteria of team performance and member satisfaction, which used by most team effectiveness models before (Campion, Medsker, & Higgs, 1993; Cohen, 1994; Gladstein, 1984; Guzzo & Dickson, 1996; Hackman, 1987; McGrath, 1964; Pearce & Ravlin, 1987; Sundstrom, De Meuse, & Futrell, 1990).. Organizational Performance Organizational performance referred to the degree to which organizations achieve their business objectives (Elenkov, 2002). This definition held for both profit organizations as well as NGOs. The assessment of organizational performance was based on Balanced Scorecard which consisted of the criteria of customer satisfaction, innovativeness, and financial performance.. 6.

(17) Organizational Survival and Competitiveness Organizational survival and competitiveness referred to the organization’s effort to respond to changes in market and social conditions by developing the most appropriate and adaptive structure that could allow it to maximize its resources and meet organizational goals (Chan, 2011). Organizational survival and competitiveness was measured using 9-item scale adapted from Knowledge Management by Lin (2009).. 7.

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(19) CHAPTER II LITERATURE REVIEW 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.. 9.

(20) 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.. 10.

(21) 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.. 11.

(22) 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.. 12.

(23) Table 2.1 Dimensions in Prior Team Effectiveness Models No 1 2 3. Models. McGrath Gladstein Driskell, Hogan, & Salas 4 Pearce & Ravlin 5 Hackman 6 Sundstrom, et al. 7 Tannenbaum, Beard & Salas 8 Salas, Dickinson, Converse, & Tannenbaum 9 Campion, et al. 10 Cohen 11 Klimoski & Jones 12 Rasker, van Vliet, vanden Broek, & Essens. 1964 1984 1987. Organizational Team Team Team Process Context Composition Effectiveness A L CT RS AM P AR D CP TE CL SL TP MS X X X X X X X X X X X X X X X X X X X X X. 1987. X. 1987 1990. Year. X. X. X. X X X. X. X. X X. 1992. X X. X. X. X. X. X. 1992. X X. X. X. X. X. X. 1993. X. X. 1994 1995. X X X. X. 2001. X X. X. X. X. X X. X X. X. X X. X X. X. X. X X. X. X. X. X X. X. X. X X. X X. X. X. X. X X. X X. X. 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.. 13.

(24) Context - Adequate Resources - Leadership - Climate of Trust - Performance evaluation and Reward Systems Composition - Abilities of Members - Personality - Allocating Roles - Diversity - Size of Teams - Member Preferences. Team Effectiveness. Process - Common Purpose - Specific Goals - Team Efficacy - Conflict Levels - Social Loafing Figure 2.1 Team effectiveness model. Adapted from “Organizational Behavior” by S. P. Robbins and T. A. Judge. 2013. p. 347. Copyright 2013 by the Pearson Education, Inc.. 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.. 14.

(25) 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.. 15.

(26) 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 16.

(27) 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 17.

(28) 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).. 18.

(29) 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 team. A number of different team members may enact the same role and any one person may fill a number of roles. By any means, the team has to ensure that all the various roles are filled (Robbins & Judge, 2013). The roles create a pattern of relationships that influence not only how each team member acts but also how others treat him (Stewart et al., 1999). Robbins and Judge (2013) also pointed out that event though teams with more experience and skillful members can perform better, the experience and skill of those inc ore roles who handle more of workflow of the team and who are central to all work processes were especially vital. There are times teams have capable members but are not fully utilized as they are put in wrong roles. Successful teams selected people to play their roles according to their skills and preferences. In other words, by putting those more experienced and capable persons in the critical roles, it will bring teams into better performance.. Diversity. It is a human perception that homogeneity is more beneficial for teamwork as similarity produce easier cooperation. However, there is a counter argument that homogeneity is harmful as it spoils creativity and limits the variety of viewpoints and ideas that can prosper the team. One quantitative study by Watson, Kumar, and Michaelsen (1993) observed that in early stages, the homogenous teams were found to have more positive social interactions and performance. However, over the time, when the processes of diverse teams improved, they became as effective as those homogenous teams. After four months, the diverse teams achieved higher than homogenous teams for creative performance. Although diverse teams take longer to get through the beginning stage, they tend to see problems and solutions from very different viewpoints and therefore are better, more creative problemsolvers (McClay, 2009). One study found that teams in European Union made up of members from collectivists and individualist countries benefited equally from having group goals (Robbins & Judge, 2013).. 19.

(30) Obliterated factors. Even though in the model, size of teams and member preferences are included as effective team characteristics factors, in this research these two factors in the composition dimensions will be obliterated. . Size of teams Robbins and Judge (2013) have observed that the ideal number for an effective team is from five to nine members. This size is enough to allow for sufficient diversity of perspectives, but at the same time is small enough to allow for avoidance of insufficient participation, domination of sub-group and other similar problems. In this study however, the size of team in the YCAB Foundation can be considered as fixed. Moreover, team size is not necessarily seen as a primary determinant of team effectiveness, but size cannot be ruled out as a potential variable in team performance (Shea & Guzzo, 1992). Therefore, the factor is not significant to study on.. . Member preferences Robbins and Judge (2013) mentioned that when selecting the team members, managers should consider individual preferences with abilities, personalities, and skills. High-performing teams are likely to be composed of people who prefer working as part of a group. In this study however, based on situation in YCAB Foundation, it is very seldom members are asked to do work in teams or individuals. Moreover, it is also very rare to be able to choose your own team members as it is based on the voluntary work, so people are in the team without firstly knowing who are the members in that team. Therefore, the factor is not significant for further study.. Process. Team process defines the intra group and intergroup actions that transform resources into a product (Gladstein, 1984). In his model, Gladstein (1984) refers it directly as group process. Hackman (1987) refers it as process criteria of effectiveness, while Shea and Guzzo (1992) refer it as the social interaction process. Hackman (1987) described it as performance processes norms, group synergy, and level of effort. On the other hand, Gladstein (1984) has proposed more elements of team process as such work norms, open communication, supportiveness, conflict, strategy discussion, weighting individual inputs, and boundary management. In this research, team process consists of common purpose and specific goals, team efficacy, conflict levels, and social loafing.. 20.

(31) Common purpose and specific goals. Team goals are a desirable state of affairs members intend to bring about through combined effort (Zander, 1994). In Pinto, Pinto, and Prescott (1993), cross functional cooperation is defined as “joint behavior toward a goal of common interest” (p. 1286). The most important characteristic of a high performance team is that its members are clear about team’s goals (Wheelan, 2013). However, even this is obvious; often members have different ideas about the strategic plan. Robbins and Judge (2013) agreed that effective teams begin by analyzing the team’s mission, developing goals to achieve that mission, and creating strategies to achieve the goals. Research on work teams even shows that clear project goals help to improve team performance and internal team processes (McComb, Green, and Compton, 1999). This is why members of successful teams usually put tremendous amount of time and effort to discuss, shape and agree on a purpose (Robbins & Judge, 2013). After everyone is clear about team’s goals, it is important that members agree with the team’s goals. When members accept the common purpose, it becomes what celestial navigation is to a ship captain, it provides direction and guidance under any and all conditions. Evidence suggest that different perspectives on learning versus performance goals lead to lower levels of team performance overall (Robbins & Judge, 2013). Also according to the book, effective team also reflects and adjusts their master plan when necessary. Some evidences also suggest that teams high in reflexivity are better to adaptation in conflicting plans and goals among team members. Moreover, Zander (1994) believed that there are three most important characteristics of team goals, which are accessibility, measurability, and difficulty. Accordingly, accessibility refers to the realistic probability to complete the goals; measurability refers to the ability to quantify whether the team is reaching its goals; difficulty refers to the level of complexity of goals that can help to encourage and motivate performance (Levi, 2001). Therefore, it is concluded that specific goals can facilitate clear communication and help teams maintain their focus on getting results (Robbins & Judge, 2013).. 21.

(32) Team efficacy. Team efficacy refers to the extent to which team members agree about their ability to succeed at an alliance team activity (Brown, 2003; Kraiger & Wenzel, 1997). It is stated by Robbins and Judge (2013) that effective teams have confidence in themselves, they believe they can succeed. Team efficacy affects team cognitive and behavioral processes such as coordination, communication and cooperation and team effectiveness (Bray, 2004; Brown, 2003; Kraiger & Wenzel, 1997). When team members believe in themselves, it will motivate them to work harder. According to Bandura (1986) and Mischel, Northcraft, Markovsky, Lovaglia, and Lawler (1997), teams with high collective efficacy will outperform and persist longer in the face of obstacles than teams with low collective efficacy. Therefore, it is true that team efficacy has an important effect to team performance and team effectiveness.. Conflict levels. Conflict in the team is not necessarily bad. Conflict is the process by which people or groups perceive that others have taken some action that has a negative effect on their interest and this is normal in team situation (Levi, 2001). Levi added that if a team has no conflict, then it might be a sign of a problem that the team is suffering from unhealthy agreement, opinion suppression, or members have no effort to improve on the team. Robbins and Judge (2013) elaborated further that that conflict has a complex relationship with team performance. A study conducted in China found that moderate levels of task conflict during initial phases of team were positively related to team creativity, but both very low and very high levels of task conflict were negatively related to team performance. Therefore, conflict indeed brings many benefits to the team as it stimulates discussion, promotes critical assessment of problems and options, which can lead to better team decisions (Robbins & Judge, 2013). However, it also depends on the level of conflicts occurred in team, not too much but not too little. The way conflicts are resolved also one of the factor that has effect on team effectiveness. A study of ongoing comments made by 37 autonomous work groups showed that effective teams resolved conflicts by explicitly discussing issues, whereas ineffective teams had conflicts focused more on personalities and the way things were said (Robbins & Judge, 2013). There are many ways to resolve conflicts but to have a long-term relationships within team members, collaborative approach is suggested to resolve conflicts whenever possible (Levi, 2001).. 22.

(33) Social loafing. Social loafing is the de-individuation or the reduction of individual contributions that can occur when people work in groups as opposed to working alone (Liden, Wayne, Jaworski, & Bennett, 2004). There are some conditions of social loafing. First, people can become “free riders” because they do not believe that their individual efforts are important and they know they will receive their share of group’s rewards regardless their efforts (Sweeney, 1973). Second, people can also be “sucker effect” when the good performers slack off in teams because they do not want others to take advantage of them (Johnson & Johnson, 1997). All of these can lead to less contribution of group members. Effective teams however undermine this tendency by making members individually and jointly accountable for the team’s purpose, goals and approach, as mentioned by Robbins and Judge (2013). Therefore, members should be clear on what they are individually responsible for and what they are jointly responsible for on the team. It is also identified that when there is commitment of members to the team, social loafing does not occur (Hackman, 1986). Based on this, in order to contribute to the effectiveness, team should minimize the social loafing of its members and expect responsibility from each member.. Review of Team Characteristics Empirical Studies Many prior studies have been conducted a statistical research about the relations between team characteristics and team effectiveness. The results in the studies showed that there has been a significant relation between criteria of team characteristics and criteria of team effectiveness. Furthermore, table 2.2 is presenting the empirical studies from previous literatures that have conducted researches for supporting the effects of each team characteristics dimensions to the team effectiveness.. 23.

(34) Table 2.2 Empirical Studies of Team Characteristics to Team Effectiveness Study Campion, Papper, & Medsker. Year 1996. Research Setting 60 teams of a large financial service company. Cohen, Ledford, & Spreitzer. 1996. 169 teams of a large US telephone company. Janz, Colquitt, & Noe. 1997. 27 teams form information system department of 13 different organizations. Neuman, Wagner, & Christiansen. 1999. DrachZahavy & Somech. 2002. 82 teams of a large retailing organization with stores located across the US 48 teams from 48 different middle and high schools in northern Israel. Costa. 2003. Foo. 2011. Sun, Xu, & Shang. 2012. Chou, Lin, Chang, & Chuang. 2013. 112 teams of three social care institutions in The Netherlands 82 teams that participate in a business plan competition organized by a university in the north-eastern part of the United States 92 teams from Chinese high-tech firms 46 teams from various organizations in Taiwan. Findings Training, managerial support, coordination/ communication, potency, heterogeneity, and workload sharing correlated to member satisfaction, perceived effectiveness, and manager ratings. Group characteristics (stability, norms, coordination, expertise, innovation) are positively related to team rating of performance. Employee involvement context (power, information, recognition, training/resources, feedback) is positively related to quality of work life and manager rating of performance. Team process (information sharing, helping behavior); Team development (mission clarity, team coordination, team unity); as well as contextual support are positively related to team effectiveness. For the traits of conscientiousness, agreeableness, openness to experience, extraversion, and emotional stability were positively related to team performance. Team heterogeneity was positively and significantly related to team effectiveness. Informational, instrumental, emotional and appraisal supports are all positively and significantly related to team effectiveness. Trust between team members was positively associated with attitudinal commitment, perceived task performance, and team satisfaction. Both task and non-task conflict related negatively to member-rated team effectiveness. This shows any conflict can be a hindrance for teams. Age, task, experience diversity related positively to member-rated team effectiveness.. Dimensions Adequate Resources, Climate of Trust, Allocating Roles, Diversity, Team Efficacy Adequate Resources, Climate of Trust, Reward Systems, Abilities of Members. Adequate Resources, Climate of Trust, Common Purpose and Specific Goals Personality. Adequate Resources, Diversity. Climate of Trust. Diversity, Conflict Levels. Transformational leadership is positively related to team performance.. Leadership. Cognitive trust in the team leader and cognitive trust among team members mediate the positive impact of transformational leadership style on collective efficacy, where collective efficacy has a positive impact on team performance.. Climate of Trust, Leadership, Team Efficacy. 24.

(35) Most of the dimensions of team characteristics are statistically proved to have an impact to team effectiveness in the previous literatures. Only one dimension, social loafing, that has limited literature to support. This variable is still retained as it is seen as important and noteworthy to be study on. Even though there are a lot of empirical studies about the team characteristics on team effectiveness, there is limited study investigated using this model as this model is introduced in 2013 and can be considered as new. Therefore, by adopting Robbins and Judge’s Team Effectiveness Model (2013) as the newest model in the teamwork knowledge as the basic framework is considered significant.. Team Effectiveness Dimensions of Team Effectiveness As been mentioned before, many models have been investigated about team effectiveness. Team effectiveness is viewed as the major output of small group behavior. However, many researchers found that establishing empirical measures for team performance is difficult (Yeatts & Hyten, 1998). Cohen (1994) has stated, “In many cases, no good objective measures of team performance exist. If good objective measures exist, they may not be comparable across teams and across organizations.” (p. 69) However, many researchers have suggested that determinants of team effectiveness can be generally defined by productivity and member satisfaction (Gladstein, 1984; Guzzo & Dickson, 1996; Hackman, 1987; Sundstrom, et al., 1990).. Team productivity. Given that the purpose of a team is to produce a good or a service, team productivity is the most frequently used criterion of team effectiveness (Shea & Guzzo, 1987). Productivity is indicated by team-produced outputs (quantity, quality, efficiency, under budget, and performance expectation).. Member satisfaction. Member satisfaction is indicated by members’ pleasurable or positive affective attitude toward the team resulting from the team experience. Satisfaction is examined from two perspectives. First, satisfaction is derived from participating in team. Second, satisfaction is derived from overall job satisfaction. The first definition of satisfaction looks only at the. 25.

(36) emotional response of working within the team. Overall job satisfaction is the macro measure of emotional state resulting from the how the employee perceives his job.. Review of Team Effectiveness Empirical Studies Many previous studies have conducted research for relations between team characteristics and the performance which in here, the performance is referring to the team performance, and not organizational performance. There is common assumption that the effective team will bring excellent performance for the organization. However, limited studies have been found to measure the relationship of team effectiveness and organizational performance, which particularly measured on customer satisfaction, innovativeness, and financial performance. Moreover, in terms of the empirical studies between variables of team effectiveness and survival and competitiveness, there has been little study that can be gathered as the concept of survival and competitiveness of an organization is new.. Organizational Performance Performance of NGOs came into focus after World War II, where the industry was gradually criticized for its deficiency of professionalism, and failure to meet up with performance objectives (Courtney, 2002). Consequently, many donators would put an obligation of performance measurement on NGOs to ensure their level of accountability. Even now there is a common believe that in order for NGOs to be successful, they have to use the frameworks and systems that can be held accountable to their key stakeholders, most importantly to their donors and beneficiaries (Cutt & Murray, 2000). This expectation for NGOs shifted the NGOs approach to become more competitive. Renshaw & Krishnaswamy (2009) explained that, “These shifts in the landscape represent competitive forces, which have coerces the non-profit sector to adopt commercial business models and practices or utilize for-profit organizations as their models. (p 458)”. Heap (2000) added that NGOs must do a better job at selling themselves to businesses by emphasizing not just their agendas but also their capabilities and assets. This forced NGOs to take the profit organizations management strategies to improve their work and performance. 26.

(37) Balanced Scorecard (BSC) BSC is a performance measurement tool, developed by Kaplan and Norton in 1992 in order to measure the economic and operational performance of a profit organization. It balances between both measures of financial and non-financial as well as between internal and external measures. It has four dimensions of performance (Kaplan & Norton, 1992), such as: 1. Customer Perspective It refers to customer concerns about time, quality, performance, service, and cost. It measures the timeliness, quality, and responsiveness of service. 2. Internal Business Process Perspective It refers to those business processes that have the greatest impact on customer satisfaction. It measures the acquisition excellence and how accurate, timely, and effective the data collection. 3. Innovation and Learning Perspective It refers to innovation, as well as improvements to existing products and processes. It measures the continuous improvement and strategic planning of an organization. 4. Financial Perspective It refers to the extent to which the organization strategy contributes to profitability, growth and shareholder value. It measures the cost, productivity, savings, and payment.. Balanced Scorecard has primarily been employed in the business field, but it is increasingly utilized by public and non-profit organizations. While the four perspectives of BSC are relevant to all types of organizations, the use of performance measures must be adapted to the specific goals and strategies of the organization.. Dimensions of Organizational Performance The internal process in BSC will be focused only at the teamwork of YCAB Foundation. Therefore, the internal process indicator will be abolished from the organizational performance measurement. The other three dimensions will be used as the measurement, such as customer satisfaction, innovativeness, and financial performance. The. 27.