Does Cooperation Require Co-Laboring? How Authority Moderates Project Team Structure
Trevor Daniel Young-Hyman · Academy of Management Proceedings · 2014
This paper examines how the distribution of authority within organizations impacts the structure and effectiveness of team- based work. In a wide range of contexts, teams are organized to solve complex and uncertain problems, yet we have little understanding of the way that their structure and performance is informed by their organizational context. The distribution of authority, defined as distribution of control over ownership and governance within the firm, has been examined as a determinant of innovative capacity, yet we know little about its influence on teams. The general argument, advanced here, is that different types of teams function more effectively in the context of different distributions of organizational authority. In particular, teams can be structured to achieve two types of benefits: (a) workers from different occupational groups can work collaboratively to align goals and incentives or (b) different occupational groups can work separately to deepen their task-specific knowledge. I hypothesize that teams in a firm with broadly distributed authority are more likely to yield successful outcomes when occupational groups within the team work separately. To test this hypothesis, I analyze a dataset of projects from two competitors in the custom automated manufacturing equipment industry. While similar in a range of dimensions, one firm is a worker cooperative with broadly distributed authority and the other is a traditional small business with concentrated authority. Results from the statistical analysis support the hypothesis that task-oriented teams generate more profitable projects in the worker cooperative, while teamwork- oriented teams yield higher profits in the narrowly-held firm. To illuminate the processes behind the relationship between authority and teams, I provide qualitative evidence from fieldwork conducted in the two firms.