A group is two or more people who interact regularly to accomplish a common purpose or goal. General kinds of groups in organizations are functional groups, task groups and teams, and informal or interest groups. A team is a group of workers that functions as a unit, often with little or no supervision, to carry out organizational functions.

People join functional groups and teams to pursue a career. Their reasons for joining informal or interest groups include interpersonal attraction, group activities, group goals, need satisfaction, and potential instrumental benefits. The stages of team development include testing and dependence, intragroup conflict and hostility, development of group cohesion, and focusing on the problem at hand.

Four important characteristics of teams are role structures, behavioral norms, cohesiveness, and informal leadership. Role structures define task and socioemotional specialists and may be victimized by role ambiguity, role conflict, or role overload. Norms are standards of behavior for group members. Cohesiveness is the extent to which members are loyal and committed to the team and to one another. Several factors can increase or reduce team cohesiveness. The relationship between performance norms and cohesiveness is especially important. Informal leaders are those leaders whom the group members themselves choose to follow.

Conflict is a disagreement between two or more people, groups, and/or organizations. Too little or too much conflict may hurt performance, but an optimal level of conflict may improve performance. Interpersonal and intergroup conflict in organizations may be caused by personality differences or by particular organizational strategies and practices.

Organizations may encounter conflict with one another and with various elements of the environment. Three methods of managing conflict are to stimulate it, control it, or resolve and eliminate it.