A conceptual framework for leveraging team composition decisions to build human capital

Abstract

Twenty-first century organizations often rely on teams to enact their strategy and to enhance their flexibility in interacting with their external environment over time. Team composition, or the configuration of team member attributes, can influence team effectiveness and is an important consideration in the management of teams. To date, however, there is limited guidance on how seemingly smaller team composition decisions can contribute to organizational effectiveness and competitive advantage. We draw on strategic human resource management (HRM), HRM, and industrial and organizational psychology literatures to develop a conceptual framework for strategic team composition decisions. We describe how organizations use teams to enact their strategy (i.e., fit), and use adaptive teams and networks of teams to achieve fit in a dynamic environment (i.e., flexibility). Using the concepts of fit and flexibility, we develop four guiding principles for strategic team composition decisions.