The Impact of Perceived Subgroup Formation on Transactive Memory Systems and Performance in Distributed Teams

Abstract

With distributed teams becoming increasingly common in organizations, improving their performance is a critical challenge for both practitioners and researchers. This research examines how group members' perception of subgroup formation affects team performance in fully distributed teams. The authors propose that individual members' perception about the presence of subgroups within the team has a negative effect on team performance, which manifests itself through decreases in a team's transactive memory system (TMS). Using data from 154 members of 41 fully distributed teams (where no group members were colocated), the authors found that members' perceptions of the existence of subgroups impair the team's TMS and its overall performance. They found these effects to be statistically significant. In addition, decreases in a group's TMS partially mediate the effect of perceived subgroup formation on team performance. The authors discuss the implications of their findings for managerial action, as well as for researchers, and they propose directions for future research.