4 Types of Teams

Here are four common team types - which are: Functional, Cross
Functional, Virtual, and Self-directed.

The Functional team is something which is related to a

function. For example, you have the design function, 
purchasing function, etc. People from these group when they
work together form a functional team.

On the other hand, Cross Functional Team is a team where

people from different functions work towards a common goal.
The members of this team could be as subject matter experts
from different functions, say, for example, one person from
maintenance, one person from design, one person from
purchasing, one person from sales. Together they make a cross-
functional team. This team is used when you're working on it
improvement project which spans over a number of functions.

Virtual Team is a team which is not sitting together, which do

not have a face-to-face interaction. Here we have people who
were sitting in different time zones. These are people from
different cultures, different language and they are working
towards a common goal using the help of technology.
The next type of team is the Self-directed team. The self-
directed team comes together on their own. These are not
formally assigned to a particular project. The members of the
self-directed team come together on their own with the
minimum input from management. For example, they see a
problem; they come together to form an informal team and work
together towards that goal.
In addition to these four team types, there could be many other
types of teams; for example, a quality circle is also a kind of
team where 5-6 people work towards a common goal of
improvement.
 Types of Teams

Teams can be divided into four main groups: project teams,

self-managed teams, virtual teams, and operational teams.
What type of team you have depends on its purpose, location,
and organizational structure. Each type of team comes with its
unique set of strengths and weaknesses. In order to fully utilize
your team, you first need to understand where each type of
teams works the best.

Project Teams

Project teams are groups of employees who work collectively

toward shared goals. This type of team allows you to structure
work in a specific, measurable, and time-constrained way. You
can assign clear roles, responsibilities, and deadlines. Also, by
selecting both experienced and inexperienced workers, you
enable them to do informal coaching and mentoring.

There are four main types of project teams:

Functional Teams

These teams are permanent and always include members of the

same department with different responsibilities. A manager is
responsible for everything, and everyone reports to him. These
types of teams are more likely to be found in companies that
incorporate traditional project management.
 Sometimes, in order to complete a project, several departments
need to work together. For example:

 Work on the new product starts with the idea from the
marketing department;
 The idea is passed down to research and development to
determine its feasibility;
 After R&D, the design department is tasked with giving it
an appealing look and feel;
 And finally, the product is made by the
manufacturing department.
This type of approach is known as ‘baton passing’. It requires a
manager that has oversight of the entire project and ensures that
there are no obstacles when it comes to transferring work from
one team to another.
 Advantages and Disadvantages of Functional Teams

Advantages:

 Handles routine work

 Line management has control of projects
 Pools technical and professional expertise
Disadvantages:

 Difficult communication across areas

 Pushing the decision-making process upwards
 Inflexible

Cross-functional Teams

Cross-functional teams are made up of members from various

departments. These teams tackle specific tasks that require
different inputs and expertise. Even though cross-functional
teams are becoming increasingly popular worldwide, a
recent study has proven that a whopping 75% of all cross-
functional teams are dysfunctional.
 Advantages and Disadvantages of Cross-functional Teams

Advantages:

 Greater speed of task completion

 Can handle a wide array of projects
 Source of unconventional ideas
Disadvantages:

 Takes long to develop cohesion

 Management can prove to be challenging
 Diversity can cause conflict
Matrix Teams

These teams are characterized by a “two-boss system”, where

an individual report to a different manager for various aspects of
his work. This type of team is the product of Matrix
management approach.

Let’s say Jeff, a designer, was given a task of making a design

for a new product that marketing provided an idea for and that
R&D deemed feasible. By being included in this project, Jeff all
of a sudden has two bosses: the first one is a project manager
who only cares about the design being done, while the other one
 is his functional line manager who’s in charge of Jeff’s training,
career development, and routine tasks.

While this approach helps the top management retain control

over the project without being included in day-to-day decisions,
employees are often faced with challenges of dual command:
Jeff now has to report to two managers, whom might give him
conflict instructions, which causes confusion and frustration.

Advantages and Disadvantages of Matrix Teams

Advantages:

 Acceptable to traditional managers

 Flexibility for assigned personnel
 Top management controls projects, stays out of daily
activities
Disadvantages:

 Dual reporting
 The team leader is usually unable to choose who will be on
the project
 Difficult performance appraisal

Contract Teams

Contract teams are outsourced teams that are tied down by a

contract and brought in to complete a part of a project. After the
 project is completed and the contract has ended, the client can
cut all ties to the team, no questions asked.

The project manager is the key to success when it comes to

contract teams. The project manager has to:

 maintain constant communication between the team and the

client,
 compensate for the lack of a team’s physical presence
(given that most contract teams work remotely),
 bear full responsibility for the success or failure of a project

Advantages and Disadvantages of Contract Teams

Advantages:
 Easy employment of experts
 A team can use the existing management structure
 No need for client training
Disadvantages:

 Difficult assessment of project progress for the client

 Difficult to resolve political and organizational issues
 The client is the only judge of success

Self-managed Teams

Typically, members of self-managed teams are employees of the

same organization who work together, and even though they
have a wide array of objectives, their aim is to reach a common
 goal. There is no manager nor authority figure, so it is up to
members to determine rules and expectations, to
solve problems when they arise, and to carry
shared responsibility for the results.
One of the first major companies that decided to implement self-
managed teams was software company Valve in 2012. Around
300 employees have neither bosses nor a formal division of
labor. Instead, they are expected to organize themselves around
individual or group projects and are obligated to take care of
customer support themselves. The work ethic at Valve relied
heavily on individual responsibility.

When setting up a self-managed team, you have to define two

parameters:

 Levels of responsibility
 Autonomy that is given to the self-managed team
Research has shown that employees in self-managed teams feel
more useful on the job and find their jobs more challenging,
although there is no proof that they are actually more
productive.

Advantages and Disadvantages of Self-Managed Teams

Advantages:

 Autonomy improves employee motivation;

 Team members can manage their own time and handle
tasks when it suits them;
 You don’t have to pay for an office;
 Shared responsibility instills pride in team
accomplishments.
Disadvantages:

 The lack of hierarchical authority can put personal

relationships over good judgment;
 It can lead to conformity that suppresses creativity and
critical thinking;
 An added layer of responsibility is time-consuming and
requires skills that some people simply don’t have;
 Training time and costs are higher due to a broader scope
of duties.

Virtual Teams

Virtual teams are made up of people who work in different

physical locations and who rely heavily on collaboration tools to
get things done together. Virtual teams provide members with
better life-work balance and allow business owners to employ
the best experts in the field, regardless of the fact that they live
on another continent.
One of the organizations that had the most success with its
virtual teams is Automattic, best known by their
company, WordPress. Over 100 employees in 43 different
countries use Wordpress plugin P2 that enables them to
communicate with each other in real-time. Also, when a new
employee gets on board he receives $2.000 stipend to improve
his home office, gets the latest Macbook, and an open “time off”
policy to use take free time whenever they need.

It may seem a little farfetched, but this policy is one of the key
factors behind Automatic’s success: Wordpress is now used by
27.5% websites globally.

Types of virtual teams

According to the Manager’s guide to virtual teams, virtual teams

are characterized by three dimensions:
 Time - WHEN people work. They could work during
different hours, on different shifts, or in different time-zones.
 Space - WHERE people work. They could be working
right next to each other or hundreds of miles away.
 Culture - HOW and WHOM people work for. ‘Culture’
dimension includes factors such as gender, race, language,
profession, education, nationality, as well as political, social,
religious, and economic factors.

Operational teams

Operational teams support other types of teams. They are

formed to make sure that all back office processes go smoothly.
 For example, the Human Resource department doesn’t handy
any projects but it has to perform candidate screening,
interviewing, and recruiting. If one of the key players decides to
leave, HR has to find a substitute so the respective team can
carry on its work.

Also, operational teams can have their own projects and function
like a project team because they have well-defined roles and
responsibilities. For instance, if accounting department received
a task to make an annual financial report by a certain date, they
will most likely devise a timeline, delegate tasks, and keep track
of deadline just like any other project team.

What type of team is right for you?

When choosing a type of team to perform a certain task, ask

yourself these questions:

 What’s the team’s purpose exactly?

 How many people are required, and what will their roles
be?
 Are selected members capable of self-management, or they
require a strong leader?
 Is it necessary for them to be located in a single place?
 Is their engagement temporary or permanent?
If you have a project that requires input from marketing, design
as well as the Customer Support department, choose a cross-
functional team.
If, on the other hand, you choose to outsource the design, and
the agency you have chosen uses a designer that works
remotely, the only logical way to go is opting for a mixture of
virtual and contract team.

In practice, you will rarely find a team that can be defined as

solely functional or solely virtual: most teams in modern
business represent a hybrid of some, if not all of the team types.