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The team scaling fallacy: Underestimating the declining efficiency of larger teams

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  • Staats, Bradley R.
  • Milkman, Katherine L.
  • Fox, Craig R.

Abstract

The competitive survival of many organizations depends on delivering projects on time and on budget. These firms face decisions concerning how to scale the size of work teams. Larger teams can usually complete tasks more quickly, but the advantages associated with adding workers are often accompanied by various disadvantages (such as the increased burden of coordinating efforts). We note several reasons why managers may focus on process gains when they envision the consequences of making a team larger, and why they may underestimate or underweight process losses. We document a phenomenon that we term the team scaling fallacy—as team size increases, people increasingly underestimate the number of labor hours required to complete projects. Using data from two laboratory experiments, and archival data from projects executed at a software company, we find persistent evidence of the team scaling fallacy and explore a reason for its occurrence.

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Bibliographic Info

Article provided by Elsevier in its journal Organizational Behavior and Human Decision Processes.

Volume (Year): 118 (2012)
Issue (Month): 2 ()
Pages: 132-142

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Handle: RePEc:eee:jobhdp:v:118:y:2012:i:2:p:132-142

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Web page: http://www.elsevier.com/locate/obhdp

Related research

Keywords: Coordination neglect; Estimation; Planning fallacy; Team scaling fallacy; Team size;

References

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  1. Daniel Kahneman & Dan Lovallo, 1993. "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking," Management Science, INFORMS, vol. 39(1), pages 17-31, January.
  2. Buehler, Roger & Messervey, Deanna & Griffin, Dale, 2005. "Collaborative planning and prediction: Does group discussion affect optimistic biases in time estimation?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 97(1), pages 47-63, May.
  3. Paulus, Paul B. & Yang, Huei-Chuan, 2000. "Idea Generation in Groups: A Basis for Creativity in Organizations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(1), pages 76-87, May.
  4. Moreland, Richard L. & Myaskovsky, Larissa, 2000. "Exploring the Performance Benefits of Group Training: Transactive Memory or Improved Communication?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(1), pages 117-133, May.
  5. Robert S. Huckman & Bradley R. Staats & David M. Upton, 2009. "Team Familiarity, Role Experience, and Performance: Evidence from Indian Software Services," Management Science, INFORMS, vol. 55(1), pages 85-100, January.
  6. Robert S. Huckman & Bradley R. Staats, 2011. "Fluid Tasks and Fluid Teams: The Impact of Diversity in Experience and Team Familiarity on Team Performance," Manufacturing & Service Operations Management, INFORMS, vol. 13(3), pages 310-328, July.
  7. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, December.
  8. Alan MacCormack & Roberto Verganti & Marco Iansiti, 2001. "Developing Products on "Internet Time": The Anatomy of a Flexible Development Process," Management Science, INFORMS, vol. 47(1), pages 133-150, January.
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