Answer to Question 1
Effective work groups perform at the highest level possible by minimizing performance difficulties or process losses. Moreover, effective work groups increase their potential performance over time by achieving process gains, or finding better ways to work.
Managers strive to have groups perform at the highest level possible, which is called a group's potential performance. Although potential performance is important because it reflects a work group's capabilities, it is often difficult to know in advance and can change as conditions change. In order for an organization to achieve its goals, managers and work groups need to strive to ensure that a group's actual performance comes as close as possible to its potential performance. In many situations, however, a group's actual performance falls short of its potential performance, even though the group is capable of achieving its potential.
Research has shown that process losses (performance difficulties that a group experiences because of coordination and motivation problems) are an important factor when a group's actual performance falls short of its potential performance. To meet the challenge of ensuring that a group's actual performance equals its potential performance, managers must try to eliminate as many process losses as possible.
In addition to eliminating process losses that prevent a group from performing up to its potential, managers also need to increase a group's potential performance. To increase the effectiveness of a work group, managers need to identify ways to improve the group's motivation and coordination to achieve process gains-increases in potential performance that result from new ways of motivating and coordinating group members.
Answer to Question 2
B
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