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Group Dynamics: Theory, Research, and Practice2001, Vol. 5, No. 2, 111-123

Copyright 2001 by the Educational Publishing Foundation1089-2699/01/S5.00 DO1: 10.1037//1089-2699.5.2.111

Understanding Team Innovation:The Role of Team Processes and Structures

Anat Drach-Zahavy and Anit SomechUniversity of Haifa

The present study focused on innovation of teams, examining the contributions of teaminteraction processes (exchanging information, learning, motivating, and negotiating)and structures (functional heterogeneity and frequency of meetings) to innovation.Specifically, it was hypothesized that (a) team structures will be positively related toteam innovation, (b) team heterogeneity will be positively related to team interactionprocesses, (c) team interaction processes will be positively related to team innovation,and (d) team interaction processes will mediate the relationship between team hetero-geneity and team innovation. Results from a sample of 48 intact teams in elementaryand secondary schools supported the main hypotheses. These results imply that thedevelopment of mutual interaction processes is a crucial mechanism for translatingteam heterogeneity into innovation.

As working under changing circumstancesbecomes an essential feature of organizations(Van Offenbeek & Koopman, 1996), and teamsbecome the common work unit for managingchange (Jackson, 1996), investigating team in-novation and its underlying formative processesis essential. Earlier research on innovation fo-cused primarily on the adoption of innovationby organizations and was largely restricted totop-down innovations, namely those introducedby the highest level of management. There hasbeen little research on emergent innovation orthe introduction of new and improved ways ofworking introduced by teams at the lower levelsof organizations (Agrell & Gustafson, 1996;West & Wallace, 1991).

This study focused on team innovation: "theintentional introduction and application within ateam, of ideas, processes, products or proce-dures new to the team, designed to significantlybenefit the individual, the team, the organiza-tion, or wider society" (West & Wallace, 1991,p. 303). This definition emphasizes that innova-tion is related to intentional attempts of team

Anat Drach-Zahavy, Faculty of Health and Welfare, Uni-versity of Haifa, Haifa, Israel; Anit Somech, Faculty ofEducation, University of Haifa, Haifa, Israel.

Correspondence concerning this article should be ad-dressed to Anat Drach-Zahavy, Faculty of Health and Wel-fare, University of Haifa, Mount Carmel, Haifa 31905,Israel. Electronic mail may be sent to [email protected].

members to arrive at anticipated benefits for theindividual, the team, the organization, or thesurrounding society, in contrast to top-downchange. Furthermore, the definition is applica-ble to innovations across a variety of organiza-tions: industrial and high technology as well asservice and educational. Finally, the definitionrequires an application component, which willalmost always imply a social element of theinnovation process (Agrell & Gustafson, 1996).

A review of the relevant literature revealedthat innovation is no longer viewed as solelystimulated through a burst of creativity by atalented individual. It is defined as an interac-tive process among people, structures, and in-teraction processes (Agrell & Gustafson, 1996;Van Offenbeek & Koopman, 1996; West,1990). For example, Van Offenbeek and Koop-man (1996) argued that innovation is a contin-uous process that consists of the participation ofpeople and the interaction among them. Accord-ing to Agrell and Gustafson (1996), althoughthe innovation process begins with the produc-tion of ideas from individuals, often the inno-vation will be unfairly abandoned or defeated ifthese ideas are not properly discussed in a dia-logue that involves the whole team. West(1990) outlined the innovation cycle as contain-ing four phases: recognition of an opportunityfor innovation, initiation of a process within theteam to foster implementation, implementationof the innovation, and stabilization of the inno-vation. Hence, although at the recognition phase

i l l

112 DRACH-ZAHAVY AND SOMECH

the enterprising disposition of an individualmight be relatively dominant, the initiation, im-plementation, and stabilization phases of theinnovation depend critically on team processesand structures, which serve as innovation carri-ers and ensure that an individual's ideas arechecked, processed, and executed.

The main purpose of this study was to inves-tigate process and structure variables that fosterinnovation in teams and to integrate the findingsinto a comprehensive model. On the processlevel we chose to focus on team interactionprocesses (Van Offenbeek & Koopman, 1996),whereas on the structural level we emphasizedthe team's frequency of meetings and functionalheterogeneity (Jackson, 1996). These groups ofvariables, the postulated relationships betweenthem, and their impact on innovation are dis-cussed subsequently.

Team Interaction Processesand Innovation

As mentioned, on the process level, we choseto focus on team interaction processes (VanOffenbeek & Koopman, 1996). Almost all mod-els addressing the issue of promoting team out-comes such as team innovation have empha-sized the important role of team interaction pro-cesses as key antecedent variables (Hackman,1990; Tannenbaum, Salas, & Cannon-Bowers,1996). In the specific context of promoting teaminnovation, empirical results have identified theroles of developing a team climate of trust andopenness (West, 1990), vision and shared ob-jectives (West, 1990), team collaboration (West& Wallace, 1991), and the team's belief in itspotency to perform well and attain its goals(Farr & Ford, 1990).

Influenced by research concerning learningorganizations (Argyris, 1992), authors have re-cently shown interest in the cognitive and learn-ing benefits of teams. These conceptualizationshave usually focused on one specific cognitivecomponent, such as variety of members' re-sponses (Pearce & Ravlin, 1987), reflexivity(West, 1996), or constructive conflict (Tjosvold,1990), and have fallen short of depicting theoverall cognitive contribution of team membersto team effectiveness and innovation.

Recently, Van Offenbeek and Koopman(1996) suggested four interaction processes inteams that promote team innovation: exchang-

ing information, learning, motivating, and ne-gotiating. Exchanging information refers to theaccumulated individual inputs of information,knowledge, and experience necessary for teamfunctioning. Exchange of information expandsknowledge and experience resources availableto team members, improves the analysis of theproblem, and allows better assessment of theusefulness of potential solutions (Jackson,1996; Nemeth & Owens, 1996), all of whichare important in regard to innovation. In im-plementing innovation, information exchangeleads to a more complete and accurate specifi-cation of the needs of the different parties, tointerventions and solutions that suit the charac-teristics of the organization, and to more realis-tic expectations (Ives & Olson, 1984). Never-theless, information exchange is not sufficientfor innovation, because it does not ensurechanges in subsequent behavior (Van Offen-beek & Koopman, 1996).

The learning function is defined as the extentto which team members overtly reflect on theteam's objectives, strategies, and processes forthe purpose of creating a team-level intellectualproduct that initiates change (Larson & Chris-tensen, 1993; Swieringa & Wierdsma, 1992;West, 1996). Empirical evidence indicates thatorganizational and collective learning is a pre-requisite for the development and adoption ofinnovation at the organizational level (Argyris,1993). Although not directly investigating inno-vation, research has revealed that team learningresults in improvements in detecting and iden-tifying problems (Hirokawa, 1990), scanningthe environment (Ancona & Caldwell, 1992),and producing creative solutions (Maier &Solem, 1962), all of which might be crucial toteam innovation.

Motivating in Van Offenbeek and Koop-man's (1996) model focused on the cognitiveprocesses whereby team members become com-mitted to their innovative goals. The issue ofmotivating innovation is complex. Empirical re-search has indicated that external rewards canoften serve to diminish creativity (Amabile,1988; Nemeth & Owens, 1996). Hence, in de-scribing the motivation of those involved in aninnovation process, process-oriented motivationtheories offer more support than those that aremostly based on reinforcement or oriented tothe content of motivation (Van Offenbeek &Koopman, 1996). This approach led researchers

UNDERSTANDING TEAM INNOVATION 113

to focus more on the cognitive motivating pro-cesses that foster innovation, as suggested byLocke and Latham's (1990) goal-setting theory.In the context of innovation, research findingshave emphasized the role of team participationin goal setting to establish a high level of ac-ceptance of goals, to overcome resistance, andto generate commitment to team projects (Erez,Earley, & Hulin, 1985).

Finally, although an innovation process de-mands cooperative relations, it involves, in thecase of high conflict potential, political compo-nents as well. The negotiating function consti-tutes the political dimension of team interactionand is evident when team members strive toexpress their opinions, which allows mutual in-fluence (Van Offenbeek & Koopman, 1996).Although not directly examining the negotiatingprocess, research has shown that teams exposedto minority views prove to be more original anduse a greater variety of strategies to invent novelsolutions (Nemeth & Owens, 1996; Vroom &Yago, 1988). In addition, Tjosvold (1990)showed that allowing opposing opinions withinteams promoted mutual influence of team mem-bers and, consequently, team effectiveness andinnovation.

As a whole, the literature is wanting in regardto the effects of exchanging information, learn-ing, motivating, and negotiating on team inno-vation. To our knowledge, no study has exam-ined the four team interaction processes com-bined, to offer empirical support for VanOffenbeek and Koopman's (1996) model. Onthe basis of the related results described here,we posited that team interaction processes—namely, exchanging information, learning, mo-tivating, and negotiating—would be positivelyrelated to team innovation.

Team Structures and Innovation

In this article, we refer to a team's structuresas institutionalized structural arrangements thatserve as innovation carriers. We chose to focuson two structural variables: frequency of teammeetings and team functional heterogeneity(Jackson, 1996).

Team meetings constitute the basic prerequi-site for collaboration (McGrath, 1991). Al-though not addressing innovation in particular,the literature has demonstrated close relation-ships between frequency of meetings and team

performance. For example, results from studiesaddressing teams such as boards, councils, andcollege trustees have indicated a positive rela-tionship between frequency of meetings andsuccess of the team (Brewer & Kramer, 1986).It seems that the more the team meets, the moreteammates are motivated and committed to theteam's mission and hence contribute to theteam's success in achieving its goals (Brewer &Kramer, 1986). In another study, Hofner (1996)found that members of productive global busi-ness teams met and communicated more oftenthan members of less productive teams. More-over, members of the former also disagreedmore frequently, which contributed to criticalanalysis of work-related issues at meetings. Onthe basis of these related results, it seemedlogical to suggest that frequent meetings wouldenable team members to interact and hence pro-vide greater opportunity for members to de-velop the four team interaction processes sug-gested by Van Offenbeek and Koopman (1996).

Functional heterogeneity is described as thediversity of organizational roles embodied inthe team (Jackson, 1996). Research on teaminnovation often depicts tension between thedesire for heterogeneous teams, which fostercreativity and innovation (Ancona & Caldwell,1992; Bantel & Jackson, 1989; Zenger & Law-rence, 1989), and the desire for more homoge-neous teams, which promote cohesiveness,commitment, and member satisfaction and,therefore, implementation of innovation (Tsui,Egan, & O'Reilly, 1992). Rather than drawinggeneral conclusions, research should focus onthe inhibiting and facilitating variables that helptranslate team heterogeneity into team innova-tion. We suggest that the aforementioned set offour team interaction processes (Van Offenbeek& Koopman, 1996) might serve as such a me-diating construct. We go on to review prelimi-nary empirical evidence of how functional het-erogeneity might facilitate exchanging informa-tion, learning, motivating, and negotiating andhow this could lead to team innovation.

Exchanging Information

Functional heterogeneity might affectamount of information exchange, because team-mates with different organizational roles pos-sess different skills and expertise and, hence,broader informational resources and knowl-


edge. Although not directly examining this is-sue, Ancona and Caldwell (1992) found thatwhen a team recruited a new member froma certain functional area in an organization,communication increased dramatically in thatarea. This in turn might favor innovationthrough the introduction of additional and dif-ferent ideas and models (Agrell & Gustafson,1996). Similarly, Zenger and Lawrence (1989)suggested that functional heterogeneity mightinfluence team performance through the higherrate of communication outside the work team'sboundaries.

Learning

Functionally heterogeneous teams do notcarry only diverse knowledge and informationbut also different vocabularies, cognitive pat-terns, and styles. Hence, as the team considerswider sources of information, the diverse per-spectives will presumably increase team learn-ing. No empirical evidence has been adduced tosupport this assertion directly. A few authorshave emphasized the role of team discussion ofinformation and reflection on it as a prerequisitefor a team's ability to convert an individual'sinformation into team knowledge (Argyris,1993). Empirical results have indicated thatwhen team members discuss alternative views,the team improves its ability to foresee all pos-sible costs, benefits, and side effects (Pearce &Ravlin, 1987).

Motivating

Heterogeneity in general may well harm mo-tivation and commitment to team goals, becausethe diversity in opinions and perspectives mayspark conflict and resentment (Jackson, 1996).Tentatively confirming this logic, several stud-ies have indicated that team heterogeneity isassociated with deficient social integrationwithin teams (Jackson, 1996) as well as lessattachment and member satisfaction (Tsui et al.,1992). On the other hand, in functionally heter-ogeneous teams in particular, each member hasa unique contribution to make to the team'smission and therefore might be more account-able, committed, and motivated toward attain-ing team goals (Harkins & Petty, 1982; Weldon& Gargano, 1988). Therefore, we expected that

team functional heterogeneity would be posi-tively related to team motivation.

Negotiating

Functional heterogeneity might foster nego-tiating, because team members with differentorganizational roles probably make unique con-tributions to the team and hence may strive toexpress their unique opinions. Pfeffer (1981)showed that individuals with diverse functionalroles were less power oriented and less inclinedto perceive their attainment of personal successas being in competition with the success ofother team members. Hence, individuals withdiverse functional roles might be more open tomutual influence. In another study, Pelled,Eisenhardt, and Xin (1999) demonstrated thatmembers of functionally heterogeneous teamsexpressed more opposing opinions about taskissues, including goals, key decision areas, pro-cedures, and the appropriate choice for action,than members of more homogeneous teams,which contributed to mutual influence and en-hanced team performance.

In summary, a review of the relevant litera-ture demonstrated primary support for the ef-fects of team functional heterogeneity on thefour team interaction processes and on teaminnovation. However, no research so far hasaimed at integrating these findings into a com-prehensive model. We suggest a mediatingmodel in which the four interaction processesserve as mediators in the relationship betweenteam structures (frequency of meeting and func-tional heterogeneity) and team innovation. Inline with the preceding discussion, we proposethe following hypotheses:

1. Exchanging information, learning, moti-vating, and negotiating will emerge as distinc-tive facets of team interaction processes.

2. The team's frequency of meetings andfunctional heterogeneity will be positively re-lated to team innovation.

3. The team's frequency of meetings andfunctional heterogeneity will be positively re-lated to the four team interaction processes.

4. The four team interaction processes willbe positively related to team innovation.

5. Team interaction processes will serve asmediators in the relationship between teamstructures (frequency of meetings and func-tional heterogeneity) and team innovation.


Method

Participants and Procedure

Fifty-two self-managing teams were re-cruited randomly among a list of elementaryand secondary schools that enrolled for educa-tional training programs in northern Israel ad-ministered by the Ministry of Education. Schoolsettings were chosen because commentators(Henkin & Wanat, 1994) have suggested thateducational teams have arisen because of thenecessity to yoke together separate but inter-linked professional skills in response to growthof services, expansion of knowledge, and in-creases in specialization. In addition, schoolstaff teams offer a continuum of functionalheterogeneity, with homogeneous disciplinaryteams at one end and interdisciplinary hetero-geneous teams at the other and with differentdegrees of heterogeneity along the continuum.Following the definitional work of Hackman(1987), teams were identified as intact workteams in that they had responsibilities and re-sources, had worked together at least 9 monthsbefore data collection, depended on one anotherfor knowledge and effort, and had interdepen-dent tasks. Of the original 52 teams, 1 had apolicy of not participating in research, 1 was anew team and thus did not meet our criteria,and 2 had to be dropped from the analysisbecause the principal did not rate the team'sinnovation. Hence, 48 teams comprising 321school staff members (258 women and 63 men)were covered by the survey. The average num-ber of members per team was 6.23 (SD = 2.11).

Data were collected through questionnairesduring a training program. Research assistantswere present and answered questions if neces-sary. In addition, the team innovation measurewas distributed by research assistants person-ally to the teams' principals during their breaks.

Level of Analysis

The hypotheses identified the team as the unitof analysis. Researchers can measure team-levelphenomena using individual members' data inseveral ways (Kirkman & Rosen, 1999). Teamscan provide consensus survey ratings (Kirkman& Rosen, 1999), or team members can ratethemselves or their team on different attributes,and researchers can then aggregate these data to

the team level (Campion, Papper, & Medsker,1996). Following the recommendations of theauthors just listed, we averaged individual re-sponses across all team members who com-pleted the questionnaires and used the meanteam indexes (both for team functions of inter-action and team appraisal of innovation) asmeasures for analysis. We tested the efficacy ofthese aggregations through the interrater agree-ment procedure (James, Demaree, & Wolf,1993).

Measures

Team functional heterogeneity. Team func-tional heterogeneity was defined as the diversityof organizational roles embodied in the team(Jackson, 1996). Information for this measurewas obtained from a demographic question-naire. Functional heterogeneity was measuredby Blau's (1977) heterogeneity index, dennedas 1 — 2 7T2, in which TT is the proportion of thetotal team that each function category repre-sents. The function categories used were home-room teacher, professional teacher, principal,educational counselor, organizational counselor,psychologist, and school nurse.

Frequency of meetings. The frequency ofmeeting scale was a self-report measure,adopted from West (1994), designed to assessthe extent of formal and informal interactionwithin the team. The scale contains four itemsrated on a 5-point Likert-type scale indicatingextent of agreement (1 = strongly disagree, 5 =strongly agree). The Cronbach alpha reliabilityvalue was .89.

Team interaction processes. Team inter-action processes reflected the degree to whichteam members engaged in exchanging infor-mation, learning, motivating, and negotiating(Van Offenbeek & Koopman, 1996). To de-velop this scale, we distributed a pool of 40items adopted from West's (1994) effectiveteamwork questionnaire to three doctoral stu-dents in the field of teamwork and leadership.They were then asked to select, by the Q-sortprocedure, those items that best reflectedVan Offenbeek and Koopman's (1996) con-ceptualizations of exchanging information,learning, motivating, and negotiating. Itemsjudged irrelevant or on which the judges dis-agreed were excluded.

The final questionnaire consisted of four sub-


scales based on factor analysis (see Table 1): (a)a four-item exchanging-information scale witha reliability (alpha) level of .79, (b) a four-itemlearning scale with a reliability level of .85, (c)a four-item motivating scale with a reliabilitylevel of .83, and (d) a two-item negotiating scalewith a reliability level of .68. Each subscale wasmeasured by the mean responses to the relevantitems rated on a 5-point Likert-type scale (1 =strongly disagree, 5 = strongly agree).

Team innovation. A four-item scale modi-fied from West and Wallace (1991) for use withteachers measured team innovation (see Appen-dix). The items reflected the extent to which, inthe previous 6 months, the team had initiatedchanges in each of four job areas: work objec-tives, working methods, teaching methods, anddevelopment of skills. To measure team inno-

vation, we used both the principal's rating andthe team's own evaluation. (Cronbach alphareliability coefficients were .89 for principal'sratings and .90 for team's ratings.) This proce-dure was adopted for three reasons. First, aswith other team research in organizations(Alper, Tjosvold, & Law, 1998), obtaining ob-jective work outcome measures proved impos-sible, because schools usually do not collectteam-level innovation data. Second, when ateam was assessed by its organization, it was bymeans of the organization's own measurementsystems, so comparability across organizationswas limited (Kirkman & Rosen, 1999). Third,we surveyed both principals and team membersto avoid the same-source bias that would havearisen if we had used team members' data only(Podsakoff & Organ, 1986).

Table 1Factor Analysis of the Four Team Interaction Processes

Item

Usually we share information in theteam and do not keep information toourselves

We inform each other on different workissues

We really try to exchange informationand knowledge

My teammates always look for differentinterpretations and perspectives toconfront a problem

My teammates and I criticize eachother's work in order to improveteaching

My teammates are prepared to reflecton the way we act

My teammates and I engage inevaluating our weak points inattaining effectiveness

The team often utilizes the differentopinions for the sake of obtainingoptimal outcomes

The team's goals are specific andunambiguous

The team usually discusses its goalsand attains the agreement of teammembers

The team's goals are realistic andattainable

To what extent do you believe thatteam members are committed to theteam goals?

In our team, we all influence each otherEverybody in our team strives to

express his/her opinion

Exchanginginformation

.79

.66

.76

.66

.18

.23

.26

.26

.20

.13

.03

.21

.29

.07

Learning

.06

.32

.34

.27

.69

.73

.78

.72

.10

.19

.17

.16

.17

.24

Motivating

.20

.08

.17

.13

.12

.27

.17

.17

.73

.86

.89

.61

.09

.18

Negotiating

.09

.11

.19

.12

.26

.18

.02

.24

.14

.17

.13

-.04.77

.79


Control variables. Team size was treated asa control variable in our study because the lit-erature on teams has noted that size is a keyvariable influencing team effectiveness (Brewer& Kramer, 1986) and because larger teams havemore potential for heterogeneity (Bantel &Jackson, 1989). Team size was measured astotal number of team members.

Results

The hypotheses identified the team as the unitof analysis, so team-level variables were used inall analyses. Table 2 presents means, standarddeviations, and intercorrelations for all key vari-ables included in the analysis. Table 2 showsacceptable interrater reliabilities for the aggre-gated variables averaged across all of the teams(James et al., 1993). All teams met Glick's(1985) heuristic, whereby values of at least .6suggest that aggregating individual responses iswarranted.

As shown in Table 2, there was a consistentpattern of correlation among heterogeneity, fre-quency of meetings, and team interaction pro-cess variables and the two measures of teaminnovation (by the team and by the principal).This finding imparted more force to our predic-tions, especially because the two innovationvariables were assessed by two different sources(the team and the principal). In addition, thecorrelation between the innovation scores ob-tained by the team and those obtained by theprincipal was considerably high (r = .61, p <.001). Because of these consistencies, and to

avoid same-source bias, we used the principal'sappraisal measure for further analysis.

To test the first hypothesis, we performed afactor analysis using the maximum-likelihoodrotation varimax method (see Table 1). From avarimax rotation, four factors with eigenvaluesgreater than 1.0, ^ ( 3 , N = 321) = 63.44, p >. 1, emerged, corresponding to our original the-oretical expectation. Factor 1 appeared to rep-resent team members' behaviors directed at ac-knowledging teammates concerning work is-sues and sharing information, knowledge, andexperience necessary for the team's function-ing. This dimension referred to the exchanginginformation function of team interaction andconsisted of four items. Factor 2 pertained to amore intense form of dealing with informationthat ensured changes in subsequent behavior.These behaviors were directed toward criticalappraisal of the information gathered in theteam, drawing lessons from failure, and contin-uous learning. This factor referred to the learn-ing function of team interaction and consisted offour items. Factor 3 seemed to capture theteam's perception of specific attainable andmeaningful goals, as well as committing tothose goals. This dimension referred to the mo-tivating function of team interaction and con-sisted of four items. Finally, Factor 4 appearedto represent behaviors directed at mutual influ-ence in the team. This factor referred to thenegotiating function of team interaction andconsisted of two items.

Taken together, the factor analysis resultssupported Hypothesis 1. To obtain further sup-

Table 2Descriptive Statistics, Reliabilities, and Intercorrelation Matrix for the Study Variables

1.2.3.4.5.6.7.8.9.

Variable

Team sizeFrequency of meetingTeam's functional heterogeneityExchanging informationLearningMotivatingNegotiatingTeam innovation: principalTeam innovation: teammembers

M

6.603.600.433.863.604.103.923.69

3.70

SD

4.200.490.490.450.470.390.530.82

0.35

.82

.80

.80

.81

.77

.86

1

.06

.28*

.09

.07-.10

.07-.15

.02

2

—.36**.65***.52**.50**.40**.46**

.54***

3

—.36**.40**

-.01.30*.30*

.27*

4

—.85**.50**.58***.48**

.76***

5

—.41**.57***.62***

,79***

6 7 8 9

—.45** —.37** .55*** —

.31* .51** .61*** —

Note. The statistic rwg represents the reliability within groups averaged across all teams (James et al., 1993). Reliabilityscore ranges were as follows: .78—.91 for frequency of meetings, .70-.92 for exchanging information, .69-.88 for learning,.71-.90 for motivating, .65-.89 for negotiating, and .80-.92 for innovation. N = 48.* p < .05. ** p < . 01. * * * p < . 0 0 1 .


port, we examined the correlations between thedimensions, which, contrary to our expecta-tions, were moderate to high (ranging from .41for motivating and learning to .85 for exchang-ing information and learning; see Table 2). Thisfinding suggested that although the differentinteraction processes had common variance,each contained a unique aspect of team support.However, the moderate to high correlations be-tween the dimensions did not provide sufficientevidence for discriminant validity, and overallHypothesis 1 received only mixed support.

To test the second hypothesis, we conducteda hierarchical regression analysis. The controlvariable of team size was entered into the re-gression equation in Step 1, followed by thestructural predictors of team functional hetero-geneity and frequency of meeting in Step 2. Theresults of the hierarchical regression analysisare presented in Table 3. As shown in Table 3,team size accounted for 2% of the variance inteam innovation (team innovation, Equation 1).The complete model accounted for 18% of thevariance in team innovation (team innovation,Equation 2). Concerning the structural predict-ing variables, our results demonstrated that, insupport of our hypothesis, functional heteroge-neity and frequency of meetings significantlypredicted team innovation.

As a means of testing the third hypothesis,four hierarchical regression analyses were con-ducted for each of the four team interactionprocesses. As in the analysis of the first hypoth-esis, the control variable of team size was en-tered in the regression equation in Step 1, fol-lowed by the structural predictors of functionalheterogeneity and frequency of meeting inStep 2. As shown in Table 3, team size ac-counted for a negligible percentage of the vari-ance in all four interaction processes (Equation1). However, examination of the effects of thestructural predictors on the four interaction pro-cesses gave general support to the hypothesis,as follows. The complete model accounted for29% of the variance in exchanging information(exchanging information, Equation 2). Our re-sults indicated that frequency of meetings andfunctional heterogeneity significantly predictedexchanging information. In regard to the learn-ing function, the complete model accounted for25% of the variance in learning (learning, Equa-tion 2). Functional heterogeneity and frequencyof meetings significantly predicted team learn-ing. In regard to motivating, the complete

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model accounted for 20% of the variance (mo-tivating, Equation 2), with frequency of meet-ings as the sole significant predictor of motivat-ing. Finally, concerning the negotiating func-tion, the complete model accounted for 12% ofthe variance (negotiating, Equation 2). Func-tional heterogeneity and frequency of meetingssignificantly predicted team negotiating. Insummary, the preceding results supported thethird hypothesis.

To test the fourth hypothesis, we conducted ahierarchical regression analysis in which thecontrol variable of team size was entered in theregression equation in Step 1, followed by thefour interaction process indexes in Step 2. Theresults of the hierarchical regression analysis(see Table 4, Equations 1 and 2) demonstratedthat team size accounted for 2% of the variancein team innovation (team innovation, Equation1). The complete model accounted for 38% ofthe variance in team innovation (team innova-tion, Equation 2). Concerning the interactionprocesses, our results demonstrated that learn-ing was the sole significant (albeit potent) pre-dictor of team innovation, thus providing onlypartial support for our predictions.

Finally, the fifth hypothesis concerned themediating effects of team interaction processesin the relationship of team heterogeneity andfrequency of meetings (antecedent variables)with team innovation (consequence). Mediationcan be demonstrated by showing that (a) theantecedents are related to the consequence (thisassertion was supported in Hypothesis 2); (b)

the mediator is related to the consequence (thisassertion was supported in Hypothesis 4); and(c) the relation between the antecedent and theconsequence is eliminated when the mediator iscontrolled (James & Brett, 1984). To test this,we used a hierarchical regression analysis. As inthe preceding analyses, we entered the controlvariable of team size in the first step (teaminnovation, Equation 1). To control for the ef-fects of team interaction processes, we enteredthe four interaction processes in the second step(team innovation, Equation 2). In the third step,we entered the team structural variables, func-tional heterogeneity and frequency of meetings,to assess their residual variance. The resultsindicated that, after the effects of team interac-tion processes had been controlled, team heter-ogeneity and frequency of meetings did notcontribute significantly to the explained vari-ance of team innovation. Thus, team interactionprocesses mediated the relationship of team het-erogeneity and frequency of meetings with teaminnovation.

Discussion

The present study explored the issue of inno-vation at the team level of analysis. This isimportant because although teams are increas-ingly becoming a significant work unit in mod-ern organizations and are required to developinnovative products and services, most researchon innovation so far has focused on the individ-ual or organizational level (Agrell & Gustafson,

Table 4Hierarchical Regression Analyses Testing the Mediating Effect of TeamInteraction Processes in the Team Structures-Team Innovation Relationship

Dependent variable

Mean team members (/3)Exchanging information (/3)Learning (/3)Motivating (j3)Negotiating (J3)Frequency of interaction (/3)Functional heterogeneity (/3)

R2

Adjusted R2

FdfAR2

Equation 1

-.15

.03

.021.101

Team innovation

Equation 2

-.19.05.47*

-.01.22

.45

.386.42**5

.36

Equation 3

-.20-.00

.45*

.01

.18

.08

.09

.46

.364.57**7

.02

* p < .05. ** p < .01.


1996). Investigating innovation at the individuallevel, particularly individual characteristicssuch as creativity, self-efficacy, and cognitivefluency that foster innovation, seemed to fallshort of fully capturing the innovation phenom-enon, in that innovation is not restricted to aburst of creativeness in individual inventivethinking (Agrell & Gustafson, 1996; West &Wallace, 1991). On the other hand, focusingmainly on institutionalized structural and pro-cess arrangements at the organizational levelmight miss the inquiry into emergent innovationby team members working on the shop floor ofthe organization. Hence, we chose, in thepresent study, to address the innovation issue byinvestigating at the team level. Our results high-light the importance of structural and processarrangements within the team, which serve asinnovation carriers, and thereby contribute tothe innovation literature in several aspects.

First, at the structural level, our results em-phasized the role of formal and informal meet-ings as a basic prerequisite for team innovation.Our results also confirmed both long-standingtheory (Maier, 1971) and more recent empiricalevidence (Bantel & Jackson, 1989; Hambrick,Cho, & Chen, 1996; Jackson, 1996) indicatingthat team innovation depends greatly on teamheterogeneity. A mix of organizational roles cancontribute to increased environmental scanning,generation of alternatives, and multiple inter-pretations of information (Hambrick et al.,1996), all of which are relevant to innovation.

Second, this study complemented previouswork emphasizing the structural determinantsof team innovation by incorporating the inter-action processes of the team as an importantinfluence. Our results indicated that althoughheterogeneity is important, the interaction pro-cesses the team used outweighed heterogeneityin predicting innovation (team heterogeneitypredicted 16% of the explained variance in in-novation, whereas team interaction processesand, especially, team learning predicted 36% ofthe explained variance). These results indicatedthat teams seem more than merely a structurefor individuals who work together. Team mem-bers must exchange information, learn, negoti-ate, and motivate each other so that they can usetheir heterogeneity properly and work effec-tively and innovatively. Unless team memberslearn to work together, their aggregate cognitiveendowment can become a net liability, with

team performance and innovation suffering(Hambrick et al., 1996).

Moreover, team learning was found to be themost potent carrier of innovation in teams. Thisfinding supports both theoretical arguments(Argyris, 1993; Larson & Christensen, 1993;Swieringa & Wierdsma, 1992) and recent em-pirical evidence (West & Wallace, 1991) high-lighting the importance of learning and reflect-ing at the organizational level. Our findingsunderline the importance of reflection on theteam's objectives, strategies, and processes forthe purpose of creating a team-level intellectualproduct that initiates change at the team level.However, in considering the four interactionprocesses, a word of caution is warranted. Al-though the present study emphasized the impor-tant role of exchanging information, learning,motivating, and negotiating in the innovationprocess, our findings provided only partial sup-port for the distinctive nature of these processes.More studies are needed to explore the detailedinterrelationships as well as causal relationsamong exchanging information, learning, moti-vating, and negotiating.

Third, we found that team functional hetero-geneity influenced three of the four team inter-action processes. Specifically, the more hetero-geneous the team, the more its members en-gaged in exchanging information, learning, andnegotiating. If successfully replicated, this find-ing supports former research indicating thatteam functional heterogeneity does not neces-sarily mean potential problems for teamworkand helps to identify the specific beneficial ef-fects of functional heterogeneity. Concerningteam motivation, the results of the present studycould not resolve the tension detected in previ-ous studies between the inhibiting and the ben-eficial effects of team heterogeneity on teammotivation and commitment. Some studies em-phasized the deficient social integration withinteams and indicated motivational decline (Tsuiet al., 1992). Others argued that, in functionallyheterogeneous teams, team members might be-lieve that they make a unique contribution to theteam mission and are accountable for attainingteam goals; thus, these studies indicated moti-vational increment (Weldon & Gargano, 1988).

More research is needed in this area to betterour understanding of the nature of motivation inteams, specifically as to whether an individual'smotivation can automatically be aggregated intoa team-motivation characteristic. For example,


Manz (1993) suggested that granting teamsmore empowerment might in fact detract fromindividual levels of motivation. An individualmay actually perceive less autonomy on a teamin which decision making and responsibilitieshave to be shared among its members (Manz,1993). Perhaps what is needed most now inteam motivation research is an examinationof motivation at the team level and individuallevel simultaneously (Kirkman & Rosen, 1999),along with clarification of their interrelations.

Fourth, our findings demonstrated that teaminteraction processes mediated the team hetero-geneity-team innovation relationship. Morespecifically, team heterogeneity affected teaminnovation through its effects on team pro-cesses, especially team learning. This findingcan contribute to an understanding of the con-flicting evidence concerning the relative impor-tance of team heterogeneity at all stages of teaminnovation (Ancona & Caldwell, 1992; Bantel& Jackson, 1989; Zenger & Lawrence, 1989).As our findings imply, the development of mu-tual work processes emphasizing learning andreflection is a crucial mechanism for translatingteam heterogeneity into team innovation. On theother hand, our findings also shed light on thedrawbacks of more homogeneous teams. Teamhomogeneity apparently did not stimulate teammembers to engage in mutual learning, whichimpaired the innovation of these teams. Homo-geneous teams, more than heterogeneous teams,must seemingly make deliberate efforts and en-gage in team building and training interventionsto learn how to work together and fostercreativity.

The results of this study are, of course, lim-ited by its operations. The data were largelyself-reported and subject to biases, although re-cent research suggests that self-reported data arenot as limited as commonly believed and thatpeople often accurately perceive their socialenvironment (Alper et al., 1998). However,common method variance may not be a seriousproblem in our data, because we included anindependent rating of innovation by principalsthat evinced a strong relationship with theteam's rating.

In addition, the cross-sectional design of thepresent study raises the issue of causality. It isdifficult to determine the nature of the relation-ship between the team processes we observedand team innovation. Do teams that introduceinnovation also introduce innovative ways of

working together? Are these different team pro-cedures and interactions a determinant or a con-sequence of innovation? Nor could the dataprovide direct evidence of causal links betweenthe structural variables of heterogeneity and fre-quency of meeting. It may well be that teamsthat function well together and generate positiveprocess norms will attract and maintain a moreheterogeneous membership and will be inspiredto meet more often. Longitudinal studies in-volving more objective criteria are clearly re-quired to further explore the nature of theserelationships.

Conclusion

The present study focused on emergent inno-vation at the team level and explored the struc-tural and process arrangements embodied byteams that serve as innovation carriers: teamfunctional heterogeneity, frequency of teammeetings, and team interaction processes. Ourresults help to incorporate the structural andprocess aspects of teamwork into a comprehen-sive model that contributes to the prediction ofteam innovation. The results of the presentstudy demonstrated that team interaction pro-cesses, and especially team learning, mediatedthe team heterogeneity-team innovation rela-tionship. These results have several theoreticaland practical implications for improving teaminnovation.

First, our results support a social psycholog-ical perspective of innovation. The innovationprocess can be seen to consist of people's par-ticipation in the innovation and the nature of theinteraction among them.

Second, our findings emphasize the impor-tance of integrating team heterogeneity consid-erations into the devices for selection of indi-viduals for teams. Existing devices rely at beston individual characteristics such as how toidentify the best person for the job or who willbe more innovative (Tannenbaum et al., 1996).Our results imply that team-level considerationsshould include enhancing functional diversity.Moreover, such improvements in selection in-terventions will promote team information ex-change, team learning, and team negotiating aswell as team innovation.

Third, our findings highlight the importanceof dialogue as a carrier of the creative process.In a team, opportunities exist for genuine dia-logue, but they are endangered by individuals'


fear of exposing themselves and of rejection bythe other team members. Managers should as-similate institutionalized structural and processframeworks to facilitate dialogue and to en-able team members to learn and reflect onthemselves.

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Appendix

Team Innovation Scale

Directions. Please think of the teamwork in the last6 months, and try to review performance data. Foreach of the following sentences, please indicate theextent to which the team had initiated the followinginnovations.

1. The team initiated new procedures and methods. and methods.

2. The team developed innovative ways of accom-plishing work targets/objectives.

3. The team developed new skills in order to fosterinnovations.

4. The team initiated improved teaching strategies