Group Formation: 5 Theories, Process

What is Group Formation?

Groups are formed to satisfy both organizational and individual needs. They form in organizations because managers expect people working together in groups will be better able to complete and coordinate organizational tasks. Organizations of all types are forming teams to improve some aspect of the work, such as productivity or quality.

Hence, Group formation has certain objectives. The purpose behind group formation may be task achievement problem-solving, proximity, or other socio-psychological requirements. Group formation is based on activities, interactions, and sentiments.

Group Formation

People form groups to use its numerous benefits. Members of a group help each other in need, cooperate to reach goals, share resources, and, last but not least, provide opportunities for social interaction, companionship, and support.

  1. Task Accomplishment
  2. Problem-Solving
  3. Proximity
  4. Socio-Psychological Factors
Group Formation
Group Formation

Task Accomplishment

The basic purpose of group formation is the achievement of certain objectives through task performance. Individuals come closer in order to understand the tasks and decide on the procedures of performance.

In any organization, task accomplishment is the reason for which different groups such as engineering group; marketing group, foreman’s group, and personnel groups are formed for the achievement of the organization’s goals. When an organization faces some procedural difficulties, concerned groups discuss them and evolve new techniques of production, marketing, and other functions.


When people anticipate or face certain problems, they unite to solve the problems. Unity has strength. A group provides strength to members who are willing to challenge any problem. Group behavior gives more strength to come down heavily on problems.


People form groups because of proximity and attraction toward each other. The group formation theory is based on proximity, which means that individuals affiliate because of spatial or geographical proximity. They interact frequently with each other on many topics, because this interactive communication is rewarding.

Socio-Psychological Factors

Sentiments and action uniforms bring people closer. They also form groups for safety, security, and social achievements. People cooperate with members of the group on social as well as economic grounds to reach satisfactory levels.

Theories of Group Formation

This has been stated to understand the reasons behind the formation of informal groups. These theories of group formation are explained in brief:

  1. Propinquity Theory
  2. Interaction Theory of Homans
  3. Balance Theory
  4. Exchange Theory
  5. Group Development
Theories of Group Formation
Theories of Group Formation

Propinquity Theory

The meaning of the term propinquity means nearness. In the organizational context, employees working together come close to forming a group with certain objectives with others.

Thus, according to this theory, the group formation process of informal groups is based on the nearness factor. Nearness is only a facilitating factor for group formation and cannot be a reason for group formation. This theory does not take into consideration the reasons for which the groups are formed.

Interaction Theory of Homans

Three elements that have been considered by Homans in stating his theory are activities, interactions, and sentiments. These three are interrelated. George C. Homans states that more the individuals share their activities, the more they will interact with each other, and more stronger their sentiments for each other and vice-versa.

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The nearness factor is not merely considered, but the accomplishment of group goals is also given importance. This theory helps to understand the group formation process by making clear the important elements behind forming groups.

Theories of Group Formation
Theories of Group Formation

Balance Theory

Theodore Newcomb stated the balance theory. According to Newcomb, “Persons are attracted to one another on the basis of similar attitudes towards commonly relevant objectives and goals. Once a relationship is formed, it strives to maintain a symmetrical balance between attraction and common attitudes.

If an imbalance occurs, attempts are made to restore the balance. If the balance cannot be restored, the relationship dissolves”. This theory no doubt is very simple and explains the motives behind the forming of groups. However it does not explain various other causes of the formation of the group. Both propinquity and interaction play a role in the balance theory.

Thus, the balance theory is addictive in nature in the sense that it introduces the factor of ‘balance’ to the propinquity and interaction factors. There must be a balance in the relationship between the group members for the group to be formed and for its survival.

As shown in the figure below, Mr. X will interact with Mr. Y and form a group because of some common attitudes and values such as authority, work, lifestyle, religion, policies, etc. They will strive to maintain a symmetrical balance between the attraction and the common attitudes. If they fail in their efforts, the group will be dissolved.

Exchange Theory

John W. Thibaut and Harold H. Kelley proposed this theory. It is based upon ‘REWARD-COST outcomes of interaction’. Rewards should be greater than the costs of an outcome and must be there for affiliation or attraction to take place.

In the Exchange Theory, it is suggested that an individual joins a group on the basis of the outcomes of rewards and costs. If the cost is more than the reward, he will not join the group.

Satisfaction of needs with more rewards than cost is an important reason for individuals to join groups. It is true with respect to formal as well as informal. There is an element of truth in each theory stated above. Thus, no theory throws light on all the factors which affect the formation of GROUPS.

Group Development

The Five-Stage Model: The five stages perspective is probably the best-known theory of how groups develop over time. The five-stage group development model given by Tuckman and Jensen characterizes groups as proceeding through five distinct stages: forming, storming, norming, performing, and adjourning.

Process of Group Formation

These are the stages of the process of group formation:

  1. Stage 1: Forming
  2. Stage 2: Storming
  3. Stage 3: Norming
  4. Stage 4: Performing
  5. Stage 5: Adjourning
Process of Group Formation
Process of Group Formation

Stage 1: Forming

In the Forming stage, personal relations are characterized by dependence. Group members rely on safe, patterned behavior and look to the group leader for guidance and direction. Group members have a desire for acceptance by the group and a need to know that the group is safe.

Rules of behavior seem to be to keep things simple and to avoid controversy. Serious topics and feelings are avoided. The major task functions also concern orientation. Members attempt to become oriented to the tasks as well as to one another. To grow from this stage to the next, each member must give up the comfort of non-threatening topics and risk the possibility of conflict.

Stage 2: Storming

The next stage, called Storming, is characterized by competition and conflict in the personal-relations. As the group members attempt to organize for the task, conflict certainly results in their personal relations. Individuals have to bend and mold their feelings, ideas, attitudes, and beliefs to suit the group organization.

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Because of the “fear of exposure” or “fear of failure,” there will be an increased desire for structural clarification and commitment. Although conflicts may or may not surface as group issues, they do exist.

Questions will arise about who is going to be responsible for what, what the rules are, what the reward system is, and what criteria for evaluation are. These reflect conflicts over leadership, structure, power, and authority.

There may be wide fluctuations in members’ behavior based on emerging issues of competition and hostilities. Because of the discomfort generated during this stage, some members may remain completely silent while others attempt to dominate. In order to progress to the next stage, group members must move from a “testing and proving” mentality to a problem-solving mentality. The most important trait in helping groups to move on to the next stage seems to be the ability to listen.

Stage 3: Norming

In the Norming stage, interpersonal relations are characterized by cohesion or consistency. Group members are engaged in active acknowledgment of all members’ contributions, community building and maintenance, and solving group issues.

Members are willing to change their preconceived ideas or opinions on the basis of facts presented by other members, and they actively ask questions of one another. Leadership is shared, and cliques dissolve.

When members begin to know and identify with one another, the level of trust in their personal relations contributes to the development of group cohesion. It is during this stage of development (assuming the group gets this far) that people begin to experience a sense of group belonging and a feeling of relief as a result of resolving interpersonal conflicts.

Stage 4: Performing

The Performing stage is not reached by all groups. If group members are able to evolve to stage four, their capacity, range, and depth of personal relations expand to true interdependence. In this stage, people can work independently, in subgroups, or as a total unit with equal facilities.

Their roles and authorities dynamically adjust to the changing needs of the group and individuals. Stage four is marked by interdependence in personal relations and problem-solving in the realm of task functions. By now, the group should be most productive.

Individual members have become self-assured, and the need for group approval is past. Members are both highly task-oriented and highly people-oriented. There is unity: group identity is complete, group morale is high, and group loyalty is intense.

Stage 5: Adjourning

The final stage, adjourning, involves the termination of task behaviors and disengagement from relationships. A planned conclusion usually includes recognition for participation and achievement and an opportunity for members to say their personal goodbyes.

Concluding a group can create some apprehension in effect, a minor crisis. The termination of the group is a regressive movement from giving up control to giving up inclusion in the group. The most effective interventions in this stage are those that facilitate task termination and the disengagement process.

FAQs Section

What is the process of group formation?

These are the stages of the process of group formation:
1. Stage 1: Forming
2. Stage 2: Storming
3. Stage 3: Norming
4. Stage 4: Performing
5. Stage 5: Adjourning.