However, if the individual is unable to conform the impact will be negative. The famous Hawthorn studied conducted in the 1920s and 1930s revealed the results of non-conformity. One such experiment, The Bank Wiring Operation Study revealed that workers were more responsive to the social norms of the peer group than to the control and incentives of the organisation.

This study involved 14 men who were organised into three sub-groups. Each contained three wirers and one supervisor.In addition, two inspectors moved between the three groups. The detailed observations revealed that the men had formed two informal groups or cliques made up from those at the back of the room and those at the front.

The second major finding indicated that the cliques developed informal rules of behaviour or norms. Several of these norms concerned the rate of productivity. Not only did the men control the productivity rates but they gave incorrect reports to the management on the output achieved.The group established a norm of what they considered to be a fair day’s work.

Any deviant from the norm was admonished. Other group members elicited social pressure such as name calling and practical jokes to curb the deviant behaviour. Social ostracism resulted if the person did not respond to the pressure. (Handy, 1993, p 153) Therefore, the pressure to conform can be seen as a negative impact on the individual.The individual can be stifled by the pressure to conform reducing originality and innovation. Moreover, this study indicates that the social functions of the work-group can negatively effect the organisation and productivity. To identify the positive and negative impact of the formal group upon the organisation we need to explore the characteristics of an effective group, and the stages of group formation.

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Truckman (1965) categorized the creation and development of groups into four stages.Storming; this is the testing stage. Conflict and disagreements between members help to determine how the group will develop.

At this stage, a leader will emerge as well as various sub-groups. In this stage the group is likely to rebel against the rules of the organisation and create its own rules and values.