A group in itself does not necessarily constitute a team. Teams normally have members with complementary skills and generate synergy through a coordinated effort which allows each member to maximize his or her strengths and minimize his or her weaknesses.

Thus teams of sports players can form (and re-form) to practice their craft. Transport logistics executives can select teams of horses, dogs or oxen for the purpose of conveying goods.

Theorists in business in the late 20th century popularized the concept of constructing teams. Differing opinions exist on the efficacy of this new management fad. Some see "team" as a four-letter word: overused and under-useful. Others see it as a panacea that finally realizes the human relations movement's desire to integrate what that movement perceives as best for workers and as best for managers. Still others believe in the effectiveness of teams, but also see them as dangerous because of the potential for exploiting workers — in that team effectiveness can rely on peer pressure and peer surveillance.

Compare the more structured/skilled concept of a crew, and the advantages of formal and informal partnerships.

Team size, composition, and formation

Team size and composition affect the team processes and outcomes. The optimal size (and composition) of teams is debated and will vary depending on the task at hand. At least one study of problem-solving in groups showed an optimal size of groups at four members1. Other works estimate the optimal size between 5-12 members.Fact: date=June 2007 Less than 5 members results in decreased perspectives and diminished creativity. Membership in excess of 12 results in increased conflict and greater potential of sub-groups forming.

David Cooperrider suggests that the larger the group, the better. This is because a larger group is able to address concerns of the whole system. So while it may not be effective at solving a given task, Cooperider asks us to consider the relevance of that task: "effective at what?"

Regarding composition, all teams will have an element of homogeneity and heterogeneity. The more homogeneous the group, the more cohesive it will be. The more heterogeneous the group, the greater the differences in perspective and increased potential for creativity, but also the greater potential for conflict.

Team members normally have different roles, like team leader and agents. Large teams can divide into sub-teams according to need.

Many teams go through a life-cycle of stages, identified by Bruce Tuckman as: forming, storming, norming, performing and adjourning.

Independent and interdependent teams