Closing the Psychological Distance: The Effect of Social Interactions on Team Performance

Abstract

Social interactions in the workplace can generate reciprocal peer effects and narrow the psychological distance for team prosociality among coworkers. Incorporating such a psychological interdependence into a team production model, we investigate how the optimal social interactions characterized by the type of task the team is performing (complementary or substitutable tasks) and the vertical and horizontal structure of the team (with or without leadership). Specifically, we find that in the case of complementary task, social interactions can enhance team performance in horizontal teams by narrowing the prosociality gap among members and resolving task bottlenecks. In the case of substitutable task, however, social interactions can actually decrease team performance. In vertical teams with leadership, we find that when the team is led by a more prosocial leader, social interactions can enhance performance in complementary task teams, but decrease performance in substitutable task teams. When the team is supported by a more prosocial follower, social interactions decrease team performance in both complementary and substitutable task teams. Our results provide important implications for organizations in considering when, for what type of team, by whom, and to what extent to promote social interaction within teams that bring members' personal (psychological) distances closer, as a means of enhancing organizational effectiveness.