The Effect of Teams on Firm Profitability and Customer Satisfaction

Abstract

This article examined whether the use self-directed work teams increased profit and customer satisfaction. It also examined whether leadership styles and the compensation system moderated how teams affected performance. All the firms involved in this study were automobile dealer service garages. Service garages using teams had significantly higher profits than service garages that did not use teams. The differences in customer satisfaction levels between service garages using teams and those not using teams were significant at the .10 level.