The Effects of Decision-Making Structure on Performance and Satisfaction in Temporary Teams

Temporary teams are frequently formed on-demand in organizations for short-term engagements involving tightly coupled and complex tasks. We examine how the distribution of decision-making authority among team members affects the effectiveness of such teams. Specifically, we shed light on how decision-making (de)centralization (i.e., whether decision-making authority is concentrated in a formal leader or shared among team members) impacts temporary teams’ task performance and satisfaction. Empirically, we conduct a field experiment, involving 113 temporary distributed teams and a unique field setting, i.e., an online escape game. Our findings reveal that while decentralized structures enhance task performance, they also lead to lower team task satisfaction compared to centralized structures. Further, causal mediation analysis reveals that the main effect of centralized versus decentralized structure on team task satisfaction can be explained by differences in teams’ collective perceptions of social loafing. Our findings contribute to existing research on temporary team effectiveness and the role of decision-making structures in such teams.