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1. Theories of Group Formation
• Propinquity Theory
• Homans Interaction Theory
• Balance Theory
• Exchange Theory
Jayant Isaac,Asso.Profesor –
Mkt.,Sys.,& HRM

2. Propinquity Theory
• The term Propinquity means nearness.
• This theory states that an individual affiliate
with one another because of spatial or
geographical proximity.
• In organizational context ,individuals working
together tend to form a group with others
more easily as compared to with individuals
working relatively at a distance place.
• Here in this theory nearness is only a
facilitating factor for group formation and
not the reason for it.
Jayant Isaac,Asso.Profesor –
Mkt.,Sys.,& HRM

3. • Propinquity theory of group formation states that individuals form group due to
spatial and geographical nearness. The word propinquity means “Nearness’’.
According to this theory, people who work within the same business area or at
nearby places are more likely to affiliate with each other and form a group
than those who works at a distant places. Proximity of people is the only factor
considered by propinquity theory for group formation of people. It does not
take into account several other factors or complexities that affects the
formation of group of peoples. Therefore, propinquity theory is not analytical
as it focuses on only proximity of peoples for creating team but ignored
several practical and theoretical reasons

4. Homans Interaction Theory
• This theory is based on the activities, interactions
and sentiments.
• All these elements are directly related to one
another.
• Acc. To this theory “the more activities persons
share, the more numerous will be their interaction
and the stronger will be their shared activities and
sentiments.
• This theory helps to understand the basic idea
behind the group formation.

5. • George C, Homans propounded the Homan’s Interaction theory. Activities,
interaction and sentiments are the three main factors for group formation according
to this theory. These factors directly affect each other’s and are responsible for
affiliating people with one another. This theory states more the activities people’s
share, more will be their interactions and stronger will be their shared activities and
sentiments, and more the sentiments peoples have for one another, then they will
share their activities more which will also increase their interactions. It says that
peoples do not share activities and interacts with one another just because of
physical proximity but also for achievement of group goals. Key element is
interaction due to which they develop common sentiments for each other leading to
formation of group among them.

6. BALANCE THEORY
• Provided by Newcomb, suggested similarity
of attitudes towards relevant objects and
goals as the basics for group formation.
• Persons are attracted to one another on the
basic of similar attitudes towards commonly
relevant objects and goals .
• Once a relationship is formed, it strives to
maintain a symmetrical balance between the
attraction and common attitudes.
Jayant Isaac,Asso.Profesor –
Mkt.,Sys.,& HRM

7. BALANCE THEORY OF GROUP
FORMATION
SIMILAR ATTITUDES
(TOWARDS
AUTHORITY,WORK,LIFE
STYLES,POLITICS,RELIGION
S ETC.)
Jayant Isaac,Asso.Profesor –
Mkt.,Sys.,& HRM

8. • Balance Theory
• Balance theory states that people having similar attitudes and values are attracted
towards each other and form a group. This theory was put forward by Theodore
Newcomb. Similarity of attitudes is the main factor for developing a group among
people as per this theory. After forming group and creating relationship, it is ensured
that there is symmetrical balance between the attraction and common attitudes. In
case of any imbalances attempts are made to restore them. Relationship is
dissolved if balance between the two cannot be restored. Propinquity and interaction
theory have vital role in this theory and that’s why balance theory is additive in
nature. This theory adds balance factors to propinquity and interaction factors.
Balance in relationship is must among all group members for survival of group.

9. EXCHANGE THEORY
• In this theory the people involve in social
exchange on the basis of perceived reward-
cost relationship in a particular relationship.
• This theory suggest that an individual will join(or
will not join) on the basis of the outcomes of
reward and cost.
• If the reward is equal to or more than cost, the
individual will join the group, in reverse case
,(s)he will not join the group.
Jayant Isaac,Asso.Profesor –
Mkt.,Sys.,& HRM

10. • Exchange theory was put forward by Thaibaunt and Kelly. Outcomes of
interactions that are basically reward and cost are main factors for formation
of group. Peoples joins group by considering what they are getting in return
for interaction with group members. According to exchange theory, outcomes
of interactions should be able to attract and affiliate the peoples in group. It
should be ensured that minimum level of positive outcomes should be
maintained. Reward from interactions gratifies needs whereas cost results in
anxiety, frustration, fatigue and embarrassment. Peoples will join group only if
reward is more than or equal to cost of interactions.

11. Why People Join Groups:
To gain some insight into groups and group processes, we may first examine why people join groups.
In truth, people join groups for various reasons. They join functional groups simply by virtue of joining
organisations. This means that people accept employment to earn money or to practice their chosen
profession.
Once inside the organisation, they are assigned to jobs and roles and thus become members of
functional groups. What is normally, though not always, found is that functional group membership
precedes task group membership. People in existing functional groups are told, are asked, or
volunteer to serve on ad hoc committees, task forces and teams.

12. • Interpersonal attraction:
• The primary reason why people choose to form informal or
interest groups is that they are attracted to each other. There are
various reasons for interpersonal attraction such as physical
features, similarity of attitudes, personality, economic spending
or even the perceived abilities and the usefulness of others. All
these factors lead in various degrees to the interpersonal
attraction that can result in the formation of an informal or
interest group.

13. • 2. Group activists:
• The second important reason for people to get motivated to join
groups is that the activities of the group appeal to them.
Jogging, playing cards, gossiping in clubs’ discussing current
political motivation are activities that some people enjoy. People
enjoy these only when they are in a group and most such
activities actually require more than one person.

14. • 3. Group goals:
• The goals of a group may also be another motivator. They may
also motivate people to join. For example, an individual may not
like to collect subscription for a political party, but people may
join a group to perform the same activity because they subscribe
to its goal.

15. • 4. Group membership:
• Another reason why people join groups is that the mere fact of
being a member may be personally satisfying. Industrial
psychologists have argued that the need for affiliation prompts
people to seek the company of others.
•