Challenges in Managing Amoeba Teams: Evidence from Fast Fashion Industry(CEIBS Working Paper, No. 032/2020/MKT, 2020)

Many companies turn agile in response to the rapid changes in market, technology, and workforce. An agile organization consists of many amoeba teams – small teams responsible for their own operation decisions and performances. We identify the challenges in managing amoeba teams based on evidences from a leading online fast fashion company. One challenge lies in achieving a desirable team structure with each team member assigned to a unique role: a designer, a marketing-sales operator, a support. The fully staffed (3-person) teams significantly outperformed the understaffed (2-person) teams that required shared roles. Furthermore, the reduction in productivity not only came from human capital constraint, but also team incentive design. Specifically, a regressive team bonus plan created disincentive for a 2-person team to accept the third member. Another challenge is on the bonus allocation among the team members to balance pay leadership with concern for parity. Among the 3-person teams, those with sales leadership (the marketing-sales operator receiving the highest bonus) significantly outperformed those with design leadership. This reflects the importance of market orientation in the fast fashion industry. However, pay disparity within a team undermined some teams’ performance. Overall, these results underscore the importance of new management practices for agile organizations.