If the employees of an organization, are given an opportunity to interact with one another, they find that they have many things similar, which also creates a group.
When individuals share common interests and goals, it requires cooperation and coordination for its achievement, which also results in the formation of groups.
Last but not the least, a group has more influence and power, as compared to an individual, which also promotes its formation.
Figure 1.8 Reasons for group formation
In general, groups are created out of individual need satisfaction, which can be personal, social or economic. Meaning that the members need to associate with the group in order to fulfil their basic needs.