Group formation has certain objectives. The purpose behind group formation may be task achievement, problem-solving, proximity or other socio-psychological requirements. Group formation is based on activities, interactions and sentiments.
1) Task accomplishment: the basic purpose of group formation is the achievement of certain objectives through task performance. Individuals come closer in order to understand the tasks and decide on the procedures of performance. In any organization, task accomplishment is the reason for which different groups such as an engineering group; marketing group, foreman's group and personnel group are formed for achievement of the organization's goals. When an organization faces some procedural difficulties, concerned groups discuss them and evolve new techniques of production, marketing and other functions.
2) Problems solving: when people foresee or face certain problems, they unite to solve the problems. Unity has strength. A group provides strength to members who are willing to challenge any problem group behavior gives more strength to come down heavily on problems.
3) Proximity: people form groups because of proximity and attraction towards each other. The group formation theory is based on propinquity, which means that individuals affiliate because of spatial or geographical proximity. They interact frequently with each other on many topics, because this interactive communication is rewarding.
4) Socio-psychological factors: sentiments and action-uniformities bring people closer. They also form groups for safety, security and social achievements. People cooperate with members of the group on social as well as economic grounds to reach satisfactory levels. People form groups basically for activities, interaction and due to sentiments. People proximity frequently discuss their problems. They try to reduce their tensions and achieve satisfaction. Individuals interest each other only when they have common attitudes and sentiments. People with diverse attitudes form groups under certain compulsions to meet unexpected problems. Employees form unions to ensure the safety and security of jobs. Outside the factory, they form groups for religious, social, cultural and political activities.