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What happens (or what can happen) is that the firm is not as profitable or as efficient as it would want to be. Its managers focus on creating teams instead of on making the production process as efficient as it can possibly be.
What can happen is that managers reflexively make teams. They make teams even in instances where one person might be able to do the job much more quickly and efficiently. The team, then, might waste time as it searches for consensus or tries to include everyone's input. When time is wasted, the costs of a project go up and its profitability goes down.
Lower efficiency and lower profits, then, can often happen when managers create teams just because they think that is the thing to do.
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