This study tests social identity theory and realistic conflict theory by ex
amining intra- and intergroup relations in a team-based community-health ca
re organization. The relationships between people's patterns of identificat
ion (with their work group and with the organization) and their perceptions
of intergroup competition for scarce resources are related to in-group fav
oritism Questionnaire data gathered from 112 participants, who were members
of 17 wort groups within the organization, reveal that strong identificati
on with the work group rather than the organization is related to high leve
ls of in-group favoritism, thus supporting the relevance of social identity
theory in an organizational setting. In-group identification did nor predi
ct between-group discrimination in resource distribution, although such dis
crimination was demonstrated We suggest that in applied settings the factor
s influencing social behavior ore more complex than in laboratory studies b
ut that social identity theory has clear practical importance for understan
ding and influencing the effectiveness of team-based organizations.