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This research investigates subgroup formation as an important mediator in the goal interdependence-intragroup conflict linkage. Specifically, it proposes that subgroup formation will mediate the relationship between cooperative goal interdependence and intragroup conflict, but not for competitive goal interdependence and intragroup conflict. Further, competitive goal interdependence is posited to have direct, positive effects on intragroup conflict. Using structural equation modeling analyses with 79 student project teams, the findings revealed that subgroup formation fully mediated the relationship between cooperative goal interdependence and task and process conflict, but only partially mediated the relationship between cooperative goal interdependence and relationship conflict. As predicted, subgroup formation did not mediate the relationship between competitive goal interdependence and intragroup conflict; however, competitive goal interdependence was negatively, rather than positively, related to intragroup conflict.

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