Groups, like dreams, have a manifest, overt aspect and a latent, covert aspect. The manifest aspect is the work group, a level of functioning at which members consciously pursue agreed-on objectives and work toward the completion of a task. Although group members have hidden agendas, they rely on internal and external controls to prevent these hidden agendas from emerging and interfering with the announced group task. They pool their irrational thinking and combine their skills to solve problems and make decisions.

In truth, groups do not always function rationally or productively, nor are individual members necessarily aware of the internal and external controls they rely on to maintain the boundary between their announced intentions and their hidden agendas. The combined hidden agendas of group members constitute the latent aspect of group life, the basic assumption group. In contrast to the rational group, this group consists of unconscious wishes, fears, defenses, fantasies, impulses, and projections. The work group is focused away from itself, toward the task; the basic assumption group is focused inward, toward fantasy and a more primitive reality. Tension always exists between the two; it is balanced by various behavioral and psychological structures, including individual defense systems, ground rules, expectations, and group norms.