But what about when something happens that the team can't resolve internally? Say a personality conflict, or maybe team morale has dropped so low that no longer is "for the good of the team" good enough. That's when you need help.
In the case of a personality conflict, some suggest that the team can vote someone off the island. In that case, the team has the power to remove a person from the team who has become an impediment. But a team can't fire a person, only remove him from the team. So that person has to go somewhere, this is where management helps [or doesn't help]. If management can't provide him with a place to go, he's going to stay on your team and everyone suffers. If management forms a new healthy team, then you're all set, everyone wins.
In the case of low morale, where a team no longer functions well enough to solve even the smallest of impediments, an outside hand is needed. Sure, it is possible that the outside hand is part of the reason the morale is low, but who better to solve the problem? Everyone makes mistakes, and everyone gets the opportunity to fix them.
Keep in mind, that management shouldn't step in every time "for the good of the team" isn't good enough. The idea is that a team is self-organizing, and draws on the creative solutions of the creative people that make up the team. Their solutions of a four person team are expected to be better than the results of four individuals working on the same problem. Collaboration makes them better, and the struggles they overcome makes that bond stronger.
So when should management step in? The answer is simple, but sometimes hard to identify: When the team fails to identify a problem. Individuals may have identified a problem, but if the whole team doesn't agree that it needs solving, then this is when management needs to step in. We had a situation where there was clearly a conflict within the team. As usual, we were allowed to work it out, so after a sprint, we talked (and drew) it out. The result of this particular discussion was that the feature specification we made up front wasn't being followed, and two members viewed this as a problem, one was indifferent, and another thought that everything was fine. The team did not agree that there was a problem, and thus created a problem for two of the members (Matt and I) who felt that the feature spec needed to be adhered to, or revised as a group.
This is a perfect time for a manager to step in. His job at that point would be to determine if the problem did exist. He'd have to listen to both sides, and then make a call based on the company's history and goals. Chances are he was there when the feature spec was put in place, and knows the issues that arise when there is no documentation of discussions. But he might also say that the feature spec is antiquated, offering no value outside of the team, so something more valuable to the company might be suggested.
The bottom line: A team usually does an amazing job of solving problems that affect the whole team. The team struggles when a problem affects a part of the team in a negative way, but another part benefits from it. This is where management plays an important role, and their action or inaction can greatly affect the health of the team.