How important is it for a Manager to spend time with his team outside of the work and how does this reflect on the smooth function in the work?

Its very important both for managers and colleagues to have a close relationship out of the competitive work environment, it helps a lot to solve issues and keeps relationship positive, improves productivity, creativity and motivation.

It is important for manager to spend time outside of the work, its part of project manager's job to engage in team building activities including spending time with team, celebrate the success on achieving milestones, resolve conflicts and gain trust of the team.

 The engagement of staff out side the work should help to bring  the team members understand each other more personally and this should help for a good working environment later.