FORMAL STRUCTURE AND THE DEVELOPMENT OF INFORMAL HIERARCHY:

THE DEVELOPMENT OF INFORMAL HIERARCHY 0

FORMAL STRUCTURE AND THE DEVELOPMENT OF INFORMAL HIERARCHY:

AN EXPERIMENTAL STUDY CONCERNING THE ROLE OF INTERPERSONAL BEHAVIOUR

MASTER THESIS

MSc Human Resource Management University of Groningen

Faculty of Economics and Business

June 15 ^th , 2014

Madelon Sporrel Student number: 2384655

Veemarktstraat 97B 9724 GC, Groningen

+31 (0) 646821149 m.l.sporrel@student.rug.nl

Supervisor: J. Oedzes

Second assessor: Prof. dr. H.B.M. Molleman

Abstract

In 41 experimental groups I examined the relationship between formal structure and informal hierarchy. I hypothesized that informal hierarchy would emerge more strongly (i.e. more linear) in groups without a formal structure compared to groups in which a formal structure is present. In addition, I expected that interpersonal behaviour would mediate the relationship between the presence of a formal structure and the development of informal hierarchy. Results indeed revealed that, in the absence of the formal structure-condition, informal hierarchy emergence was significantly stronger compared to the presence of the formal structure-condition.

Furthermore, the absence of a formal structure is found to lead to more interpersonal behaviour shown by the team members. However, results did not show the expected mediation pattern for interpersonal behaviour. An important implication of these findings is the awareness of the emergence of informal hierarchy within groups and the understanding of the interplay between formal structure and informal hierarchy.

Keywords: formal structure, informal hierarchy, interpersonal behaviour, influence, rank-order

Formal structure and the development of informal hierarchy: an experimental study

Organizations used to employ strict formal structures, in which roles and responsibilities of co-workers were determined by the formal role structure of the organization (Magee & Galinsky 2008; Diefenbach & Sillince, 2011). The organizational structure was characterized as a stable entity with top-down relationships between directors, managers and subordinates in multiple organizational levels (Monge & Eisenberg, 1987). As an example, bureaucratic organizations are featured by these strict formal structures and can be recognized by standardization of work processes for coordination and decision-making processes tend to be structured by formal authority (Mintzberg, 1980). Since strong formal structures have long been associated with strong competitive advantages, this structural configuration has long been a default for organizations (Meyer &

Rowan, 1977).

However, nowadays organizations move away from old-fashioned strictly structured types of organizations towards more modern structures such as hybrid or network structures (Clegg, Courpasson &

Philips, 2006; Courpasson & Danny, 2003). This trend is also recognized by Volberda (1996) and he suggests that more flexible and organic organizations are better able to cope with a competitive and dynamic environment compared to static bureaucratic organizations. Most recent development, is the upcoming type of organization based on self-managed teams (Cohen & Bailey, 1997) in which formal structure appears to be limited to the minimum. Along with decreasing vertical formal rank-orders, these organizations create more egalitarian environments, in which employees and team members are increasingly equal to each other in terms of power, status and influence. This development can be explained by a belief in performance enhancing benefits of egalitarian hierarchies (Delery & Shaw, 2001; Huselid, 1995; Pfeffer, 1998).

However, questions have been raised about whether it is possible for groups to function properly if there are no mechanisms (i.e. formal structure) to coordinate the work. For example, research shows that the development of informal hierarchy is an inevitable and natural process and therefore, informal hierarchy will rise up even though organizations intend to suppress rank differences (Magee & Galinsky, 2008). Interestingly, theorists believe that informal hierarchy is never absent within groups or organizations (Leavitt, 2005; Sidanius

& Pratto, 1999; Diefenbach & Sillince, 2011). Resulting from this, the question arises if it is actually useful for

organizations to reduce their formal structures, because informal hierarchy may simply take its place. In addition, in the need to adapt to environmental developments organizations might have overlooked the effect of the emergence of an informal hierarchy (McEvily, Soda & Tortoriello, 2014). In light of the increased organizational interest in maintaining egalitarian structures, the current study will investigate whether groups indeed remain egalitarian. Or, as theory suggest, informal rank ordering will emerge inevitably within groups and therefore hierarchy will never be absent (Magee & Galinksy, 2008)

More specifically, I propose that egalitarian structured groups have difficulty in coordinating tasks and making decision, as it is formally unclear what the role division entails. Guidelines, rules and procedures for interaction that used to exist have been diminished, leaving room for social processes that team members develop themselves (Diefenback & Sillince, 2011). Ultimately, team members are expected to structure such interactions themselves, since they have the authority to make decisions and define tasks and in order to coordinate these actions and achieve the team goals. Therefore, one type of interaction that I expect to emerge within egalitarian groups is interpersonal behaviour (i.e. relation interaction between team members) between team members. This important group process is recognized by Kauffeld & Lehmann-Willenbrock (2012), who have found interpersonal behaviour to be a crucial factor in team processes and for the prediction of team outcomes (Marks, Mathieu, & Zaccaro, 2001). Finally, interpersonal behaviour is interesting for this study since it is expected to be a mechanism through which informal relationships emerge.

In this research, I will study the development of informal hierarchy through the social processes of interpersonal behaviour. I expect that the absence of formal structure may inevitable lead to strong informal hierarchy due to the increase in room for interpersonal behaviour. The hypotheses will be tested in an experimental study with two conditions, where I manipulate the presence and absence of formal structure in groups. Furthermore, interpersonal behaviour will be analyzed using video-recordings of group interactions.

The behaviour in these face-to-face groups will be classified using Bales (1951) interaction process analysis.

Previous research is published concerning the development of informal hierarchy (Magee & Galinksy,

2008; Diefenbach & Sillince, 2011). Although these studies have provided valuable insights and recognized

elements of both the formal structure and informal hierarchy (Barnard, 1938; Simon, 1947), there is no research

yet which particularly examined the interplay between them. From this it can be concluded that there is a gap

regarding the literatures on formal structure and informal hierarchy (McEvily, Soda & Tortoriello, 2014) and a lack of knowledge and understanding of the interplay between them. Therefore, this study is the first to show empirically that formally egalitarian groups indeed develop an informal hierarchy. Also, this study contributes to the line of research by providing more understanding of how formal structure affects informal hierarchy.

In addition, in the current study I use objective video recording of interactions between group members on a detailed level, which provides insight in how interpersonal behaviour evolves in the process of forming informal hierarchy. The practical implications are useful for the awareness of the inevitable emergence of an informal hierarchy, which could be of special interest for organizations that focus on maintaining equal relations between team members.

The structure of this paper will be the following. First, I introduce the concepts of formal structure, informal hierarchy, and interpersonal behaviour. Thereafter, the relationship between formal structure and informal hierarchy will be analyzed. Following this, I will discuss the effects of interpersonal behaviour within this relationship.

In this study I examine the central question: how can interpersonal behaviour by team members explain the negative relationship between the presence of a formal structure and informal hierarchy?

Formal structure

The definition of a formal structure is the formal system of unequal person-independent roles and positions which are linked via the vertical lines of command and control (Laumann, Siegel, & Hodge, 1971; Mousnier, 1973). Thus, a formal structure can be viewed as the vertical integration of official positions within organizational teams, in which certain formal roles fall under the control and supervision of a higher formal position (Weber, 1921/1980). These roles are often clearly defined and demarcated from each other in formal structures (Zeitlin, 1974). Finally, in a formal structure rules and procedures are described, which are designed to structure the behaviour of the organizational members towards the achievement of collective goals (McEvily, Soda & Tortoriello, 2014).

In the current research, formal structure is operationalized by creating the most simple form of a formal

structure. More specifically, in certain groups a formal rank-order was established by appointing a formal

leader and the remaining members were assigned with the role of subordinate. This created that the

subordinates had to work under the supervision and control of a supervisor (i.e. formal leader). These groups will be compared with the groups in which a formal structure was absent.

Informal hierarchy

The definition of informal hierarchy is the person-dependent social relationships of influence and subor- dination which emerge from social interaction and become persistent over time through the repetition of these social processes (Diefenbach & Sillince, 2011, p. 1518). Blau and Scott (1962) define rank-order to indicate that one group member must be subordinate to one other group member.

Informal hierarchy is usually measured by its degree of linearity (e.g. Chase 1980; Singh, Singh, Sharma &

Krishna, 2003) which refers to the strength of linearity in influence relationships among members of a groups.

In a linear hierarchy this means that the top ranking individual influences all other individuals, the one with second-highest rank influences over all individuals besides the top ranker and so on, with the lowest-ranking individual being influenced by all others (Schmid & De Vries, 2013). In other words, hierarchy linearity depends on the number of established relationships and on the degree to which these relationships are transitive (Landau, 1951; Kendall, 1962; Appleby, 1983; De Vries, 1995). A transitive dominance relationship in a triadic interaction means that for example individual A dominates B and C, and B dominates C (Chase, 1980).

This includes that individual A dominates two members, B dominates only one and member C dominates no other member. This means that in a linear hierarchy the members can be ranked by the number of team members they dominate from top to bottom (Chase, 1980). In an intransitive triad each individual dominates one other individual and Chase (1980) describes that the fewer the intransitive triads, the more linear the hierarchy becomes.

In this research, informal hierarchy will be measured by hierarchy linearity.

Table 1. Influence matrix showing a linear hierarchy

Figure 1. Transitive and intransitive triads in an informal hierarchy

Building upon influence relationships, members of human groups are likely to automatically be involved into an informal hierarchy based on the expectations that they have of others (Bales, 1970; Gould, 2002;

Overbeck, Correll, & Park, 2005; Ridgeway & Johnson, 1990; Whyte, 1943). The role of expectations is recognized by previous research (Berger, Rosenholtz & Zelditch, 1980) in which is stated that expectations are created on the basis of people’s beliefs and evaluations of the observable characteristics of others in social interaction. Especially, competence seems to be an important dimension in these expectations and a determinant of individuals showing influence attempts, since individual members achieve influence because others expect them to be competent (Anderson & Kilduff, 2009; Berger, Cohen and Zelditch, 1972). Influence in this sense, is described as a process in which individual members reshape other’s behaviours (Cartwright, 1959; Lewin, 1951) and people obtain influence through behaving in ways that make them appear competent (Anderson &

Kilduff, 2009).

Dominant

Person Dominated Person

Number Dominated

A B C D E

A _ 1 1 1 1 4

B 0 _ 1 1 1 3

C 0 0 _ 1 1 2

D 0 0 0 _ 1 1

E 0 0 0 0 _ 0

Focusing on formal structures in teams, an important responsibility of formal leaders is making decisions about planning, procedures, the division of labour and the allocation of resources (Yukl, 2013; Mintzberg, 1980). Due to this responsibility, it is likely that the formal leader will try to influence the group processes to achieve the team goals and outcomes. In order to reach this the leader can use influence derived from his formal position to exert a certain degree of control over the subordinate members. In this sense, influence can be used for providing directions during a task, assigning resources and making the final decision (Copeland, 1994;

Fiske & De´pret, 1996; Keltner, Gruenfeld & Anderson, 2003; Sachdev & Bourhis, 1985). From this it can be concluded that formal leaders influence group outcomes by shaping the interaction processes in order to effectively reach the collective goals (McGrath, 1984; Katz & Kahn, 1966).

On the other hand, when focusing on groups in which team members are initially equal, the team members have to decide themselves how to achieve team goals. Therefore, team members have to coordinate their activities and decision-making themselves through informal communication (Kauffeld, 2006; Mintzberg, 1980).

Previous research found that members who are initially equal to each other (i.e. egalitarian structure) created unequal opportunities in participation and in influencing decisions (Bales, 1950/1953; Bales, 1951; Bales &

Slater, 1955; Heinecke & Bales, 1953). In order to help explain this process, Berger, Rosenholtz and Zelditch (1980) discuss the expectation-states theory, in which expectations are argued to emerge out of social interaction and these determine in turn the degree of influence attempts showed by team members. As already argued, people attain influence by appearing competent and use this influence to affect other’s behaviour.

More concrete, in teams in which a formal structure is absent, I expect to emerge more influence attempts of individuals since the team members have to coordinate the actions themselves. In addition the coordination and influence mechanisms are not restricted by a formal structure, and therefore it is likely that team members will use this room for processes of influence in order to reach the team goals. The involvement in these processes of influence will lead to the establishment of a more linear hierarchy since one individual will gain more influence within the group than another member.

Together, these arguments suggest that in teams in which a formal structure is absent, more influence

attempts of individuals will emerge in order to coordinate their actions towards the collective goals compared to

teams in which a formal structure is present. From this it can be concluded, that there is a negative relationship between the presence of a formal structure and informal hierarchy. Stated formally:

H1: The presence of a formal structure leads to a weaker development of informal hierarchy.

Interpersonal behaviour

In social interactions, people create expectations about other’s competence and performance, based on the way they interact, the information they share and their attitude toward others (Berger, Rosenholtz & Zeldithc, 1980). In addition, in social interaction people influence each other’s cognition, emotions and behaviour (Kelly, Berscheid, Christensen, Harvey, Huston, Levinger, McClintock, Peplau & Peterson, 1983). Campbell, Overall, Rubin and Lackenbauer (2013) found that people create these expectations based on other member’s positive and negative behaviours during social interaction. Beside judgment of other’s behaviour, people also value and evaluate the self (Campbell, Overall, Rubin and Lackenbauer, 2013). Together, these self-perceptions and expectations about others, guide people in their interpersonal behaviour (Berger, Rosenholtz & Zelditch, 1980).

Building upon this, Bales (1951) suggests that interpersonal behaviour includes both positive and negative interpersonal behaviour that are focused on clarifying roles and other’s competence. Bales specifies the positive interpersonal behaviours as ‘showing solidarity’ and can be characterized by the elements of raising other’s status, giving help, and rewarding others. This means that people show acts in which they devalue their own contribution to the group or express admiration for the thoughts of another member of the group. In other words, people give influence to the team members who are seen as competent and consequently decrease their own influence within the team.

Opposed to the positive interpersonal behaviours, people also show negative interpersonal behaviours. Bales

describes such behaviours as ‘showing antagonism’ and proposes that antagonistic behaviour is associated with

elements like deflating other’s status, or defending one’s own status. This means that people express acts to

protect their selves and their position in the group by portraying another member badly or to show acts in which

the member tries to upgrade their own position in the group. So, members attempt to achieve influence by

behaving in ways that make them appear competent and on the other hand people attempt to decrease the

influence of other team members.

In this study, the above described positive and negative interpersonal behaviours will be measured together, since they form a complementary pair in the socio-emotional area in Bales’ (1951) interaction process analysis, and will be further referred to as interpersonal behaviour.

In egalitarian groups, the team members have the shared responsibility for the allocation of tasks and decision-making processes to achieve the collective goals. Since team members are initially equal to each other in these groups, it is likely they aim to raise their own status and position within the team in order to gain more power and influence. This line of thought is confirmed by previous research on social motivation that suggests that power and status are both desirable (Hays, 2013) and together lead to influence in social interaction. Within groups, high influence members feel a greater sense of social acceptance, which helps satisfy the need for belongingness (Anderson, Kraus, Galinsky, & Keltner, 2012; Baumeister & Leary, 1995). The aim of individuals to raise their influence within the team is also recognized by the social dominance orientation, which is introduced by Pratto, Sidanius, Stallworth, & Malle (1994) as a preference for inequality among social groups. More specific, the need to gain influence within teams explains why team members show status- and influence enhancing behaviours.

On the other hand, team members also show behaviours in which they decrease their own influence and enhance the degree of influence of another member. It is supposed that when team members see another member as competent they will show influence enhancing acts toward this member (Bales, 1951; Campbell, Overall, Rubin and Lackenbauer, 2013). Pratto, Sidanius, Stallworth, & Malle (1994) explain these inequality reducing behaviours by the social dominance theory and state that the members showing these behaviour have a low social dominance orientation and show less influence attempts. In addition, Anderson and Kilduff (2009) argue that influence is achieved when individuals tend to appear competent to others since giving influence to the most competent member is associated to lead to better team results.

Another explanation for group members to show these influence deflating acts is the natural tendency of

people to create and maintain positive relationships (Baumeister & Leary, 1995). Since influence enhancing

acts might result in a negative atmosphere, people tend to compensate these violent acts by showing friendly

behaviours. This tendency to create and maintain a equilibrium within the team is also recognized by Bales

(1951), who describes that in order to solve the problem of ‘reintegration’, people work towards a steady state.

To summarize, people desire to gain influence within a group. On the other hand, people also give influence to other team members, when these members are perceived to be competent since this is expected to lead to better team results. From this it can be concluded that equality in teams will lead to higher levels of interpersonal behaviour compared to teams in which a formal structure is present.

H2: The presence of a formal structure leads to team members showing less interpersonal behaviour.

Presence of a formal structure, interpersonal behaviour and informal hierarchy

In a formal structure, it is suggested that the leader will use his formal power to influence the team interaction processes toward the collective goals for which he is held responsible. While influencing these processes, the leader will coordinate and structure the behaviours of his subordinates in order to work effective on reaching the team outcomes. Through the influence of these leader behaviours there is less room for interpersonal behaviour among subordinates and therefore an informal hierarchy is less likely to develop.

In case of absence of a formal structure, equality among team members is expected to lead to interpersonal behaviours in order to enhance the own status and position in the hierarchy, since people have the natural tendency to gain influence. Beside this tendency, people show status enhancing acts toward others when these members are perceived to be more competent. Consequently, team members deflate their own influence within the team.

To conclude, the interpersonal behaviour will change the initial egalitarian hierarchy towards a linear hierarchy. Stated formally:

H3: Interpersonal behaviour mediates the relationship between the presence of a formal structure and informal hierarchy.

The conceptual model below, visualizes the relationships between the presence of a formal leader, interpersonal

behaviour and hierarchy linearity.

Figure 2. Conceptual model

Method Sample

Hypotheses were tested using data obtained from 41 teams who participated in the experiment. The above hypotheses are concerned with team-level relationships and were therefore tested at the team level of analysis.

The experiment was conducted at the behavioural research lab at the University of Groningen, Faculty of Economics and Business. Participants voluntarily participated in the study, either for study credits or money and we guaranteed confidential treatment of the data and the participants signed for the recording of the experiments.

The participants were all students and together they formed 41 teams ranging from the age of 18 until 30 years with an average of µ=22,43 (SD=2,03). Of the 184 participants, 94 were male (51,1%) and 90 were female (48,9%). The study backgrounds of the participants ranged from Pre-master programs to Master programs in the field of Marketing, Finance, Economics, HRM, Small Business & Entrepreneurship, IBM, Change Management and Cultural Geography. Among the participants 30 nationalities can be distinguished.

The four most represented nationalities are Dutch, ( 69%), Chinese, (12%), and German (3,3%).

The leaders consisted of randomly appointed male students who were assigned to fulfil the role of formal leader within a team of four other students, these other students are called subordinates (N=20). The remaining team members formed 21 teams consisting from five students in which a formal leader was absent (N=21).

The reason for appointing males as formal leaders can be explained by the affect of stereotyping. Due to stereotyping organizations appear to hold the belief that males are more independent objective, competitive, and better suited to handle responsible leadership positions than the typically gentle, sensitive, passive stereotyped

_ +

women (Bryce, 1970; Cecil, Paul, & Olins, 1973; Hobart & Harrick, 1977; Peters, Terborg, & Jacobs 1974;

Terborg, Peters, Ilgen, & Sweth, 1974). Since we want to avoid the risk that women are not accepted as formal leaders due to the effects of stereotyping, we have chosen to appoint male leaders.

Procedure

Upon entering the research lab participants signed an informed consent form. After that, participants finished a pre-task questionnaire in which they were asked to fill in their nationality, age and study. The experimental tasks, was the NASA’s ‘Moon Landing’ exercise, created by Grahame Knox (2009). In this exercise the participants are informed to be members of a space crew and their spaceship was forced to land at a spot 200 miles from the rendezvous point. After landing, only fifteen items remained undamaged and the participants had the assignment to rank fifteen items in terms of their importance to reach the rendezvous point. First, participants ranked the items individually and after that, they had to discuss their ranking with the team and make a new ranking list based on the group discussion. The group had the assignment to finish the discussion and ranking list within ten minutes. When nine minutes were passed, the researcher came in to tell the group they had one minute left to finish their tasks. After the discussion, the members were asked to fill in the post task questionnaire, in which they had to evaluate their team members.

Manipulation

Formal structure was manipulated by the assignment of a formal leader and four formal subordinates in the presence of formal structure-condition. The leaders received the assignment which is based on Galinsky, Gruenfeld & Magee (2003) and is stated as;

‘You will be the leader of the group. Together with your team, you will try to find a group solution to the

survival task. As the leader, you are in charge of leading this process. You will decide how to structure the

discussion. You will be in charge of the team members and you will set the standards by which they are

evaluated. Because you are the group leader, you receive two raffle tickets that each represent a chance of

winning a 10 Euro extra reward. This raffle will be conducted at the end of the experiment. One of these tickets

is for you. At the end of the experiment, you will decide who gets the other ticket. You should give the ticket to

the one subordinate that you think performed best in the group...’

To conclude, the leader was responsible for directing the discussing, evaluating his subordinates’

performance, and determining who gets the opportunity of winning the 10 Euro extra reward. The subordinates in the first condition received the following instructions;

‘Your group role is the role of a subordinate. Together with your team, you will try to find a group solution to the survival task. One of the other members is appointed as the leader of the team. This means that he/she will be in charge. He or she directs the discussion process and sets standards to evaluate you and the other subordinates..’

The subordinates were also informed about the leader’s ability to reward a ticket to the subordinate who appeared to be the performer according to the leader. In the third condition, the team members were provided with the instructions;

‘Your role is the role of team member. Together with the other team members, you are responsible for finding a group solution to the survival task. Therefore, you all carry responsibility for a good outcome of the task...’

Among this condition, the best performing team member received a bonus of 10 euro’s based on a comparison between the individual solutions that each member provided and the final collective team solution.

Measures

Hierarchy linearity. Hierarchy linearity is measured based on pair wise comparisons between all team members. Specifically, members were asked to indicate which person in every dyad of the team they found most influential.

Testing linearity, I made use of the optimum order method developed by Ross (1934) since the aim was that the participants were equally critical to each paired comparison. Ross states that in order to reach this and to reduce errors in space and time, the ordering of the paired comparisons matters. Also repetitions can be reduced by this method, since these might influence judgement, for example when member A is first compared to all the other members and following that, member B is compared to all the other members. Therefore, the spacing between pairs is important to establish in comparing.

Based on the following formula by Singh, D’Souza and Singh (1992), I calculated hierarchy linearity.

In their research, they used the formula to test the strength of dominance hierarchy in primates. In this formula, P a refers to the proportion of encounters won by a team member against another team member in a pair wise encounter. D _a is a product of a summation process on the basis of proportion of encounters won rather than merely the number of team members dominated by a team member. The calculated values ranged from 0 to 1 in which 0 would indicate a total absence of a ranking system, which equals an egalitarian hierarchy, and 1 refers to a perfect linear hierarchy. To illustrate this, a dominance matrix can be found below.

Table 2. Dominance matrix

Interpersonal behaviour. Interpersonal behaviour ¹ is measured using the definitions and characteristics defined by Bales (1951). Bales defined an extensive set of interaction categories for the analysis of small group interaction. He stated that all the behaviour that goes on in any verbal interchange can be viewed as a sequence of questions, answers and positive and negative reactions to the questions and answers. In addition, Bales defined three areas, the social-emotional area including the positive reactions such as showing solidarity, showing tension release and agrees (referring to category 1, 2 and 3 respectively). These interactions fall within area A, as shown in Table 3. The neutral task area, contains a question part (area B) and an answer part (area C). The three types of questions can be distinguished in: asking for information, opinion, and suggestion

1

This study focuses on interpersonal behaviour, however, we coded all interaction categories developed by Bales (1951).

Person A B C D D

A .00 .13 .13 .26

B 1.00 1.00 .63 2.63

C .88 .00 .13 1.01

D .88 .38 .88 2.14

(referring to categories 7, 8 and 9, respectively). Corresponding to these three types of questions are three types of answers: giving information (category 6), opinion (category 5), and suggestion (category 4). The answers are problem-solving attempts, and according to Bales they call for reactions. Finally, the third area is the area D, the social-emotional categories include the negative behaviours which include showing disagreement, tension, and antagonism (referring to categories 10,11 and 12, respectively).

Interpersonal behaviour is measured by acts of showing solidarity and showing antagonism. Examples of solidarity behaviour are encouraging or rewarding the other, offering assistance and support to the other and giving compliments. Examples of antagonistic behaviour according to Bales are attempts to direct or supervise that can be interpreted as autocratic, trying to deflate other’s status by override or interrupting others in conversation. Also ridiculing, being sarcastic or showing expressive gestures are included.

Table 3. Bales system of categories

Based on the Interaction Process Analysis method developed by Bales, transcripts have been made of the recorded group discussions. These transcripts included except for verbal interactions also expressive and gestural behaviour in order to determine to which of the categories the interaction belongs. The next step in using the Interaction Process Analysis system, was to identify a “unit” of interaction. The definition by Bales is that of a single simple sentence or its equivalent. The unit to be scored is the single “act.” An act is a communication or an indication, either verbal or nonverbal, which, in its context, may be understood by another member as equivalent to a single simple sentence (Bales, 1951).

1. Shows solidarity, raises other’s status, gives help, reward 2. Show tension release, jokes laughs, shows satisfaction

3. Agrees, shows passive acceptance, understands, concurs, complies 4. Gives suggestion, direction, implying autonomy for other

5. Gives opinion, evaluation, analysis, expressive feeling, wish 6. Gives orientation, information, repetition, confirmation 7. Asks for orientation, information, repetition, confirmation 8. Asks for opinion, evaluation, analysis, expression of feeling 9. Asks for suggestion, direction, possible ways of action 10. Disagrees, shows passive rejection, formality, withholds help 11. Shows tension, asks for help, withdraws out of field

12. Shows antagonism, deflates other’s status, defends or asserts self a

A B

D

C

B

A

Subsequently, I was able to assign each unit of interaction a code out of one of the twelve categories.

Solidarity and antagonism fall within the outer categories of Bales interaction model, and are scored by “1” and

“12” respectively while coding the interaction units. For solidarity the following elements are leading for the recognition of this category; ‘giving help’, ‘raising other’s status’ and ‘rewarding’ (Bales, 1951). Showing antagonism falls within the negative reactions on questions or answers. Based on the definition and behavioural characteristics according to Bales, I focused on three elements of ‘antagonism’, which include, ‘deflates other’s status’, and ‘defends or asserts self’. Together solidarity and antagonism form the variable interpersonal behaviour and will be measured on the team level and was therefore aggregated to the team level.

In order to ensure consistency, a coding book was developed which includes rules for dividing phrases into the correct units and for coding. For determining units, we formulated the ‘If...then’-rule, which explains that sentences with this construction will be viewed as a single unit. One of the rules in the coding book concerning coding is to view each act as a response to the last act of the last other and in case of doubt between two categories choosing the outer category. Focusing on the study variables, concrete rules concerning the solidarity category are calling yourself stupid and helping a team member to finish his sentence. Successful interruptions are determined to fall within category 12, showing antagonism. Since this is a team level study, the data were aggregated to the team level

Control variable. The total number of interactions was used as control variable in this research since it was expected to influence interpersonal behaviour. It is more likely that the total of interactions in one category increases, when the total number of all interaction categories increases. This can also be explained by Bales (1951) theory concerning the tendency to establish a normal balance between the categories.

Reliability

Of the total of 41 transcripts, fifteen randomly selected coded transcripts were used in order to test the

reliability of the coding procedure. For appraising reliability, we calculated Cohen’s Kappa coefficient to test

the interrater agreement between each pair of raters on a nominal scale. The coefficient k is simply the

proportion of chance-expected disagreements which do not occur (Cohen, 1960), or alternatively, it is the

proportion of agreement after chance agreement is removed from consideration. Kappa is scaled to vary from -1

to +1 and in the coding process the lowest coefficient appeared to be k = .70 between two raters and the highest

coefficient equals k = .93. Together, we estimated the overall reliability by taking the mean of the highest and the lowest Cohen’s Kappa (k = .82). From this it can be concluded that the reliability of the measure was sufficient.

Supplementary measures

To provide further insight regarding the development of informal hierarchies a supplementary analysis is performed.

Bales Interaction Categories. Except positive and negative interpersonal behaviours, I present data of the remaining categories of Bales (1951) in order to provide an overall view of the scores on all the categories and additionally to present the correlations among them. Table 3 provides an overview of Bales’ system of categories, which include the key concepts per category.

Results

Table 4 presents the Pearson zero-order correlations for the study variables and the control variable.

Table 4. Study Variables Inter-correlations

Tests of Hypotheses

For testing the hypotheses, a bias corrected bootstrap technique (Preacher & Hays, 2008, Model 4, 10.000 bootstrap resamples) was used to test the mediating effect of interpersonal behaviour. The hypotheses suggest an indirect effects model, whereby the relationship between the presence of a formal structure and hierarchy linearity is mediated by interpersonal behaviour. The independent variable was dummy coded by 0 and 1 to

Variables Mean S.D. 1. 2. 3.

1. Total of interactions 366.39 113.69 2. Positive interpersonal behaviour 7.12 4.42 .35*

3. Negative interpersonal behaviour 3.93 3.44 .54*** .31*

4. Hierarchy linearity 0.53 0.19 .16 -.02 -.12 Note. N = 41 teams

***p < .001, *p<.05

represent subgroups of the sample in this study. In addition the independent variable and the mediating variable were standardized before analyzing.

Hypothesis 1 states that linearity will be lower in groups in which a formal structure is present. Results of the regression analysis are reported in Table 5 and from this, it can be seen that a significant relationship between the presence of a formal structure and hierarchy linearity exists (t(39) = -2.21, p=.03, R ² =.11, p = <

.05). The coefficient shows that the formal structure-condition indeed leads to a less linear hierarchy.

Hypothesis 2 states that interpersonal behaviour will be lower in teams in which the formal structure is present. Performing a regression analysis, a marginally significant relationship between the presence of a formal structure and interpersonal behaviour is found (t(39) = -1.70, R ² = .07, p = <.10). Interpersonal behaviour was lower in the formal structure-condition.

Hypothesis 3 describes that interpersonal behaviour mediates the relationship between the presence of a formal structure and hierarchy linearity. Table 5 shows that the relationship between interpersonal behaviour and hierarchy linearity is not significant (t(38) = -1.16, p = .25, n.s.). Model 2 shows that the indirect effect is significant (p = .05, R ² = .14). However, the significance between the presence of a formal structure and hierarchy linearity did not drop after adding the mediating variable, meaning that interpersonal behaviour did not mediate the effect of the formal structure-condition on hierarchy linearity.

Table 5: Regression Analyses Results

Interpersonal behaviour Hierarchy linearity

Predictor Model 1 Model 1 Model 2

B SE B SE B SE

Main effects Presence formal

structure -.26 .15 -.06 .03 -.07 .03

Interpersonal

behaviour -.03 .03

As discussed, Model 2 shows that there is no significant mediation between the presence of a formal structure and hierarchy linearity, however, I performed the Sobel-test (Preacher & Hayes, 2004) to check the significance of the mediation effect. The formal two-tailed significance test using normal distribution demonstrated that the indirect effect was not significant (Sobel z= –.86, n.s). Bootstrap results confirmed the Sobel-test, with a bootstrapped 99% CI around the indirect effect not containing zero (–.27, .07). As expected the Sobel-test confirmed the results of the simple mediation model and significance for the mediating role of interpersonal behaviour within the relationship of the presence of a formal structure and hierarchy linearity was not found.

Supplementary analyses

Bales Interaction Categories. Table 6 presents the overall intercorrelations among the twelve categories and the study variables. The results reveal that the variables that fall within the same category, as also in the case with positive and negative interpersonal behaviour, are strongly correlated. This is in line with the expectations, since these variables form complementary pairs (Bales, 1951).

Note. N = 41. Unstandardized regression coefficients are presented.

Discussion

This study examined the relationship between the presence of a formal structure and informal hierarchy.

Therefore, I developed a conceptual model, in which this relationship is visualised. In addition, also the mediating role of interpersonal behaviour becomes clear from this framework, of which it was expected to explain the proposed negative relationship between the presence of a formal structure and informal hierarchy.

The results reveal that there is sufficient evidence to support hypothesis 1. In this hypothesis I described to expect a negative relationship between the presence of a formal structure and informal hierarchy. This means that in groups in which team members are equal to each other and no formal roles are divided, a stronger informal hierarchy develops automatically. From this it can be concluded that when a formal structure is absent, team members are more likely to be involved in influence relationships by structuring their activities and create a role division themselves in working towards the collective goals. In this influence relationships, one or more members gain more influence compared to other members of the group, which can be explained by the affect of viewing some team members as more competent than others. Through these influence relationship team members work towards a more linear hierarchy, since the room for these processes is not restricted or by a formal structure or determined by the influence of a formal leader.

In addition, I found marginal significance for hypothesis 2, which proposed a negative relationship between

the presence of a formal structure and interpersonal behaviour. Since the formal leader is mainly concerned

with coordinating the team members towards the team goals and uses his formal power to influence the

processes towards these goals, it was expected that team members will be less involved in interpersonal

behaviour trying to enhance their influence within the team or to enhance other’s influence. One reason for not

finding a significant relationship between formal structure and interpersonal behaviour is the socio-emotional

nature of these behaviours. The interpersonal behaviours were measured with the objective method for

interaction processes analysis (Bales, 1951) by which literally was written down what has been said to who and

in which we additionally noted the expressions shown by the team members when these appeared to be

remarkable. Although, I view this method as a strength for this research, it might have excluded socio-

emotional acts that belong to the interpersonal behaviour category, since these are more difficult to observe

objectively.

The third hypothesis suggested that interpersonal behaviour would mediate the relationship between the presence of a formal structure and informal hierarchy. The results reveal that there was no significant relationship, meaning that interpersonal behaviour did not mediate the effect of formal structure on informal hierarchy. In other words, although a significant relationship was found between the presence of a formal structure and informal hierarchy, interpersonal behaviour does not explain this relationship. As already argued, it is possible that the objective method was not able to include all interpersonal behaviours while observing, since this category leaves room for interpretation and is harder to measure than task-related behaviours in social interaction. Concerning the interaction process analysis, also Bales (1951) recognized that the outer categories of his system seem to occur less frequently.

Finally, as a supplementary analysis, I tested the twelve interaction categories of Bales (1951) and their correlations. The results indicate that there are strong correlations between the behaviours in the complementary pairs, which was in line with the expectations based on Bales explanation of the problem solving function of these complementary pairs. This means, that people indeed tend to create a equilibrium within social interaction in order to solve problems and reach the team goals.

Theoretical contributions

This study contributes to the current literature since it provides more understanding of the interplay between formal structure and informal hierarchy. Previous research proposed that decreasing formal structure will lead to an increase in strength of the informal hierarchy (Diefenbach & Sillince, 2011). This study indeed shows that informal hierarchy is stronger in groups in which a formal structure is absent and confirms prior assumptions about the possible interplay between formal structure and informal hierarchy. This is a valuable insights since there is a literature gap with regard to the interplay between formal structure and informal hierarchy (McEvily, Soda & Tortoriello, 2014) and provides progress in the understanding to which extent informal hierarchies follow from a formal structure.

Furthermore, this study presents a possible explanation for the emergence of an informal hierarchy by the involvement in interpersonal behaviours by team members. This reasoning is based on the desire of people to gain influence within the team and to give influence to the team members who are perceived to be competent.

This line of thought is included in the social dominance orientation and the expectation-states theory. To

conclude, these theories give insight in why people show influence enhancing behaviours and influence decreasing behaviours towards the self and towards others in social interaction.

Practical contributions

Except theoretical contributions, this study also provides valuable insights for practitioners. Since it can be concluded that informal hierarchies develop stronger within groups in which a formal structure is absent, egalitarian groups such as self-managed teams will establish a more linear hierarchy. So, the members are more likely to create a rank-order themselves in which one members influences all other members, the second member influences all other members besides the top ranker and so on. Therefore, this study creates awareness of the emergence of influence processes within social interaction, and that these influence processes leads to a stronger informal hierarchy in case a formal structure is absent.

Study Strengths, Limitations and Future Research

One strength of this study is the use of the interaction process analysis, which was based on the method developed by Bales (1951). This is an objective method to test interactions in human groups. In addition to the use of Bales interaction process analysis, we added supplementary rules and procedures for analyzing group interactions in a coding book. This handbook for the coding procedure can additionally be used for replication of such experiments.

Another value of this research is the experimental setting in which I was able to examine the influence of two different conditions (i.e. presence or absence of a formal structure) on the strength of informal hierarchy.

This resulted in the finding that there is a stronger informal hierarchy in groups in which a formal structure was absent compared to groups in which a formal structure was present.

To conclude, another strength of this research is the method for calculating informal hierarchy by the

strength of hierarchy linearity (i.e. influence relationships) based on pair wise comparisons between all team

members. For testing hierarchy linearity, the ordering method was taken into account for which the ordering

method by Ross (1934) was used to reduce errors such as repetition. Finally, hierarchy linearity was calculated

on the formula developed by Singh, D’Souza and Singh (1992) which resulted in a number between 0 and 1

referring to the degree of hierarchy linearity.

As with any research, I recognize limitations to this study. First, insights regarding the development of an informal hierarchy are described, however I did not examine the specific question whether the absence of a formal structure leads to performance benefits for organizational teams. Previous research provided insights into how informal hierarchies influence organizational performance (e.g. Ahuja, 2000; Castilla & Bernard, 2010; Soda, Usai & Zaheer, 2004). However, further research is valuable for knowledge about the difference for performance of formal structures and informal hierarchies.

Second, although the supplementary analysis provided an overall view of the twelve interaction categories of Bales (1951) and their mutual relationships, numerous other factors might influence the strength of hierarchy linearity. For example personality traits such as extraversion and agreeableness might be additional determinants of the influence an individual gains in social interaction, which in turn influences the strength of an informal hierarchy. Therefore, further research concerning personality traits in the relationship between formal structure and informal hierarchy would be interesting.

Finally, what could also be interesting for further research is the influence and development of different phases in group processes. Also Bales (1951) recognizes different phases from initiation to completion with regard to problem-solving in group processes. Phases within group processes are interesting, since it is likely that phases influences the behaviours of team members (Bales, 1951; Fisher, 1970). Insights in the behaviours over time are valuable to clarify which phases are most important for the development of an informal hierarchy.

Notwithstanding the limitations discussed, the present study contributes to the literature by showing that the

absence of a formal structure leads to the development of a stronger informal hierarchy and provides more

understanding whether formal structure predicts the strength of the informal hierarchy.

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