TO EMPOWER OR NOT TO EMPOWER?
THE MODERATING ROLE OF TEAM COMPOSITION ON THE
RELATIONSHIP BETWEEN LEADERSHIP AND
INFORMAL HIERARCHY
Master thesis, MSc Human Resource Management
University of Groningen, Faculty of Economics and Business
TABLE OF CONTENTS
ABSTRACT ... 3
1. INTRODUCTION ... 4
2. THEORY AND HYPOTHESES ... 6
2.1 Informal Hierarchy ... 6
2.2 Informal Hierarchy Stimulating Factor: Empowering Leadership ... 8
2.3 Informal Hierarchy Attenuating Factor: Directive Leadership ... 9
2.4 The Moderating Role of Team Composition ... 10
3. METHODOLOGY ... 14 3.1 Procedure ... 14 3.2 Sample ... 14 3.3 Measures ... 15 4. RESULTS ... 19 4.1 Descriptive Statistics ... 19 4.2 Hypotheses Testing 1-3 ... 21 4.3 Hypotheses Testing 4-6 ... 24
5. DISCUSSION AND CONCLUSION ... 25
5.1 Theoretical and Practical Implications ... 26
5.2 Strengths, Limitations and Future Research ... 27
5.3 Conclusion ... 28
THE MODERATING ROLE OF TEAM COMPOSITION ON THE RELATIONSHIP BETWEEN LEADERSHIP AND INFORMAL HIERARCHY
ABSTRACT
This paper addresses the influence of group differences in extraversion on the relationship between leadership and informal hierarchy within teams. The effects of two leadership styles: (1) empowering leadership and (2) directive leadership, on three dimensions of informal hierarchy were tested: (1) centralization, (2) linearity and (3) steepness. Six hypotheses were tested in a field study in 56 teams in Dutch organizations. Results revealed that empowering leadership indeed positively influences the development of informal hierarchy, such that informal hierarchy was more centralized, linear and steep when empowering leadership was high. Moreover, the findings suggest that informal hierarchy is even stronger in teams with empowering leaders along with low differences in extraversion within the team. The opposite, high difference in terms of extraversion, was initially expected. Subsequently, no significant results regarding the expected negative influence of directive leadership on informal hierarchy were found. Besides these findings, this study gives further clarification on the unintentional consequences of empowering leadership, specifically the rise of informal hierarchy within teams.
Keywords: teams, empowering leadership, directive leadership, informal hierarchy,
THE MODERATING ROLE OF TEAM COMPOSITION ON THE RELATIONSHIP BETWEEN LEADERSHIP AND INFORMAL HIERARCHY
1. INTRODUCTION
Organizations are increasingly required to be flexible in order to deal with changing business needs and dynamic environments (Ahuja & Carley, 1999). As a response, many organizations have adopted a loose formal team hierarchy1, in the form of, for example, empowerment initiatives (Baron, Kerr, & Miller, 1992; Bolman & Deal, 1992; Kang, Yang, & Rowley, 2006). The organizational goal of these empowerment initiatives (e.g. self-managing teams) is to create an egalitarian formal structure (i.e. loose formal hierarchy), where team members receive more autonomy and discretion (Marks, Mathieu & Zaccaro, 2001; Spreitzer, 1995), and thus equally contribute. A crucial tool for organizations to achieve empowerment within groups, is the encouragement of empowering instead of directive leadership styles (Ahuja & Carley, 1999). Empowering leaders are expected to grant autonomy to all team members (Martin, Liao, & Campbell, 2013), and thus ensure a formally egalitarian structure, in which group members equally share influence and responsibilities.
However, theory suggests that hierarchy is a ubiquitous feature of human groups. Differences in influence between team members will develop automatically and rapidly, even when group members are formally equal in terms of their position within the team (Diefenbach & Sillince, 2011; Magee & Galinksy, 2008; McEvily, Soda, & Tortoriello, 2014). Besides, egalitarian team structures may cause problems of intra-team coordination, because when roles and hierarchical relations are unclear, work tends to become confusing, inefficient, and frustrating (Magee & Galinsky, 2008). Therefore, team members will automatically look for ways to structure work and clarify group roles.
Empirical research has shown that leadership plays a crucial role with regard to influencing group processes (Phipps, Prieto & Verma, 2012). Therefore, I expect that the adoption of new forms of leadership (e.g. empowering leadership) and the decrease of more traditional leadership styles (e.g. directive leadership) will have important implications for how group members interact and cooperate. Within the management literature, directive and empowering leadership have frequently been studied and compared (Kahai, Sosik, & Avolio, 1997; Martin et al., 2013; Srivastava, Bartol, & Locke, 2006). Interestingly, empowering
1 Formal team hierarchies can be defined as when power and authority that are vested in some official positions
leadership has been advocated as being effective in enhancing the success of empowering employees and creating self-management. Empowering leaders are supposed to encourage team members to set their own goals, and develop their own working methods (Ahearne, Mathieu, & Rapp, 2005). At the same time, however, empowering leaders are less focused on the explicit coordination, planning and structuring of group work (Martin et al., 2013). Therefore, I argue that empowering leadership may not always be effective in suppressing informal influence differences between team members. In fact, by encouraging opinion sharing, differences between group members may become all the more evident, in turn leading to the emergence of informal differentiation between group members. On the other hand, directive leadership is known for its guidance, structure and coordination (Martin et al., 2013). As such, directive leaders, by clearly structuring the group process, are capable of managing individual group member contributions such that everyone contributes equally.
Additionally, previous research shows that team composition has important effects on how team members cooperate within teams (e.g. Barry & Stewart, 1997; McCrea & Costa, 1989). Particularly, team composition with regard to extraversion may play an important role in stimulating or attenuating informal hierarchy emergence in groups. After all, within the literature, extraversion is consistently related to leadership and the development of hierarchy within groups (Bendersky & Shah, 2013; Costa & McCrea, 1992; Stein & Heller, 1979). More specifically, I expect that when intragroup differences in terms of extraversion are particularly pronounced, the emergence of informal hierarchy is all the more likely, especially under highly empowering leaders.
In sum, this paper proposes that, despite beliefs about the effectiveness of empowering leadership in diminishing team hierarchical relations, it will not help in maintaining equal relations among team members. In line with this argumentation, it is expected that empowering leadership has a stimulating influence on the development of informal hierarchy. Additionally, this paper proposes that directive leadership might be an informal hierarchy attenuating factor. Lastly, this paper will test the effects of empowering and directive leadership on informal hierarchy emergence, influenced by team composition in terms of group differences in extraversion. The hypotheses will be tested in a field study in 56 teams in Dutch professional organizations, where the leadership style, team composition and the presence of informal hierarchy will be investigated.
leadership, directive leadership might be the best solution in order to create less hierarchy within teams. Secondly, this research bridges the gap between leadership and informal hierarchy, which is important since the role of leadership with regard to informal hierarchy is currently underemphasized. Thirdly, the current study expects to confirm statements made in previous research, that extraversion is important in understanding how personality traits influence group processes (e.g. Barry & Stewart, 1997; Judge, Bono, Ilies, & Gerhardt, 2002). Additionally, a practical implication of this study will be the advice for companies with regard to the leadership style and team composition in relation to hierarchy. Current research has a stronger focus on empowering leadership with regard to diminishing hierarchy, but this study might show a different story. These are important new insights, since organizations still desire more egalitarian teams these days.
This paper is structured as follows. First, the different concepts of leadership (empowering and directive) and informal hierarchy (centralization, linearity and steepness) will be discussed, including the role of extraversion. This will be followed by the research methodology. Thereafter, the results will be presented and discussed in the final parts, concluded with a conclusion of the main findings and insights of this research.
2. THEORY AND HYPOTHESES
This chapter is divided into four different sections. The first section will elaborate on hierarchy and especially the concept of informal hierarchy. The second and third section will introduce empowering and directive leadership as an informal hierarchy stimulating or attenuating factor respectively. The final section will discuss the proposed moderating role, including the presentation of the hypotheses and conceptual models.
2.1 Informal Hierarchy
Hierarchy. Hierarchy, with its wide presence, appears to be one of the most fundamental
Informal hierarchy. Informal hierarchy arises when differences in status and influence
naturally develop among people working together (Anderson & Brown, 2010). Diefenbach and Sillince (2011) define informal hierarchy as person-dependent social relationships of dominance and subordination, which emerge from social interaction and become persistent over time through repeated social processes. In addition, social guidelines and interaction like norms, values, and beliefs that underlie such behaviour are important (McEvily et al., 2014; Zenger, Lazzarini, & Poppo, 2001). Lastly, research has demonstrated that informal hierarchy within groups tends to develop spontaneously and rapidly (Magee & Galinsky, 2008).
Recent research proposes the emergence of dominance complementary as an important underlying process of informal hierarchy emergence (Tiedens & Fragale, 2003; Tiedens, Unzueta, & Young, 2007). Based on interpersonal theory, scholars have shown that individuals have a natural tendency to complement others’ behaviour in terms of dominance and submission. Meaning that, people are affected by the most subtle and nonintrusive behavioural cues in terms of the dominant-submissive dimension of interpersonal perception, and will respond to others with the opposite behaviour. As such, when individual A behaves in a dominant fashion, individual B will automatically complement this behaviour by behaving submissively. For example, Tiedens and Fragale (2003) demonstrated that people’s behaviour is influenced by even the most minor changes in the interactant’s posture. In an experiment they show that, when a confederate shows postural expansion (i.e. dominant behaviour), research participants automatically responded with postural constriction (i.e. submissive behaviour). For example, if people take up a lot of space, they are perceived as dominant; whereas when they take up little space, they are perceived as submissive. The principle of dominance complementarity is believed to be a crucial underlying mechanism for hierarchy emergence in groups (Tiedens et al., 2007).
To capture informal hierarchical differentiation, this paper focuses on the three most commonly used dimensions of informal hierarchy: centralization, linearity and steepness. All three dimensions capture distinct characteristics of informal hierarchy, and thus provide unique information. Interestingly, all three hierarchical shapes discussed below may structure group work in different ways.
Centralization. First of all, within social network research, hierarchy has been described
Additionally, this leader generates structure to the interactions within the team (Tolbert & Hall, 2009).
Linearity. Secondly, mainly used within the ethological literature (i.e. to measure
hierarchy emergence in groups of animals), there is the concept of linearity. In a completely linear hierarchy, individual A dominates all team members. Furthermore, individual B dominates all team members but A, individual C dominates all team members but A and B, down to the last individual, who dominates no one (Chase, 1980; Schmid Mast, 2002). As such, in completely linear hierarchies, the rank order of all individuals is clear and there is no confusion as to what position team members occupy within the hierarchy. In addition, this clear rank ordering of team members gives structure to the interaction, since every individual knows his position within the hierarchy.
Steepness. Lastly, the steepness of a hierarchy refers to the size of the absolute influence
differences between adjacently ranked individuals (i.e. dyadic comparisons). When these differences are large, the hierarchy is steep; when they are small, the hierarchy is shallow (De Vries, Stevens, & Vervaecke, 2006). It is more difficult to state which impact steepness has on the structuring of interactions within teams, since no current research has focused on that specific issue. However, a tentative suggestion can be that the steeper the hierarchy, the clearer it is for individual team members which position they possess within the hierarchy (influential or not). For the reason that shallow steepness might lead to discussions concerning who is the leader in the first place.
Centralization and steepness are two concepts that are widely used within the psychological and business literature (Anderson & Brown, 2010). Even though linearity has its origins in the ethological literature, it has also been successfully used to capture hierarchical differentiation in human groups (Mascaro & Csibra, 2012; Schmid Mast, 2002). Therefore, by studying these three different concepts the research will be more thorough and in-depth, and gives new insights in their distinctive functions.
2.2 Informal Hierarchy Stimulating Factor: Empowering Leadership
Leadership. One of the antecedents that may stimulate or attenuate informal hierarchy
antecedent of individual psychological empowerment more than any other antecedent (Seibert, Wang, & Courtright, 2011). In line with the focus on empowerment, organizations have increasingly advocated empowering leadership structures (Ahuja & Carley, 1999).
Empowering leadership. Empowering leadership entails a few important aspects. To
begin with, empowering leadership deals with the delegation of autonomy (Spreitzer, 1995). More specifically, empowering leaders share responsibilities (Mills & Ungson, 2003), engage in participative goal setting (Burke et al., 2006), and share power with subordinates (Ahearne et al., 2005). Furthermore, empowering leadership is seen as person-oriented (Burke et al., 2006), with a focus on the development of the followers (Pearce et al., 2003). Other aspects that are linked to empowering leadership in this research are being supportive to the followers, and stimulate the creation of new ideas and suggestions within the team.
A key distinction between empowering leadership and directive leadership concerns the locus of decision rights (McEvily et al., 2014). Although empowering leadership seems to fit the empowering nature of organizations who strive for hierarchy-free teams, it may also lead to problems. Since empowering leaders lack structure and coordination (Magee & Galinsky, 2008), it encourages individuals to initiate action and interaction, and to step up in order to clarify group roles by themselves.
Since empowering leaders delegate autonomy, share responsibilities and lack coordination and structure, I expect that informal hierarchy will arise when empowering leaders are in charge of the team process. This is for the reason that team members will automatically look for ways to structure the work and clarify group roles. Therefore, team members develop consciously and unconsciously informal hierarchy. This will be in line with previous mentioned research, which stated that hierarchy always exists and that decreasing formal hierarchy leads to increasing informal hierarchy (Diefenbach & Sillice, 2011; Magee & Galinsky, 2008; McEvily et al., 2014). Following these arguments, it is expected that empowering leadership has a positive influence on informal hierarchy within teams.
2.3 Informal Hierarchy Attenuating Factor: Directive Leadership
Another widely studied leadership style besides empowering leadership, is directive leadership. This leadership style contains several contradicting characteristics to empowering leadership, and therefore may actually facilitate the prevention of informal hierarchy emergence in groups.
Directive leadership. Directive leadership is focused on guidance and characterized by
1971, 1996; Locke & Latham, 2002; Pearce & Sims, 2002). Also, such leader behaviours are likely to undermine employees’ self-directed actions (Locke & Latham, 1990). This is in line with the path-goal theory from House (1971, 1996). This theory states that providing structure for subordinates, coordination and scheduling are also tasks of a directive leader. Furthermore, initiation and organization of work group activity, and the establishment of clear channels of communication can also be seen as directive behaviour (Pearce et al., 2003).
Based on the structuring nature of directive leadership, I expect that less coordination problems require less need for any form of hierarchy. Following these arguments, it is expected that directive leadership has a negative influence on informal hierarchy within teams.
2.4 The Moderating Role of Team Composition
Previous research suggests that team composition can have important effects on team processes and outcomes (e.g. Barry & Stewart, 1997; McCrea & Costa, 1989). When investigating the emergence of informal hierarchy, one important compositional factor is extraversion (Anderson & Kilduff, 2009; Barry & Stewart, 1997).
Extraversion. Extraversion can be defined as an energetic approach to the social and
material world and it includes traits like sociability, activity, assertiveness, and positive emotionality (John & Srivastava, 1999). As such, extraversion is generally characterized as an interpersonal trait, as it is related to the quality of social interactions (McCrea & Costa, 1989). Individuals that score high on extraversion (i.e. extraverts) are seen as outgoing and talkative, they tend to be warm, enthusiastic and friendly (Costa & McCrea, 1992), and command high levels of intragroup popularity (Akert & Panter, 1988; Barry & Stewart, 1997).
Empirical research has demonstrated links between extraversion to leadership and hierarchy before. For example, extraverted people tend to exhibit high levels of group participation and henceforth emerge as group leaders (Littlepage, Schmidt, Whisler, & Frost, 1995; Stein & Heller, 1979). Furthermore, extraverted people tend to be assertive and dominant (Costa & McCrea, 1992), exhibit leader behaviours (Mann, 1959), and are not seen as good followers (Smelser, 1961). Besides, according to a qualitative and quantitative review, extraversion is the most important trait of leaders, leadership, and leader emergence (Judge et al., 2002). Clearly, team composition in terms of extraversion, may importantly affect the relationship between leadership and informal hierarchy.
Dominance complementarity. As mentioned before, dominance complementarity refers
display dominant behaviour if the other person displays submissive behaviour. By reason of avoiding conflict and strengthening the relationship. People’s tendency to complement others’ behaviour has been shown to be a highly automatic and unconscious process (Dryer & Horowitz, 1997; Strong et al., 1988). That is, people are generally unaware of their tendency to behave complementary to others. Empirical research further shows, that people unconsciously enjoy dominance complementarity (Tiedens et al., 2007). However, findings do suggest that in some situations it may be easier to develop complementary relations than others. For example, it has been suggested that, when people’s expected complementary behaviour is in line with their dispositional traits (e.g. extraversion), it is easier for them to adopt such a role. However, when people are expected to adopt behaviour that is opposite to their own, it is more difficult (Dryer & Horowitz, 1997).
Therefore, I expect that, when group members differ in terms of extraversion, it will be easier for them to develop complementary relations. Thus, when individual A is highly extravert and therefore adopts the dominant role; it is easy for individual B, who scores low on extraversion, to complement this behaviour. When the team composition contains high differences in extraversion, the team members will experience this as pleasant and are reluctant to change their behaviour, in order to avoid conflict. Hence, by just following their natural behaviour, group members are capable of building dyadic relations that lead to smooth and pleasurable interactions.
On the contrary, consider a team with equally extraverted individuals. In such a situation, the team members will have more difficulties to behave according to the dominance complementarity theory, as one of the interaction partners has to adjust his or her natural behaviour (Tiedens et al., 2007). The team members will find difficulties in clarifying team roles, which results in weaker informal hierarchy.
Hypothesis 1: Group differences in extraversion strengthens the positive influence
empowering leadership has on informal hierarchy centralization, such that informal hierarchy centralization increases most strongly when the group differences in extraversion are the highest and the leadership style is empowering.
Hypothesis 2: Group differences in extraversion strengthens the positive influence
empowering leadership has on informal hierarchy linearity, such that informal hierarchy linearity increases most strongly when the group differences in extraversion are the highest and the leadership style is empowering.
Hypothesis 3: Group differences in extraversion strengthens the positive influence
empowering leadership has on informal hierarchy steepness, such that informal hierarchy steepness increases most strongly when the group differences in extraversion are the highest and the leadership style is empowering.
Accordingly, the expected influence of the first three hypotheses is presented in Figure 1 below.
FIGURE 1
Conceptual Model Empowering Leadership
+
+
On the contrary, directive leaders generally restrict group member behaviour to expected norms. Even though people would naturally develop differentiated relations through the adoption of complementary roles, directive leaders may prevent this by guiding group member behaviour. For directive leaders, the ‘prevention’ of dominance complementary may even be easier in groups that do not differ in terms of extraversion, since people already had difficulty with developing dominance complementarity. Thus, teams that contain high differences in extraversion are expected to weaken the attenuating influence of directive
Empowering leadership
Group differences in extraversion
leadership on the development of informal hierarchy. Oppositely, teams that contain low differences in extraversion are expected to strengthen the attenuating influence directive leadership might have on informal hierarchy. Following these arguments, it is expected that group differences in extraversion has a negative influence on the relationship between directive leadership and informal hierarchy within teams. Stated formally, the last three hypotheses of this research paper are:
Hypothesis 4: Group differences in extraversion weakens the negative influence
directive leadership has on informal hierarchy centralization, such that informal hierarchy centralization decreases most strongly when the group differences in extraversion are the lowest and the leadership style is directive.
Hypothesis 5: Group differences in extraversion weakens the negative influence
directive leadership has on informal hierarchy linearity, such that informal hierarchy linearity decreases most strongly when the group differences in extraversion are the lowest and the leadership style is directive.
Hypothesis 6: Group differences in extraversion weakens the negative influence
directive leadership has on informal hierarchy steepness, such that informal hierarchy steepness decreases most strongly when the group differences in extraversion are the lowest and the leadership style is directive.
Correspondingly, the expected influence of the last three hypotheses is presented in Figure 2 below.
FIGURE 2
Conceptual Model Directive Leadership
3. METHODOLOGY
3.1 Procedure
Data were collected in a broad sample of teams by Bachelor and Master students. To make sure the data could be reliably investigated together, a standard data collection protocol was utilized. Teams were identified that met the criteria of the basic definition of a team, which includes: have common objectives, deal with interdependent tasks, have joint accountability, and meet on a regular basis (Kozlowski & Bell, 2003). The students first contacted team leaders in different organizations, explained the research and requested participation. When a team leader agreed to cooperate, he or she provided details such as the nature of the tasks performed by the team and the names of all the team members. Thereafter, all individual team members were contacted, informed about the research procedures and confidential treatment of the data, and asked consent for participation in the study.
The questionnaires were distributed through Qualtrics, and standard data collection instruments were used. Two separate surveys were distributed: a team member survey and a team leader survey. All the participants received a link to the questionnaire individually. The questionnaires contained mainly closed scale questions. The questionnaires were translated into Dutch, to ensure that employees fully understood the questions. Questions in the team member survey included personal characteristics, the team leader, team tasks, team cooperation, the decision making process within the team, job satisfaction, and hierarchical differentiation. Questions in the team leader survey included personal characteristics, the team members, hierarchical differentiation, team performance, the team environment, and organizational characteristics.
3.2 Sample
Among the 56 team leaders, there was a 100 per cent response rate. The age ranged between twenty and 62 years old (M = 42.44, SD = 10.64), with two missing values (3.6%). Furthermore, 64.3 per cent were male respondents and 71.4 per cent had at least a higher vocational qualification. In addition, the organizational tenure ranged between zero and 42 years (M = 12.64, SD = 10.36), and the team tenure ranged between zero and 30 years (M = 7.21, SD = 7.86). Most of the team leaders had a permanent contract (85.7%), and worked for at least 36 hours per week (67.9%).
Among the 260 team members, there was a 93.5 per cent response rate. The age ranged between sixteen and 63 years old (M = 35.43, SD = 13.16), with eight missing values (3.3%). Additionally, 52.3 per cent were male respondents, with three missing values (1.2%). Furthermore, 55.7 per cent of the team members had at least a higher vocational qualification, with four missing values (1.6%). The organizational tenure ranged between zero and 40 years (M = 8.89, SD = 9.55), with five missing values (2.1%), and the team tenure ranged between zero and 35 years (M = 4.88, SD = 6.09), with seven missing values (2.9%). Lastly, most of the team members had a permanent contract (75.3%), with four missing values (1.6%), but worked less than 36 hours per week (53.6%), with six missing values (2.5%).
3.3 Measures
Aggregation. In order to justify data aggregation of the empowering and directive
leadership variables the rWG, ICC(1) and ICC(2) statistics were measured. The application of
rWG-based indices is based on the belief that each leader has a true score on the assessed
consistency in team members’ ratings (LeBreton & Senter, 2007). This is one of the reasons that there is no widely accepted threshold, however again .70 is often used (LeBreton & Senter, 2007).
Empowering leadership. Empowering leadership was measured using a 7-point Likert
scale based on the research of Lorinkova, Pearsall and Sims (2013). Only the team members had to fill in questions about the leader concerning the leadership style of their team leader. Example items that were asked in order to measure the empowering leadership are: “Our team leader gives the team autonomy and freedom”; “Our team leader encourages the team members to take on responsibilities”; and “Our team leader encourages information exchange within the team”. Questions were measured on a scale from one being ‘not true at all’, to seven being ‘completely true’. The seven items were framed in the same direction and therefore it was not necessary to reverse-code items. The Cronbach’s alpha (α) for empowering leadership was .89, showing consistency among the items. A Cronbach’s alpha above .70 is widely accepted as being reliable (Field, 2013). In order to utilize the analyses, the standard score (z-score) was used. This was possible since the data distribution was normal. The rWG mean score of
empowering leadership was .80. The ICC(1) score was .20 and the ICC(2) score .51. The rWG
score justifies the data aggregation, however both ICC scores are relatively low, which is a limitation of this research.
Directive leadership. Directive leadership was also measured using a 7-point Likert
scale based on the research of Lorinkova and colleagues (2013). Again, only the team members had to fill in questions about the leader concerning the leadership style of their team leader. Example items that were asked in order to measure the directive leadership are: “Our team leader determines the goals of the team”; “Our team leader gives instructions to the team members”; and “Our team leader takes implementation decisions”. Questions were measured on a scale from one being ‘not true at all’, to seven being ‘completely true’. The seven items were framed in the same direction and therefore it was not necessary to reverse-code items. The Cronbach’s alpha (α) for directive leadership was .88, showing consistency among the items. In order to utilize the analyses, the standard score (z-score) was used. This was possible since the data distribution was normal. The rWG mean score of directive leadership was .84. The
ICC(1) score was .36 and the ICC(2) score .71. The rWG score and the ICC(2) score justify the
data aggregation, however the ICC(1) score is relatively low.
Group differences in extraversion. Extraversion was measured using a 7-point Likert
“I talk with many different people at parties”; and “I am quiet around people I do not know”. Questions were measured on a scale from one being ‘not true at all’, to seven being ‘completely true’. The eight items were not all framed in the same direction, and therefore four items had to be reverse-coded. The Cronbach’s alpha (α) for extraversion was .80, showing consistency among the items. The group differences in extraversion were measured using the standard deviation of the scores of the team members on extraversion. In order to utilize the analyses, the standard score (z-score) was used. This was possible since the data distribution was normal.
Informal hierarchy. All three dimensions of informal hierarchy were measured through
dyadic comparisons between all team members, based on Schmid Mast (2002). For each dyad, each team member was asked to answer who is most influential within the team. For example, team member A answered if team member A is more influential than team member B or vice versa, or if they are both equally influential. However, between the three different dimensions, the data from the dyadic comparisons is used differently.
Centralization. Firstly, to calculate the informal hierarchy centralization, the formula
presented below, constructed by Freeman (1979), was used.
𝐶𝑥 = ∑ [𝐶𝑥(𝑃 ∗) − 𝐶𝑥(𝑃𝑖)
𝑛 𝑖=1
max ∑𝑛𝑖=1[𝐶𝑥(𝑃 ∗) − 𝐶𝑥(𝑃𝑖)]
In this formula, n refers to the number of team members. Cx (Pi) refers to each different team members’ score. The lower part of the formula refers to the largest value of Cx (Pi) for any point in the hierarchy. For example, in a team consisting of four team members the Cx (P*) is six (i.e. when team member A wins three dyadic encounters, team member B two, team member C one, and team member D zero). In that specific example, the upper part of the formula is also six. The index, Cx, will determine the degree to which Cx (P*) exceeds the centrality of all of the other points and, since Cx is a ratio of an observed sum of differences to its maximum value, it will vary between zero and one (Freeman, 1979). More specifically, if Cx is zero, all team members are scoring equal within the hierarchy and the team is completely egalitarian. Additionally, when Cx is one, one team member completely dominates the team with respect to hierarchy centralization.
Linearity. Secondly, to calculate the informal hierarchy linearity, the result of the dyadic
TABLE 1
Dominance Matrix: Linear Informal Hierarchy (Chase, 1980)
Team member A B C D E Da 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
The resulting data from the matrix were used as input for a formula from Singh, Singh, Sharma and Krishna (2003) which was used to calculate the strength of informal hierarchy. This formula is stated below.
ℎ = [12 ÷ (𝑛3− 𝑛)] ∑[𝑑𝑎− (𝑛 − 1) ÷ 2]2, 𝑛 𝑎=1 𝑤ℎ𝑒𝑟𝑒 𝑑𝑎 = ∑ 𝑃𝑎 𝑛 𝑎=1 .
In this formula, Pa refers to the proportion of encounters won by a team member against
another team member in a dyadic encounter. In addition, Da refers to the sum of these
proportions. The left side of the formula corrects for the team size. More specifically, it ensures that larger teams not automatically score higher on informal hierarchy linearity. The outcomes vary between zero and one, whereas the informal hierarchy linearity is the highest at one and the lowest at zero.
Steepness. Thirdly, to calculate the informal hierarchy steepness, the scores from the
dyadic comparisons were used in the formula below to create individual influence scores. This formula is based on hierarchy steepness calculations of De Vries and colleagues (2006).
𝐼𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙 𝐼𝑛𝑓𝑙𝑢𝑒𝑛𝑐𝑒 𝑆𝑐𝑜𝑟𝑒 = 𝑊𝑖𝑛𝑠 + (𝑇𝑖𝑒𝑠 ÷ 2) (𝑛 − 1) × (𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡𝑠 − 1)
vary between zero and .50, whereas the informal hierarchy steepness is the highest at .50 and the lowest at zero.
Control variables. Team size and gender diversity were used as control variables in this
research, since they were expected to influence the results. Team size (mean) was used as a control variable, since empirical research has found that team size influences the team processes (Curral, Forrester, Dawson, & West, 2001). In this research, it may be more difficult to rate every team member correctly when the teams are larger. Thus, hierarchical differences might be more difficult to determine. Additionally, gender diversity was used as a control variable, since the effects of power and hierarchical differentiation might differ between men and women. This is supported by Schmid Mast (2002), who stated that women are less hierarchically organized than men in the beginning of an interaction. Gender diversity was measured by taking the standard deviation of the scores on gender, with one corresponding to male and two to female. Therefore, the scores varied between zero and .50, whereas the gender diversity was the highest at .50 and the lowest at zero. In order to utilize the analyses, the standard score (z-score) of both variables was used.
4. RESULTS
The results chapter is divided into three sections. The first section describes the descriptive statistics and variable correlations. The second section deals with testing the first three hypotheses via linear regressions. The third section corresponds to the last three hypotheses.
4.1 Descriptive Statistics
TABLE 2
Descriptive Statistics and Variable Correlations
Variables M SD 1. 2. 3. 4. 5. 6. 7.
1. Team size 5.64 1.54
2. Gender diversity .20 .21 -.12
3. Empowering leadership 5.05 .70 .08 .06
4. Directive leadership 4.87 .84 .13 .06 .44c
5. Group differences in extraversion .85 .41 .10 -.18 -.15 -.13
6. Informal hierarchy centralization .65 .22 .05 -.26a .32b .02 .07
7. Informal hierarchy linearity .48 .25 -.14 -.12 .33b .16 -.01 .67c 8. Informal hierarchy steepness .15 .08 -.75c .02 .08 -.06 .05 .40c .60c
N = 56
ap < .10, bp < .05, cp < .01
4.2 Hypotheses Testing 1-3
Below, the results of the separate regression analyses are summarized, which are related to the first three hypotheses (see Table 3). A bias corrected bootstrap technique (Field, 2013: Model 1) was used to test the proposed moderating role of group differences in extraversion on the relationship between empowering leadership informal hierarchy.
TABLE 3
Regression Analysis Results Hypotheses 1-3
Variables Centralization Linearity Steepness
B SE B SE B SE
Control variables
Team size -.00 .03 -.05 .03 -.07c .01
Gender diversity -.07b .03 -.05 .03 -.01 .01
Main effects
IV: Empowering leadership .10c .03 .11c .03 .02b .01 M: Group differences in extraversion .00 .03 -.01 .03 .01 .01
Interaction
Group differences in extraversion -.05a .03 -.06a .03 -.02b .01
R2 model .23 .22 .65
R2 interaction .04 .06 .04
N = 56; B and SE represent the unstandardized beta and standard error coefficients.
ap < .10, bp < .05, cp < .01
Hypothesis 1. Hypothesis 1 states that group differences in extraversion strengthens the
empowering leadership and informal hierarchy centralization (B = .14, 95% CI [.05, .24], t = 3.00, p < .01). On the contrary, when group differences in extraversion are high, there is a non-significant positive relationship between empowering leadership and informal hierarchy centralization (B = .05, 95% CI [-.02, .11], t = 1.32, p > .10). Figure 3 on the following page plots the results.
Hypothesis 2. Next, hypothesis 2 states that group differences in extraversion
strengthens the positive influence empowering leadership has on informal hierarchy linearity, such that informal hierarchy linearity increases most strongly when the group differences in extraversion are the highest and the leadership style is empowering. Group differences in extraversion has been found to marginally significantly moderate the relationship between empowering leadership and informal hierarchy linearity (F(5, 50) = 2.80, p < .10), but only on the condition that group differences in extraversion are low. When group differences in extraversion are low, there is a significant positive relationship between empowering leadership and informal hierarchy linearity (B = .17, 95% CI [.06, .28], t = 3.18, p < .01). However, when group differences in extraversion are high, there is a non-significant positive relationship between empowering leadership and informal hierarchy linearity (B = .05, 95% CI [-.03, .12],
t = 1.24, p > .10). Figure 4 on the next page plots the results.
Hypothesis 3. Hypothesis 3 states that group differences in extraversion strengthens the
positive influence empowering leadership has on informal hierarchy steepness, such that informal hierarchy steepness increases most strongly when the group differences in extraversion are the highest and the leadership style is empowering. Group differences in extraversion has been found to significantly moderate the relationship between empowering leadership and informal hierarchy steepness (F(5, 50) = 18.21, p < .05), but also only on the condition that group differences in extraversion are low. When group differences in extraversion are low, there is a significant positive relationship between empowering leadership and informal hierarchy steepness (B = .04, 95% CI [.01, .06], t = 3.02, p < .01). Oppositely, when group differences in extraversion are high, there is a non-significant positive relationship between empowering leadership and informal hierarchy steepness (B = .00, 95% CI [-.02, .02],
FIGURE 3-5
Two-Way Interaction Plots Regarding the Relationship Between Empowering Leadership and Informal Hierarchy (Centralization, Linearity, and Steepness), Moderated by Group Differences in Terms of Extraversion
In conclusion, the results of the first three hypotheses only show minor differences. In all three hypotheses, the effect of empowering leadership on informal hierarchy has been positively and significant. The moderating role of group differences in extraversion has been significant, however only in teams with low differences in extraversion. This contradicts the expectation that teams with high differences in extraversion would be positively significant. Further elaboration on these results will follow in the discussion chapter.
4.3 Hypotheses Testing 4-6
Below, the results of the separate regression analyses are summarized, which are related to the second three hypotheses (see Table 4). Again, a bias corrected bootstrap technique (Field, 2013, Model 1) was used to test the proposed moderating role of group differences in extraversion on the relationship between directive leadership informal hierarchy.
TABLE 4
Regression Analysis Results (with Directive Leadership)
Variables Centralization Linearity Steepness
B SE B SE B SE
Control variables
Team size .00 .03 -.05 .03 -.06c .01
Gender -.06a .03 -.04 .03 -.00 .01
Main effects
IV: Directive leadership .01 .03 .04 .04 .01 .01
M: Group differences in extraversion .01 .03 .01 .04 .01 .01
Interaction
Group differences in extraversion -.00 .03 .02 .03 -.01 .01
R2 model .07 .08 .60
R2 interaction .00 .00 .01
N = 56; B and SE represent the unstandardized beta and standard error coefficients.
It can be concluded that there are no significant relationships between directive leadership and one of the informal hierarchy variables (see Table 4). Also, no significance in the moderation effects is found with directive leadership. Therefore, hypothesis 4 (F(5, 50) = .74, p > .10), hypothesis 5 (F(5, 50) = .84, p > .10), and hypothesis 6 (F(5, 50) = 14.82, p > .10) can all be rejected. Further elaboration on these results will follow in the discussion chapter.
5. DISCUSSION AND CONCLUSION
The primary aim of the current study was to investigate the informal hierarchy enhancing effect of empowering leadership and the informal hierarchy attenuating effect of directive leadership. Over the last decades, organizations are increasingly implementing looser formal structures in which empowering leadership plays an important role. However, I argued that empowering leadership will actually stimulate the development of informal hierarchy. Furthermore, directive leadership was proposed as a solution for diminishing informal hierarchy within teams. Lastly, team composition in terms of group differences in extraversion was proposed as a moderator of these relationships.
Using data from 56 organizational teams, informal hierarchy was found to be significantly higher under high empowering leadership, compared to low empowering leadership. This result was consistent among the three dimensions of informal hierarchy. This finding supports theories that argue that teams under highly empowering leaders solve problems that arise due to a lack of coordination, planning, and structure via informal hierarchy (e.g. Magee & Galinsky, 2008). Since empowering leaders delegate autonomy and share responsibilities (Mills & Ungson, 2003; Spreitzer, 1995), team members are able to use this freedom in order to investigate possibilities to structure the work and clarify group goals, which subsequently leads to the development of informal hierarchy.
people are able to score high on the empowering leadership scale, but also high on the directive leadership scale.
Furthermore, the findings reveal a significant moderating effect of team composition with regard to extraversion. Surprisingly, the simple slope analyses revealed that only in teams with low differences in extraversion, positive significance occurred. Thus, surprisingly, in groups with low differences in extraversion, informal hierarchy developed even stronger than in groups with high differences in extraversion. This might be explained by the role of conflict. According to the dominance complementarity theory, team members are experiencing more difficulties in obtaining their role within the team when teams experience low differences in extraversion (Tiedens & Fragale, 2003). These difficulties trigger new team processes that may actually lead to more differentiation than under simple complementarity. An example of such a team process can be the emergence of relationship conflict within the team. Relationship conflict typically includes feelings such as tension, annoyance and friction, and differences between personal issues regarding non-task issues (De Dreu & Weingart, 2003). Conflict is generally ‘won’ by one influential individual, and ‘lost’ by a less influential individual (Barki & Hartwick, 2001). As such, group conflict may thus even more clearly delineate influence differences between group members, as they more consciously engage in this behaviour, and it is observable for all group members. This is in line with previous research in the ethological literature, where Goessmann, Hemelrijk, and Huber (2000) found that in dyadic relationships, in which there is a winner and a loser, informal hierarchy emerges.
5.1 Theoretical and Practical Implications
Besides the findings, the current study offers multiple theoretical implications. First, the current research has identified empowering leadership as an important antecedent of the development of informal hierarchy within teams. This is contradicting to the current focus of the leadership and hierarchy literature on using empowering leadership to create more egalitarian and hierarchy-free teams. Second, this research links leadership and informal hierarchy, which is important since the role of leadership in creating informal hierarchy is currently underemphasized. Third, this study statistically supports main theories arguing that extraversion plays an important role within group processes (e.g. Barry & Stewart, 1997).
suitable leadership style in combination with the lowest hierarchy is still needed. A recommendation for companies could be to ask leadership style questions in the selection process, in order to obtain a more complete picture of their future leaders and possibilities to assign different leaders to different teams. Additionally, even though the effect of group differences in extraversion on the development of informal hierarchy is not yet completely clear, its significant effect by teams with low differences in extraversion, does suggest that it needs to be taken into account when composing teams. In practice, highly diverse groups in terms of extraversion would be more advisable to avoid structuring problems, and prevent informal hierarchy stimulation.
5.2 Strengths, Limitations and Future Research
different dimensions of hierarchy on outcomes, for example team performance, job satisfaction or creativity. It would be valuable for organizations in order to know which dimension of hierarchy causes the best preferred results.
5.3 Conclusion
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