AN UNAVOIDABLE PHENOMENON IN ORGANIZATIONS: INFORMAL HIERARCHIES, THEIR IMPACT ON GROUP PERFORMANCE AND THE ROLE
OF LEGITIMACY IN TEAM MEMBERS’ RANK ORDERING.
Master Thesis, MSc in HRM
University of Groningen, Faculty of Economics and Business
5 March 2017 Andreas Polydorou Student Number: S3007057 Esdoornlaan 626 9741MC Groningen Tel: +31 064 990 5640 Email: a.polydorou@student.rug.nl Supervisor/University J. Oedzes, MSc
ABSTRACT
Informal hierarchies are omnipresent in human groups because they emerge from the unavoidable social interactions of individuals in groups. Past research demonstrates mixed findings with regards to the relationship between informal hierarchy centralization and team performance. The present research aims to resolve these inconsistent findings by focusing on a critical moderating variable. Specifically, it is proposed that informal hierarchy
centralization is positively related to team performance when the informal hierarchy is perceived legitimate, and negatively related when the informal hierarchy is perceived illegitimate. This is attributed to the fact that informal hierarchical legitimacy can prevent status conflict and thus help team members to work together smoothly. To test the
hypothesis, surveys were administered in work teams from different industries in Germany, Cyprus and Greece. Data from 52 work teams did not support the hypothesis. The findings imply that informal hierarchical legitimacy might not have a moderating effect on the relationship between informal hierarchy centralization and team performance. Limitations and suggestions for future research are further discussed.
INTRODUCTION
When working together in groups or teams, individuals informally interact and naturally form informal hierarchies that become persistent over time (Mast, 2002). The informal hierarchies that emerge may be based on different dimensions (Magee & Galinsky, 2008), that is, based on team member personality traits (Kenny & Zaccaro, 1983) such as dominance (Cheng, Tracy, Foulsham, Kingstone & Henrich, 2013; Kilduff, Willer, & Anderson, 2016) or on other dimensions such as team members’ competence (Hollander 1961, 1964), seniority (Insko et al., 1982), expertise (Bottger, 1984) and even formal position (Diefenbach & Sillince, 2011) such as individuals’ salary (Bloom & Michel, 2002). The end-result is that one or more individuals become highly influential in the team, while others are less influential. As such, informal hierarchy ranges in different strengths: Informal hierarchy is strong – or highly centralized - indicating that there is an individual who is the most influential and takes on an informal leadership role in the team. Informal hierarchy is weak – or decentralized - meaning that all team members possess and exert equal amounts of influence over each other.
Research indicates that informal hierarchy centralization can affect team performance in two different ways. On the one hand, studies demonstrate that informal hierarchy
centralization is positively related to team performance (Frauendorfer, Mast, Sanchez-Cortes, & Gatica-Perez, 2015; He & Huang, 2011). When informal hierarchy is centralized (i.e., strong), it provides social order and coordination (Magee & Galinsky, 2008) because there is one highly influential individual in this hierarchy that takes on a leadership role and provides clear lines of direction to team members and facilitates coordination (Halevy, Chou, &
coordinates and directs team members, thus the performance of such a team is low (Groysberg, Polzer, & Elfenbein, 2011).
On the other hand, research found that informal hierarchy centralization is negatively related to team performance because it induces status conflict (Bendersky & Hays, 2012). This is explained by the fact that team members sometimes become to dislike the informal centralized hierarchy that has been established and may engage in competitive behaviors and status conflict (Bendersky & Hays, 2012), thus team performance is hampered (Kilduff et al., 2016). However, this is not true for an informal decentralized hierarchy because in this hierarchy team members have equal amount of influence (Carson, Tesluk, & Marrone, 2007) which makes them less likely to engage in competitive behavior (Tjosvold, 1981) and in status conflict. To conclude, based on past research findings, informal hierarchy
centralization indicates mixed effects on team performance while this suggests that a moderator might help to make certain these mixed effects.
alternatives to the status structure (Hornsey, Spears, Cremers, & Hogg, 2003) thus, when the rank ordering in the team is illegitimate, informal hierarchy centralization is negatively related to team performance. For example, an informal hierarchy may be illegitimate when informal hierarchy emerges based on dominance personality of team members. Research indicates that dominant individuals acquire highly influential positions in the informal hierarchy because they are assertive and they talk more than the other team members (Van Vugt, 2006), so they appear competent while in fact they lack competencies, knowledge and skills (Anderson & Kilduff, 2009). Thus, on the one hand team members accept influence from such individuals because they are dominant but on the other hand they may come to question their position in the informal hierarchy because they are not the most competent. When this happens, team experiences status conflict (Bendersky & Hays, 2012) and team performance is hampered (Kilduff et al., 2016). Status conflicts in teams can last long since dominant individuals constantly fight to defend their position in the informal hierarchy (Berger, Ridgeway, Fisek, & Norman, 1998). So, the illegitimate informal hierarchy takes time to be legitimate again and so as the team members’ cooperation in the team. Based on this reasoning, I propose that informal hierarchical legitimacy moderates the relationship between informal hierarchy centralization and team performance.
To test the proposition, the present study has been conducted in teams of
informal hierarchical legitimacy and the negative relationship is due to low informal
hierarchical legitimacy (Bendersky & Hays, 2012; Frauendorfer et al., 2015). Secondly, this is the first time that different characteristics of the hierarchy are studied and the first time to be studied in combination. In other words, this study will demonstrate that hierarchies should be conceptualized not only by their strength (i.e. centralization), but also their legitimacy. Finally, this research will practically contribute by clarifying to organizations that when their teams are characterized by informal centralized hierarchies, formal leaders should make sure that these hierarchies are legitimate because as this research will demonstrate, when informal centralized hierarchies are legitimate they foster team performance (Halevy et al., 2011). The formal leader can make sure that the informal centralized hierarchy is legitimate by
monitoring whether the most competent individual is in change.
THEORETICAL BACKGROUND AND HYPOTHESIS Informal hierarchy centralization and team performance
Informal Hierarchy. Informal hierarchy is a pervasive feature of social groups
(Magee & Galinsky, 2008). That is, informal hierarchies can be found in teams in
organizations (Diefenbach & Sillince, 2011), classrooms or athletic teams (Kenny & Zaccaro, 1983). When people work together, they naturally engage in social interactions by
exchanging information which allows them to get to know each other (Anderson, John, Keltner, & Kring, 2001). These informal interactions determine the formation of informal hierarchy (Magee & Galinsky, 2008). Informal hierarchy is defined as a rank ordering of individuals who compose a social system in certain socially important dimensions (Parsons, 1940). The dimensions on which informal hierarchies are formed are among others:
expertise (Bottger, 1984) and formal pay disparity (Bloom & Michel, 2002). Thus, an informal hierarchy does not emerge only based on formal hierarchy but also on a variety of other social dimensions that are associated with the individuals per se such as personality characteristics (for a review see, Judge, Bono, Ilies, & Gerhardt, 2002). The end-result of team members’ interactions is that one or more team members acquire highly influential positions in the informal hierarchy, while others become less influential.
Centralization. Hierarchies have been given a lot of characterizations by scholars and
one of them is centralization (Bunderson et al., 2016). Informal hierarchy’s centralization is defined as “the degree to which influence over group members and activities is concentrated in one group member” (Berdahl & Anderson, 2005: p45.). In other words, when one member possesses and exerts influence over all other team members and activities in a team, then informal hierarchy is centralized. If all team members possess and exert influence equally on other team members, then informal hierarchy is decentralized. Research on teams indicates that informal hierarchy centralization demonstrates mixed effects on team performance, thus it is uncertain whether informal hierarchy centralization hampers or fosters team
performance.
Informal hierarchy centralization is positively related to team performance. On the
one hand, research indicates that informal hierarchy centralization is beneficial for team performance (He & Huang, 2011; Frauendorfer et al., 2015). For example, Frauendorfer et al., (2015) in their research used small task-related groups consisted of three and four
and coordination, thus improves the group´s performance. In other words, these authors explained that in informal centralized hierarchies team members have clear roles and responsibilities and they know who defers to whom thus they have smooth and efficient interactions between them. Moreover, in the informal centralized hierarchy the most influential individual takes on a leadership role in the team and provides specific and clear lines of direction to team members, thus he/she coordinates team members’ actions and enhance team performance (Magee & Galinsky, 2008).
However, research indicates that when informal hierarchies are decentralized the performance of team is low (Groysberg et al., 2011). This is attributed to the fact that in the informal decentralized hierarchy team members are equally influential so they lack clear hierarchical relations and roles in the team (Magee & Galinsky, 2008). This contributes to inefficiencies within the team (Neubert, 1999) because while the number of informal leaders increases in the team, the coordination of team members decreases as there is not clearly an individual who can take a leadership role, solve any disputes regarding team tasks and coordinate team members’ actions for effective performance (Groysberg et al., 2011).
Informal hierarchy centralization is negatively related to team performance. On the
inequality and dissatisfaction to team members who in turn lower their cooperation between them and hamper team performance (Bloom, 1999). Thus, in informal centralized hierarchy, when team members perceive the rank ordering in the team as unfair, they can lead team to experience status conflicts as they challenge its own and other´s position in the hierarchy (Bendersky & Hays, 2012). Status conflict in turn leads team members to lower cooperation because they spend their energy on attaining influence positions rather than on task
performance (Bendersky & Shah, 2012), thus team performance is hampered.
However, this is not true for informal decentralized hierarchy because research indicates that when team members are equal or in other words possess the same amount of influence in the team, might be more open to work and communicate between each other (Carson et al., 2007) and to experience low competitive behaviors in the team (Tjosvold, 1981). Thus, in informal decentralized hierarchy status conflict will be low while teams’ performance will be high. To sum up, based on previews research findings, it is evident that informal hierarchy centralization demonstrates mixed effects on team performance while this may suggest that a moderator is at play.
The moderating role of hierarchical legitimacy
centralization and team performance while low levels of legitimacy establish a negative relationship between informal hierarchy centralization and team performance.
High legitimacy in informal hierarchy. Informal hierarchy is legitimate when team
members perceive their rank order and others’ in the informal hierarchy fair. In other words, team members believe that they and other individuals in the team have justly obtained their position due to the knowledge and competence they possess as well as their contribution to team success.
When informal centralized hierarchy is perceived legitimate, team members will not be involved in status conflicts because they are less encouraged to change the status quo (Ellemers, Wilke, & Vanknippenberg, 1993). Additionally, the perceived fairness of hierarchy will induce cooperation between team members (Halevy, et al., 2011) and demonstration of voluntarily deference behavior (Tyler, 2006) to the most influential individual (e.g. informal leader) despite high levels of centralization (Halevy et al., 2011). So, the legitimate informal leader can direct and coordinate team members’ actions and thus to enhance team
Low legitimacy in informal hierarchy. Informal hierarchy is sometimes illegitimate
when team members perceive the overall rank ordering in the team as unfair or illegitimate. In other words, team members believe that they are more competent to lead or influence a group than other group members, so they believe they deserve a higher influence position in the informal hierarchy (Berger et al., 1998). This can be true when the informal hierarchy emerge based on personality trait dominance (Anderson & Kilduff, 2009). Dominant individuals acquire higher influential positions in an informal hierarchy because they are assertive and motivated to lead (Van Vugt, 2006) thus they induce team members to perceived them as competent and to expect from them to lead the team to high performance (Rosa & Mazur, 1979). However, research has indicated that dominant individuals sometimes appear to be competent but in fact they lack skills and competencies (Anderson & Kilduff, 2009). Because dominant individuals become informal leaders often1 (Lord et al., 1986) and sometimes they are not competent (Anderson & Kilduff, 2009), they cannot lead the performance of team to higher levels. This is eventually made obvious to team members when the team performance at some point in time is low due to the choices of the dominant informal leader (Berger et al., 1998). Therefore, when team members realize that the influence positions in informal hierarchy are not held by competent individuals, team
members become to dislike informal established hierarchy (Berger et al., 1998), thus informal hierarchy becomes illegitimate.
When an informal centralized hierarchy is illegitimate, team members experience feelings of anger, outrage and resentment (Tyler, 1997) because they believe that the informal rank is not fairly established. Consequently, team members will seek alternatives to the existing informal centralized hierarchy and they will experience competitive behavior and
1 A meta-analysis of 85 years of research indicates informal leaders emerge frequently based on dominance trait
engage in status conflicts (Bendersky & Hays, 2012) because of the resistance to the social order and the desire to change it (Hornsey et al., 2003). This leads team members to maintain a low cooperation between them for some time since dominant informal leaders constantly fight to defend their position in the informal centralized hierarchy (Berger et al., 1998). The low cooperation leads the team to experience low team performance (Kilduff et al., 2016), especially when the informal hierarchy is strong (i.e. centralized).
Regarding the impact of low legitimacy on the relationship between informal decentralized hierarchy and team performance, I suggest that low informal hierarchical legitimacy will not be much of a problem in informal decentralized hierarchy. This is because in this hierarchy team members are equal between each other in terms of influence and they communicate openly (Carson et al., 2007) thus is more likely not to experience competitive behavior (Tjosvold, 1981) – even when they find it unfair that some do not occupy a higher or lower position in the hierarchy. In other words, the equality and open communication between team members makes them to be less bothered with the fact that informal decentralized hierarchy is illegitimate so they will experience lower status conflicts and higher team performance. This means when an informal hierarchy is illegitimate, informal decentralized hierarchies will experience higher team performance than informal centralized hierarchy. To conclude, when informal hierarchical legitimacy is low, informal hierarchy centralization is negatively related to team performance.
Using what has been stated so far, I hypothesize that:
Hypothesis: Informal hierarchical legitimacy will moderate the relation between
informal hierarchy centralization and team performance, such that when informal
METHOD Sample
In order to test the hypothesis in this research, me and two fellow researchers
administered online surveys to 300 individuals embedded in 75 work teams in organizations in Cyprus, Greece and Germany. These teams were part of different types of organizations in industries such as communication, healthcare, retail, education, production and government services. Each team had to fulfill a number of requirements to be included in this research such as whether team members have common goals, whether team members are
interdependent, whether team members are jointly accountable or whether the team has regular meetings. The teams are composed by one formal leader and among 3 to 12
subordinates. Later, when I calculated the scores for the informal hierarchy centralization the formal leader was excluded from the analysis with the aim of capturing informal hierarchy strength (i.e. centralization) among a group of formally egalitarian individuals. To test the hypothesis this research used only 52 (69.3%) out of 75 teams in the analysis because the team members and/or formal leaders in the rest 23 teams (30.7%) did not provide full
answers to the survey so they were excluded from analysis. The sample of 52 teams includes 243 participants from which 191 were team members and 52 formal leaders.
Regarding the 52 formal leaders, 29 (56%) are male and 23 (44%) are female, while their average age is 36.5 years old and the standard deviation is 10.6 years. Among them 82.7% work full time (36 hours per week or more) while only 17.3% work less than 36 hours per week. As for their education, 76.8% of the formal leaders (40 persons) possess a
Concerning the 191 team members, 80 are male (41.9%), 109 are females (57.1%) and two team members did not provide their gender (1%). Their average age is 31.4 years old and standard deviation is 10.7 years. In total 123 persons (64.5%) work full time (36 hours per week or more) while 61 persons (31.8%) work less than 36 hours per week. Seven people (3.7%) did not provide this information. Regarding team members’ education, 112 persons (58.6%) have a certificate of higher education, 75 persons (39.3%) do not have a degree of higher education while 4 persons (2.1%) did not provide this information. Finally, the average tenure of members in team is 3 years while the standard deviation is 4 years.
Procedure
Formal team leaders were invited to participate in a study of team process, team relations as well as team performance in organizations. The team leaders who agreed to participate in this research provided a form by email in which they had to specify the team goal, if the team members are interdependent, jointly accountable, have common goals, if the team has regular meetings and information about team members (names, surnames, emails etc.). Afterwards the forms collected and evaluated in order to accept only the teams who fulfilled the requirements mentioned above. After teams were approved, me and the two fellow researchers sent to each team member and the formal leader a link by email which led to an online survey. Surveys were separated in two categories, one was created for team members and a second one for formal team leaders. Team members answered questions about how much they were influenced by the other team members and if the team member’s
influence position in the informal hierarchy is legitimate/illegitimate in other words fair/unfair. Formal team leaders answered questions about team performance and the
Measures
Informal hierarchy centralization. Informal hierarchy centralization indicates the
degree to which one group members’ influence is superior to all other members’ influence (Berdahl & Anderson, 2005). Centralization is therefore maximized when one member has informal influence over all other team members, and is minimized when all team members are equally influential. To measure each team members’ level of influence, we presented them with a list that included all team members and asked them to indicate to what extent this individual exerts influence over them. Response options were: ‘Not at all’ (=1), ‘Somewhat’ (=2) and ‘Strongly’ (=3). Based on these scores, we calculated an average influence score for each team member and used this as input the Freeman’s (1978) degree centralization index. The formula is ∑(cmax-ci) / (n-1)2, where cmax is the highest influence centrality score within the team, ci is each member’s influence centrality score and n stands for the number of team members. The 52 formal leaders were excluded from the calculations regarding the centralization so all the hierarchies that were created were purely informal. Scores could theoretically run from 0 (completely decentralized) to 2 (highly centralized). In the sample, I obtained scores from 0.00 which indicates that informal hierarchy is decentralized to 1.04 which demonstrates that informal hierarchy is centralized. Mean informal hierarchy centralization is 0.45.
Hierarchical legitimacy. To measure hierarchical legitimacy, I used a self-developed
legitimate (fair). The Cronbach’s alpha for this measurement tool was 0.72, and aggregation statistics supported aggregation to the team level: ICC1 = .09, ICC2 = .24 and Rwg mean = .83 (James, Demaree & Wolf, 1984).
Team performance. Finally, to measure team performance a broad measure was used
(Ancona & Caldwell, 1992) because of the diversity of the work of teams. Formal leaders’ one and only contribution in this research was to indicate the performance level of their team. Each formal leader was asked to determine the performance of his/her team base on 5-item scale. Example questions that were provided to formal leaders are: (a) How does this team score on reaching team goals? (b) How does this team score on meeting deadlines? (c) How does this team score on work speed? (d) How does this team score on quality of work? (e) How does this team score on productivity? (f) How does this team score on effectiveness? Team leaders’ responses were collected on a scale ranging from 1 (far below average) to 7 (far above average). Cronbach’s alpha for the combined 5-item scale was 0.87.
Control variables. Six variables were considered as controlled variables in this research because they impact team performance in different ways. These variables are: gender diversity, the average educational level in team, team size, average team tenure and two dummy variables for country (=countryV1: Germany, Greece & Cyprus, =CountryV2: Cyprus, Greece & Germany).
Gender diversity. Research indicates that when a team has low gender diversity or in
Team size. Team size is related to team performance because research indicates that
small teams are more cohesive, have better group processing and communication than larger teams (Dennis & Valacich, 1994) thus in this way small teams perform better than larger teams. The size of teams was provided by formal leaders on the participation form and ranges between 3 to 12 members across groups. Thus, a numeric variable was created in spss file containing the size of the team and will be used as a control variable.
Team tenure. Research indicates that as the average tenure of team increases, the
team members understand better the policies and procedures in the team and their
communication improves since everyone understand the argot language that is used in the team (Zenger & Lawrence, 1989). Thus, teams that have high average team tenure will function better and perform better than low tenure teams. Team tenure was obtained through the online survey by asking team members to indicate in two open scales the number of years and the number of months that are members in their team. Firstly, the years and months were summed into one variable at individual level and secondly, they were aggregated into team level to find the average team tenure of each team.
Educational level. The educational background of team members is a significant
indicator of knowledge, skills and capacity (Horwitz, 2005). This means that teams that are consisted of more educated individuals will be more capable to lead their team to success that teams that have less educated individuals. The educational level of individuals was obtained in the survey using a single item-scale: What is the highest level of school you have
completed or the highest degree you have received? Response options2 ranged between 1(=less than high school degree) to 8 (=Professional degree). After the measures obtained at
2 The response options for this single-item scale were: 1) Less than high school degree, 2) High school graduate
individual level they were aggregated to group level to indicate team’s average educational level.
Country effect (countryV1 & countryV2). Research indicates that cross-national
differences in work attitudes and behaviors such as social loafing and participation in
decision making might impact the performance in teams positively or negatively, (Brockner, 2003). Thus, two dummy variables for country were used as controlled variables to
investigate the differences between the nations. This first one (countryV1) tests the differences between teams in Germany and teams in Greece and Cyprus. The second one (countryV2) tests the differences between teams in Cyprus and teams in Germany and Greece.
RESULTS Means, Standard Deviations and Correlations
Table 1 presents the mean values, standard deviations and bivariate correlations for all model variables and control variables. As the results demonstrate, the relationship between centralization and team performance had a positive coefficient (r = 0.08), however, the relationship is not significant at p<0.05. In a similar vein the relationship between
hierarchical legitimacy and team performance had a positive correlation (r= 0.11) but again not significant within the sample (p>0,05). Moreover, regarding the control variables, only CountryV1 variable (differences between teams in Germany and teams in Cyprus and
Main analysis – Hypothesis Testing
To analyze the hypothesized effect of hierarchical legitimacy as a moderator on the relationship between informal hierarchy centralization and team performance, a regression analysis was performed using the ‘Process’ add-on (by Andrew F. Hayes) on SPSS. Predictor variables, informal hierarchy centralization and legitimacy were standardized prior to
analysis, to facilitate interpretation of the moderation results. Additionally, CountryV1 variable that separate teams in Germany from teams in Greece and Cyprus was included in moderation analysis as a covariate, since it was significantly correlated with team
performance (r=-0.32, p<0.05).
Hypothesis. The hypothesis of this research assumed that when informal hierarchical legitimacy is high, informal hierarchy centralization is positively related to team performance and when informal hierarchical legitimacy is low, informal hierarchy centralization is
TABLE 1
Means, Standard Deviations and Correlations
Variable Mean S.D. 1 2 3 4 5 6 7 8 1. Team Size 3.67 1.59 2. Team Tenure 3.05 2.84 0.03 3. CountryV1 0.65 0.48 0.21 0.10 4. CountryV2 0.10 0.30 -0.10 -0.19 -0.45** 5. Average Education 3.90 1.31 -0.14 -0.09 -0.23 -0.07 6. Gender Diversity 40.90 35.80 0.12 0.06 0.21 -0.07 -0.13 7. Centralization 0.45 0.26 0.11 -0.16 0.18 0.14 0.11 -0.14 8. Legitimacy 5.03 0.57 -0.14 0.08 -0.19 0.13 -0.26 0.10 -0.19 9. Team performance 5.53 0.78 0.10 -0.02 -0.32* 0.12 0.21 0.07 0.08 0.11
TABLE 2 Hypothesis Testing B LLCI ULCI SE t p Constant 5.53 5.31 5.75 0.12 49.75 0.00*** legitimacy 0.15 -0.10 0.41 0.13 1.19 0.24 centralization 0.15 -0.03 0.34 0.09 1.62 0.11 interaction 0.01 -0.18 0.19 0.09 0.10 0.92 CountryV1 -0.30 -0.52 -0.08 0.11 -2.73 0.00** R2=0.16, MSE=0.55, F=2.38, df1=4, df2=47, p=0.06 Conditional effect of Centralization
on team performance at different values of legitimacy
95% Confidence Interval LLCI ULCI
-1SD 0.14 -0.10 0.38
M 0.15 -0.04 0.34
+1SD 0.16 -0.13 0.45
Note. N = 52 *p < .05, **p < .01, p ***< .001
DISCUSSION
This research aimed at to demonstrate that informal hierarchy centralization is
positively related to team performance because hierarchical legitimacy is high and negatively related to team performance because hierarchical legitimacy is low. Using data from 52 work teams in organizations located in Germany, Greece and Cyprus this research demonstrated that the effect of moderator (informal hierarchical legitimacy) on the main relationship is not significant thus the hypothesis is not confirmed.
Theoretical reasoning. Before explaining why hierarchical legitimacy does not moderate the main relationship, it is important to mention the findings regarding the
relationship between informal hierarchy centralization and team performance. In examining the relationship between informal hierarchy centralization and team performance, this research indicates that the relationship could not be established in the sample (B=0.08, p>0.05). This finding is not surprising, since research has demonstrated mixed effects with regards to informal hierarchy centralization and team performance (Bendersky & Hays, 2012; Frauendorfer et al., 2015). It may mean that the relationship is moderated, as was my
hypothesis.
personality trait dominance and be incompetent the same time (Anderson & Kilduff, 2009) so these informal dominant leaders cannot lead a team to high team performance. On the other hand, other research suggests that informal leaders can emerge based on their actual task ability and foster team performance (Desouza & Klein, 1995) So, because it is not certain whether an emergent informal leader is competent or not, I suggest that leader’s competence is an important variable to be considered as a moderator in the relationship between informal hierarchy centralization and team performance.
Limitations. Next some limitations have been identified in this research which might have contributed to the fact that this research results were inconclusive.
Firstly, this research was cross sectional which suggests that it is not possible to establish causality between the variables. So, this study is limited by fact that the data were obtained only in one point in time so results could be different in this research if data were obtained in more points in time. Thus, future research might resolve this issue by obtaining data in more points in time.
the hierarchy were taken from the same individuals there is common source bias (Andersen, Heinesen & Pedersen, 2016).
Thirdly, this research because used an online survey to obtain data is subject to social desirability. Social desirability is defined as “the need of social approval and acceptance and the belief that it can be attained by means of culturally acceptable and appropriate behaviors (Podsakoff, MacKenzie, Lee & Podsakoff, 2003, p.881). In other words, participants may have provided answers in socially desirable ways that do not represent what they really think or believe (Sax, Gilmartin & Bryant, 2003). Thus, they might have answered the questions without paying the necessary attention, by avoiding extreme response options or by
exaggerate in their answers. This might be another reason that might have limited this research from been conclusive.
A final limitation is about the measurement error in individuals’ judgments regarding hierarchical legitimacy variable. To specify reliability of hierarchical legitimacy I used intraclass correlation coefficients (ICCs) and Rwg coefficient (James, Demaree & Wolf, 1984). ICC (1) estimates interrater reliability, ICC (2) estimates the reliability of group means and Rwg index measures interrater agreement aiming to determine the appropriateness of aggregating data to higher levels of analysis (Castro, 2002). The results show that reliability regarding hierarchical legitimacy is low at individual level ICC(1)=0.09 and group level ICC (2)=0.24 although rwg mean was 0.83. In other words, team members perceptions regarding the level of hierarchical legitimacy in their team is not aligned since each member had a different opinion about the legitimacy of the hierarchy (ICC(1)=0.09). This might be another reason that limits the observation of moderating effects of hierarchical legitimacy on the relationship between informal hierarchy centralization and team performance.
centralization demonstrates on team performance, future research could add more knowledge to this topic.
Research in the future should consider investigating whether an informal leader is competent. For example, research suggests that leaders must not only be the most influential individuals but they must have skills, knowledge and capabilities to be effective leaders for their teams (Mumford, Zaccaro, Harding, Jacobs & Fleishman, 2000). Although this is true, a relatively recent research indicates that the most influential individual in a team is not always the most competent person (Anderson & Kilduff, 2009). According to Anderson and Kilduff (2009) there are cases in which the most influential individuals are acting in ways that look like competent thus they induce team members to perceive them as competent while in fact they lack skills. When this happens, the influence of these individuals helps them to ascend social hierarchies but because they are incompetent the performance in team is hampered. In contrast, informal leaders can also emerge based on their task ability which they use to help the team members improve their work and foster the performance of the team (Desouza & Klein, 1995). Since informal leaders who emerge each time are not necessarily competent, this suggests that informal leader’s competency could moderate the relationship between informal hierarchy centralization and team performance. For this reason, future research should focus on definite characteristics that illustrate the actual level of competence of individuals such as skills, task competence and knowledge (for a review see, Connelly et al., 2000; Mumford, et al., 2000).
person in the hierarchy (e.g. informal leader) with the right skills and competencies can make decisions for the group and thus direct and coordinate team member’s actions for effective team performance (Anderson & Brown, 2010). In contrast, complex tasks require aggregation of ideas and innovation for effective team performance. In this case hierarchies are not
effective because they diminish the efficacy of aggregation. This is attributed to that fact that team members adopt the perspectives of leaders (Newcomb, 1943) thus their unique input vanishes in the light of informal leader’s influence. Based on these thoughts, I propose for future research the variable task complexity as a moderator on the relationship between informal hierarchy centralization and team performance.
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