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Why Office Hierarchies Are Good for Business

New research suggests that hierarchies make companies more productive. (But too much testosterone does not.)

Too Many Bosses

One experiment required participants to work together to create sentences. Groups with varied levels of power were nearly twice as productive as were groups filled with dominant personalities.

Group with low power: 3.1 sentences

Group with high power: 2.5 sentences

Group with mixed power: 4.5 sentences

Disenchanted with the corporate world, many entrepreneurs strive to keep their organizations as flat as possible. But a recent study suggests that, in some cases, office hierarchies help employees get more done. And that too many dominant personalities could jam up the works.

The Findings

The study, conducted by researchers from the business schools at Columbia University and Northwestern and the University of Queensland, Australia, found that when there are tasks that require teamwork, people get more done when there are defined leaders and followers. Without a clear chain of command, members often become sidetracked with grabbing power and lose focus on the task at hand. "When control and coordination are really important, then hierarchy actually helps the group perform more effectively," says Adam Galinsky, a professor at Northwestern's Kellogg School of Management and a co-author of the study.

The Methodology

The study included two experiments. In the first, participants were primed to think as leaders or followers by writing essays about past incidents in their lives involving power dynamics. Some were asked to recall a time when a person had exerted power over them; others were told to describe a time when they were in charge. On the basis of the essays, participants were organized into three types of groups: all high-power individuals, all low-power individuals, and a mix. Each group was asked to complete two tasks. The first task was to find as many words as possible from a scramble of letters and then create sentences from those words. Each sentence required at least one word from each member of the group. The second task was to list unconventional uses for common items, such as a paper clip and a brick; participants could work together or individually. In the end, the mixed-power groups produced more sentences than did the other groups, but all three groups generated a similar number of uses for the household items.

In the second experiment, participants were grouped by dominance, as measured by testosterone levels. Again, participants were placed in three types of groups: all high-testosterone individuals, all low-testosterone individuals, and a mix. As in the first experiment, each group had to work together to create sentences. Afterward, participants were asked to rate the level of conflict within their group. The mixed groups created more sentences and reported less conflict than did the high-testosterone groups. The low-testosterone groups also had less conflict but were less productive.

The Takeaway

Big projects need a balance of leaders and followers. And certain projects may require flexibility in the chain of command. For example, a committee charged with developing product ideas will probably be more effective with minimal hierarchy--allowing everyone's voice to be heard. But the group that develops the product will require a clear leader and defined roles. Additionally, entrepreneurs should hire a mix of personality types within departments. Having too many dominant personalities on one team could create a toxic work environment.

 

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