The functions and dysfunctions of hierarchy

Functionalist accounts of hierarchy, longstanding in the social sciences, have gained recent prominence in studies of leadership, power, and status. This chapter takes a critical look at a core implication of the functionalist perspective namely, that steeper hierarchies help groups and organizations perform better than do flatter structures. We review previous research relevant to this question, ranging from studies of communication structures in small groups to studies of compensation systems in large corporations. This review finds that in contrast to strong functionalist assertions, the effects of steeper hierarchies are highly mixed. Sometimes steeper hierarchies benefit groups and sometimes they harm groups. We thus propose five conditions that moderate the effects of hierarchy steepness: (1) the kinds of tasks on which the group is working; (2) whether the right individuals have been selected as leaders; (3) how the possession of power modifies leaders' psychology; (4) whether the hierarchy facilitates or hampers intra-group coordination; and (5) whether the hierarchy affects group members' motivation in positive or deleterious ways. (C) 2010 Elsevier Ltd. All rights reserved.