Innovation as Group Process: Hierarchy, Status, and the Dilemma of Participative Leadership

Abstract

Organizations that are characterized by vertical authority structures, where decisions are made and implemented through a clear chain-of-command, are commonly seen as less responsive, less innovative, and less dynamic than organizations that have authority distributed more horizontally. This study takes aim at this presumption by miniaturizing authority structures to the level of the group, where group process theory can be marshaled to predict, measure, and assess outcomes for group innovation in an experimental setting. Using status theory, I propose that hierarchical groups will be more rather than less innovative than egalitarian groups. I conduct an experimental test by manipulating hierarchy in groups instructed to complete a common task, with outcomes mapped to innovative performance. Findings show that hierarchical groups are actually no more, and no less, innovative than egalitarian groups. Irrespective of authority structure, innovation appears to be most likely in groups in which a clear leader emerges who makes others in the group feel like her equal during group interaction.

Other findings are presented to explain the apparent no-effect of authority structure on innovation. I will show that status processes advantage each type of group differently with respect to innovation. Hierarchical groups are advantaged by the presence of a clear leader; egalitarian groups are advantaged by the participative interaction that comes naturally to status peers. But the two conditions must occur together to maximize the likelihood for innovation, and this poses a problem for groups who seek to innovate, because status dynamics that promote one of the conditions undercut the status dynamics that promote the other. In egalitarian groups, when authority seekers try to take charge and lead, participative interaction is endangered because members resent the status move. In hierarchical groups, when higher ranking members act participatively, group leadership is contested because others feel empowered to take charge. Each group type therefore faces a dilemma of participative leadership, and because the dilemma is reversed across group types, the net effect of authority structure on innovation is no apparent effect. Implications of the findings for theory and practice are discussed.