Andy J. Yap, Nikhil Madan, Phanish Puranam
Formal hierarchies may be presumed to reduce uncertainty about the status ordering of employees as they imply a consistent global ranking. However, formal hierarchies in organizations are not merely linear, but are characterized by branching and nesting (i.e., they comprise subunits within the organization and subunits within other subunits), which creates a local ranking of individuals within each subunit. This can create tension between global and local formal ranks as status cues. Moreover, individuals may also draw on informal status cues that are inconsistent with formal ranks. Consequently, organizational members may experience upward status disagreement (USD), whereby each assumes they have higher status than the other. We offer a theoretical model that identifies important conditions under which cues arising from the structure of the formal hierarchy-either on their own or in conjunction with informal status cues-can be a source of USD. We also explore when USD can result in status conflict and identify moderators of this relationship. Our research has implications for how the frequency of USD can be mitigated as organizational structures become more complex and the workforce becomes increasingly diverse. © 2021 INFORMS
INSEAD, 138676, Singapore; Indian School of Business, Gachibowli, Telangana, Hyderabad, 500111, India
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