These organizational changes can shake up company hierarchy

Organizational change is often viewed as a threat, but it can also present opportunities for growth and development.

According to recent research from the University of Washington, how individuals react to these changes is influenced by their standing within the status hierarchy of their work groups. A status hierarchy is an informal ranking of employees based on the level of respect and admiration they receive from their colleagues.

Once a hierarchy is established within an organization, it becomes difficult to disrupt. Employees tend to behave in a manner that aligns with their status: higher-status individuals are more assertive, while lower-status individuals often defer to others.

The study, published in the Journal of Applied Psychology, reveals that task-based changes—disruptive organizational changes that require a group to adjust their way of working and invest additional personal resources—have an impact on employees regardless of their status. However, the effects of these changes vary depending on an individual’s position within the hierarchy.

“Hierarchy has a self-reinforcing nature,” explained co-author Elijah Wee, an assistant professor of management at the UW Foster School of Business. “The highest-status person has more freedom to act as they please. They enjoy greater visibility and respect compared to someone lower in the hierarchy. If a lower-status person steps out of line, it may not be well-received. Our initial objective was to identify the contexts in which lower-status individuals are more likely to overcome the reinforcing nature of the status hierarchy and ascend within their organization.”

To navigate the challenges associated with organizational transitions, employees must collaborate and support one another. Higher-status individuals are better equipped to adapt to these transitions and provide support to their colleagues. However, immediately following a task-based change, higher-status individuals may become concerned about potentially losing their advantages in a new environment.

“The fear of losing status prompts higher-status individuals to become more introspective,” Wee noted. “When you feel like you’re losing something, you naturally focus on how to rectify the situation. We found that higher-status individuals withdraw from helping others and instead spend their additional time on personal development and learning to enhance their competence. During this period, the team perceives this person as having less status.”

Lower-status employees, on the other hand, perceive change as an opportunity because it liberates them from existing constraints. These individuals have often felt discouraged, believing that they cannot contribute significantly to the team. Change represents a chance for them to actively participate and be recognized within the group, leading to an increase in their status.

“Lower-status employees strive to contribute by being more generous,” Wee commented. “Through generosity, they can elevate their status. There are two primary ways to gain status within a group: demonstrating competence and showcasing care for the team.”

The researchers conducted two studies that examined the short-term effects of task-based changes. The first study analyzed a real task-based reorganization at a Southeast Asian real estate firm that had primarily focused on the private sector but was considering a shift to the public residential resale market.

The second study consisted of two parts. The researchers initially surveyed undergraduate students from a public university in the northwestern United States. The second sample included working adults from the U.S. and the United Kingdom. All participants received information about an imaginary job and were randomly assigned to one of four roles, such as higher-status or lower-status employees during a task-based change. Both studies yielded consistent results, indicating that higher- and lower-status individuals evaluate changes in different ways.

“When we think about change, we often consider factors like resistance or commitment,” Wee emphasized. “We don’t always delve into the implications for status and the dynamics between team members. It is important to address these interpersonal dynamics during times of organizational change.”

The co-authors of the study are Rellie Derfler-Rozen and Jennifer Carson Marr from the University of Maryland. This research received the Best Paper Award from the Organizational Behavior Division at the Academy of Management Conference.

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