From assigned to assumed power: Informal hierarchies in network organizations

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School of Business | Master's thesis
Degree programme
Management and International Business (MIB)
Power, and thus hierarchy is present in all human interaction. Even when no formal hierarchy has been communicated, we create social or informal hierarchies in its place. This thesis examines what types of informal hierarchies are experienced in organizations that have little or no formal hierarchy, and how these hierarchies are experienced by employees. The empirical research is based on a theoretical framework of power, suggesting that informal hierarchy is an outcome of interpersonal power relationships in the context of organizational culture. Ten employees from two companies in the consulting industry were interviewed. Each company can be defined as a network organization, in which a formal hierarchy has been removed or minimized and replaced by self-regenerating, autonomous processes. Additionally, an autoethnographic approach is utilized in the research design and data collection. Results are then thematically analyzed and discussed with specific focus on managerial implications. The findings of the study indicate nine experienced hierarchy types in the studied organizations, with experiences of them varying from helpful to harmful. Two of these hierarchies were considered formal and seven informal. These results support previous literature’s view on the persistent nature of hierarchy as well as the prevalence of informal hierarchy in network organizations. Consequently, the current thesis proposes that power in organizational context is a constant, merely changing form from assigned to assumed when manipulated by different forms of organizing.
Thesis advisor
Vuorenmaa, Hertta
hierarchy, power, network organization, self-organizing, self-management