The Impact of Hierarchical and Egalitarian Organization Structure on Group Decision Making and Attitudes

Abstract

This article reports a simulation experiment which compared the decisions made by hierarchically organized groups with decisions made by egalitarian groups. The criterion for evaluating decision quality was return On investment. Overall the return on investment for hierarchically organized groups was significantly less than that of egalitarian groups. However, when sacrifices by individual group members gave a competitive advantage, hierarchically organized groups had a significantly higher return than egalitarian groups. The experiment also found that the hierarchically organized groups spent more time and effort making decisions but enjoyed the task less. The experiment used 64 groups of senior level business students that were organized into 11 computing industries.