Intra-Team Hierarchy Triggers Inter-Team Competition: The Impact of Hierarchy on Team Negotiations.

Organizations rely on teams to negotiate over the division and allocation of scarce resources (e.g., two departments discussing budget, space, and personnel needs). These teams are often organized hierarchically, such that they have a clear and designated leader with greater decision-making authority than the rest of the team. Existing work suggests that such hierarchical teams suffer from greater intra-team competition. However, it remains unclear from this research how hierarchical differentiation within teams affect the team's ability to compete and cooperate effectively with other teams. Combining insights from the literatures on negotiations and social hierarchies, we propose that hierarchical differentiation within teams promotes a more competitive negotiation strategy between teams, which undermines joint gain and leaves valuable resources unused. We tested these predictions in two laboratory experiments involving 554 negotiating teams and find that hierarchical teams achieved lower joint gain than egalitarian teams because they adopted a more competitive strategy during the negotiation itself. [ABSTRACT FROM AUTHOR]