Social Hierarchies: Why They Matter for Decision Governance

“Social hierarchy is an explicit or implicit rank order of individuals with respect to a valued social dimension.” [1]

A hierarchy is explicit if rules that position individuals on it are clear, and will often be documented. It is implicit otherwise.

A valued social dimension is that which is used to distinguish between individuals and which leads to placing them at a specific rank in the hierarchy. The performance of an individual determines their rank, whereby performance is perceived by those who have the authority to assign rank.

Hierarchical differentiation is the process by which a social dimension becomes important in a group, leading to assignment of rank within the group.

Understanding explicit hierarchies and detecting implicit ones is important in decision governance because hierarchy influences possible assignments of decision rights and responsibilities. 

This text is part of the series on the design of decision governance. Decision Governance refers to values, principles, practices designed to improve the quality of decisions. Find all texts on decision governance here, including “What is Decision Governance?” here.

If decision rights are assigned to roles held by individuals who may have a low rank in an implicit hierarchy, then this may reduce the quality of the decisions they will make: decisions may not be credible, chosen actions may not be taken, or may be done poorly.

If decision rights are given to wrong roles in an explicit hierarchy, comparable issues may arise, as well as others. For example, a decision made at the wrong rank will likely be more frequently contested by those of higher rank (including those whom, in the explicit hierarchy, the decision maker reports to).

Position in a hierarchy can also suggest possible motives of the decision maker: they may prefer options which they believe will improve their position in a hierarchy. Not that an individual is always part of multiple implicit and explicit hierarchies, as they are part of multiple groups, and groups have different social dimensions that matter.

Hierarchy “provides incentives for individuals in groups and organizations. Individuals are motivated to obtain higher rank to satisfy material self-interest and their need for control, and, in turn, this serves the organization’s interests as long as rank is determined by a dimension that is related to organizational or group performance.” [1]

The implication for decision governance is that rules and processes for decision making cannot ignore the existence of hierarchies. Valuable social dimensions, as well as dimensions that correlate strongly with perceptions of group performance, need to be managed: we need to make assumptions about how they correlate with factors which influence the quality of decisions. For example, if the decision maker is part of a group that values rigorous analysis prior to making decisions, then it is reasonable to assume that they will more easily accept a more structured decision process. In contrast, if they are part of a group that values ignorance of risk, then the approach needs to be different when trying to implement rigorous decision processes: it will be necessary to have governance that disincentivizes risk taking that is not informed by a prior risk assessment.

Decision governance cannot simplistically impose rules grounded in values that are incompatible with values promoted in hierarchies that the decision makers are part of. 

Bluntly, it is counterproductive to impose rules to individuals who rank higher when they ignore or break them. Instead, it is necessary to have mechanism through governance which, for example, progressively introduce structure to decision making, combine this with education of decision makers, both in the aim of ensuring the decision makers dissociate values of specific hierarchies they are part, from the idea that decisions which we are trying to govern are going to lead them to higher rank. Reframing also needs to be done to help decision makers rationalize the discrepancies between their motives driven by rank and the values promoted through decision governance, and the importance of the latter for improving decisions. 

Over time, decision governance will be successful if it reduces, in a decision process, the importance of rank in hierarchies that promote values detrimental to making better decisions. 

References and Further Reading

1. Magee, Joe C., and Adam D. Galinsky. “Social hierarchy: The self‐reinforcing nature of power and status.” Academy of Management Annals 2.1 (2008): 351-398.