Hierarchical leadership versus self-management in teams: Goal orientation diversity as moderator of their relative effectiveness

Within team leadership literature much attention has been given to the role of authority differentiation (the degree to which responsibility for decision-making is vested in a limited number of team members). However, contingencies associated with its effectiveness remain largely unclear. Building on authority differentiation, substitutes for leadership, and social hierarchy literatures, we propose that teams low in authority differentiation (self-managing teams) require that team members are aligned in their goal orientations. Otherwise, goal orientation diversity leads team members to spend valuable cognitive resources on aligning team member efforts instead of information elaboration. Goal orientation homogeneity, however, serves as a substitute for leadership in these teams. By contrast, teams high in authority differentiation (hierarchical leadership teams) function more effectively with diverse goal orientations. In support of our arguments, we show experimentally that low authority differentiation is beneficial for teams homogeneous in goal orientations and detrimental for teams diverse in goal orientations.