"Hierarchy is a fundamental element of social life, one that emerges spontaneously and gives order and coordination to the dynamics within social collectives"
- Steven Blader, New York University, and Ya-Ru Chen, Cornell University, Differentiating the Effects of Status and Power: A Justice Perspective
In every social system, there's an order. Some systems are more self-selecting and based on democracy, whereas others emerge through coercion or even luck. And whether or not the process of selection is based on free will has a huge effect on the psychology of those at the top.
NYU Stern professor Steven Blader and Cornell University professor Ya-Ru Chen dug into this topic in their latest research published in the Journal of Personality and Social Psychology. They wrote that there are "important conceptual differences between status and power," and defined them as:
"Status: prestige, respect and esteem that a party has in the eyes of others ... an index of the social worth that others ascribe to an individual or a group. Status originates externally and is rooted in the evaluations of others through status-conferral processes."
"Power is best conceptualized as control over critical resources — that is, outcome control."
And interestingly, "although power and status are often thought of as two sides of the same coin," says Blader, "they in fact have opposite effects on the fairness of people’s behavior."
Blader and Chen did a few experiments to test this hypothesis. In one, they asked 188 MBA students from an East Coast school to take part in a 25-minute negotiation exercise. Each person was assigned the role of a CFO of one of two pharmaceutical companies who were working out terms of a deal. Those assigned to the "status" condition were informed that:
You are quite well known in the industry as a high-status individual. You are one of the most respected people in the industry. People really hold you in high regard, and you have a great deal of esteem from others.
Those assigned to the "power" condition were told that:
You are quite well known in the industry as a powerful individual. Your company is one of the most profitable in the industry — and through your connections, you have access to a great deal of additional resources.
There was also a control group, which was not given specific qualities. The researchers found that those with "status" treated others much more fairly, and those with "power" were more dismissive. Those in the control group stood somewhere in the middle.
Blader says the results have major implications for workplaces, and within any organization. Put simply, leaders who are judged primarily on how they affect the rest of a company end up treating people better — and more justly — than those who are measured purely on financial goals.