Victorious and Hierarchical, Defeated and Flat: When Team Hierarchies Change Following Success or Failure

Hierarchies emerge as collectives attempt to organize toward successful performance. Consequently, the relationship between team hierarchies and team performance has been widely explored. However, extant research has conceptualized hierarchies primarily as static entities, examining how a hierarchy at one point in time relates to team performance at a later point in time. This approach tends to neglect a fundamental reality about hierarchies: they change. In this paper, we develop a theory about the dynamic relationship between team hierarchies and performance by suggesting that performance also serves as an important input that actively shapes hierarchies. Drawing on the exploration and exploitation framework, we argue that successful (unsuccessful) performance triggers exploitation (or exploration) which leads to an increase (decrease) in the degree of a team’s hierarchy, an effect that is especially strong when the team already has a high degree of hierarchy. Utilizing recent advances in behavioral sensors as a proxy for team processes, we exploit fine-grained passing data from the National Basketball Association (NBA) to test our hypotheses. We observe how a team’s hierarchy changes on a game-by game basis based on prior performance. Winning is associated with an increase in hierarchy, and this relationship is stronger among teams already high in hierarchy. We then explore the full cycle of performance–hierarchy–performance by testing how hierarchy affects subsequent performance. We conclude by highlighting how our theory and findings extend prevailing discussions in the hierarchy literature.