BUS603: Managing People

A fourth characteristic, or structural property, of work groups is the status system. Status systems serve to differentiate individuals on the basis of some criterion or set of criteria. There are five general bases on which status differentiations are made: birth, personal characteristics, achievement, possessions, and formal authority. All five bases can be seen as establishing status in work groups. For example, an employee may achieve high status because he is the boss's son (birth), the brightest or strongest member of the group (personal characteristics), the best performer (achievement), the richest or highest paid (possessions), or the foreman or supervisor (formal authority).

Reasons for Status Systems. Status systems can be seen throughout most organizations. We differentiate between blue-collar and white-collar employees (and even pink and gold collar), skilled tradespersons and unskilled workers, senior and junior managers, high achievers and low achievers, and popular and unpopular employees. Why do we do this? In essence, status differentiation in organizations (and their related status symbols) serves four purposes:

Motivation. We ascribe status to persons as rewards or incentives for performance and achievement. If high achievement is recognized as positive behavior by an organization, individuals are more willing to exert effort.

Identification. Status and status symbols provide useful cues to acceptable behavior in new situations. In the military, for example, badges of rank quickly tell members who has authority and who is to be obeyed. Similarly, in business, titles serve the same purpose.

Dignification. People are often ascribed status as a means of signifying respect that is due them. A clergyman's attire, for instance, identifies a representative of the church.

Stabilization. Finally, status systems and symbols facilitate stabilization in an otherwise turbulent environment by providing a force for continuity. Authority patterns, role relationships, and interpersonal interactions are all affected and, indeed, defined by the status system in effect. As a result, much ambiguity in the work situation is reduced.

Status can be conferred on an individual in many different ways. One way common in organizations is through the assignment and decoration of offices. John Dean, counsel to former President Nixon, provides the following account concerning status in the White House:

Everyone [on the White House Staff] jockeyed for a position close to the President's ear, and even an unseasoned observer could sense minute changes in status. Success and failure could be seen in the size, decor, and location of offices. Anyone who moved into a smaller office was on the way down. If a carpenter, cabinetmaker, or wallpaper hanger was busy in someone's office, this was the sure sign he was on the rise. Every day, workmen crawled over the White House complex like ants. Movers busied themselves with the continuous shuffling of furniture from one office to another as people moved in, up, down, or out. We learned to read office changes as an index of the internal bureaucratic power struggles. The expense was irrelevant to Haldeman. . . . He once retorted when we discussed whether we should reveal such expense, "This place is a national monument, and I can't help it if the last three Presidents let it go to hell". Actually, the costs had less to do with the fitness of the White House than with the need of its occupants to see tangible evidence of their prestige.

Modern businesses looking to attract top talent do not have office spaces that have a group of workers siloed in their own walled-off offices with doors 20 years old.

One Orlando business, for instance, spent about $330,000 on the design and build-out of its space.

Status Incongruence. An interesting aspect of status systems in organizations is the notion of status incongruence. This situation exists when a person is high on certain valued dimensions but low on others, or when a person's characteristics seem inappropriate for a particular job. Examples of status incongruence include the college student who takes a janitorial job during the summer (usually referred to as the "college kid" by the other janitors), the president's son who works his way up through the organizational hierarchy (at an accelerated rate, needless to say), or the young fast-track manager who is promoted to a level typically held by older employees.

Status incongruence presents problems for everyone involved. The individual may become the target of hostility and jealousy from coworkers who feel the individual has risen above his station. The coworkers, on the other hand, may be forced to acknowledge their own lack of success or achievement. One might ask, for example, "Why has this youngster been promoted over me when I have more seniority?" At least two remedies for this conflict are available to managers. An organization can (1) select or promote only those individuals whose characteristics are congruent with the job and work group, and (2) attempt to change the values of the group. Neither of these possibilities seems realistic or fair. Hence, dynamic organizations that truly reward high achievement (instead of seniority) must accept some level of conflict resulting from status incongruence.

Expanding Around the Globe

Status Systems in Japanese Business

In Japan, etiquette is not simply a prescription for appropriate social responses, it is a complete guide to conducting oneself in all social interactions. At the root of this system of social interaction is one's status within the organization and society.

The effects of status in Japan can be seen in many ways. For example, when two businesspeople meet for the first time, they exchange business cards - before they even say hello to each other. After carefully reading the cards, each knows precisely the other's rank (and status) in the organizational hierarchy and, thus, how to respond. The person with the lower status must bow lower than the person with the higher status.

Moreover, when four managers get into a car, status determines where each will sit. This is shown in Exhibit 9.6, where it can be seen that the most important (highest-status) manager will sit in the back seat, directly behind the driver. Similarly, when four managers enter an elevator, the least senior stands in front of the elevator controls, with the most senior behind. In a meeting room or in a restaurant, the most honored seat is farthest from the door, whereas the least honored is nearest the door. Even within the meeting room itself, a sofa is considered higher in rank than armchairs.

Exhibit 9.6 The Place of Honor in Japan

Clearly, status plays an important role in Japanese (and several other East Asian) societies. Status recognizes age (an important cultural variable in these societies) and tells everyone involved how to behave. Though such prescriptive practices may seem strange to many Westerners, it is quite natural in Japan. In fact, many Japanese feel such guidelines are helpful and convenient in defining social relationships, avoiding awkward situations, and making business transactions more comfortable and productive. Whether or not this perception is accurate, status systems are a fact of life that must be recognized by Western managers attempting to do business in Asia. Failure to understand such social patterns puts the Western manager at a distinct disadvantage.