This thesis integrated theories of inequality, stratification, status characteristics and system justification to investigate how power centralization shapes group political climate level and affects group performance in frontline work groups in the organization. While past research has already demonstrated that high power centralization in the upper echelon of organizations is more likely to induce intragroup power struggle that further compromises group performance, this thesis argued for a curvilinear relationship between power centralization and group political climate level as well as group performance on basis of how power is construed in terms of stability, legitimacy and permeability in frontline work groups. Using a sample of 69 frontline work groups (with 456 employees...[ Read more ]

This thesis integrated theories of inequality, stratification, status characteristics and system justification to investigate how power centralization shapes group political climate level and affects group performance in frontline work groups in the organization. While past research has already demonstrated that high power centralization in the upper echelon of organizations is more likely to induce intragroup power struggle that further compromises group performance, this thesis argued for a curvilinear relationship between power centralization and group political climate level as well as group performance on basis of how power is construed in terms of stability, legitimacy and permeability in frontline work groups. Using a sample of 69 frontline work groups (with 456 employees) from 2 state-owned manufacturing enterprises in China, it was found that formal power centralization induces high level of group political climate level and compromises group performance when it ranged from low to medium level. And it was especially problematic for groups with low formal power density and/or large group size. While high formal power centralization was found to have marginal contribution to group performance indirectly through the reduction of group political climate level in general, it was also found to have significant direct contribution to group performance especially when formal power density was low. Besides, informal power centralization ranging from low to medium level was found to have differential indirect effects on group performance through group political climate level depending on legitimacy of informal power distribution. When illegitimate, the indirect effect was negative, and when legitimate, the indirect effect was positive. And high informal power centralization was found to have directly contribution to group performance when informal power distribution was legitimate and/or when group size was large. This thesis was concluded with discussion of the theoretical and practical implications for future research.