Organizations as Resource Dilemmas: The Effects of Power Balance on Coalition Formation in Small Groups

Abstract

This research combines the coalition and social dilemmas literature to understand the complexity of choice in small group decision making that occurs within organizations. In an exercise which simulates the organization as a resource dilemma, power balance (equal, unequal) is manipulated in five-person groups to examine its impact on coalition formation and group outcomes. In a 15 round game players had the option of forming coalitions, which decreased the size of the resource pool, or practicing collective resource allocation, which increased it. Unequal power balanced groups were more likely to begin the exercise by forming coalitions and distributing the resource pool to a subset of group members than equal power balanced groups. Unequal power balanced groups also included fewer people in the funding distributions across all 15 rounds than did groups with equal power. As a result, unequal power balanced groups had significantly lower individual as well as group outcomes than did equal power balanced groups. Unequal power balanced groups also used the resource pool less efficiently than equal power balanced groups, and only equal power balanced groups were able to significantly increase the size of the resource pool across all game rounds. Finally, unequal power balanced groups had more difficulty reaching funding allocation agreements than equal power balanced groups. The results are discussed in terms of their implications for small group decision making in organizations.