The role of hierarchical differentiation for the effectiveness of soccer teams

The impact of hierarchical differentiation on team effectiveness is heavily discussed in scientific research with strong argumentslined up on both the pro and the contra sides. To contribute to this debate, I investigated the relationship between a specificfacet of hierarchical differentiation, pay dispersion, and team effectiveness. I collected data from five seasons of PremierLeague and conducted a regression analysis to study the effect of pay dispersion on team performance, cooperation andaggressivity. The empirical results show that pay dispersion is positively and directly associated with aggressivity, whilst itsrelation with team performance and cooperation is moderated through the financial might of teams. The significant interactioneffect for team performance means that pay dispersion has a significant negative effect for high financial might teams, and aweak positive effect for low financial might teams. For cooperation the interaction shows a significant positive effect for thelow financial might teams and a weak negative effect for the high financial might teams. Thus, I conclude that pay dispersionindeed affects team effectiveness, however the economic power standing behind the teams needs to be considered.