The Power In The Organization Itself: Organizational Performance Evaluation Deviation

The dataset used is from the in‐firm interviews of Survey of Chinese Employee Participations, conducted by the Institute of Sociology, CASS (Chinese Academy of Social Sciences) in2007. The power bias in self‐reported organizational performance assessment is identified in the framework of item response theory (IRT), and discussed in two complementary points of view, i.e., measurement bias and organizational operations. The results of the analysis indicated that there is a robust and consistent positive bias, referred to organizational grandiosity, in the self‐reported organizational performance assessment of the same organization and on the same performance indicator as organizational hierarchy (as a status measure of power) or decision‐making power (as an operational measure of power) increases. The bias is not affected by organizational characteristics (e.g., region, ownership) or individual attributes (e.g., gender, education), and manifested in many indicators of organizational performance, thus, it is an eigen trend in organizational dynamics. The result has many implications on both management and studies of organization.