How steep should a hierarchy be, or should there be a hierarchical stratification at all? Research on power, divided between two main research streams (i.e., functionalist and conflict theories of power), reports discrepant answers to this question. This paper suggests that the choice between groups with low, high, and moderate power disparity depends on whether power assignment is based on competency or not. Problem complexity, group size, and size of the difference between high and low power are also proposed as moderators in comparing different power models. The present paper extends earlier work by conceptualizing power simultaneously as a relational capacity, behaviors emanating from this capacity, and exercise of power in the form of influence. Additionally, it goes beyond the formal organizational design perspective where power is confined to formal and stable hierarchies, and allows for informal power structures and evolutionary dynamics.