This study investigates horizontal power differences in three companies using a case based approach. Three objectives were set, to examine the nature of the phenomenon within the different context of each company, to investigate the processes that create the power distribution, and to examine existing literature as an explanation of the cases findings. The existence and nature of horizontal power differences were found to vary in each case due to contextual factors and a previously unexplored variable, leadership proximity, was uncovered. The process by which power differences emerge was seen as arising from a social construction of the context of the organisation. Critical success issues were inferred from leader actions and communications which in turn determined an institutionalised order legitimising the power of certain departments. The findings further suggest that a relationship exists between the two primary perspectives (structural and cultural) traditionally used to explain horizontal power differences. The research also allows the development of a tentative model on communication cycles and the development of a common understanding of critical success issues.