Chapter 8 POWER AND POLITICS

LEARNING OUTCOMES Define power Explain the difference between power and leadership Describe the bases of power Identify the causes and consequences of political power

POWER Power is a crucial ingredient to effective leadership. There are two sources of power: Formal Power Personal Power

POWER VS LEADERSHIP Power Leaders Used as a means for achieving goals Focuses on goal achievement Requires follower dependency Requires goal compatibility with followers Used to gain lateral and upward influence Focuses influence downward

IMPORTANT FACTORS OF POWER Influence The person with power will influence other people. Dependency The more people depend on you, the more power you have on them. The level of dependency is based on the alternatives available and the level of importance a person has.

FORMAL POWER Formal power is based on an individual’s position in an organization. Four categories of formal power: Coercive Reward Legitimate Information

COERCIVE POWER Coercive power happens when a person who has the control over a situation imposes a penalty on his followers. Examples of penalty or fear are: Verbal abuse Loss of promotion Possibilities that name is dropped from dealing in mega important projects Possibilities of job losses Delayed for promotion

REWARD POWER Reward power happens when a leader has the ability and power to reward or share positive values with the followers. Benefits or rewards can be given through financial or non-financial rewards. Financial reward - pay rates, raises or bonuses Non-financial reward - recognition for a job well done (a box of chocolates or gift vouchers), opportunity to work in the organization’s mega projects or trust in relationship

LEGITIMATE POWER Is a combination of both coercive and reward power. It is derived from the position the person holds. The person who holds legitimate power is a person who seats in formal authority to control and uses organizational resources

INFORMATION POWER Information power is when a person has access to the key information in the organization. Under information power, the person is in power as: He or she controls the flow of information to others. He or she has the ability to manage and control environmental uncertainties Uncertainties can be managed through prevention, forecast and absorption

EXPERT POWER A person who obtains special skills, knowledge or is an expert in certain areas. Having the special skills, knowledge and the expertise allows him or her to be in control.

REFERENT POWER The ability of a leader to influence a follower because of the follower's loyalty, respect, friendship, admiration, affection, or a desire to gain approval. This situation happens when followers tend to like and respect the leaders.

DEPENDENCY The key to power is the extent of dependency to power between the person who wields it and the person who are influenced by it. The power dependency is influenced by three factors: Importance of a resource Scarcity of a resource Availability of substitute

ORGANIZATIONAL POLITICS Organizational politics generate political behaviour. Political behaviour is defined as an activity which is not required as part of one’s formal role. Political behaviour happens when people who lack power wish to be involved or wish to influence decision. There are two ways to it, either via legitimate or illegitimate means.