1. Naina Lal Kidwai, Group GM and Country Head of HSBC Group Companies in India, is a powerful woman in the banking industry.
Kidwai’s formal power is an example of legitimate power, as it is based on her structural position at the bank. This power gives Kidwai the authority to control and use organizational resources.
Source : HSBC India

2. Concept of Power
Power is the capacity of a person, team, or organization to influence others.
The potential to influence others
Power requires one person’s perception of dependence on another person.

3. Person A’s power over Person B
Amity Business School
Power and Dependence
Person A
Person B
Person
B’s Goals
Person A’s power over Person B

4. “Power refers to a capacity that A is able to influence the behavior of B such that B does something he or she would not otherwise do.”
“Power is the potential ability to influence behavior, to change the course of events, to overcome resistance and to get people to do things that they would not otherwise do.”
- Pfeffner

5. Acquisition of Power Factors contributing to positional power
Centrality
Uncertainty
Substitutability

6. Amity Business School
Centrality
It refers to those activities that are most central to the work flow of the organization.
The manager will acquire potential power if the information filters through him.
This will give him some say in the work of many sub units.
For ex – the finance manager approves all the payments to all the departments. this gives him extra power base to affect the behavior of other departments.

7. Scarcity
When resources are scarce, there will be a struggle in different departments for acquiring these resources.
Whosoever is the winner of the struggle, will acquire power.
Power will become apparent when the resources are scarce.
When there is abundance, scarcity will not be the factor to judge the power.

8. Uncertainty
Uncertainty about future events can play havoc with the plans of different departments.
Uncertainty may relate to reduction in supply of resources, fall in demand of company’s products, change in government’s policies, etc.
The manager who are able to cope with such uncertainty and who can gain from such uncertainty can acquire power.

9. Substitutability
The more valuable a person is to the organization, the greater power he holds.
There are some people, whose contributions are so much, that they become indispensable.
This may be the result of their specialty, expertise and knowledge which cannot be substituted easily by others.

10. The essence of power lies in having control over the behavior of others.
A manager’s power may be measured in terms of his ability to :
Give rewards,
Promise rewards,
Threaten to withdraw current rewards,
Withdraw current rewards,
Threaten punishment, and
Punish

11. Sources of Power Positional Power/Formal Power:
Over 40 years ago, social scientists John French and Bertrand Raven listed five sources of power within organizations :
Positional Power/Formal Power:
Reward Power
Coercive Power
Legitimate Power
Information Power
Personal Power/ Informal Power:
Expert Power
Referent Power
Charismatic Power
Sources of Power

12. Legitimate Power
It represents the power a person perceives as a result of his position in the formal hierarchy of the organization.
Legitimate power is also known as positional power because of the authority inherent in the position.

13. Reward Power
It depends upon the extent to which one has control over rewards that are valued by another.
The greater the perceived value of such rewards, greater will be the power.
People comply with the wishes or directives of others because doing so produces positive benefits.
These rewards can be extrinsic in nature with tangible values or these can be subjective and intrinsic rewards such as recognition and praise.
Other types of rewards can be better pay, promotions, favorable performance appraisal, preferred shifts, etc.

14. Coercive Power It is the ability to influence punishment.
Coercive power reflects the extent to which a manager can deny desired rewards or administer punishment to control other people.
The more punishments a manager can impose upon the subordinates, the stronger is his coercive power.

15. Information Power Control over information flow
Based on legitimate power
Relates to formal communication network
Common in centralized structures
People in the organisation who have data or knowledge that others need can make those others dependent on them.
For eg. The legal dept. when a firm faces a major law suit or the HR dept. during critical labour negotiations- will gain increased power in their organisation until those uncertainties are resolved.

16. Expert power
It is based on the perception or belief that the influencer has some relevant expertise or specialized knowledge that others do not have.
It is more of a personal power rather than organizational power.
For example, we follow doctor’s advice because of our faith in his knowledge and competence or a CA for filing our tax returns and other legal issues.

17. Referent Power
This power is also known as charismatic power and is based upon the attraction exerted by one individual over another.
Reference power is more of a personal nature than the positional power.
It develops out of the personal admiration of another and a desire to be like that person.
The stronger the association, the stronger is the power.
Eg. Celebrities endorsing brands in commercials.

18. Charismatic Power
It is the extension of referent power stemming from an individual’s personality and interpersonal style.
Others follow them because of their heroic qualities- articulating attractive visions, taking personal risks and are willing to engage in behaviour that most others consider unconventional.
Eg. People who bring great reforms in policies, spiritual gurus.

19. Types of Power Tactics Legitimacy
Inspirational appeals ( best in downward)
Consultation ( best in downward)
Rational persuasion ( best in downward)
Coalitions (best in lateral)
Ingratiation
Pressure( least effective)
Exchange
Personal Appeals (best in lateral)
The chances of compliance can be increased by using more than one type of tactic at the same time or sequentially. For eg. Using both ingratiation and legitimacy can lessen the negative reactions that might come from the appearance of being “dictated to” by the boss.

20. Legitimacy – Relying on one’s authority position or stressing that a request is in accordance with the organizational policies and rules.
Rational Persuasion – Presenting logical arguments and factual evidence to demonstrate that a request is reasonable.
Inspirational Appeals – Developing emotional commitment by appealing to a target’s values, needs, hopes, and aspirations.

21. Consultation – Increasing the target’s motivation and support by involving him or her in deciding how the plan or change will be accomplished.
Personal Appeals – asking for compliance based on friendship or loyalty.
Coalitions – Enlisting the aid of other people to persuade or using the support of others as a reason for the target to agree.
Pressure – Using warnings, repeated demands, and threats.

22. Exchange: rewarding the target with benefits or favours in exchange for following a request. Basically the norm of reciprocity is central to exchange.
Personal Appeals: Asking for compliance based on friendship or loyalty.