2. Chapter 8
POWER AND POLITICS

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

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

5. 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

6. 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.

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

8. 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

9. 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

10. 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

11. 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

12. 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.

13. 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.

14. 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

15. 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.