1. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-1 Chapter 5 Power

2. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-2 Learning Objectives  Define power and its key role in leadership  Understand the cross-cultural differences in the definition and use of power  Identify the individual and organizational sources of power available to leaders  Describe the consequences of power for the leader, followers, and organizations.  Understand the role of power in the leadership and effectiveness of teams  Identify the power sources available to top executives  Explain the causes of power abuse and corruption and present ways to prevent them  Trace the changes in use of power, the development of empowerment, and explain their consequences for leadership

3. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-3 Definitions  Power: the ability of one person to influence other and exercise control over them  Influence: the power to affect the course of an action  Authority: the power vested in a position

4. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-4 Consequences of Power on Power-Holder Positive Effects  More action-orientation  More sensitivity towards others  Focus on rules  More generous Power changes those who hold it.

5. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-5 Consequences of Power on Power-Holder Negative Effects  Focus on retaining power at all costs  False belief that they understand others well  Oblivious to others’ needs  Lose ability to empathize  Take credit of others’ work Power changes those who hold it.

6. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-6 Followers’ Reaction to power  Compliance  Commitment  Resistance

7. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-7 Power and Culture Power Distance Uncertainty Avoidance Delegation Use of teams Empowerment HIGH LOW

8. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-8 Distribution of Power and Culture  The more equal the power distribution in an organization, the higher the performance  Culture strongly impacts the perception and use of power  In high-power distance culture, expectation of power sharing are low

9. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-9 Individual Sources of Power  Legitimate power  Reward power  Coercive power  Expert power  Referent power

10. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-10 Potential Reactions to Individual Sources of Power Coercion Reward Legitimacy Expertise Referent Coercion Reward Legitimacy Expertise Referent Sources of Power Resistance Compliance Commitment Resistance Compliance Commitment Potential Reactions

11. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-11 Influence Tactics  Rational persuasion  Inspirational appeal  Consultation  Ingratiation  Personal appeal  Exchange  Coalition building  Legitimate tactics  Pressure

12. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-12 Career Stages and Power CAREER PROGRESSION SOURCES POWER AND CHALLENGES Legitimate power; appropriate use of power Personal credibility; relationships; expertise; gaining power All power sources; letting go gracefully Early Late

13. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-13 Organizational/Team Sources of Power  Coping with uncertainty  Centrality  Dependency  Substitutability

14. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-14 Sources of Power for Top Executives  Legitimate power and position  Distribution of resources  Control of decision criteria  Centrality in organizational structure  Access

15. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-15 Power Abuse and Corruption  Abuse: taking advantage of one’s power for personal gain; unethical, but not always illegal  Corruption: abusing one’s power to benefit oneself or another person; both illegal and unethical.

16. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-16 Causes of Power Corruption: Leader Characteristics  Inflated view of self  Rigid and inflexible  Sense of entitlement  Willingness to exploit others  Lack of empathy  Vicious and ruthless  Overly concerned with power  Ingratiating with supervisor

17. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-17 Causes of Corruption: Follower Characteristics  Fear  Silence  Agreement  Compliance  Inaction  Flattery

18. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-18 Cause of Power Corruption: Organizational Factors  Organizational culture  Hiring practices  Short-term orientation  Centralized structure

19. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-19 The Corruption Cycle Compliance Distance from others Inflated view of self Flattery Dependence Processes Causes Consequences Leader Characteristics Organizational Factors Organizational Factors Poor decisions Coercion Devaluation of others Ethical and legal violations Poor decisions Coercion Devaluation of others Ethical and legal violations

20. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-20 Solutions to Corruption  Clear message and consistency  Accountability  Reducing uncertainty  Training for leaders and followers  Protecting employees  Open communication

21. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-21 Solutions to Corruption  Leader involvement in day-to-day activities  Reducing follower dependence on leader  Empowerment  Objective performance measures  Involvement of outsiders  Changing the organizational culture

22. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-22 Empowerment: Leadership Factors  Create a positive emotional atmosphere  Set high performance standards  Encourage initiative and responsibility  Reward openly and personally  Practice equity and collaboration  Express appropriate confidence in subordinates

23. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-23 Empowerment: Organizational Factors  Decentralize structure  Select and train leaders appropriately  Select and train employees appropriately  Remove bureaucratic constraints  Reward empowering behaviors  Create fair and open organization policies

24. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-24 Leadership Challenge  Understand the reasons for high salaries: Market competition High risk jobs  Attracting talent  Fairness is highly subjective  Organizations in crisis need to attract talent  High salary differentials affect morale

25. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-25 Leadership and Change: Semler  Open book management  Share information and power  Train employees to understand financial information  Sabbaticals to refresh  High performance

26. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-26 Leadership in Action: Fuld Sources of power  Legitimate title  Considerable expertise  Bullying – intimidation  Performance  Reward and punishment Corruption Factors  Entitlement  Narcissistic personality  Lack of accountability  Compliant followers  Centralization  Organization culture focused on performance only

27. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-27 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.