1. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 1 Chapter Five Power and Leadership

2. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 2 Leadership and Management 1.Define power and its key role in leadership 2.Understand the cross-cultural differences in the definitions and use of power 3.Identify the individual and organizational sources of power available to leaders and describe their consequences for followers and organizations 4.Understand the role of power in the leadership and effectiveness of teams 5.Identify the power sources available to top executives 6.Explain the sources of power corruption and present ways to prevent its occurrence 7.Trace the changes in use of power and explain their consequence

3. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 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. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4 Individual Sources of Power  Legitimate power  Reward power  Coercive power  Expert power  Referent power

5. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5 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

6. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6 Reactions to Power Coercive Power Reward Power Legitimate Power Expert Power Referent Power Resistance Compliance Commitment

7. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 7 Influence Tactics  Rational persuasion  Inspirational appeal  Consultation  Ingratiation  Personal appeal  Exchange  Coalition building  Legitimate tactics  Pressure

8. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 8 Organizational Sources of Power  Coping with uncertainty  Centrality  Dependency  Substitutability

9. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 9 Power Sources for Top Executives ÜLegitimate power and position ÜDistribution of resources ÜControl of decision criteria ÜCentrality in organizational structure ÜAccess

10. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 10 Causes of Power Corruption: Leaders 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

11. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 11 Causes of Power Corruption: Organizational Characteristics  Organizational culture  Hiring practices  Short-term orientation  Centralized structure

12. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 12 Corruption Cycle Leader Characteristics Organizational Factors Compliance Distance from others Inflated view of self Follower submission Follower dependence Poor decisions Coercion Devaluation of others Ethical and legal violations Causes Processes Consequences

13. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 13 Solutions to Corruption Involve leaders in day-to-day activities Reduce followers’ dependency on leader Use objective measures of performance Involve outsiders in decision making Change the organizational culture

14. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 14 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

15. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 15 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

16. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 16 Leadership Challenge oUnderstand the reasons for high salaries: Market competition High risk jobs oAttracting talent oFairness is highly subjective oOrganizations in crisis need to attract talent oHigh salary differentials affect morale

17. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 17 Leading Change: Ricardo Semler  Open book management  Share information and power  Train employees to understand financial information  Sabbaticals to refresh  High performance

18. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 18 Leadership in Action: Dick Grasso  Fired for having a high salary  Made full use of all forms power  Built network and friendships with people in power  Intimidated and abused subordinates  High performance

19. Chapter 5 Power and Leadership Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 19 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. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall