Definition  of  Power

Power is the capacity to influence others who are in a state of dependence.  Several points about this definition deserve elaboration. First, notice that  power is the capacity to influence the behavior of others. Power is not always  exercised.2 For example, most professors hold a great degree of potential  power over students in terms of grades, assignment load, and the ability to embarrass students in class. Under normal circumstances, professors use only  a small amount of this power.

Second, the fact that the target of power is dependent upon the power  holder does not imply   that a poor relationship exists between the two. For  instance, your best friend has    power to   influence your behavior and attitudes  because you are dependent upon him or her for friendly   reactions and social  support. Presumably you can exert reciprocal influence for similar reasons.

Third, power can flow in any direction in an organization. Often, members at   higher organizational levels have more power than those at lower  levels, However, in specific cases, reversals can occur, For example, the janitor  who finds the president in a compromising position with a secretary might  find himself in a powerful position if the president wishes to maintain his reputation in the organization!

Finally,  power is a broad concept that applies to both individuals and  groups, on one hand, an individual production manager might exert considerable influence over the supervisors who report to her. On the other, the marketing department at XYZ Foods might be the most powerful department in  the company able to get its way more often than other departments. But from  where do the production manager and the marketing department obtain their  power? We explore this issue in the following sections, we consider individual bases of power then we examine how organizational  subunits, such as  the marketing department, obtain power.


If you wanted to marshal some power to influence others in your organization,  where would you get it? As psychologists John French and Bertram Raven  explained, power can be found in the position that you occupy in the organization or the resources that you are able to command.3 The first base of power,  legitimate power, is dependent upon one's position or job. The other bases   (reward, coercive, referent, and expert power) involve the control of important  resources. If other organizational members do not respect your position or  value the resources that you command, they will not be dependent on you, and  you will lack power to influence them.  (The  29  Women  were  lacking  in  power  to  accomplish  their  task)

Legitimate Power

Legitimate power derives from a person's position or job in the organization, It constitutes   the organization's judgment about who is formally permitted to influence whom, and it is often called authority, As we move up the organization's hierarchy, we find that members possess more and more legitimate power. In theory, organizational equals (e.g., all vice-presidents) have equal legitimate power. Of course, some people are more likely than others to  invoke their legitimate power--"Look, I'm the boss around here."  Organizations differ greatly in the extent to which they emphasize and  reinforce legitimate power. At one extreme is the U.S. Army, which has many  levels of command, differentiating uniforms, and rituals (e.g., salutes), all  designed to emphasize legitimate power.  On the other hand, the academic hierarchy of universities tends to downplay differences in the legitimate power of  lecturers, professors, chairpeople, and deans.

When legitimate power works, it often does so because people have been  socialized to accept its   influence. Experiences with parents, teachers, and law  enforcement officials cause members to  enter organizations with a degree of  readiness to submit to (and exercise) legitimate power. In   fact, studies consistently show that employees cite legitimate power as a major reason for lowing their boss's directives, even across various cultures.4

Reward Power

Reward power means that the powerholder can exert influence by providing  positive outcomes and preventing negative outcomes. In general, it corresponds   to the concept of positive reinforcement in Chapter 3. Reward power  often backs up legitimate power. That is, managers and supervisors are given   the chance to recommend raises, do performance evaluations, and assign preferred tasks to subordinates. of course, any organizational member can  attempt to exert influence over others with praise, compliments, and flattery which also constitute rewards.

Coercive Power

Coercive power is available when the powerholder can exert influence using  punishment and threat. Like reward power, it is often a support for legitimate  power. Supervisors and managers might be permitted to dock pay, assign  unfavorable tasks, or block promotions. Despite a   strong civil service system,  even U.S. government agencies provide their executives with plenty   of coercive power.  Some agencies have a Siberia--an unpleasant or professionally unproductive duty station, to which rebellious employees may be reassigned. Faced with Siberia, an employee may, of course, resign, but  even if he accepts exile, he is effectively removed from the position in  which he caused difficulty. "You'd be surprised how many resignations we had when people discovered they had been reassigned to  Anchorage," said one former Federal Aeronautics Administration  official. 5      Of  course, coercive power is not perfectly correlated with legitimate  power. Lower-level organizational members can also apply their share of coercion. For example, consider work-to-rule campaigns that slow productivity by  adhering religiously to organizational procedures. Cohesive work groups  especially skillful at enforcing such campaigns.  In Chapter 3 we pointed out that the use of punishment to control  behavior  is  very  problematic  because of emotional side effects. Thus, it is not   surprising that when managers  use coercive power it is generally ineffective   and can provoke considerable employee resistance.6    (Mitsubishi  plant  was  imposing  lots  of coercive  power  to  it  employees.)
Referent Power

Referent power exists when the powerholder is well liked by others. It is not  surprising that people we like readily influence us. We are prone to consider  their points of view, ignore their failures, seek their approval, and use them as  role models. In fact, it is often highly dissonant to hold a point of view that is  discrepant from that held by someone we like.7

Referent power is especially potent for two reasons. First, it stems from  identification with the   powerholder. Thus, it represents a truer or deeper base  of power than reward or coercion,   which may stimulate mere compliance to  achieve rewards or avoid punishment. In this sense, charismatic leaders (Chapter 10) have referent power. Second, anyone in the organization   may be  well liked, irrespective of his or her other bases of power. Thus, referent power   is available to everyone from the janitor to the president.

Friendly interpersonal relations often permit influence to extend across the  organization, outside of the usual channels of legitimate authority, reward,  and coercion.  For example, a production manager who becomes friendly with  the design engineer through participation in a task force might later use this  contact to ask for  a  favor  in solving a production problem.

Expert Power

A person has expert power when he or she has special information or expertise   that the organization values. In any circumstance, we tend to be influenced  by experts or by those who perform their jobs well. However, the more crucial   and unusual this expertise, the greater the expert power available. Thus,   expert power corresponds to difficulty of replacement. Consider the business  school that has one  highly  published professor who is an internationally  known scholar and past presidential cabinet member. Such a person would  obviously be difficult to replace and should have much greater expert power  than an unpublished lecturer. One of the most fascinating aspects of expert power occurs when lower  level organizational members accrue it. Many secretaries have acquired expert  power through long experience in  dealing with clients, keeping records, or  sparring with the bureaucracy.  Frequently, they have been around longer  than   those they serve. In this case, it is not unusual for bosses to create  special titles   and develop new job classifications to reward their expertise and prevent their resignation. FedEx sends a quarterly magazine to 350,000 secretaries in Recognition   of the power they wield to select a courier.8

Expert power is especially common among lower-level members in scientific  and technical area. Consider the solid-state physicist who has just completed  her Ph.D. dissertations on a topic of particular interest to her new  employer. Although new to the firm, she might have considerable   expert  power. Put simply, she knows more than her boss, whose scientific knowledge  in this   area is now outdated.  Expert power is a valuable asset for managers. Of all the bases of  power,  expertise is most consistently associated with subordinate effectiveness.9 Also,  research  shows  that  subordinates perceive women managers as more likely  than male managers to be high on   expert power.10 Women often lack easy  access to more organizationally based forms of power,  and expertise is free for  self-development. Thus, being "better" than their male counterparts is   one  strategy that women managers have used to gain influence.  Exhibit 13.1 summarizes likely   employee responses to various bases of  managerial power. As you can see, coercion is likely to produce resistance and  lack of cooperation. Legitimate power and reward power are likely to   produce  compliance with the boss's wishes. Referent and expert power are most likely  to   generate true commitment and enthusiasm for the manager's agenda.


Now that we have discussed the individual bases of power, we can turn to the  issue of how people get power. That is, how do organizational members obtain  promotions to positions of legitimate power, demonstrate their expertise, and  get others to like them? And how do they acquire the ability to provide others  with rewards and punishment? Rosabeth Moss Kanter, an organizational sociologist, has provided some succinct answers--Do the right things, and cultivate the right people.11

Doing the Right Things

According to Kanter, some activities are "righter" than others for obtaining  power. She argues that activities lead to power when they are extraordinary,  highly visible, and especially relevant to the solution of organizational problems.

Extraordinary Activities.  Excellent performance of a routine job might not  be enough to obtain power. What one needs is excellent performance in  unusual or nonroutine activities. In the large company that Kanter studied,  these activities  included  occupying  new  positions,  managing substantial  changes, and taking great risks. For example, consider the manager who establishes and directs a new TQM program. This is a risky major change that  involves the occupancy of a new position. If successful, the manager should  acquire substantial power.

Visible Activities.   Extraordinary activities will fail to generate power if no one  knows about them. people who have an interest in power are especially good  at identifying visible activities and publicizing them. The successful marketing  executive whose philosophy is profiled in Fortune will reap the benefits of  power. Similarly, the innovative surgeon whose techniques are reported in the  New England journal of Medicine will enhance her influence in the hospital.

Relevant Activities.  Extraordinary, visible work may fail to generate power  if no one  cares. If  nobody  sees  the work  as relevant to  the  solution  of  important  organizational           problems, it will not add to one's influence. The English  professor who wins two Pulitzer  prizes will probably not accrue much power  in his small college is financially strapped and hurting for students. He would  not be seen as contributing to the solution of pressing organizational problems. As we shall see shortly, being in the right place at the right time is crucial to the acquisition of power. In another college, these extraordinary, visible activities might generate considerable influence.

Cultivating the Right People

An old saying advises, “It’s not what you know, it's who you know" in reference   to power in organizations, there is probably more than a grain of truth  to the latter part of this statement. Developing informal relationships with the  right people (especially when coupled with doing the right things) can prove a  useful means of acquiring power. Dr. Kanter suggests that the right people can  include organizational subordinates, peers, and superiors. To these we might add certain crucial outsiders.

Outsiders.  Establishing good relationships with key people outside of one's  organization can lead to increased power within the organization. Sometimes  his power is merely a reflection of he status of the outsider, but all the same  it may  add to  ones   internal influence. The assistant director of a hospital who  is friendly with  the  president of the American Medical Association
might find  herself holding power by association. Cultivating outsiders may also contribute to more tangible sources of power.  Organizational members who are  the boards of directors of other companies might acquire critical information   about business conditions that they can use in their own firms.

Subordinates.  At first blush, it might seem unlikely that power can be  enhanced by cultivating relationships with subordinates. However, as Kanter  notes, an individual can gain influence if she is closely identified with certain  up-and-coming subordinates-"I taught her everything she knows." In academics, some professors are better known for the brilliant Ph.D. students they  have supervised than   for their own published work. Of course, there is also  possibility that an outstanding subordinate will one day become one's boss!  Having  cultivated  the relationship earlier,   one might then be rewarded.
      Cultivating subordinate interests can also provide power when a manager  can demonstrate that he or she is backed by a cohesive team. The research  director who can oppose a policy change by honestly insisting that “My  people won't stand for this” knows that there is strength in numbers.

Peers.  Cultivating good relationships with peers is mainly a means of ensuring  that nothing gets in the way of one's future acquisition of power. As one  moves  up through the ranks, favors can be asked of former associates, and fears  of  being "stabbed in the back" for a past misdeed are precluded. Organizations  often reward good "team players" with promotions on the assumption  that   they have demonstrated good interpersonal skills. On the other side of the  coin,  people often avoid contact with peers whose reputation is seen as questionable. 29  female  employees  were  shunned  by  their  colleagues  for  this   reason.

Superiors.  Liaisons with key superiors probably represent the best way  of   obtaining power through cultivating others. Such superiors are often called  mentors or sponsors because of the special interest they show in a promising  subordinate. Mentors can provide power in  several ways. Obviously, it  is  useful to be  identified as a  protégé  of  someone  higher  in  the  organization    more  concretely  mentors  can provide  special  information  and  useful introductions to other "right people."


Early organizational theorists used to treat power as something of a fixed  quantity: An organization had so much, the people on the top had a lot,  and  lower-level employees had a little. Our earlier analysis of the more informal  sources of power (such as being liked and being an expert) hints at the weakness  of this idea. Thus, contemporary views of power treat it less as a fixed  sum phenomenon. This is best seen in the concept of empowerment, which  means giving people the authority, opportunity, and motivation to take initiative  to solve  organizational problems.   We used this concept earlier in the text  when discussing total quality management (Chapter 7) and  participative  leadership   (Chapter 10). Here, we'll examine the idea in a little more detail. In practice, having the authority to solve an organizational problem  means having legitimate power. This might be included in a job description, or  a boss might delegate it to a subordinate. Having opportunity usually means freedom from bureaucratic barriers  and other system problems that block initiative. In a service encounter; if  you’ve  ever heard “Sorry, the computer won't let me do that" or "that's not  my job," you've been the victim of limited opportunity. Opportunity also  includes any relevant training and information about the impact of one’s  actions on other parts of the organization.  The motivation part of the empowerment equation suggests selecting  people for positions who will be intrinsically motivated by power and opportunity   and aligning extrinsic rewards with successful performance. Also,  leaders who express confidence in subordinates' abilities (especially transformational   leaders, Chapter10) can contribute to empowerment. A good  example occurred when a nay-saying union shop  steward, doubting General  Electric's commitment to changing its corporate culture, explained  a  recurrent  problem with a supplier's component. His manager, sensing he was correct, chartered a plane and the subordinate left that same night to visit the supplier and solve the problem.

It goes without saying that managers have to be tolerant of occasional mistakes from empowered employees.  People who are empowered have a strong sense of self-efficacy, the feeling  that they are capable of doing  their jobs well and "making things happen." Empowering lower-level employees can be critical in service organizations, where providing customers with a good initial encounter or correcting any  problems that develop can be essential for repeat business.   The Nordstrom store chain is one firm that is known for empowering sales personnel to make on-the-spot adjustments or search out merchandise at other stores. Customers have even had enthusiastic store personnel change flat tires. This dedication to customer service enables Nordstrom to spend  only  a  fraction  of  the industry average on advertising.

We  should  emphasize  that  empowerment  does  not  mean  providing  employees with a maximum amount of unfettered power. Rather, used properly,   empowerment puts power where it is needed to make the organization  effective. This depends on organizational strategy and customer expectations.  The average Taco Bell customer does not expect highly empowered counter  personnel who offer to make adjustments to the posted menu--a friendly, fast,  efficient encounter will do. On the other hand, the unempowered waiter in a  fancy restaurant who  is fearful of accommodating reasonable adjustments and  substitutions  can really irritate customers. Speaking generally, service encounters   predicated on high volume and low cost need careful engineering. Those  predicated  an customized  personalized service treed more empowered personnel.   This contrast is illustrated in the comparison between FedEx and UPS  in the "In Focus:   Empowerment at  FedEx,  Rules  at  UPS”  feature.  Given this discussion, you might wonder  whether organizational members  could  have  too  much  power. Exhibit 13.2  nicely illustrates the answer. People  are empowered, and should exhibit effective performance, when they  have sufficient power to carry out their jobs. Above, we mainly  contrasted empowerment   with situations in which   people had inadequate power for effective  performance. However, as the exhibit, shows,   excessive power can lead to  abuse and ineffective performance. One is reminded of the   recurrent and inappropriate   use of government aircraft by political bigwigs as an example.  As  we'll see in the following sections, the fact that people can have too much  power doesn't always   inhibit them from seeking it  anyway!


As we discussed earlier, power is the potential to influence others. But exactly  how does power     result in influence?  Research has shown that various  influence tactics convert power into actual influence. These are specific  behaviors that power holders use to affect others.15 These tactics include the  following:

*Assertiveness--ordering, nagging, setting deadlines, and verbal  confrontation;

*Ingratiation--using flattery and acting friendly, polite, or humble;

*Rationality--using logic, reason, planning, and compromise;

*Exchange--doing favors or offering to trade favors;

*Upward appeal--making formal or informal appeals to organizational  superiors for

*Coalition formation--seeking united support from other organizational  members .

What determines which influence tactics you might use? For one thing,  your bases of power. Other things equal, someone with coercive power might  gravitate toward assertiveness, someone with referent power might gravitate  toward  ingratiation, and someone with expert power might try rationality .Of  course, rationality or its appearance is a highly prized quality in organizations  and its use is viewed positively by others. Thus, surveys show that people     report trying to use rationality very frequently.  As you can guess, the use of influence tactics is also dependent upon just  whom you are trying to influence--subordinates, peers, or superiors.  Subordinates are more likely to be the recipients of assertiveness than peers or  superiors. Despite the general popularity of rationality, it is most likely to be directed toward superiors.   Exchange, ingratiation, and upward appeal are  favored tactics for influencing both peers and subordinates.

Which influence tactics are most effective?    Some of the most interesting  research has concerned upward influence attempts directed toward superiors.  It shows that, at least for men, using rationality as an influence tactic was associated with receiving better performance evaluations, earning more money, and experiencing less work stress.  A particularly ineffective influence style is a "shotgun" style that is high on all tactics with particular emphasis on assertiveness and exchange.  In this series of studies, women who used ingratiation as an influence tactic received the highest performance evaluations (from  male managers).


Who wants power? At first glance, the answer would seem to be everybody.  After all, it is both convenient and rewarding to be able to exert influence over  others. Power whisks celebrities to the front of movie lines, gets rock stars the  best restaurant tables, and enables executives to shape organizations in their  own image. Actually, there are considerable individual differences in the extent  to which individuals pursue and enjoy power. On television talk shows, we  occasionally see celebrities recount considerable embarrassment over the  unwarranted power that public recognition brings.  Earlier we indicated that some people consider power a manifestation of  evil. This is due in no small part to the historic image of power seekers that some psychologists and political  scientists  have  portrayed.

Several aspects of  this image are

·  power seekers are neurotics who are covering up feelings of inferiority.
·  Power seekers are striving to compensate for childhood deprivation.
.  Power seekers are   substituting power for lack of affection. 19   There can be little doubt that
   these characteristics do  apply to some power  seekers.

Underlying this negative image of power seeking is the idea that some  power seekers feel weak and resort primarily to coercive power to cover up,  compensate for, or   substitute for this weakness. Power is sought for its own  sake and is used irresponsibly   to hurt others. Adolf Hitler comes to mind as  an extreme example.

But can one use power responsibly to influence others? Psychologist David   McClelland says   yes. In Chapter 6 we discussed McClelland’s research on need  for   power (n Pow). You will   recall that n Pow is the need to have strong influence  over others. This need  is a reliable personality characteristic – some  people have more n   Pow than others. Also, just as many women have high n  Pow as men.  In "pure" form,   people who are high in n Pow conform to the  negative stereotype depicted above--they  are rude, sexually exploitive, abusive  of alcohol, and show a great concern with status   symbols. However, when n  Pow is responsible and controlled, these negative properties   are not observed.  Specifically, McClelland argues that the most effective managers:

· have high n Pow;

· use their power to achieve organizational goals;

· adopt a participative or "coaching" leadership style;

? are relatively unconcerned with how much others like them.

McClelland calls such managers institutional managers because they use  their power for   the good of the institution rather than for self-aggrandizement.  They refrain from   coercive leadership but don't play favorites, since they aren’t  worried about being well   liked. His research reveals that institutional managers are more effective than personal   power managers, who use their power  for personal gain, and affiliative managers, who   are more concerned with  being liked than with exercising power. Exhibit 13.4 shows   that institutional  managers are generally superior in giving subordinates a sense of   responsibility, clarifying organizational priorities, and instilling team spirit. We can  conclude that the need for power can be a useful asset as long as it is nor a  neurotic expression of perceived weakness.

Finally, what happens when people want power but can't get it because  they ate locked   in a low-level job or faced with excessive rules and regulations? People react to such   powerlessness by trying to gain control, but if they  can't succeed, they feel helpless and   become alienated from their work.  This  is something that empowerment is designed to

Thus far we have been concerned with the bases of individual power and how  individual organizational members obtain influence. In this section we shift  our concern to  subunit power. Most straightforwardly, the term subunit  applies to organizational departments. In some cases, subunits could also refer  to particular jobs, such as those held by software engineers or environmental  lawyers.  How do organizational subunits acquire power? That is, how do they  achieve influence that enables them to grow in size, get a bigger share of the   budget, obtain better facilities, and have greater impact on decision? In short,  they control strategic contingencies, which are critical factors affecting organizational effectiveness, This means that the work other subunits perform is  contingent upon the activities and performance of a key subunit. Again, we see  the critical role of dependence in power relationships. If some subunits are  dependent upon others for smooth operations (or their very  existence), they  are susceptible to influence. We turn now to the conditions under which   subunits can control strategic contingencies.


Differences in subunit power are likely to be magnified when resources  become scarce. When there is plenty of budget money or office space or support staff for all subunits, they will seldom waste their energies jockeying for  power. If cutbacks occur, however, differences in power will become apparent.  For example, well-funded quality of worklife programs or organizational  development efforts might disappear when economic setbacks occur because the subunits that control them are not essential to the firm's existence,  Subunits tend to acquire power when they are able to secure scarce  resources that are important to the organization as a whole. One study of a  large state university found that the power of academic departments was associated with their ability to obtain funds through consulting contracts and  research grants. This mastery over economic resources was more crucial to their  power than was the number of   undergraduates taught by the department.


Organizations detest the unknown. Unanticipated events wreak havoc with  financial   commitments, long-range plans, and tomorrow's operations.  The   basic sources of uncertainty exist mainly in the organization’s environment--  government policies might change, sources of supply and demand might dry  up, or the economy might take an unanticipated turn. It stands to reason that  the subunits that are most capable of coping with uncertainty will tend to  acquire power. In a sense, these subunits are able to protect the others from  serious problems. By the same token, uncertainty promotes confusion, which   permits changes in power priorities as the organizational environment  changes.

The most power goes to those people in those functions that provide  greater control over what the organization finds currently problematic:  sales and marketing people when markets are competitive; production  experts when materials are scarce and demand is high; personnel or labor relations specialists when labor is scarce; lawyers, lobbyists, and  external relations        specialists when government regulations impinge;  finance and accounting types when business is bad and money tight.  There is a turning to those elements of the system that seem to have the power to create more certainty in the face of dependency, to generate a more advantageous position for the organization.

A dramatic example of a shift in subunit power has occurred for the personnel or human resource departments of large corporations during the past  20 years. For many years, the personnel function in most organizations had  relatively little power, However, beginning in the 1970s, increased government  intervention into personnel policies began. This was especially true in the area  of employment discrimination, in which legislation provoked considerable uncertainty. In coming to the rescue, personnel departments acquired a long-awaited measure of power. Currently, the uncertainty provoked by downsizing, new technology, and mergers and   acquisitions continues the trend.


Other things being equal, subunits whose activities are most central to the  work flow of the organization should acquire more power than those whose  activities are more peripheral. A subunit's activities can be central in at  least three senses. First, they may influence the work of most other subunits.  The finance or accounting department is a good example here--its authority   to  approve expenses and make payments affects every other department in the  firm.   Centrality also exists when a subunit has an especially crucial impact on  the quantity or quality  of the organization's key product or service. This is one  reason for the former low power of   personnel departments--their activities  were then seen as fairly remote from the primary goals  of the organization.  Similarly, a production department should have more power than a   research  and development department that only "fine-tunes" existing products.  Finally, a  subunit's activities are more central when their impact is more  immediate. As an example,   consider a large city government that includes  fire department, a police department, and a   public works department. The  impact of a lapse in fire or police services will be felt more   immediately than  a lapse in street repairs. This gives the former departments more potential for  power acquisition.

One prominent trend in large North American organizations has been the  reduction in power of corporate headquarters staff units. An example would  be a marketing research department that is set up to do studies for several divisional product lines. Many organizations have found that, because of their  centrality (literal and figurative) in the decision process, such units slow decision making and damage communication between top management and the  field. This is out of step with the increasing global pace of business. One reaction has been to slash corporate staff and push more of its responsibilities  down into the divisions.


A subunit will have relatively little power if others inside or outside of the  organization can perform its activities. If the subunit's staff is nonsubstitutable, however, it can acquire substantial power.29 One crucial factor here is  the labor market for the specialty performed by the subunit. A  change in the  labor market can result in a change in the subunit’s influence:

In the 1950s, when there were relatively few engineers to service an   expanding American economy engineers had great prestige and power.  They could force employers to provide them with large salaries and  benefits, by threatening to withhold their services. By the early 1970s,   however, many persons had become engineers and consequently the  bargaining power of engineers with employers was practically nil.  In the 1990’s there is again a shortage of engineers (and scientists), with a  consequent increase   in their bargaining power. Precisely  with the  strategic contingencies idea, observers note how   this shortage has provided  real opportunities for properly trained women and members of   minorities to  move into positions of power from which they were excluded when there were  plenty of white male engineers and scientists to go around. If the labor market is constant,   subunits whose staff are highly trained in   technical areas tend to be less substitutable than   those which involve minimal  technical expertise, For example, consider the large telephone   company that  makes extensive use of a computerized management information system. The  department in charge of this system might acquire considerable power because  its computer   analysts perform specialized work that others in the company  can't do. On the other hand, if   telephone operators go on strike, management  personnel can substitute for them by handling   the phones.  Finally, if work can be contracted out, the power of the subunit that usually   performs these activities is reduced. Typical examples include temporary  office help,   off-premises data entry, and contracted maintenance, laboratory,  and security services, The   subunits that control these activities often lack power  because the threat of "going outside" can   counter their influence attempts.
The Irrational Face Power

The strategic contingencies theory presents a very rational view of subunit  power-power gravitates to where it is needed to solve pressing organizational  problems, In the previous chapter, however, we covered in some detail how  many organizational decisions are made on less-than-rational terms, and  acquisition of power by subunits is no exception. For example, we have  heard of empire building, the process by which departments expand in size  responsibility beyond what is necessary in terms of strict effectiveness.  Similarly, a study in the semiconductor industry showed that the founders  functional background (e.g., engineering, science) influenced which  department  had the most power in newly founded companies.

     When a subunit acquires power, however that happens, it will often  attempt to hold onto that power. This goal is aided considerably by the fact  that if has power at its disposal to influence other  departments and their  members. Thus, power can get institutionalized in a department even the organizational priorities appear to have changed. This is often accomplished  by playing organizational politics, a topic to which we now turn.


  Organizational politics always have been and always will be an important by-product of the corporate world, as people continue with the pursuit of moving-up in the workplace.  Corporate politics and personal management play important roles in how we perform, how much we are paid, whether we will advance upward, and whether or not we will keep our jobs.
 Over time, politicking has become an important part of corporate culture and it is now on the up-rise.  People who do well at the game of politicking are usually promoted into senior positions and, in turn, promote others who are like themselves.   Those who dislike this type of working environment or who aren't as good at playing the political games are pushed out or voluntarily leave the company.   The bottom line here is that if you are unable to play the game, you will most likely find yourself on the outside looking in.  Most people occasionally grumble about company politics and when asking individuals their opinions of organizational politics, you will likely receive some interesting answers.  Answers that view organizational politics both negatively and positively.  Some believe that office politics severely disrupt the running of a company, whereas others view office politics as positive forces within an organization, when played fairly.  Everyone practices politics, in some form and to some degree.  And even though the preceding is true, the many people who discuss these office politics in their work environment have no idea what the true definition of organizational politics is.  The Webster's Dictionary defines Organizational Politics as A competition between competing interest groups or individuals for power of leadership in a government or group.  The total complexity of relations between people in a society and political activities that are characterized by artful practices.
 The truth is that office politics have become an important part of the business world, and it has manifested itself as one of most prominent activities of modern business.  In a narrower sense, politics comes down to personalities, which encompasses differences of opinions, different working styles and different approaches to certain situations.  These items cangenerate into disagreements between people, which can in-turn escalate into broader conflicts and political infighting within the company.  Political infighting is so common in the workplace, that many people take if for granted, especially in the larger corporate companies.   The major problem with this is that uncontrolled and excessive politicking can reduce productivity, costing companies a lot of money and it also damages employee morale.  When managers do not immediately resolve these issues, conflicts can drag on for years, the companies operating efficiency falls below standards, the company will lose money and lose its competitive edge.  The longer the negative political activities within the organization continue to persist, the harder it becomes to break the habits that have formed.  Without intervention, the entire business may eventually be lost.  When managers make the decision and initiate conscious efforts to build professional organizations, the company can avoid the aforementioned predicaments.  Managers must create atmospheres that reward the performance of all individuals and ensures that everything is openly communicated.  Secrecy, rumors, deal making, hypocrisy, cliques and favoritism within an organization are the predecessors to poor workmanship and negative politics within a company.  To maintain a healthy political standard within organizations, it is important for managers to be able to understand the basis for organizational politics as well as the influence means and the influence ends, which determines whether the activities that are taking place are political and whether or not they benefit the organization.  Understand that all politics in the workplace are not to be seen as negative and harmful to the company.  Many times workplace politics can be used in a positive manner, so long as they are beneficial to all in the organization, rather than to a single person or a certain group of individuals.  To reduce the impact of negative politics within an organization, it is important for managers to be familiar with the following basics of organizational politics.

The Basics of Organizational Politics

 Organizational politics is the pursuit of self-interest within an organization whether or not this self-interest corresponds to organizational goals.  Politics are said to suggest opinions, principles, or policies, which are to be carried out in order to promote employee participation in a group.
To establish a basis for organizational politics:

Machiavellianism: The Harder Side of Politics  

Machiavelli, a political theorist and writer who advocated the establishment and maintenance of authority by any means.  Evil acts of the ruler were justified by the evil acts of the ruled.  Machiavellanism is cynical beliefs about human nature, morality, and the permissibility of using various tactics to achieve one’s ends.

Those who follow the Machiavellian theory are often termed “Machs.”  Machs are more likely to advocate the use of lying and deceit to achieve desired goals and to argue that morality can be compromised to fit the situation in question.  Machs assume that many people are excessively gullible and do not know what is best for themselves.  Machs tend to be convincing liars and good at “Positing out”  competitors by creative diversions.  They are also willing to form coalitions with others to outmaneuver or defeat people who get in their way.  Overall. Machs are likely to be enthusiastic organizational politicians.

Networking: The Softer Side of Politics  

Only a small proportion of the population has the personality profile characteristic of the hardball Machiavellian politician.  Thus, a more common and more subtle form of political behavior involves networking.  Networking can be defined as establishing good relations with key organizational members and/or outsiders in order to establish one’s goals. If these goals are beneficial to the organization, we can describe networking as functional political behavior.  Networking involves developing informal social contracts to enlist the cooperation of others when their support is necessary.

Defensiveness: Reactive Politics  

On the opposing side of politics it is more reactive in that it concerns the defense or protection of self interest.  The goal here is to reduce threats to one’s own power by avoiding actions that don’t suit one’s own political agenda or avoiding blame for events that might threaten one’s political capital.

Avoiding Action  

Astute organizational politicians are aware that sometimes the best action is to take no action at all.  A number of defensive behaviors can accomplish this mission:

Workers should view office politics as neither negative nor positive.  The way to regard these dynamics in a workplace is to look at them as a reality, which can be used to an individuals advantage.  Office politics, should not be allowed to be misused.  The overall key to working effectively and constructively with office politics lies in developing personal skills in areas such as observation and awareness.  Everybody can be successful even when placed in the midst of office politics, so long as they have the attitude that they are the only person that is ultimately in control of the various situations around them.  According to Patty Kellogg, a mental- health counselor in Vancouver, Washington, who conducts workshops on coping with workplace issues,“You aren’t a victim of the office politics around you; you are a reactor, a planner and a strategist in coping with them and using them to your advantage.”


Several years ago, the Johnson & Johnson subsidiary that was responsible for Tylenol quickly  and decisively withdrew the product  from  the  market  after poison-laced  examples of  it  were  discovered.  Subsequent to this,  Copley Pharmaceutical was criticized for acting slowly to  recall tainted drugs, and Syntex and Upjohn were  both  charged with obscuring negative side  effects  in newly developed medicines. How can we account for the apparent difference in ethics reflected in the decisions that underpinned these actions?

For our purposes, ethics involves learning what is right or wrong, and then doing the right thing.  Business ethics is coming to know what is right or wrong in the workplace and doing what is right—this is in regard to effects of products/services and in relationship with stakeholders. Stakeholders are simply people inside or outside of the organization who have a potential to be affected by the decision. This could range from the decision makers themselves to "innocent bystanders".Ethics is a major branch of philosophy, and we won’t attempt to describe the various schools of ethical thought.  Instead, we will focus on the kinds of ethical issues that organizational decision makers face and some of the factors that stimulate unethical decisions.  Attention to business ethics is critical during times of fundamental change—times much like those faced now by businesses, both nonprofit or for-profit.

Over the years, researchers have conducted a number of surveys to determine managers’  views about the ethics of decision making in business.  Some striking similarities across studies provide an interesting picture of the popular psychology of business ethics. First, far from being shy about the subject, a large majority agree that unethical practices occur in business.  Furthermore, according to a 1997 survey sponsored by the Belmont, Massachusetts-based Ethics Officer Association of a 1,324-person cross section of the working population nationwide, 48% admitted to an unethical or illegal act during the last year.  Finally, in line with the concept of self-serving attributions managers invariably tend to see themselves having higher ethical standards than their peers and sometimes their superiors. The unpleasant picture emerging here is one where unethical behavior tempts managers who sometimes succumb, but feel that they still do better than others on moral grounds.

In case you think that students are purer than organizational decision makers, think again. Research is fairly consistent in showing that business students have looser ethical standards than practicing managers, at least when responding to written descriptions of ethical issues.

The Nature of Ethical Dilemmas

First, it is important to understand the Definition of an Ethical Dilemma. Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option appears to be the clear choice. For example, case studies are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear guidelines, whether in law or often in religion. What are the kinds of ethical dilemmas that most frequently face organizational decision makers?  Exhibit 13.5 shows the results of a Conference Board survey of 300 companies around the world. As you can see conflicts of interest, questionable gift giving, and sexual harassment top the list of ethical concerns (while executive salaries are seen to present fewer problems!). Especially note worthy is the fact that 77%  of firms report problems in dealing with foreign  business practices that are contrary to their own ethical norms.  Ethical issues often tend to be peculiar to the specific domain in which we're usually making decisions. As an example, let's consider the ethical dilemmas that the various subspecialties of marketing face.  Among market researchers, telling subjects the true sponsor of the research has been an ongoing topic of debate. Among purchasing managers, where to draw the line in accepting favors (e.g., sports tickets) from vendors poses ethical problems. Among product managers, issues of planned obsolescence, unnecessary packaging, and differential pricing (e.g., charging more in the inner city) raise ethical concerns. When it comes to salespeople, how far to go in enticing customers and how to be fair in expense account use have been prominent ethical themes. Finally, in advertising, the range of ethical issues can (and does) fill books. Consider, for example, the decision to use sexual allure to sell a product.

In contrast to these occupationally specific ethical dilemmas, what are the common themes that run through ethical issues that managers face?  An in depth interview study of an occupationally diverse group of managers discovered  seven themes that defined their moral standards for decision making 60.  Here are those themes and some typical examples of associated ethical behavior:

Causes of Unethical Behavior

What are the causes of unethical behavior! The answer to this question is important so that you can anticipate the circumstances that warrant special vigilance. Knowing the causes of unethical behavior can aid in its prevention.  Because the topic is sensitive, you should appreciate that this is not the easiest area to research. The major evidence comes from surveys of executive opinion, case studies of prominent ethical failures, business game simulations, and responses to written scenarios involving ethical dilemmas.


Although the paint might seem mundane, it is critical to recognize the role of temptation in unethical activity. The anticipation of healthy reinforcement for following an unethical course of action, especially if no punishment is expected, should promote unethical decisions.  Consider, for example, Dennis Levine, the Drexel Burnham Lambert investment banker who was convicted of insider trading in Wall Street's biggest scandal.
       It was just so easy.  In seven years I built $39,750 into $11.5 million, and all it took was a 20-second phone call to my          offshore bank a couple of times a month--maybe 200 calls total. My account was growing at 125% a year, compounded.          Believe me, I felt a rush when I would check the price of one of my stocks on the office Quotron and learn I'd just made          several hundred thousand dollars. I was confident that the elaborate veils of secrecy I had created-plus overseas bank-          privacy laws--would protect me.

Role Conflict.  

Many ethical dilemmas that occur in organizations are actually forms of role conflict (Chapter 8) that get resolved in an unethical way. For example, consider the ethical theme of corporate social responsibility we listed above.  Here, an executive's role as custodian of the environment (don't pollute) might  be at adds with his or her role as a community employer (don't close the plant that pollutes).

A very common form of role conflict that provokes unethical behavior occurs when our "bureaucratic" rule as an organizational employee is at odds with our role as the member of a profession.  For example, engineers who in their professional role opposed the fatal launch of the space shuttle Challenger due to cold weather were pressured to put on their bureaucratic "manager's hats” and agree to the launch.  More recently,  both  the  insurance  and  brokerage businesses have been rocked by  similar ethics problems.  Agents and brokers report being pressured as employees to push products that are not in the best interests of their clients.  Frequently, reward systems (i.e., the commission structure) heighten the conflict, which then becomes a conflict of interest between self and client.

Competition.   Stiff competition for scarce resources can stimulate unethical behavior.  This  has  been  observed  in  both  business game  simulations  and industry  studies of illegal acts, in which trade offenses such as price fixing and monopoly  violations have been shown to increase with industry decline.  For example,  observers cite a crowded and mature market as one factor prompting price fixing violations in the folding-carton packaging industry.  We should note one exception to the "competition stresses ethics" thesis. In cases in which essentially no competition exists, there is also a strong temptation to make unethical decisions.  This is because the opportunity to make large gains is not offset by market checks and balances. Prominent examples have occurred in the defense industry in which monopoly contracts to produce military hardware have been accompanied by some remarkable  examples of overcharging taxpayers.

Personality.    Are there certain types of personalities that are prone to unethical decisions? Perhaps. Business game simulations have shown that people with strong economic value orientations (Chapter 5) are more likely to behave unethically  than those with weaker economic values.  Also, there are marked individual differences in the degree of sophistication that people use in thinking about moral issues.  Other things being equal, it is sensible to expect that people who are more self-conscious about moral matters will be more likely to avoid unethical decisions. Finally,  people with a high need far personal power (especially Machiavellians) might be prone to make unethical decisions, using this power to further self-interest rather than for the good of the organization as a whole.

In closing this section, let's recall that we have a tendency to exaggerate the role of dispositional factors, such as personality, in explaining the behavior of others (Chapter 4). Thus, when we see unethical behavior, we should look at situational factors, such as competition and the organization's culture, as well as the personality of the actor.

Organizational and Industry Culture.   Bart Victor and John Cullen found that there were considerable differences in ethical values across the organizations they studied.  These differences involved factors such as consideration for employees, respect for the law, and respect for organizational rules.  In addition, there were differences across groups within these organizations.  This suggests that aspects of an organization's culture (and its subcultures) can influence ethics. This corresponds to the repeated finding in executive surveys that peer and superior conduct are viewed as strongly influencing ethical behavior, for good or for bad.  The role of culture is also seen in certain professions, for example, the percentage of honest and ethics of pharmacists are higher than that of car salesmen according to the study recent years.  Observers of the folding-carton price-fixing scandal note how top managers frequently seemed out of touch with the difficulty selling boxes in a mature, crowded market. They put in place goal setting a reward systems (e.g., commission forming 60 percent of income) that almost guaranteed unethical decisions, systems that are mush more appropriate for products on a growth cycle.  In fact, research shows that upper-level managers generally tend to be naive about the extent of ethical lapses below them. This can easily contribute to a success-at-any-cost culture.   Other than explicit instruction, the implicit requirement made by the manager can also make the unethical behavior appear in the organization.  In more general terms, managers in most corporations will delegate certain tasks to subordinates.  Depending upon the internal procedures of the organization, detailed instructions about the methodology to be employed need not to be explicit.  This will make the unethical behavior appear due to the implicit request of the managers.  For example, The “Just Do It” relationship: Regarding implicit instructions, the manager will be able to maintain a position of deniability, usually expressed by such phrases as “I don’t want to know how you do it.” or “I don’t care about the details.”   Underlying this kind of delegation is a threat-again, usually implied- that, should the employee fail- consequences such as a poor evaluation, demotion or ever dismissal will result.  In the worst situation, a manager will demand the result  which is only achievable through unethical means, or will demand the result under a deadline which makes unethical means the only feasible alternative.

Finally, a consideration of culture suggests the conditions under which corporate codes of ethics might actually have an impact on decision making. If such codes are specific, tied to the actual business being done, and correspond to the reward system, they should bolster an ethical climate. Among them,  the morals audit is necessary, but it must be random and periodic because it is inefficient, if not unrealistic, for a manager to examine each worker’s performance on each task in sufficient detail..  People hope that the process establishes within corporations and communities a mechanism through which the importance of ethical behavior can be stressed and  the positive symbolism will enrich the ethical climate.

Is Playing Politics Ethical?

Is political activity ethical?  There are no clear-cut ways to differentiate ethical from unethical politicking, there are some questions one should consider.  Exhibit 13-6 illustrates a decision guide to ethical actions.   Unfortunately, the answers to the questions in Exhibit 13-6 are often argued in ways to make unethical practices seem ethical.  Powerful people, for example, can become very good at explaining self-serving behaviors in terms of the organization’s best interests.  Similarly, they can persuasively argue that unfair actions are really fair and just.  The point is that immoral people can justify almost any behavior.  When faced with an ethical dilemma regarding organizational politics, try to answer the questions in Exhibit 13-6 truthfully.

Myths About Business Ethics

Business ethics in the workplace is about prioritizing moral values for the workplace and ensuring behaviors are aligned with those values -- it's values management. Yet, myths abound about business ethics. Some of these myths arise from general confusion about the notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas

1. Myth: Business ethics is more a matter of religion than management. Altering people's values or souls isn't the aim of an organizational ethics program -- managing values and conflict among them is.

2. Myth: Our employees are ethical so we don't need attention to business ethics. Most of the ethical dilemmas faced by managers in the workplace are highly complex. One knows when they have a significant ethical conflict when there is presence of a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on "stakeholders" in the situation. When the topic of business ethics comes up, people are quick to speak of the Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas, most people realize there's a wide "gray area" when trying to apply ethical principles.

3. Myth: Business ethics is a discipline best led by philosophers, academics and theologians. Lack of involvement of leaders and managers in business ethics literature and discussions has led many to believe that business ethics is a fad or movement, having little to do with the day-to-day realities of running an organization. They believe business ethics is primarily a complex philosophical debate or a religion. However, business ethics is a management discipline with a programmatic approach that includes several practical tools. Ethics management programs have practical applications in other areas of management areas, as well.

4. Myth: Business ethics is superfluous -- it only asserts the obvious: "do good!" Many people react that codes of ethics, or lists of ethical values to which the organization aspires, are rather superfluous because they represent values to which everyone should naturally aspire. However, the value of a codes of ethics to an organization is its priority and focus regarding certain ethical values in that workplace. For example, it’s obvious that all people should be honest. However, if an organization is struggling around continuing occasions of deceit in the workplace, a priority on honesty is very timely -- and honesty should be listed in that organization’s code of ethics.

 5. Myth: Business ethics is a matter of the good guys preaching to the bad guys. Some writers do seem to claim a moral high ground while lamenting the poor condition of business and its leaders. However, those people well versed in managing organizations realize that good people can take bad actions, particularly when stressed or confused. (Stress or confusion are not excuses for unethical actions -- they are reasons.) Managing ethics in the workplace includes all of us working together to help each other remain ethical and to work through confusing and stressful ethical dilemmas.

6. Myth: Business ethics in the new policeperson on the block. Many believe business ethics is a recent phenomenon because of increased attention to the topic in popular and management literature. However, business ethics was written about even 2,000 years ago -- at least since Cicero wrote about the topic in his On Duties. Business ethics has gotten more attention recently because of the social responsibility movement that started in the 1960s.

7. Myth: Ethics can't be managed. Actually, ethics is always "managed" -- but, too often, indirectly. For example, the behavior of the organization's founder or current leader is a strong moral influence, or directive if you will, on behavior or employees in the workplace. Strategic priorities (profit maximization, expanding marketshare, cutting costs, etc.) can be very strong influences on morality. Laws, regulations and rules directly influence behaviors to be more ethical, usually in a manner that improves the general good and/or minimizes harm to the community. Some are still skeptical about business ethics, believing you can't manage values in an organization. Donaldson and Davis (Management Decision, V28, N6) note that management, after all, is a value system. Skeptics might consider the tremendous influence of several "codes of ethics," such as the "10 Commandments" in Christian religions or the U.S. Constitution. Codes can be very powerful in smaller "organizations" as well.

8. Myth: Business ethics and social responsibility are the same thing. The social responsibility movement is one aspect of the overall discipline of business ethics. Madsen and Shafritz refine the definition of business ethics to be: 1) an application of ethics to the corporate community, 2) a way to determine responsibility in business dealings, 3) the identification of important business and social issues, and 4) a critique of business. Items 3 and 4 are often matters of social responsibility. (There has been a great deal of public discussion and writing about items 3 and 4. However, there needs to be more written about items 1 and 2, about how business ethics can be managed.) Writings about social responsibility often do not address practical matters of managing ethics in the workplace, e.g., developing codes, updating polices and procedures, approaches to resolving ethical dilemmas, etc.

9. Myth: Our organization is not in trouble with the law, so we're ethical. One can often be unethical, yet operate within the limits of the law, e.g., withhold information from superiors, fudge on budgets, constantly complain about others, etc. However, breaking the law often starts with unethical behavior that has gone unnoticed. The "boil the frog" phenomena is a useful parable here: If you put a frog in hot water, it immediately jumps out. If you put a frog in cool water and slowly heat up the water, you can eventually boil the frog. The frog doesn't seem to notice the adverse change in its environment.

10. Myth: Managing ethics in the workplace has little practical relevance. Managing ethics in the workplace involves identifying and prioritizing values to guide behaviors in the organization, and establishing associated policies and procedures to ensure those behaviors are conducted. One might call this "values management." Values management is also highly important in other management practices, e.g., managing diversity, Total Quality Management and strategic planning.

Employing Ethical Guidelines

A few simple guidelines, regularly used, should help in the ethical screening decisions. The point isn't to paralyze your decision making but to get you to think seriously about the moral implications of your decisions before they are made.

What this advice does is enable you to recognize ethical issues, make ethical judgments, and then convert these judgments into behavior.  Training and education in ethics have become very popular in North American organizations. Take for example the Lockheed Martin Corp.  The Bethesda, Maryland-based defense giant has designed an ethics program that is a model for the corporate world.

To begin with, Lockheed Martin distributes a booklet titled Our Values To Every Employee.  It discusses why honesty, integrity and quality are crucial.  Another pamphlet, Ethics In Our Workplace, features detailed discussions on a wide array of topics, including ethics in cyberspace, conflicts of interest, cultural differences, and more.  The company also spares no effort when it comes to actual training.  Every year, all 200,000 employees attend an hour of live ethics awareness training.  The company also provides a three-inch thick binder that discusses the role of the company’s ethics officers and serves up realistic scenarios.  Finally, there is a toll free hot line that brings in more than 4,000 calls a year.
Most employees want to do the right thing; a company’s task is to make it easier for them to know what is right and to make it easier for them to do it.  Evidence exists that formal education in ethics has a positive impact on ethical attitudes.  A company that finds a way to influence the people to act ethically and responsibly is far more likely to succeed.