The Use and Abuse of Power in Management - Essay Example

? Business THE USE AND ABUSE OF POWER IN MANAGEMENT INTRODUCTION Power is a complex, multifaceted process like other social interactive processes. The use of power in an organisation is a political course of action, and a “dynamic, interactive, perishable process that is effective in the moment of use and not so much in its mere potential” (Fairholm 1993: 37). Power is a part of all organisational processes, clearly evident in the concept of division of labour and in hierarchical organisational structure. It is pervasive, extending into social communication where people interact in close relationships to influence others to behave in desired ways. Hence, power is an inherent characteristic of organisational action. Leaders and organisational management find “continued opportunity to sharpen their power-use skills in every contact they make in the group and with relevant stakeholders” (Fairholm 1993: 37). Power is an essential part of the organisational decision making undertaken by managers, and forms the medium of leadership. It plays a critical role in the selection of key staff, in resource allocation, in promotion actions, reorganisation decisions, and in the development, flow, and use of information. Power is also considered in motivational terms to be the critical difference “between the person who seeks to control the conduct of the individual and the group, and the leader who exercises control over the results they achieve” (Fairholm 1993: 46). In contemporary organisations, effective leadership depends on the use of power for success; therefore skilled use of power forms the core accomplishment in organisations. Contrasting with the use of power is the other side of the corporate coin in the form of abuse of power by organisational leadership. Increasingly, large corporation engage in corruption, and misuse of the immense power they have built up. The corporate world is overreaching the power it has amassed, similar to power in other domains such as in politics, which also exceed their limit when permitted. Due to its excessively predatory practices, the atmosphere in today’s corporate world has been termed as ‘piratical’. Abuse of power reveals itself in several ways. The most disturbing occurrences pertain to “the efforts of corporations to conscript the political process for their own benefit through their large financial contributions, both legal and illegal” (Clinard 1990: 6). Thesis Statement: The purpose of this paper is to investigate the significance of power in organisations. The dynamics of power will include the theoretical background on the use and abuse of power by leaders, examination of a case study and illustrations through organisational examples. THE DYNAMICS OF POWER IN ORGANISATIONS According to Pfeffer (1992), besides organisational leaders, the members of an organisation vie with each other for dominance. They compete for the power to get their own way, while confronting competitive action by others in their intimate work group. This situation takes five aspects into consideration. Organisational participants interact continually with people in an interdependent relationship with them. The participants are in a competitive situation regarding who among them will achieve the desired goals. Scarcity forms a part of the situation to some extent. “The participants attach enough importance to the situation, goals, or approach that they are willing to engage their energy in this relationship” (Fairholm 1993: 30). These five dimensions of the power relationship also defines typical organisational life. Employees’ understanding of a situation increases by viewing the relationship in political power terms. Theoretical Background: Use and Abuse of Power in Organisations Leadership is a relational term, it identifies a relationship in which “some people are able to persuade others to adopt new values, attitudes and goals, and to exert effort on behalf of those values and goals” (Hogg 2005: 53). The relationship is almost always defined within the parameters of a group, either a team, an organisation, or a large group like a nation. The values, attitudes and goals that leaders inspire others to adopt and to comply with are the ones that characterize and serve the group. Thus, leaders are able to transform individual action into group action. This method of defining leadership is quite common, and regards the role of group membership and group life as significant features in analyses of leadership. Such an analysis of leadership is based on the social identity approach in social psychology. Besides disregarding the shareholder in the corporate accountability process, large corporations abuse the consumer by using unethical practices, thus exploiting millions of consumers. Similarly, despite governmental controls, powerful corporations abuse the environment by indiscriminate pollution of air, water, and soil on an extensive scale, causing detrimental effects on human beings, wildlife, land, water and vegetation. Hence, the proper disposal of hazardous waste products by major corporations is a matter of serious concern today. According to Clinard (1990), abuse by western corporations of workers in Third World Countries through unfair trade practices, low wages, and poor working conditions is another issue for which the government attempts to ensure that corporations make social responsibility their core area. In this connection, large companies such as Cadbury Dairy Milk, Starbucks, Green & Black’s and Ben & Jerry’s have adopted Fair Trade practices. “The net effect is that UK sales of Fairtrade products rose 12 per cent last year to reach ?800 million” (Poulter 2010). The Social Identity Theory of Leadership The core concept in the social identity analysis of leadership is that as groups become more important, leadership approaches get more strongly influenced by perceptions of prototypicality that work together with social attraction and attribution processes. “A key insight of the social identity approach is that the basis of perception, attitudes, feelings, behaviour, and self-conception is contextually fluid” (Hogg 2005: 56). Lee-Chai and Bargh (2001) support this view, and add that the social identity theory of leadership rests on the premise that as self-categorisation as a group member grows in psychological significance, leadership endorsement and consequently leadership effectiveness becomes dependent on the extent to which the leader is prototypical or model, rather than on other features of leadership. With the growing significance of the group, developing leadership processes and leadership effectiveness perceptions “become less dependent on leader schema congruence and more dependent on group prototypicality” (Hogg 2005: 62). This concept is supported by a range of studies of leadership in relation to social identity (Hogg 2001; de Cremer 2002; Haslam & Platow 2001). There is also support for the idea that prototype-based depersonalised social attraction may facilitate leadership (Fielding & Hogg 1997), while other studies reveal social attraction as a component of the leadership evaluation measure (Hogg & Abrams 1998). However, “the role of attribution and information processing remains to be fully investigated” (Hogg 2005: 63) in assessing leadership effectiveness and the use of power by the management. The Three Process Theory The basic definition of power refers to it as the capacity for influence based on a control of resources desired by others. Power is an inescapable feature of the structure of organisations and human social life on the whole. Building on the basic definition of power is a related new three-process theory that takes into consideration group identity, social organisation and ideology, rather than dependence as the basis of power. The approach emphasizes persuasion, authority and coercion as the foundations of power. Significantly, the theory changes the way these processes have been understood by reversing the causal sequence of the standard theory, thus “control of resources produces power, power is the basis of influence and that mutual influence leads to the formation of a psychological group” (Turner 2005: 1). The three-process theory argues that psychological group formation produces influence, which forms the basis of power, and that power leads to the control of resources. The theory has implications for social change, coercion, prejudice and the extent to which power is a social evil. It is applicable to power within the organisation, its use and abuse. Luke’s Thee Dimensional Model of Power According to Lukes’ three-dimensional model, power is conceptualised as having three dimensions. “These extend from comparatively self-evident and overt forms of its exercise to forms of power that are more subtle and institutionalised” (Knights & Willmott 1999: 95). The three dimensions are as follows: First, power that is exercised to make a decision in circumstances of observable conflict or disagreement. Second, power that is exercised to keep issues on or off the decision-making agenda, to avoid potential conflicts or disagreements, thus making them unobservable. Third, institutionalised power exercised to define social reality. Norms and meanings when internalised, are accepted by people who consequently reproduce the power-invented definition of reality, even when this is against their actual interests. The first dimension consists of the observable behaviour of individuals or groups who influence the form and content of decision-making. An example is the decision of the district attorney to treat the criminal Sherman McCoy like anyone else arrested, irrespective of what his socal status may cause him to expect. The second dimension of power is related to the non-observable behaviour implicit in keeping issues on or off the agenda. An example is that where observable behaviour and conflicts are examined, some important aspects of power are unacknowledged, because the use of power can prevent a controversial issue from being discussed so that it never reaches the public domain of decision-making. The third dimension of power relates to how those in positions of power “may define reality so as to secure the general support of others including those who are most disadvantaged” (Knights & Willmott 1999: 95). The Theory of Power-Use Primarily, there must be a potential decision or choice to be made. A problem or situation has to be present, for which alternative courses of action must be obvious. Power use is a problem-solving action process. Secondly, the situation has to have two components: One, the participants should have an interdependency relationship of a type that makes it difficult for individual members to attain their goals outside of the relationship. Two, the situation in which the interdependent employees are, must have scarce resources, skills, ideas, creativity, or other parameters. That is, the resource situation should be such that with the available resources, it cannot economically as well as easily facilitate the attainment of both participants’ goals. According to Fairholm (1993), the third important factor in modeling the power situation involves the participants themselves. The two or more people who come to the choice situation must have the following three characteristics: First, at least one, and often all participants have adequate competence to function in this environment. Second, each employee will use his energy and time to engage in required interaction, with each attaching sufficient importance to the goals, the methods used, or the relationship. Finally, each participant, at least one miminum, must be in a comparative position of freedom over others in the relationship. Thus, one or more participants should believe that they have the personal capacity to achieve their desired outcome. Taking these factors into consideration, leads to the fourth element of power which is action to influence the other participants in the situation. Fairholme (1993) reiterates that employees use power to deal with the choice. House (1991: 23) presents a theory of “how the distribution and exercise of power in complex organisations varies systematically as a function of environment, organisational form, and personal characteristics of organisational members”. The conventional differentiation between organic and mechanistic organisational forms is elaborated by the introduction of features of three additional processes: selection and socialisation, looseness of coupling, and boundary spanning. The organistic and mechanistic forms are contrasted in relation to differences in their “generic dysfunctions, political arenas, political behaviour, abuses of power, contanment of power abuse, and adjustment to environmental changes” (House 1991: 23). The authors elaborate the theory in terms of twenty-five testable propositions. The Expectancy Theory in the Use and Abuse of Power The expectancy model suggests explanations for why similar tactics deployed in different situations may or may not draw out the required outcomes. For example, the expectancy approach provides a path to understanding why impression management behaviours are sometimes unsuccessful in altering impressions; why threats are not always threatening; why obligations do not compulsorily obligate; and why pressure does not always persuade or intimidate. The theory’s implications for the use and possible abuse of power is evident from the following example related to potentially unethical workplace behaviour (Lee-Chai & Bargh 2001). Case Study Example No.1: Expectancy Theory in Use & Abuse of Power The expectancy theory illustrates that achieving successful influence requires significantly more than simple similarity between influence objectives and influence tactics, as found from existing influence research. An organisation member Mary, the influence agent, is aware that another member Steven, the influence target, with power and status roughly equal to hers, is to about to take a specific action. This pertains to Steve’s intention to hire an acquaintance to fill an open position, without following standard procedures of public posting of job opportunities. It is assumed that Mary’s objective is to change Steven’s intended behaviour so that accepted practice is not circumvented. Mary’s objective may be to achieve only simple compliance on Steven’s part. Both parties having equal power and status, and the acceptability of either compliance or commitment as the outcome, several different tactics represent possible routes to successful influence depending on expectancies (Lee-Chai & Bargh 2001). Various tactics that can be used by Mary in this situation is conceptualised in the form of a quadrant, with different types of techniques given in each quadrant. Quadrant 1 tactics including altruism, ingratiation, liking, similarity, reciprocation and debt may be suitable if their use confirms information processing expectancies, or violates them in a positively valenced manner. However, if successful, the outcome is likely to be compliance rather than internalised commitment. Quadrant 2 tactics are composed of assertiveness, pressure, social proof, coalitions, upward appeal, expertise, authority, legitimating and aversive stimulation. These may succeed if their use confirms both forms of expectancies, but may not be successful if Mary’s use of tactics that reflect a role-oriented relationship is unexpected by Steven. Again, compliance rather than commitment would be the outcome (Lee-Chai & Bargh 2001). On the other hand, to achieve commitment with conformity and attitude change, the theory suggests a role of expectancy violations associated with the use of tactics in quadrants 3 and 4. The effectiveness of these tactics may depend on Steven’s level of personal involvement in this specific issue, and the nature of the pre-existing relationship between Mary and Steven. The latter may be receptive to tactics that promote systematic processing to the extent that Steven places great personal importance to the issues involved in the influence request by Mary. Further, in the absence of a personal relationship between Mary and Steven, strategies that “violate Steven’s expectancies by unexpectedly encouraging systematic processing may be more likely to be well received than heuristic tactics” (Lee-Chai & Bargh 2001: 35). In this kind of hypothetical situation according to the expectancy model, “successful influence depends on the agent’s ability to sense the information processing requirements, and conformity needs of the influence request” (Lee-Chai & Bargh 2001: 35), achieving appropriate evaluations of the agent-target relationship, and of the target’s information processing expectations. The effective influencer makes tactical choices based on these perceptions. These choices may either confirm expectancies or violate them in ways that are positively valenced by the influence target. The expectancy model demonstrates that “achieving successful influence requires substantially more than simple congruence between influence objectives and influence tactics” (Lee-Chai & Bargh 2001: 36) as implied by existing influence research. Abuse of power is said to occur when an influence seeker manipulates the power episode in ways that rely on deception or complete misrepresentation in order to achieve influence objectives. The expectancy model suggests a couple of strategic methods through which this might happen. First, along the relationship dimension of the tactics taxonomy, a duplicitous agent might pretend to an allegiance of one type, for the purpose of capitalising on expectancy effects by invoking tactics that draw out opposing relational perceptions. Similarly, in relation to information processing expectancies an agent could seek to exaggerate a target’s understandings of the severity of an expectancy violation such as unexpectedly inviting systematic processing, by engaging “in prior interactions that manipulate expectancy perceptions in the other direction, towards expectations of heuristically oriented requests” (Lee-Chai & Bargh 2001: 36). These tactics undertaken by an influence seeker are complex, and depend on participation in expectancy generating interactions over time and for all influence goals. If successfully implemented, the extent to which such actions rise to a level of power that challenges ethical norms is not clear. However, it is evident that an expectancy model of interpersonal influences can help to highlight the relationships between “context, motives, tactics, and perceptions that are interwoven into the fabric of an influence episode” (Lee-Chai & Bargh 2001: 36). Case Study Example No.2 : Theory of Power Use in Chrysler Corporation The abuse of corporate power is increasingly rampant in the contemporary world. Giant corporations are all-powerful in the twentieth and twenty-first centuries. Unfortunately for society, a large number of giant corporations have abused this power in their relations with their workers, their stockholders, their consumers, and the public at large. The large corporations have also “abused the environment, defrauded the government, and exploited the developing nations of the Third World” (Clinard 1990: 1). In their actions they have abused even the very democratic process that has given them the opportunity to achieve this power. Examples of abuse of corporate power are evident in unexpected plant closures with little advance warning, placing workers and local communities in difficult situations. No effort is made to assist the workers who are laid off. For the local community, plant closure results in reduced tax collections, consequent “impairment of community services, increased social welfare payments, and tax increases to compensate for corporate tax losses” (Clinard 1990: 8). To prevent adverse outcomes for their laid off worers, the Chrysler Corporation when faced with a large lawsuit in 1988 implemented a distinctive solution to compensate for the effects of closing its large Kenosha, Wisconsin plant. When Chrysler acquired American Motors, the state of Wisconsin waived certain pollution standards. Partly for this reason, Chrysler had assured the state about keeping the plant open for a minimum of five years. When the plant closed before the five year timeline, the company paid a settlement to the workers and the community, contributed to Kenosha six acres for a municipal golf course, supplemental employment benefits to the laid-off workers for 6 months, and health and life insurance for up to two years. Additionally, Chrysler also set up a trust fund “to help meet housing, educational, and welfare needs of the families affected by the plant closing” (Clinard 1990: 8). Corporations also abuse their power when they close plants and relocate to Third World countries such as Mexico, the Philippines, and countries in the Caribbean where labour costs are less, with working conditions far below average standards, and where unions do not play a significant part. This can have adverse consequences for all stakeholders associated with the corporation. “Almost all western European countries, as well as Japan and Canada, have laws that require prior notice of plant closings to workers and the community” (Clinard 1990: 8). CONCLUSION This paper has highlighted the use and abuse of power by organisational leaders. Leadership and the use and abuse of power have been examined with the help of theories such as the social identity theory of leadership, the three-process theory, Luke’s three-dimensional model, the theory of power use, and the expectancy theory. A social identity analysis of leadership provides a group membership approach to leadership. The social identity perspective such as that of Hogg and Abrams (1988) has become increasingly important in social psychology. This approach states that a group exists psychologically when people share a self-conception in terms of the defining features of a selfinclusive social category. Further, this representation of the group is a prototype or model; it has an unclear set of characteristics that encompasses ingroup similarities and intergroup differences pertaining to beliefs, attitudes, behaviours and feelings. Prototypes are conceptualised according to the principle of metacontrast, to maximise the ration of intergroup differences to intragroup differences. Power use is an action concept which takes place when a situation demands it. It functions as overt action by one or more of the parties in an organisational work relationship. The theory is operational in an interdependent relationship where there is some difference on the method or type of action taken by participants. A model of the power process is described using several key elements of the interpersonal relationship situation defined. The expectancy-focused framework permits an analysis of the subtleties of dyadic or twin influence in a way that can reveal how power is used and potentially misused in workplace settings. One of the basic processes of organisations in the sense of creating a homogenous unit from the collective whole, is the requirement to control, direct and focus subunits towards achieving planned goals that give purpose and clarity to the organisation. The actions that employees engage in, to achieve planned goals requires the use of power. Besides the organisational leaders, all other members also have the right to exercise power in numerous situations in the workplace. The use of power as a part of organisational dynamic is basically a political aspect of the workplace. This is supported by Fairholm (1993: 29) who adds that for an organisation’s leaders and managers, “this political process is an ingredient of planning, organising, staffing, budgeting, goal setting, and program management”. For managers, it is recommended that they should keep in mind the political power dimensions of these functions, which are often masked in the literature on management. For example, in the process of budgeting, the focus is on goals, methods, steps, and criteria of the budget cycle; besides the fundamental features of the budget process, implementation and control. The production of a budget is assumed to be as mechanical as the manufacturing of an automobile. However, organisational reality is that the members influence each other during each phase of the budget process. “They negotiate schedules, they compromise goals, they marshal support, they compete for limited resources” (Fairholm 1993: 29). Budgeting and the other activities are power tasks. Organisation members accomplish them by the use of power tactics depicted in a political action process referred to as organisational politics. In all organisations, employees continually find themselves in situations where power negotiation is a legitimate part of their working lives. BIBLIOGRAPHY Clinard, M.B. (1990). Corporate corruption: The abuse of power. New York: Praeger. de Cremer, D. (2002). 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