Major Powers in Business Management - Literature review Example

? Business Management Contents Contents 2 Introduction 3 Critical Review of Literature 3 Research methodology 6 Findings 7 Analysing the findings Discussions 10 Conclusion 13 Reference List 15 Introduction Over the past few decades, researchers as well as business managers have realised that although organisations have increasingly amassed wealth and size, the perceived power assumed within these organisations have not seen similar change. Scholars have tried to define power as “the capacity to produce intended effects, and in particular, the ability to influence the behaviour of another person” (Dunbar and Burgoon, 2005). Power can reside in various forms in an organisation. These can be in the form of formal authority such as manager, power while controlling scarce resources, power in terms of hierarchy, organisational structures, rules and regulations, control of information, knowledge, boundaries and decision process and power given to the employees. In the current study, the focus will be on role of power in the organisation. The objective will be to find out what constitutes power, what are the several external and internal influences and how power in related to the overall performance and success of an organisation. Critical Review of Literature The relationship between organisation and power is critical and intimate. The organisations exist to the degree to which they are powerful. This power, in turn affects beliefs, behaviours as well as opportunities of groups, individuals, businesses and societies. Organisations endure as a result of various social practices especially those which are repetitive, socially constructive and controlling. As a result power has become an increasingly influential tool to control and manage societies as well as organisations. The relationship between organisations and power can also be called as bi-directional. A significant research has been conducted through which it has been identified that individuals, collective and actors affect the organisational context where they work. Role of power in organisations was an ignored topic during the early neo-institutional theories but has gained attention in recent organisational studies. In these recent researches, focus has been given on considering the influence of power while examining institutions and organisational change. Incorporation of power is critical in understanding how organisations operate in society and how they are interrelated. Workplace is a setting where individuals show a working relationship as well as are independent in accomplishing present as well as future outcomes. Power in organisations is critical as individuals often need particular influences in order to accomplish their objectives and goals. Researchers have also found slight variation on the perspectives of power in workplace and study approaches. The literature has suggested that power can be seen from various perspectives such as structure or system, individual or dyadic relationship. The existence of power in an organisation is the result of its structure or system and its mechanism to control and influence behaviour. According to this approach, power can be described as the capability to mobilise resources and people to get the work done (Katz, 1998). Thus, perceived capacity of the power can be examined against its real influence on the productivity of employees. According to Second, Lawrence and Robinson (2007), organizational power reflects the actions of an individual or an organizational system controlling the beliefs or behaviour of organizational members. This perspective is considered to be more complete as it recognizes organizational power as well as importance of personal power. According to this view per has the ability to get the work done without the occurrence of any resistance. It is believable that leaders can use these perspectives in order to be able to counter resistance from employees and workers during various workplace situations such as takeover, downsizing and union disputes. This perspective also concludes that organizational power has the ability or capacity to influence various organizational outcomes. In present day organizational entities, these perspectives are used for developing situations to discourage and stop unacceptable and intolerable organizational behaviour. There are numerous bases or sources of power in the organization. Power base refers to the resources of individuals constituting the fundamentals to control other people. Power in the organization can be deduced from controlling the resources, fostering relationships with powerful people as well as formal structure of the hierarchy. Power in organizations is an influential concept for managers as they need to mobilize resources and employees for getting the work done. Thus, to be an efficient manager it is important to understand the various power bases and selecting the appropriate power in the given situation. Below are the five major power bases used by managers and leaders; 1. Legitimate Power This power is based on the position of the manager in the organization and validated by the organizational members. This legitimate power is provided by the formal structure of the organization as it defines the responsibilities and rights within organization and hierarchy. 2. Reward power It is based on the ability of the manager to administer and control rewards such as praise, money or promotions to his or her subordinates. Illustrative examples will be medals and ribbons decorating the uniforms of the army service members. Rewards may also be non-verbal and informal and exists as perceptions of employees. 3. Expert power It is based on the expertise, knowledge, abilities and skills of the manager concerning the job. It is accomplished through empowerment activities as well as reasoning. It is independent of job title and hierarchal position and considered as personal power within workplace. 4. Referent power It is based on the desire of other employees to emulate the leader or manager in an organization. Managers having referent power have the quality or ability identified by the subordinates. For example, if managers or leaders are respected and admired, their subordinates may emulate the characteristics so as to gain the same respect and admiration. 5. Coercive power It is based on the ability of leaders or managers to administer or control punishment such as verbal reprimands, pay cuts or demotions. It is used when incongruent employee actions occur with codes, workplace policies, procedures and organizational expectations. Dunbar (2004) has conducted numerous studies supporting the perspective that power in an organization exists also because of the dyadic relationships. These relationships are employee-to employee, manager-to manager and manger to employee interactions. These relationships in the organization affect individual’s power to mobilize resources and employees for the completion of the objective. Thus, for managers and leaders in an organization it is important to understand these dyadic relationships among employees and managers. This will also help in understanding the perception of organization’s employees towards their managers, leaders as well as towards power in organization and its importance and influence. Research methodology Research methodology can be described as an overall approach to the process of research, including underpinning of the theoretical research, collection of data and analysis of the facts (Collis and Hussey, 2003; Eriksson and Kovalainen, 2008). Objective The main aim of this study is to demonstrate the association between power and overall organisational performance. Thus, in order to fulfil the aim of the essay, it is intended to adopt a mixed-method approach, where the qualitative part will consist of a questionnaire method where employee perception regarding organisational power will be evaluated in order to expose and analyze this interconnection. Data Collection and Sampling This process plays a crucial role, which is essential to maintain the appropriateness of a research study towards the topic that is being addressed. Data will be collected from both primary and secondary sources. Primary data will be collected directly on-field whereas secondary data will be collected from multiple data sources such as books, journal articles, online databases and authentic websites. In the current study, stratified sampling will be used where various respondents in the population will be subdivided into various strata such as, accountants, managers, marketing executives and administrators. Each will be representing a different level of operation and business unit of the organization in this case study. The sample size taken for this study will be 100 respondents from various functional and operational departments of businesses. Questionnaire Survey The participants will be asked to sign a consent form and then, to complete a questionnaire survey anonymously. Questionnaire surveys serve as a vital information source that can be used for the purpose of a research study. The questionnaire format will be a closed ended one with objective based questions covering demographic factors such as, gender, age, job title, work experience and so on and so forth. Interview Interviews are data collection methods which require selected respondents to respond to certain questions, so that interest is obtained on issues (Kvale, 1996). Interviews can be either unstructured or structured. In the current study, both structured and unstructured interviews will be conducted. Findings After conducting questionnaire surveys and interviews with employees, various findings were presented. Out of the total participants surveyed, 73 percent were males and 27 percent were females. The demographics included age groups from 26 to 65 and organisational level included employees and managers from first level to top management. In order to attain the objective of the study various questions regarding power in organisations were asked. Table 1 Gender Demographics Demographics: Gender Percentage Male 73% Female 27% Table 2 Age Demographics Age Demographics Percentage 26-30 1% 31-35 8% 36-40 19% 41-45 24% 46-50 25% 51-55 14% 61+ 8% Table 3 Organisational Level Demographics Demographics: Organizational Level Percentage First Level 4 % Middle Management 17% Upper Middle Management 28% Executive 36% Top Management 15% In terms of an individual’s own power in the organisation, majority of the respondents said that power was concentrated among few selected individuals in the organisation. Respondents also said that power was increasingly being misused by the top leaders in the organisation. Table 4 Individual power (Source: Bal et al, 2008) Majority of the survey participants also agreed that their organisation teaches them how to best leverage their full potential. Respondents were also asked about the most important power source in the coming five years. More than 85 percent of respondents said that power of relationship will be the most important power source. Next was power of information grabbing 57 percent agreement. Table 5 Power bases in Organisation (Source: Bal, et al., 2008) In terms of personal power, respondents voted information power, expertise power and relationship power as the major sources which can leverage their future position in the organisation. The above response directly related with the next research question where the respondents were asked about the power source used by their boss as well as peers. In both the statements, majority of respondents agreed that power of relationships was majorly used by their current boss as well as peers. Respondents were also asked about power base in the organisation which had major influence on the employees. Majority of the employees responded that power based on reference and coercion was the most influential. Another objective of the survey was to understand the use of power by employees and managers in different organisational situations. Majority of respondents said that they used power in order to promote their own project and agendas and very rarely to promote someone else’s project or agenda. It was also interesting to note that promotion of organisational agenda was least leverages by the employees. Another important finding of the study was to understand the major influence of power in organisational function. It was found out that power source were majorly used by managers and leaders to inform, persuade or influence as well as to correct or refute. Table 6 Reason for using Power Reason for using Power Percentage Conduit or Central Node 30 % To Inform 24 % To Persuade or Influence 24 % To Correct or Refute 11 % Miscellaneous 11 % In terms of organisational role, participants were asked about the various kinds of support they need from their organisations in order to be more powerful at workplace. Majority of respondents agreed that formal authority during work will definitely provide them with more power. This might include different title or different roles and responsibilities. The next major indicator was support from higher management as well as their bosses. Culture and visibility also was a close third. Table 7 Role of organization in providing power Role of organization in providing power Percentage Formal Authority 42% Support 25% Visibility 13% Organizational Structure/Culture 13% Miscellaneous 7% Analysing the findings / Discussions The analysis section will discuss about the implications of key organizational power discussed in the literature as well as key analysis of the surveys. Various implications emerged from the literature study. It was found out that a common thread of connection exists between power and leadership in an organisation which in turn results in overall organizational effectiveness. In a workplace, influence of power can be seen in various situations such as coaching seminars, performance appraisals, information sharing meetings and workshops and awards and presentation ceremonies (Hirokawa, 1990). Another major point to conclude is that the five power bases used by leaders and managers in an organisation may contribute to negative or positive employee perceptions. It has been found out that managers and leaders derive their reward, legitimate and coercive power from the various positions they hold. However, the referent and expert power bases are derived from their own experience, training as well as personal qualities (Rahim, Kim and Kim, 1994). Hence, referent and expert power can be considered as power bases while others can be classified as position power. It has also been found out that referent and expert power have greater influence on individual or group activities as they lead to emulation and admiration regardless of the manager’s organizational hierarchy or job title (Fedor et al., 2001). Another key implication is that leaders and managers should always be aware of various employee perceptions regarding power and its association with employee outcomes in the organization including commitment, self-esteem as well as job satisfaction. For example, employee perception of a leader using his or her power bases can influence the overall job satisfaction of the workplace. Studies connecting job satisfaction and power also concluded that referent and expert power had positive relationship with employee job satisfaction while coercive power has negative relationship with overall job satisfaction. This is a critical evaluation as job satisfaction among employees has a direct relationship with job level, commitment and loyalty towards an organization. Thus the above findings and analysis suggest that organizations need to develop a greater understanding and utilization of power as well as its influence on leaders and employees so that organizational outcomes can be controlled and enhanced. The findings from the surveys suggested that leaders and managers need to be more effective while emphasizing on organizational power. This power can be levered in a more effective manner through various strategies; Making relationships priority From the survey results it was found out that majority of employees in any organization give emphasis to relationships as a form of power. Thus it is crucial for the leaders as well as organizational employees to identify individual’s r groups with whom establishing relationship will be fruitful from both sides. However, proper energy and time should also be invested on existing relationships. Maximizing communication network Leaders and managers should evaluate not only the volume of their network but also the quality. For example, finding out the quality and relevance of information shared via communication networks. In order to reach unique information, leaders and employees should also look for untapped resources. Making the most of the current position Experience as well as research suggests that simple authority does not involuntarily accompany a powerful role. It is easy to compare from the existing workplace environment, where peers having similar level and tenures show difference in power they accompany. Modifying the informal and non-verbal messages to enhance personal power is also an effective way. Becoming an expert The research survey showed that expert power was among the most sought after organizational power after power of relationships; among employees as well as leaders. Unless, the leader or manager is having the actual expertise and skills required for a particular position or function, it is difficult to emulate a positive perception among peers and subordinates. Having a relevant and unique experience or an advanced degree might help leaders in positioning themselves as better expert compared to their peers. Tailoring power to reward others Most of the time leaders and managers think that correct leverage of reward power means giving individuals more money. However, tem incentives and recognition can be provided in another ways too. The leader can ask his or her team members to find out their own rewards. This may include group picnic, co-curricular activities or even seminars or trainings. Assuming that one reward will fit all is one of the major mistakes by new age managers and leaders expecting to exert and implement power in the organization. Verbal rewards Verbal rewards are as critical and influential as material rewards and incentives. Leaders and managers should make it a practice of giving positive feedback and giving it often. It has been found out that negative influence affect employees more that positive message. Thus, employees receiving majorly negative news perceive leader’s power as coercive. Punishing with purpose Punishment is an unavoidable part of the organizational code of ethics. Punishment power generally invoke terrible images, it can be tailored for serving various useful purposes. In the current workplace environment, loss of accountability and failure to live up to expectations is common. Instead of blasting these employees and punishing them, leaders should employee feedback methods. It will not only get the job completed but will also help in establishing more power for the leader or manager (Mayfield and Mayfield, 2002). It is important to communicate as well as enforce the given standards. However, a leader with right power will also know to provide sufficient support with these policies. Conclusion A review of the management and communication literature on power yields various findings and future implications. It was found out that five basic power bases exist in the workforce who influences the overall performance of an organisation. From the above study it is clear that organizational power is dispersed among higher management, leaders, employees as well as organisational hierarchy. Thus, in order to utilise the power for best use of the organisation, the members will have to make sure that they are used for the right purpose as well as in best interest of the organisation as well as the individuals. Reference List Bal, V., Campbell, M., Steed, J. and Meddings, K., 2008. The Role of Power in Effective Leadership. Centre for creative leadership, pp. 1-20. Collis, J. and Hussey, R., 2003. Business Research: A practical guide for undergraduate and postgraduate students. New York: Macmillan. Dunbar, N. E. and Burgoon, J. K., 2005. Perceptions of power and interactional dominance in interpersonal relationships. Journal of Social and Personal Relationships, 22(2), pp. 207-233. Dunbar, N. E., 2004. Theory in Progress: Dyadic Power Theory: Constructing a Communication-Based Theory of Relational Power. Journal of Family Communication, 4(3), pp. 235-248. Eriksson, P. and Kovalainen, A., 2008. Qualitative Methods in Business Research. London: SAGE Publications. Fedor, D. B., Davis, W. D., Maslyn, J. M. and Mathieson, K., 2001. Performance improvement efforts in response to negative feedback: The roles of source power and recipient self-esteem. Journal of Management, 27(1), pp. 79-97. Hirokawa, R. Y., 1990. Impact of managerial power on persuasive strategy selection by female and male managers. Management Communication Quarterly, 4(1), pp. 30-50. Katz, S. M., 1998. A newcomer gains power: An analysis of the role of rhetorical expertise. Journal of Business Communication, 35(4), pp. 419-442. Kvale, S., 1996. Interviews, 1st ed. London: Sage Publications. Lawrence, T. B. and Robinson, S. L., 2007. Ain't misbehaving: Workplace deviance as organizational resistance. Journal of Management, 33(3), pp. 378-394. Mayfield, J. and Mayfield, M., 2002. Leader communication strategies critical paths to improving employee commitment. American Business Review, 20(2), pp. 89-94. Rahim, M. A., Kim, N. H., and Kim, J. S., 1994. Bases of leader power, subordinate compliance, and satisfaction with supervision: A cross-cultural study of managers in the U.S. and S. Korea. International Journal of Organizational Analysis, 2(2), pp. 136-154. Read More