Power Tactics and Sources of Power - Case Study Example

Power Tactics and Sources of Power Power is the authority one has over others. According to Suja Nair in “Power, Realpolitik and Ethics”, there is a slight difference between power and authority (Nair, 2010). Authority brings power to an individual in an organization. Someone with authority has the power to make big business decisions within the organization and direct other workers under him or her on how to work. Koch Industries, America’s second largest privately owned company, has a great detail of the power struggle. It was founded by Fred Koch and later handed over to the sons, Charles, David, Bill and Frederick Koch. Charles was trained to take over from the father since childhood, and he portrayed traits of a great Chief Executive. The training through life involved strict and sometimes harsh treatment from his father that hardened him. Their mother, Mary somewhat protected Bill and David, who were twins. David was athletic and competitive and grew up to be the perfect business partner for Charles. Bill, on the other hand, was the jealous type, always picking fights with David since childhood and often losing. He grew up to be a threat to Charles’s peace, taking Koch industries through strenuous legal proceedings. The brothers owned percentages of Koch industries, each with his shares (Schulman, 2014). Both Charles and Bill Koch had power in Koch Industries. Charles’ sources of power included reward power whereby he was handed the mantle of CEO by his father having been trained since childhood. The father had earlier lost hope in his eldest son Frederick, who was mostly involved in art and theater. Charles also had legitimate power in Koch Industries being the legal CEO. Therefore, he was in charge of many key decisions made within the company and also directed management of funds regardless of how happy or angry others would be with the cash distribution. Charles was well educated in terms of business and market and therefore had expert power which saw him, together with the help of other business partners, grow Koch Industries. Bill’s sources of power included the coercive power that he gained by threatening Charles to make Koch Industries public if he did not meet his demands. These threats were tabled to Charles in writing and got him shaken for some time. Bill always wanted liquidity of assets so that he could benefit from the riches he only had in paper. He even tried to convince Frederick, who had lesser shares in the company to join his course. Bill also had legitimate power in that he owned slightly over twenty percent of Koch Industries. He was however not co-operative with his brothers. Power tactics are important in governing people and making major deals in business. Such tactics can lead to the success or failure of a business. Both Charles and Bill used different tactics to try and gain the highest authority in Koch Industries and in return accumulate great wealth. Power tactics used by Charles included legitimacy whereby he acted on the fact that he was CEO of the company. This helped him make decisions and tune business rules and regulations to his favor. He also used personal appeal as a power tactic. This was reflected in the way he funded Non-Governmental Organizations that mostly dealt with environmental pollution expecting the favor of not being exposed to the world as one of the biggest air and water pollutant in America. He also funded filmmakers, preventing them from creating films and shows that depicted how devastating the pollution caused by Koch Industries was to the American environment and the world at large. More so, he worked with Republican politicians to the extent of funding candidates. With this, he could choreograph their every move in terms of making and passing bills. These were smart moves that he took to ensure that he remained relevant in business and that his company never went public or was never deeply scrutinized by legal bodies. Bill had his power tactics as well. He mostly relied on a coalition to get whatever he wanted. He colluded with his brother Frederick to try and expose how Charles had tried to blackmail him with homosexuality. In 1980, Bill had convinced some shareholders of Koch Industries to join him in pushing for the expansion of the board from seven to nine members.Consequently, it would ensure that the board took a more active role in overseeing management. This was after Bill had complained of just being a spectator.Moreover, the company made financial moves and huge profits per year and they still couldn’t use the wealth they had gained since it only existed on paper. Bill also used pressure as a power tactic, putting it on Charles in the form of threats and lawsuits that had Charles’ blood pressure rising. This pressure had led Charles to make rushed decisions of kicking out Bill from the company. However, he cooled down on this move after an urgent board meeting he held with his board members together with David and a family friend. Another tactic used by Bill was to try and scare away investors in Koch Industries by trying to convince them how Charles and David were poor at keeping their end of the bargain. Charles eventually defeated Bill in a legal suit filed by Bill and others to take over the company. This was through a settlement reached by Bill worth $25 million. Bill eventually sold his share of the company to Charles and David ending their long legal battle that had only worked to break their family ties rather than grow their financial base. This victory for Charles relieved the pressure placed on his company by Bill and his accomplices including their brother Frederick. Charles and David even ended up funding legal representatives of the poor public population. Charles victory can also be seen to come from the major support he had from his brother David all through his career as CEO. The power tactics he had used which included funding Non-Governmental Organizations and Charity Groups, created some sympathy towards him and his company leading to a less harsh treatment by the population. From the power struggle seen in this family business, the importance of a good business partner in an organization can be seen. Important coalitions have to be made to protect the business and to combine brain power in running that business. Distributing organizational power among the right people can lead to the success of a business, whereas the opposite leads to imminent failure accompanied by endless lawsuits. It is also important to be smart when dealing with organizational power as can be seen with Charles, who doesn’t give in to external demands easily. Organizational power is a deadly tool that can easily build an enterprise into a powerful company or bring it down. How to use such power is all that matters. References Nair, S. (2010). Chapter 14: Power, realpolitik, and ethics. Organisational Behavior, Global Media, Mumbai Read More