The Use of Power Management - Term Paper Example

Use and Abuse of Power in Management Contents Use and Abuse of Power in Management Contents 2 Introduction 3 Theoretical Background 4 Case study/ practical organizational examples 9 Conclusion 12 Reference 15 Introduction The essay is based on the use and abuse of power in management with regards to an organization. This essay aims to provide a distinction between use and abuse of power in the field of management. The essay also aims to relate the theories of power with the examples from the organizations. With the help of this essay, it would become easy to relate the theories of power in management with the practicality of the organizations. It is necessary for both the mangers as well as the non managers to study organization because organizations are vital mechanisms and helps in achieving the goals in modern society. Therefore, the aim of the essay is important to be able to distinguish between the use of power management and its abuses. Thus in order to achieve the required aim, the essay would highlight the theories in literature review and provide an example in order to relate the theories with practical examples. Thus the essay starts off with an introduction on the use and abuse of power in the management, followed by a literature review, quoting the theories necessary for the topic. The next part of the essay would put light on practical examples of organizations with relation to use and abuse of power and finally the essay ends with a conclusion and recommendation for the managers stating how a manger should distinguish between use and abuse of power in management and work accordingly providing an effective result for the organization. It has been founded that there arise a thin level of difference between the use and abuse of power and the managers are familiar with the danger of uncoupling power with politics from an ethical point of view. Managers are concerned about how can the negative aspect of power be managed. Therefore the answer to this query lies in generating an understanding of the relationship between power, the ability to influence and the political process (Butcher & Clarke, 2008, p.19). Power is defined as the ability to marshal resources in order to get something done. The use of power and authority in organizations are crucial, but a manger needs to plans, manage, organize coordinate and control the various activities of an organization. And this makes one of the reasons as to why managers want to get promoted to a higher position so that they can utilize the power. Thus an organization can be seen as political system where the use and abuse of power plays a significant role in the functioning of the organization (Dzimbiri, 2009, p.33). Theoretical Background Introduction Leaders implement the task and roles with the help of power that they possess. It has been suggested that a leader should always stay away from blaming, coercive and bullying style of leadership. A manger can support innovations and the ongoing activities of the organization are many different ways. In a hierarchical organization, the locus of power is fixed and clear but in a flatter structure power is more fluid and is constantly being negotiated. According to Adair, the authority in the organization is usually derived from position, knowledge and personality. Kotler suggested that the first and foremost thing which is important in leadership is to understand the types of power and the methods used to influence the people, to utilize different types of power as per the need and seek out the appropriate leadership role, to create more power and utilize them and finally to temper the use of power with maturity and self control and recognizing the impact of use and abuse of power on others (Morrison, 1998, p.214). It has been found out by the authorities that effective use of power is the most important element of management. Some of the leaders have proved themselves to be highly influential leaders and powerful. These leaders were powerful because of the fact that they were able to build a strong power base in the organization (Whetten, 2008, p.275). Power Power may be recognised by few as feared, mistrusted or worshipped and in most cases often misunderstood. Power in general appears to be more aligns with males rather than with the females. Most successful leaders are aware of their views on use and abuse of power (Marquis & Huston, 2008, p.294). Types of Power Manager’s power arises from organizational authority and also from personal sources. The organizational authority gives a manger the power of position. For example the dean or the principle of the school has certain authorities which come with his position. Personal power is basically based on the characteristic of the individuals and remains with the person regardless of the place of his work. According to Raven and French, there are five source of power which includes reward, coercive, referent, expert and legitimate. Rewards power refers to the power which involves the use of tangible as well as intangible rewards to influence and thereby motivate the followers. Rewards are seen as one of the strongest tool used by the managers to deliver effective output from his followers. Since rewards are the strongest motivators it is important to keep a track of the positive and negative impacts that these rewards can have on the employees (Dessler & Phillips, 2008, p. 378). In coercive power, the managers has the power to punish his subordinates, the manager can coerce the employees into complying because people generally want to avoid any kind of punishment. Punishment can be any undesired or negative consequences which might include reduction in working hours, written or verbal punishment and also undesirable shifts. This type of power usually has a negative impact on the employees which might result in stress low morale, resentment and retaliation and in the extreme case can even cause the manager to lose their respective job. But most of the managers learn early and realized that it suitable to use the power of coercion only when the need arises, for instance when a particularly employee behaves in a dangerous way (Dessler & Phillips, 2008, p. 378). The referent power is based on the manager’s charisma or the ability of the manger to attract other employees in a positive manner. The subordinates refer to the manger as their role model and respect the manger and act accordingly and seek his approval. This type of power is very flexible as all mangers can effectively use referent power by showing respect for the subordinates, matching the behaviour which is consistent with the culture of the organization, and by being effective role models for the subordinates. One of the effective examples of referent power is the case of Wal-Mart. The founder of Wal-Mart, Sam Walton still drove an old truck despite of his $25billion company, and also shared budget rooms with his colleagues. The key to the success of his company was his modelling of frugality which made Wal-Mart profitable till date (Dessler & Phillips, 2008, p. 379). The next type of power defined is the expert power, which is based on the expertise of an individual in few selected area. People response to this type of power because they believe that the manager is experience, has knowledge and skill in the desired section of the organization. For example, a sales manager might have specialized knowledge about a specific market segment or customers. The foundation of expert power lies in the knowledge of an individual and thus can occur at any level in the organization. For example, when jack Welch was the CEO of General electric, he realized the fact that the Web would become very much in demand in the coming years and thus he recognized the potential of the young employees of GE in internet and knowledge about the e-business. Therefore Internet savvy employee was paired with GE worldwide executives and the employee shared his experience about the new technology (Dessler & Phillips, 2008, p. 379). The last type of power consists of legitimate power. This type of power is based on a person who only holds the position of the manager. Legitimate power is referred to as formal authority which a firm provides a manager to hire employees, monitor the employees, and make work assignment and try to enforce the rules of organizations. Subordinates comply with the manager because they believe that a being a manager, has certain rights to make request to the employees and make them work accordingly. An effective example of legitimate power is the nurses who shows up for the shifts as assigned by their supervisor even if the shifts are not liked by the nurses. Thus the employees accept the final work schedule (Dessler & Phillips, 2008, p. 378). Use of Power Mangers must adjust the use of power according to the situation and persons whom they are trying to influence. The effect of referent and expert power rely on the internal motivation of the employees and voluntary compliance. But it has been also said that these types of powers, if they are not able to motivate the behaviour of the employee are regarded as the weakest type of power and either reward or legitimate power would be appropriate (Dessler & Phillips, 2008, p. 378). Abuse of Power Power is regarded as neither good nor bad it depends on how the people use the power or the position assigned to them. An important and essential point to make about power is the potential of power for its abuse. In any type of organisation abuse of power arises because of using any type of power which would exploit or take advantage of other members of the organisation, or else influencing the subordinates to perform activities which they may regret at a later stage of life. In addition to financial ruin, abuse of power may include racial harassment, embarrassed employees and abusive behaviour. The reason for popularity of abuse of power is due to unchecked authority. Thus a manger should not have the authority to do whatever they want and power of a manger should match his responsibility (Dessler & Phillips, 2008, p. 380). Criticism of Business-Use and Abuse of Power Business are often criticised as its too big and very powerful it pollutes the nature and environment of the organisation and exploits the people for the own use, takes advantage of the workers and the consumers. It seems that business use and perceived abuse of power. It has been noted that business often engages itself with unethical behaviour with respect to its stake holders. Business power is defined as the ability to produce an effect on a situation or people. Power can be either positive or negative but in the context of business power is often perceived as being abused (Carroll, 2008, p.19). Conclusion The central aspect of organisations lies on the pervasiveness of powers. Often the power is wrapped in velvet glove of the authorities but inside the glove lies iron fist. This fist controls the power which helps to determine the policies and practises of the organisation. It is important for an organisation to understand the limits of power and authority (Kacmar, 1995, p.145). . Case study/ practical organizational examples There have been instances in business and health care sectors over the years where the top level management such as the chief executive officer or the board of directors has abused their power. For example if a CEO wants to have a powerful influence over the organization, he might create a board of directors consisting of only friends, business partners or individuals who shares a similar strategic viewpoint. These types of boards are often referred as rubber stamps who often fail to carry out the fiduciary responsibilities within the organization. It reduces the quality of strategic making decision as they do not follow the role of effective management decisions. The management is benefited at the expense of the employees, customers and the shareholders (Burns, et.al, 2011, p.202). The following case study explains the use of power in an effective way which has benefited the people and the society as a whole. The case deals with a social justice organization based in Honduras named The Association for a More Just Society (ASJ). The president of Honduras in 1999, presented a proposal for the reform of forestry legislation which allowed large sections of forest to be sold to logging companies ignoring the importance of national forest to indigenous group as well as the poor farmers residing in that area. Therefore ASJ joined representative from other areas and formed an alliance, Honduran Agro forestry Alliance (AHA) and protested against the proposed legislation. The alliance, with the help of consultants analyzed the proposal and presented a counterproposal to the government. AHA effectively used the media and organized a campaign to educate the general public about the issue and put pressure on the government for negotiation. The media campaign organized by AHA included forums, television, press conference, radio, web pages and also press report. For the next 18 months the alliance used the campaign and was involved in negotiation and continued to use the consultant to educate the public, media and the members of the committee about the counter proposal. Thus the end result was positive, the government accepted the proposal and it was for the first time that the marginal groups such as cooperatives, poor farmers and indigenous group had participated in making of a law that would affect them directly (Tear Fund Roots Resources, n.d, p. 55). Abuse of power in management can be well discussed with the help of a case study. The following case study is about two employees named Kevin and Melanie. Kevin who was an Indonesian male was appointed and put in charge of global team which comprised of a Danish male, Columbian male, Japanese male, Ugandan male and a Thai female named Melanie. All of these employees were recruited for the water resource management an NGO, to develop a sustainable water safety management system. Thus the task of the team was to work together and determine the best location possible to start with the project. Kevin being an Indonesian knew well about the people of Indonesia better than the other team members and also he was in charge for the team, thus he instructed everyone to consult him before taking any action. The place selected for the project by Kevin was the central of Java Island. Kevin’s discussion with the chief regional manager gave him a clear understanding of what the team member needed to do for the success of the project. Kevin had assigned each member their respective task and also provided them with an economic report of Indonesia to study. Each member’s progress report was to be reported to the chief manager and members with positive response were to be chosen for the next report. The criteria stated by Kevin were the ability of the team members to work in harmony with each other and completing their respective task. Kevin introduced a feedback policy where the team members would either write or verbally gave feedback on the leadership of Kevin. Melanie responded by indentifying some errors in the management report which had wrongly identified the safe zones areas. Kevin was impressed with Melanie and her knowledge on local geography and announced that Melanie would become a become core member of the project. Melanie also pointed out that the members of the team had a good knowledge about the project and that he should have discussed before selecting the place for conducting the project. Kevin accepted the fact and acknowledged that he rushed things. At the end of the meeting, Kevin told Melanie to behave like an Asian woman and speak to him about her view privately. Melanie apologized for her behaviour but gained at the same time gained the admiration of the team. Kevin informed Melanie that he would prefer to share her thoughts and views on paper before she raises any issue that would challenge Kevin’s credibility (Halverson & Tirmizi, 2008, p. 144). Thus the case study is about the internal abuse of power by Kevin over his team members. Another example of abuse of power is well explained in the example of Halliburton Company. This example shows the abuse of power by ay of wrongful activities which included international bribery, violation of international sanctions and overcharging of the US government. Halliburton Company is an energy corporation which was headed by George W. Bush and vice president Mr. Dick Cheney. The company was accused of many wrongful activities. In the year 2002, the company agreed to pay the government $2million which was related with the inflated prices for the maintenance and repair of the military base. In 2003, prior to Iraqi Freedom the company was awarded $7billion. Halliburton was accused of excess billing over the contracts of Iraq’s oil operation. Halliburton charged the US government around $2million to transport fuel which was actually worth only $82,000. Therefore the audit conducted in 2004, reported that the company had billed the US government an excess of $100million with connection to fuel contract in Iraq (Friedrichs, 2009, p.78). Another prominent example of abuse of power in the corporate is the case of the Enron/ Dhabol case. The Enron bankruptcy and the consequences in the Dhabol Power plant in Mumbai depict the corruption in the corporate and this happened due to abuse of power by the management. Enron initially owned about 85% of the Dhabol Power Plant, which was later reduced to 65%. This affected the company and resulted in massive job losses in India as well as United States. Enron decision to file a bankruptcy left Dhabol high and dry. Both the countries had invested in the project with an expected return of 2billion dollars approximately. Enron’s action has resulted in the debts for the government of India. Thus from the case study it can be understood that globalization leads to expansion rather than economic development. The encouragement of mobility of cash, search for cheap labour and the immobility of labour in domestic ground leads to the abuse and misuse of power. Corporate crimes take place mainly because of internationalization of corporate goals (Dasgupta, 2004, p.161). Conclusion A person gets power by gaining support from other in ethical and legitimate way. This helps them to achieve their objectives which are worthy for their own benefit and also of the organization. And people who do not use the power in an effective manner do not get the needed support from others and are rarely successful. But this statement does not hold much weight in practical life. In today’s world the mangers do not fear abusing power as people who abuses power are themselves the top level management. Thus the appropriate use of power remains valid, as the ethical people ultimately would benefit from training in the use of power and in future would be able to use the skill and strategies to improve the organization. People who use their power effectively are the people who actually have an impact on the organization and get things done accordingly. Corporate crimes usually wreak no or less violence but have vast economic and political consequences. Corporate fraud effects the economic environment of the organizations rather than any violent consequences. The corporate abuse of power is determined in the form of corruption and economic consequences for the ordinary citizens. Thus multinational corporations have both benefits as well as drawbacks from the use and abuse of power. It is therefore important for the managers to view the use of power necessary for their respective organization which would help it to achieve the goal in an efficient manner. Mangers must know how to balance the functional view of power as potential abusive to the employees and external stakeholders of the organization. In order to safeguard the organization from abuse of power, managers must take into consideration several steps. The steps includes creating transparency by structuring the communication network of the organization which would help in the decision making process of the organization, implementing and evaluating the process; using the advisory group and the board of directors of the organization as counterbalances to the authority of the managers; creating an effective and strong code of ethics within the organization; designing an appropriate appraisal system and also emphasizing integrity in the process of hiring. Creating transparency in the organization would make the information public within the organization. In providing greater transparency, the mangers may end up in becoming much more accessible to the employees. Thus a manager would be able to build trust within the organization and while the manager does not preclude the use of power, it is likely that the manger would try to remove the abuse of power in a timely manner. A manger can also limit the use of power abuse by creating external transparency. Thus it is recommended to a manager to provide accurate, complete and timely data to the shareholders, customers and the regulators which would prevent the executives and the board of directors of an organization from making important decisions which are not strategically logical. Many corporate involved managerial abuse of power which could be well prevented by appointing independent set of external auditors. Reference Burns, L. R. Bradley, E. H. & Weiner, B. J. (2011). Shortell and Kaluznys Healthcare Management: Organization Design and Behaviour. Cengage Learning. Butcher, D. & Clarke, M. (2008). Smart management: using politics in organizations. Palgrave Macmillan. Carroll, A. B. & Buchholtz, A. K. (2008). Business and Society: Ethics and Stakeholder Management. Cengage Learning. Dasgupta, S. (2004). The changing face of globalization. SAGE. Dessler, G. & Phillips, J. (2008). Managing Now. Cengage Learning. Friedrichs, D. O. (2009). Trusted Criminals: White Collar Crime in Contemporary Society. Cengage Learning. Halverson, C. B. & Tirmizi, S. A. (2008). Effective multicultural teams: theory and practice. Springer. Kacmar, K. M. (1995). Organizational politics, justice, and support: managing the social climate of the workplace. Greenwood Publishing Group. Marquis, B. L. & Huston, C. J. (2008). Leadership roles and management functions in nursing: theory and application. Lippincott Williams & Wilkins. Morrison, K. R. B. (1998). Management theories for educational change. SAGE. Tear Fund Roots Resources. (No Date). Understanding politics and power. [Pdf]. Available at: http://tilz.tearfund.org/webdocs/Tilz/Roots/English/Advocacy%20toolkit/Advocacy%20toolkit_E_Part%20A_5_Understanding%20politics%20and%20power.pdf. [Accessed on December 28, 2011]. Whetten, D. A. (2008). Developing Management Skills. Pearson Education India. Read More