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University of Toronto Scarborough
Management (MGH)

Chapter 12: Power, Politics, and Ethics What is Power? Power: The capacity to influence others who are in a state of dependence Power is not always perceived or exercised, the target is dependant on the holder, it can flow in any direction in an organization, and it applies to both individuals and groups Legitimate Power o Legitimate Power: Derives from a persons position or job in the organization o Ex. Military has chains of command, differentiating uniforms, etc. designed specifically to emphasize legitimate power, Universities downplay it a little o People socialized to accept legitimate power- this is the reason that it is so effective Reward Power o Reward Power: The power holder can exert influence by providing positive outcomes and preventing negative outcomes often backs up legitimate power o Managers are given the chance to recommend raises, do performance evaluations, and assign preferred tasks to employees, giving them reward power Coercive Power o Coercive Power: Available when the power holder can exert influence using punishment and threat also supports legitimate power o Managers can dock pay, block promotions, etc. (Enron execs who disagreed with Jeff Skilling were sent overseas and given brutal performance reviews) o Generally ineffective and can provoke considerable employee resistance Referent Power o Referent Power: Exists when the power holder is well liked by others o We usually seek their approval, ignore their failures, and see them as role models o Stems from identification with the power holder o Anyone in the organization may be well liked, therefore referent power is not limited to higher level executives Expert Power o Expert Power: Power derived from having special information or expertise that is valued by an organization o Those with this power have great influence in organizations and are valued highly, therefore every effort is made to retain such employees How Do People Obtain Power? Extraordinary Activities: excellent performance in unusual or non-routine (non- daily) activities, taking greater risks, and managing substantial changes Visible Activities: Publicizing extraordinary activities to get them noticed
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