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Chapter 12&13

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Department
Commerce
Course
COMMERCE 1BA3
Professor
Emad Mohammad
Semester
Fall

Description
CHAPTER TWELVE: POWER, POLITICS AND ETHICS What is Power?  Power: the capacity to influence others who are in a state of dependence  Power is not always used  Just because target of power is dependent on power-holder does not mean that a poor relationship exists  Power can flow in any direction in an organization (members at lower levels can have power over members at higher levels in some circumstances)  An individual OR a group can have power The Bases of Individual Power  Power comes from position one holds in an organization or resources they are able to command  Cannot influence if people do not respect position or value resources Legitimate Power  Legitimate power: power derived from a person’s position or job in an organization  Higher members in organization possess more legitimate power  Organizational equals have equal legitimate power (ex. all vice-presidents)  Some people are more likely than others to invoke their legitimate power  Employees follow their boss’s direction because of legitimate power Reward Power  Reward power: power derived from the ability to provide positive outcomes and prevent negative outcomes  Backs up legitimate power  Managers given chance to recommend raises, do performance evaluation and assign preferred tasks  Any member of organization can exert influence over others with praise, compliments and flattery Coercive Power  Coercive power: power derived from the use of punishment and threat  Support for legitimate power  Managers permitted to dock pay, assign unfavorable tasks, block promotions  Using coercive power is usually ineffective and can lead to employee resistance Referent Power  Referent power: power derived from being well liked by others  If like someone will consider their points of view, ignore failures, seek approval and use them as a role model  Strong because: 1. Stems from identification with power-holder (deeper base of power than reward or coercion) 2. Anyone in organization can be well-liked (at any level) Expert Power  Expert power: power derived from having special info or expertise that is value by organization  Tend to be influenced by experts or people who perform jobs well  Expert power depends on how difficult it would be to replace that person  Lower level members can have expert power (ex. a secretary with lots of experience dealing with clients, keeping records, etc.)  Women managers are more likely to be high in expert power than male managers How Do People Obtain Power? Doing the Right Things  Extraordinary Activities: o Excellent performance of unusual or non-routine activities o Ex. occupying new positions, managing substantial changes, taking great risks  Visible Activities: o Extraordinary activities will not generate power if no one knows about them o People interested in power are good at identifying visible activities and publicizing them o Ex. innovative surgeon whose techniques are reported in the New England Journal of Medicine will have influence in hospital  Relevant Activities: o Extraordinary, visible work will not generate power if no one cares o Will not add to influence if no one sees work as relevant to solution of an organizational problem Cultivating the Right People  Informal relationships with the right people can be useful for acquiring power  Outsiders: o Good relationships with key people outside of organization can lead to increased power within organization o Power by association o Political ties o Organizational members on the boards of directors of other companies can get critical info about business conditions to use in own organizations  Subordinates: o Individual can gain influence if they are close with up-and-coming subordinates o Ex. some professors known for brilliant Ph.D. students o Always possibility that subordinate might become one’s boss one day  Peers: o Good relationships with peers is a means of ensuring that nothing gets in the way of one’s future acquisition of power o Can ask favours o No fear of being stabbed in the back o Organizations reward “team players”  Superiors: o Best way of obtaining power o Useful to be identified as a protégé of someone higher in organization o Mentors can provide special info and useful introductions to the “right people” Empowerment – Putting Power Where It Is Needed  Empowerment: giving people the authority, opportunity and motivation to take initiative and solve organizational problems  Having authority to solve an organizational problem means having legitimate power  Having opportunity means freedom from bureaucratic barriers that block initiative  Ex. the computer does not permit you to access something  Should hire people who are intrinsically motivated by power and opportunity  Leaders who express confidence in subordinates can contribute to empowerment  Empowered people have strong sense of self-efficacy  Empowering lower-level employees can lead to better customer service  Levels of empowerment: o Too little: cannot perform job effectively o Just enough to carry out job: effective performance o Excessive power: abuse and ineffective performance Influence Tactics – Putting Power to Work  Influence tactics: tactics that are used to convert power into actual influence over others  Tactics include: o Assertiveness (ordering, nagging, setting deadlines, confronting) o Ingratiation (using flattery and acting friendly, polite, humble) o Rationality (using logic, reason, planning, compromise) o Exchange (doing favours or offering to trade favours) o Upward appeal (making formal/informal appeals to organizational superiors for intervention) o Coalition formation (seeking united support from other organizational members)  Tactics used depends on bases of power, who you are trying to influence  Best influence tactics: rationality for men and integration for women Who Wants Power?  Some people have higher n Pow than others  Negative n Pow: o Use power to cover up, compensate for weaknesses o Use power irresponsibly and to hurt people (ex. Hitler) o Rude, sexually exploitive, abuse alcohol, care about status  Positive n Pow: o Use power to achieve organizational goals o Adopt participative leadership style o Do not care about how much others like them  Institutional managers: use power for good of organization  Personal power managers: use power for personal gain  Affiliative managers: more concerned with being liked than exercising power Controlling Strategic Contingencies – How Subunits Obtain Power  Subunit power: degree of power held by various organizational subunits (ex. departments, particular jobs)  Subunits acquire power because they control strategic contingencies  Strategic contingencies: critical factors affecting organizational effectiveness that are controlled by a key subunit  Work other subunits perform is contingent on activities and performance of a key subunit Scarcity  Differences in subunit power are magnified when resources are scarce  Only subunits essential to firm’s existence will survive if cutbacks occur  Subunits acquire power when are able to secure scarce resources that are important to organization Uncertainty  Organizations hate the unknown  Basic sources of uncertainty exist in organization’s environment: o Government policies might change o Sources of supply and demand might dry up o Economy might take unanticipated turn  Subunits that are most capable of coping with uncertainty will acquire power  Can protect others from serious problems  Changes in sources of uncertainty lead to shifts in subunit power Centrality  Subunits whose activities are most central to work flow of organization should acquire more power  A subunits activities are central if: o They influence the work of most other subunits o They have an especially crucial impact on quantity or quality of organization’s key product/service o Their impact is more immediate Substitutability  Subunit will have little power if others inside/outside organization can perform same activities  Can acquire substantial power if subunit’s staff is non-substitutable  Staff highly trained in technical areas tend to be less substitutable  If work performed by subunit can be contracted out the power of subunit is reduced Organizational Politics – Using and Abusing Power The Basics of Organizational Politics  Organizational politics: pursuit of self-interest in an organization, whether or not this self-interest responds to organizational goals  Political activity is self-conscious and intentional  Politics can be either an individual activity or a subunit activity  Political activity can have beneficial outcomes for organization (even though outcomes are achieved by questionable tactics)  Means/ends matrix: 1. Sanctioned means/sanctioned ends: Accepted means of influence are used to achieve sanctioned outcomes (power is used to pursue agreed-on goal) 2. Sanctioned means/not-sanctioned ends: acceptable means of influence are abused to pursue goals the organization does not approve of 3. Not-sanctioned means/sanctioned ends: ends useful for organization are pursued through questionable means 4. Not-sanctioned means/not-sanctioned ends: disapproved tactics are used to pursue disapproved outcomes  Research on political activities show: o Most political maneuvering occurs at middle and upper management levels not lower levels o Some issues more likely to stimulate political activity o Some subunits more prone to politicking o Scarce resources, uncertainty and important issues provoke political behavior The Facets of Political-Skill  Political skill: o Ability to understand others at work o Use knowledge to influence others to act in ways that enhance one’s personal or organizational objectives  Four facets to political skill: 1. Social astuteness: o Careful observers who are tuned into others needs/motives o Can read people (emotional intelligence) o Self-monitors who know how to present themselves to others 2. Interpersonal influence: o Convincing and persuasive interpersonal style o Are flexible to needs of situation o Make others feel at ease 3. Apparent sincerity: o Influence attempts will be seen as manipulative if they are not sincere o Good politician will come across as genuine 4. Networking ability: o Networking: establishing good relations with key organizational members/outsiders to accomplish one’s goals o Networks provide channel for favors to be asked and given  Aspects related to networking: o Maintaining contacts (giving out business cards, sending gifts and thank you notes) o Socializing (playing golf, participating in company sports leagues, having drinks after work) o Engaging in professional activities (giving a workshop, accepting a speaking engagement, teaching, publishing) o Participating in community activities (being active in civic groups, clubs and church events) o Increasing internal visibility (accepting high-profile work projects, sitting on important committees and task forces) Machiavellianism – The Harder Side of Politics  Machiavellianism: set of cynical beliefs about human nature, morality and the permissibility of using various tactics to achieve one’s ends  High Machs: o More likely to advocate the use of lying and deceit to achieve goals o Argue that morality can be compromised to fit situation o Assume many people are gullible and do not know what is best o Convincing liars o Can identify situations in which their favoured tactics will work o Skilled at getting their way  Good situations for High Machs: o High Mach can deal face to face with other person o Interaction occurs under emotional circumstances o Situation is unstructured with few guidelines Defensiveness – Reactive Politics  To avoid taking action: 1. Stalling: o Moving slowly when someone asks for cooperation o Take action without actually saying no o With time the demand for cooperation may disappear 2. Over-conforming: o Stick to job description or organizational regulations to avoid action 3. Buck passing o Have someone else take action o Avoid doing it yourself  To avoid blame for consequences of action: 1. Buffing: o Carefully documenting info to show that appropriate course of action was followed o Becomes dysfunctional politics if have to fabricate documents 2. Scapegoating: o Blaming others when things go wrong o Works best when have power behind you (ex. CEO) Ethics in Organizations  Ethics systematic thinking about the moral consequences of decisions  Stakeholders: people inside/outside of an organization who have potential to be affected by organizational decisions The Nature of Ethical Dilemmas  Ethical issues are usually occupationally specific  Seven themes define managers moral standards for decision-making when it comes to making decisions about ethical dilemmas: 1) Honest communication: evaluate subordinates candidly; do not slant proposals to senior managements 2) Fair treatment: pay equitably: do not give preference to suppliers with political connections; do not use lower-level people as scapegoats 3) Special consideration: fair treatment can be modified for special cases (ex. helping out long-time employee, giving preference to hiring the disabled) 4) Fair competition: avoid bribes to obtain business; do not fix prices with competitors 5) Responsibility to organization: act for good of organization as a whole not in self-interest 6) Corporate social responsibility: do not pollute; think about community show concern for employee health 7) Respect for law: do not evade taxes; do not bribe government inspectors Causes of Unethical Behaviour  Gain: o Healthy reinforcement for unethical behavior will promote it o Especially if there are no consequences  Role Conflict: o Role conflict that gets resolved in an unethical way o Bureaucratic role as organizational employee is at odds with role as member of a profession o Ex. pressured as employees to push products that are not in best interests of clients  Competition: o Competition for scarce resources can stimulate unethical behavior o Price fixing and monopoly violations increase with industry decline  Personality: o Certain types of personalities are more prone to unethical decisions o Those with external locus of control, strong economic values or high need for personal power o Some people reject responsibility for own actions  Organizational and Industry Culture: o Differences in ethical values across organizations o Differences across groups within same organization o Peers and superiors can strongly influence ethical behavior Whistle-blowing  Whistle-blowing: disclosure of illegitimate practices to some other person or organization that can take action to correct practices  Whistle can be blown from inside or outside organization  Organizations do not always have specific channels/procedures for whistle- blowers  Organizational members may be too intimidated Sexual Harassment – When Power and Ethics Collide  Form of unethical behavior that stems from abuse of power  Managers may: o Use position, reward or coercive power to request favors o Demonstrate verbal/physical conduct of sexual nature  Person harassing is usually more powerful than the person being harassed  Most vulnerable victims are those who cannot afford to lose jobs  Deaf ear syndrome: inaction or complacency of organizations in the face of charges of sexual harassment  Reasons why organizations fail to respond to sexual harassment cases: 1. Inadequate organizational policies for managing harassment complaints 2. Defensive managerial reactions 3. Organizational features that contribute to inertial tendencies (ex. international companies) CHAPTER THIRTEEN: CONFLICT AND STRESS What Is Conflict?  Interpersonal conflict: process that occurs when one person, group or organizational subunit frustrates the goal attainment of another  Conflicting parties might: o Develop a dislike for each other o See each other as unreasonable o Develop negative stereotypes of opposites Causes of Organizational Conflict Group Identification and Intergroup Bias  People have tendency to develop more positive view of own group and less positive view of groups they are not in  Identifying with successes of one’s own group and dissociating oneself from out-group failure boost self-esteem  People might identify groups/classes based on: o Personal characteristics (ex. race or gender) o Job functions (ex. sales or production) o Job level (ex. manager or non-manager)  Organizations will have to pay special attention to managing relationships between teams Interdependence  Potential for conflict exists when individuals/subunits are mutually dependent on each other to accomplish their own goals  Interdependence can cause conflict because: 1) Necessitates interaction between parties so that they can coordinate interests (no conflict if just have to work alone) 2) Interdependence implies that each party has some power over the other (power can be abused) Differences in Power, Status, and
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