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Chapter 12

MGHD27H3 Chapter Notes - Chapter 12: Taco Bell, Ingratiation, Corporate Social Responsibility

Management (MGH)
Course Code
Joanna Heathcote

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MGTB27 / 01 Week 6
- Enron filed for bankruptcy in December 2001 due to unethical corporate behaviour of using
shady accounting practices to hide losses and making Enron appear as though they were in
excellent financial health
What is Power?
- Power is the capacity to influence others who are in a state of independence
- Power has the capacity meaning that it does not always have to be exercised
- Target of power is dependent on the powerholder does not imply that a poor relationship
exists between the two (e.g. your friend has power to influence your behaviour)
- Power can flow in any direction in an organization but often times, members at higher
organizational levels have more power than those at lower levels
- Power is a broad concept that applies to both individuals (e.g. marketing manager has power
over subordinates) and groups (e.g. marketing department is the most powerful department)
The Bases of Individual Power
- Psychologists John French and Bertram Raven explains that power can be found in the
position (legitimate power) that you occupy in the organization or the resources (reward,
coercive, referent, and expert power) that you are able to command
- If organizational members do not respect your position or value the resources you command,
they will not be dependent on you, and you will lack the power to influence them
Legitimate Power
- Often called authority where the organization assigns people who can formally influence
others (when moving up organizational hierarchy, members posses more legitimate power)
- Organizations differ greatly in the extent to which they emphasize and reinforce legitimate
power (e.g. extreme ± military; downplayed ± university lecturers, professors, deans)
- Legitimate power works because people have been socialized to accept its influence (e.g.
experiences with parents, teachers, and law enforcement officers)
Reward Power
- Reward power is power derived from the ability to provide positive outcomes and prevent
negative outcomes (corresponds to Chapter 2, positive reinforcement)
- Reward power often backs up legitimate power where managers are given the chance to
recommend raises, do performance evaluations, and assign preferred tasks to employees
- Rewards without legitimate power may include: compliments, praise, and flattery
Coercive Power
- Coercive power is power derived from the use of punishment and threat
- Often a support for legitimate power where managers might dock pay, assign unfavourable
tasks, or block promotions
- Lower level organizational members can apply their share of coercion by a work-to-rule
campaign (slows productivity by only doing the minimal work required and nothing more)
- When managers use coercive power, it is generally ineffective and can provoke considerable
employee resistance (from Chapter 2, punishment to control behaviour is problematic)
Referent Power
- Referent power is power derived from being well liked by others
Chapter 12 ± Power, Politics, and Ethics (pg. 390 ± 417)

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MGTB27 / 02 Week 6
- Referent power is especially powerful since it stems from identification with the
powerholder (e.g. charismatic leaders have referent power) and anyone in the organization
may be well liked without regarding their position or authority (e.g. janitor is well liked)
- Friendly interpersonal relations often permit influence to extend across the organization,
outside the usual channels of legitimate authority, reward, and coercion (e.g. a production
manager is friendly with the design engineer so they may ask for a favour in the future)
Expert Power
- Expert power is power derived from having special information or expertise that is valued
in an organization (we tend to be influenced by experts or those who perform their job well)
- Expert power corresponds to difficulty of replacement since they have such high expertise
- Expert power can occur in lower-level organizational members where they have long
experience in dealing with company affairs (e.g. experienced secretaries in organizations)
- Expert power is a valuable asset for managers and of all the powers, expert power is most
associated with employee effectiveness
- Research shows that women managers are more likely to be high in expert power than men
Recap: coercion is likely to produce resistance and lack of cooperation, legitimate power and
How Do People Obtain Power?
- Rosabeth Moss Kanter, an organizational sociologist provides answers on how people get
power. Two of the answers are: doing the right things, and cultivate the right people
Doing the Right Things
- Some activities such as extraordinary, highly visible, and especially relevant to the solution
- Extraordinary Activities
o Excellent performance in unusual or non-routine activities may obtain power
o Activities may include occupying new positions, managing substantial change, and
taking great risks (e.g. establishing a new customer service program)
- Visible Activities
o Extraordinary activities will fail to generate power if no one knows about them
o People with an interest in power will be able to identify activities and publicize them
o E.g. innovative surgeon whose techniques are reported in the New England Journal
of Medicine will enhance his influence in the hospital
- Relevant Activities
o Extraordinary, visible work may fail to generate power if no one cares
o If nobody sees the work as relevant to the solution of important organizational
o E.g. English professor wins Pulitzer Prize may not gain power in a small college that
is financially struggling and hurting for students (does not contribute to solution)
Cultivating the Right People
- Kanter explains that developing informal relationships with the right people can prove a
- Outsiders
to increased power within the organization
o E.g. assistant director of hospital who is friends with the president of the American
Medical Association may find that they hold more power by association

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MGTB27 / 03 Week 6
o Organizational members on the board of directors of other companies may be able to
acquire critical information about business conditions that could be used in their firm
- Subordinates
o Kanter notes that an individual can gain influence is she is closely identified with
o Cultivating subordinate interests can also provide power when a manager can
- Peers
o Good relationships with peers is mainly a means of ensuring that nothing gets in the
ZD\RIRQH¶Vfuture acquisition of power (e.g. they will not stab you in the back)
o People can avoid contact with peers whose reputations is seen as questionable
- Superiors
o Liaisons with key superiors may be the best way of obtaining power
o Such superiors are often called mentors or sponsors since they have special interest
in a promising subordinate
o Mentors can provide power by providing special information & useful introductions
Empowerment ± Putting Power Where It is Needed
- Empowerment is giving people the authority, opportunity, and motivation to take initiative
and solve organizational problems
- Having authority means having legitimate power and having opportunity usually means
freedom from bureaucratic EDUULHUVHJ³6RUU\WKHFRPSXWHUZRQ¶WOHWPHGRWKDW´
- Motivation in empowerment suggest hiring people who will be intrinsically motivated by
power and opportunity and aligning extrinsic rewards with successful performance
- People who are empowered have a strong sense of self-efficacy which is the feeling that
- Empowering lower-level employees can be critical in organizations where providing
customers with a good initial encounter can be essential for repeat business
- When used properly, empowerment puts power where it is needed to make the organization
effective (empowerment may lead to higher job satisfaction and higher performance)
- Customized, personalized service need more empowered personnel (e.g. front desk staff of
hotel) while high volume and low cost service need careful engineering (e.g. Taco Bell)
Influence Tactics ± Putting Power to Work
- Influence tactics are tactics that are used to convert power into actual influence over others
- Specific behaviours that powerholders use to affect others are:
o Assertiveness ± ordering, nagging, setting deadlines, and verbally confronting
o Ingratiation ± using flattery and acting friendly, polite, or humble
o Rationality ± using logic, reason, planning, and compromise [most prized tactic]
o Exchange ± doing favours or offering to trade favours
o Upward appeal ± making formal/informal appeals to organizational superiors
o Coalition formation ± seeking united support from other organizational members
- Your bases of power determines which influence tactic you may use
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