Power, Leadership, and Organizational Behavior: Key Concepts

Power and Influence in Organizations

Power and influence are two critical aspects of the ways that people in organizations interrelate. Power is relatively simple — it is about how you get what you want. Influence is trickier; it is best understood as the reaction to power.

Issues relating to obedience are central to this discussion. The acceptance of authority is a key concern, and it has been proposed that there are four conditions that must be met in order for authority to be accepted. The text then considers what reactions to orders look like — the different levels at which obedience manifests in the organization. There is a zone of indifference, which refers to those instructions carried out without any critical evaluation on the part of the person doing the job. Sometimes, however, an employee may feel they are getting poor value from their relationship with the organization and may resist certain instructions.

There are many sources of power and influence within organizations. Legitimate power comes from formal authority. Reward power comes from one's ability to reward people for their efforts, and coercive power derives from the ability to punish people for non-compliance. Process power exists when a person has control over the resources and processes of the organization. Sometimes this aligns closely with formal power, but not always — process power and formal power are often separated on job sites where tradespeople hold the process power and the foreman holds the formal authority. In offices, there is usually a closer alignment between these two forms.

Information power is related — the more information one has, the more power one holds. Expert power is similar; people viewed as experts are typically ascribed power even when they have little formal authority. Consider the long-serving veteran employee who may hold a low-ranked post but whom colleagues turn to with questions because that person knows everything about the company. Referent power and coalition power relate to one's ability to leverage interpersonal relationships for influence.

Understanding the different sources of power enables individuals to realize the maximum extent of their power in an organization, rather than simply relying on formal authority. Knowledge of the various ways one can acquire power is politically important, because it helps build the power needed to accomplish one's goals. This is political savvy — knowing how to build power and then utilize it effectively in dealings with others. Influence capacity is the degree of influence one could potentially have; how that potential is used is a matter of choice.

Managers play a key role in organizations. They hold formal power — and often other forms as well — but they can also help others acquire power through the process of empowerment. Empowering people means giving them the power they need to do their jobs and make their own decisions. Since there are many sources of power, including expert and informational, empowerment does not refer only to granting formal authority; it can also mean giving people knowledge and confidence. There are limits to empowerment, however. Empowerment changes the power structure within the organization; power is not necessarily a zero-sum game, but neither is it infinite.

There are two traditions of organizational politics. The first views politics as the management of influence to serve self-interest. The second looks at politics as leveraging the self-interest of individuals within the organization, usually for the organization's broader benefit. In practice, power within organizations tends to be split between formal and informal structures. Under the self-interested view, people use a variety of political tactics to avoid problems, redirect responsibility, and defend turf.

Finally, governance deserves attention. Managers may have self-interests, but they are ultimately supposed to act as agents for shareholders, in the shareholders' interests. Conflicts between these interests arise regularly. At the organizational level, much of how power is structured is determined at the top levels of the hierarchy.

Leadership Theory and Styles

An important distinction must be drawn between management and leadership. Leadership is primarily about influencing individuals; management is more about allocating resources. They are related and work together, but they are not the same thing.

Leadership theory has evolved considerably over several decades. Earlier views held that leadership was based on traits — if you possessed the right traits, you would likely be a good leader. Trait theory then evolved into behavioral theory, which held that it was not the traits themselves that mattered but how those traits manifested in behavior. Many other theories have since been proposed.

One prominent model is the situational-contingency approach, which argues that leaders adapt their style to different situations. For one problem, a leader might be more autocratic; for another, more supportive. Some leaders, however, are fairly rigid in their style — often to their detriment. A particular type of contingency leadership is path-goal theory, in which the leader adjusts the path depending on the nature of the goal. Styles within this framework include directional, supportive, participative, and achievement-oriented. Hersey and Blanchard developed their situational leadership model to describe the conditions under which each of these styles is optimal.

A category of leadership study known as follower-centric approaches seeks to understand leaders through the lens of the people being led, rather than focusing solely on the leaders themselves. Implicit leadership theories focus on different cognitive categories of leadership and different patterns of follower response. Some followers are passive — largely deferential and waiting for leadership direction. Others are more proactive and respond better to leaders who provide direction and support without being heavy-handed.

Charismatic leadership has also received significant attention, as personal charisma appears to be an important element of leadership because it engages followers. Related to this are the concepts of transactional and transformational leadership. The transactional leader is oriented toward routine performance. While sometimes undervalued, many of the world's best companies reached their position through routine excellence. Transformational leadership attracts more attention — this type of leader can change the vision or culture of a company, transforming it into something new. Transformational leadership is most valuable when a company is struggling, operating in a changing industry, or otherwise has a compelling reason to reinvent itself; charisma and inspiration play a large role.

Finally, leader-member exchange (LMX) theory posits that leaders develop different relationships with different subordinates. Some of these are high-quality relationships and others are not, and this disparity affects the leader's influence. Evidence shows that work outcomes differ — and are worse — in low-quality leader-member relationships.