Assignment 2

Organizational Structure

Authority & Power

It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.

Charles Darwin

Purposes of Organizing

President
VP
Operations
VP
Marketing
VP
Finance
Mgr
Purchasing
Mgr
Warehouse
Mgr
Customer Serv.
Mgr
Planning
Mgr
Market Research
Director
Sales
Mgr
Accounting
Sales Mgr
Europe
Sales Mgr
America
Superv
Accounts
Payable
Superv
Accounts Receivables
Functional Organizational Structure

President
VP Consumer Products
VP Small
Business Accounts
VP Major
Business Accounts
Human Resources
Manufacturing
Marketing
Human Resources
Human Resources
Marketing
Manufacturing
Marketing
Manufacturing
Customer/Markets Organizational Structure
Chief Financial
Officer
Accounting
Planning

Project Manager
Product 1 Manager
Design Engineering
Manufacturing
Purchasing
Designer
Designer

Manufacturing
Employee

Purchasing
Employee

Manufacturing
Employee

Purchasing
Employee
Matrix Organizational Structure
Accounting
Accountant
Accountant
Human Resources
HR
Employee
HR
Employee

President
VP Europe
VP North America
VP Latin America
Human Resources
Manufacturing
Marketing
Human Resources
Human Resources
Marketing
Manufacturing
Marketing
Manufacturing
Products/Services/Geographical Organization
Marketing
Marketing
Marketing

Modular or Network Organizational Structure

Core Company

Logistics Company

Design Company

Payroll
Company

Home Office
(Owner and Secretary)
Temporary Telecommuter
Temporary Independent Contractor
Overseas
Programmer
Virtual Organizational Structure
Overseas Web Design Team

Sales
HR
Finance
Holacracy Organizational Structure

General Company Circle

Board Circle

Development Department Circle

Mike
Paul
Mike and Paul are part
of a pool of employees
Goal 1
Goal 2
Based on skills, these employees
are in circles with different goals.
Each circle has subcircles.
Mike is leader of one circle.
Paul is leader of a circle within that.
If Paul removes Mike from the subcircle,
Mike is still his leader in the larger circle.
Communities
Or
Temporary Groups
Holacracy

Benefits & Drawbacks
of Collaborative Work

Structural Options

Mechanistic vs. Organic
Mechanistic organization -an organizational design that’s rigid and tightly controlled
•Organic organization -an organizational design that’s highly adaptive and flexible

Mechanistic Structure = Formal
Rigid relationships
Fixed duties
Many rules
Formalized communication channel
Centralized decision making

Formalized Communication Channels
Centralized Decision Authority
Taller Structures
Emphasis on completing tasks as opposed to achieving company goals

Belief upper management is better capable of making decision

Fixed Duties
Many Rules
Rigid Hierarchical Relationships

Formalization (Mechanistic)
Formalization-the degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures.
–Highly formalized jobs offer little discretion over what is to be done.
–Low formalization means fewer constraints on how employees do their work.

Organic Structure = Informal
Collaboration
Adaptable duties
Few rules
Informal communications
Decentralized authority
Flatter structure

Few Rules
Informal Communication
Decentralized Decision Authority
Flatter Structure
Employee Empowerment

Collaboration
Vertical and Horizontal

Adaptable Duties
Networks

Internal Collaboration
Communities of practice -groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in that area by interacting on an ongoing basis.
Task force
Group
Team
Ad hoc Committee
Group Think

Making Communities
of Practice Work

How does technology affect structure?
Telecommuting -a work arrangement in which employees work at home and are linked to the workplace by computer.
•Compressed workweek-a workweek where employees work longer hours per day but fewer days per week
•Keeping Employees Connected -mobile computing and communication technology have given organizations and employees ways to stay connected and to be more productive
–e-mail, calendars, wireless networks, corporate databases, social media, video conferences and web cams.

Today’s Challenges
Managing Global Structural Issues
–When designing or changing structure, managers may need to think about the cultural implications of certain design elements
–Formalization may be more important in less economically developed countries and less important in more economically developed countries where employees may have higher levels of professional education and skills

Power vs. Authority

Chain of Command = position on the food chain (hierarchical)

Span of Control = span of influence/how many employees report to each manager

Span of Control -the number of employees who can be effectively and efficiently supervised by a manager.
Chain of Command -the continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization—clarifies who reports to whom

Authority
Authority -the rights inherent in a managerial position to tell people what to do and to expect them to do it.
•Acceptance theory of authority -the view that authority comes from the willingness of subordinates to accept it.

Line authority -authority that entitles a manager to direct the work of an employee
•Staff authority -positions with some authority that have been created to support, assist, and advise those holding line authority

Authority vs. Power
Which is which?
-Legitimacy is based on a leader’s position in the organization
-An individual’s capacity to influence decisions

Types of Leadership Power
Power Type Power Description
Coercive Power – Based on Fear
Connection Power – Based on Links with important people
Expert Power – Based on the leader’s skills & knowledge
Information Power – Based on access to information
Legitimate Power – Based on position
Referent Power – Based on personal traits
Reward Power – Based on rewards, pay, promotion, recognition
Adapted from Amacom(2005) Ethical Decision-Making. Retrieved from www.amacombooks.org/leadershipact

Improving Your Power
Identify someone –a boss, coworker, friend, roommate, teammate, parent, sibling, significant other –with whom you would like to improve/increase your power. Determine what tactics might work

How Power-Oriented am I?
Answer professor’s 10 questions with one chosen number response for each.
1 = Disagree a lot
2 = Disagree a little
3 = Neutral
4 = Agree a little
5 = Agree a lot
Machiavellianism

International Journal of Business and Social Science Vol. 4 No. 4; April 2013

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Leadership Styles: The Power to Influence Others

Marcus Goncalves, EdD

Associate Professor of Management

International Business Program Chair

Nichols College

124 Center Rd, Dudley, MA 01571, USA.

Abstract

This paper is an attempt to briefly explain the various techniques of gaining power in an organization, and how

one would use these powers (or not) when managing organizational behavior. Oftentimes, the leadership of a

corporation is in jeopardy when little attention is given to how power is deployed. Moreover, this paper discusses
how the leadership process itself can become a monologue when divorced from the mission of the organization,

its people and the culture it permeates. It suggests that the unsuccessful corporate leader will remain ineffective,

despite advanced degrees, as long as the art and the science of influencing people continue to be taught and
studied in a historic vacuum.

Keywords: leadership, organizational behavior, management power,

Introduction

This research paper has two main objectives: first, it is an attempt to briefly explain the various techniques of

gaining power in an organization, and how one would use these powers (or not) when managing organizational

behavior. Oftentimes, the leadership of a corporation is in jeopardy when little attention is given to how power,
or “the ability to influence subordinates and peers” (Montana & Charnov, 2000, p.255) is used. The leadership

process itself can become a monologue when divorced from the mission of the organization, its people and the

culture it permeates. The unsuccessful corporate leader will remain ineffective, despite advanced degrees, so long

as the art and the science of influencing people continue to be taught in a historic vacuum. That is why recently,
as market demands increase, there has been a push for mastery in management and organizational behavior

degrees at leading universities and colleges in the United States and the world.

The use of power in organizations during the agricultural era (or wave, as Toffler would probably have phrased in

his book The Third Wave) must have been significantly different after the industrial revolution. Not only had the

working environment changed dramatically, but the people, particularly professionals, had changed as well. They
were coping with inexorable transformations as they fled the farms and flocked to the mills and industrial parks.

Hence, under a historic context, what are the main power techniques available today, not for the information age

of the latter part of the last century, but rather for the knowledge economy that characterizes this new century?
What are the most successful forms of power to be adopted?

This paper attempts to address some of these issues, although it is not intended to be exhaustive; it does not

portray the history in all varieties of individual organizational powers within an organizational setting, orproclaim
the best form of power to be adopted in any given organization. It does, however, provide a bit of each, as it

strives to provide an overview of the types of individual powers while suggesting certain forms of powers

necessary to lead what Rolf Jensen (1999, p.15) called “the dream society.”

Leadership Styles: the Power to Influence Others

Leadership within organizations is only attainable through the combination and use of power and authority. As
discussed by John Kotter (1985, p.86) “power is the ability to influence others to get things done, while authority

is the formal rights that come to a person who occupies a particular position, since power does not necessarily

accompany a position.” Problems always arise when power is imposed without the backing of authority, which
almost invariably is opposed.

© Centre for Promoting Ideas, USA www.ijbssnet.com

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While too often we can find powerful people who do not hold genuine positions of authority, we frequently find
people whoare in a position of authority, but are powerless to influence the behavior of others. Leadership can be

learned, and power can be developed, but in order to be an effective leader,one must be able to distinguish from

the various forms of power and select the one most in line with his or herleadership style, character traits and
working environment.

There are seven types of management powers, which can be used separately or in combination. The most

successful leaders are capable of using most, if not all of these, simultaneously. While others less fortunate find
themselves stagnated with limitations they must overcome. It is worth noting that the most common description

of power is French and Raven’s, dated back to 1960, which includes the first five forms of power listed below.

The seven types of management powers are: Legitimate, Expert, Coercive, Reward, Referent, Charisma and
Information.

Legitimate Power refers to the authority of a formal position, and stems from the concept of ownership rights.

Although plethora of leaders believe that their power augments as they are promoted through the ranks, without
personal power, legitimate or position power has its limitations, as their power can become diluted.

Expert Power does not rely on formal positions, as it originates from people who possess technical information, or
specific skills and expertise respected by others. These professionals are typically promoted into managerial

positions because they have performed at an outstanding level in their technical functions. Unless these experts

recognize the need to exercise power and influence over their subordinates and peers, they will never be able to

become the leaders they aspire to be. They may continue to be experts in their field, but they will never gain the
respect they need in order to affect others’ behaviors.

Coercive power tends to be ubiquitous in many organizations, especially the military. It is a negative form of

power aimed at influencing others by instilling fear in them. Coercive power does not encourage or motivate
desired performance, but it does discourage undesired actions. North Korea comes to mind, as an isolated, hungry,

bankrupt and belligerent country, where according to Blaine Harden, in his book Escape From Camp 14 (2012),

between 150,000 and 200,000 people are being held in its political prison camps, which have existed twice as
long as Stalin’s Soviet gulags and twelve times as long as the Nazi concentration camps. Very few born and raised

in these camps have escaped. Although workers in developed countries have little to fear with regard to physical

harm, the reality is much different in Third World countries, particularly, those with closed economies such as

North Korea.

Nonetheless, in the preponderance of organizations today, managers continue to instill fear in their subordinates

by threatening them with “if-then” statements and consequences such as being fired, demoted, having bad
reviews, and so on. Many workers, though they may not admit it, carry some level of fear with them into the

workplace, from fear of reprisals to sabotage of their efforts. This is especially true when managers hold a great

deal of power over them and have the power to withhold benefits, including raises, assignment choices or
rewards. Fortunately, most managers today do not generally use overt fear as a way of getting things done.

Reward power results in workers doing what is asked because they desire positive benefits or rewards. Rewards

can be anything a worker values, including, but not limited to, praise, pecuniary compensation and promotion.

For instance, one of the primary reasons people work is for the remuneration they receive at the end of the payroll
cycle, so they can carry on with their lives. There are countless other forms of rewards, and anything that can be

desired can be a form of reward, from a million dollar airplane to a couple of tickets to a baseball game. Reward

power is, therefore, the ability to give other people what they want while simultaneously asking them to do things
you want. A quid-pro-quo exchange. Interestingly enough, reward power can be used to punish (passive

coercion), when rewards are withheld in response to poor performance.

Referent power is gained by association between the person exercising power and some icon that actually wields
influence and power. For instance, if someone is applying for a job, that person can influence the chances of

being hired by imposing some referent power to the hiring manager, mentioning they know the CEO very well,

and that he has been encouraged to apply for said position because he believes the applicant has the right
credentials. Those with referent power can also use it for coercion. As humans, one of our greatest fears is social

exclusion. All it takes is a derogatory or pejorative word from a social leader for us to be shunned by others in our

community.

International Journal of Business and Social Science Vol. 4 No. 4; April 201

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Charisma power is a way to exert influence over people through force of character, and to get them to do what the
leader wants, thus modifying behavior. In the words of D.A. Benton (2003, p.125) “you know charisma when

you see it in executives who exude self-confidence, style, composure, authority, and a boundless energy that

propels them straight into the corner office.” Benton goes on to say “executive charisma is the ability to gain
effective responses from others by using aware actions and considerate civility in order to get useful things done”

(Ibid, p. 132).

Information power is derived from information knowledge (an asset) a leader possesses to strategically influence

the behavior, attitudes and values in their favor. It is, therefore, based upon the persuasiveness or content of a

communication, and is independent of the influencing individual.

The Right Power for the Right Organization

In an ideal corporate scenario, effective leaders should be virtually idolized by the people they lead, or as

Goncalves suggests in his book, The Knowledge Tornado (2012, p.145) “Chief Executive Officers (CEOs) should
embody the role of Chief Enchanter Officers.” Mark Stevens goes even further by asserting in his book “Extreme

Management: What They Teach at Harvard Business School’s Advanced Management Program,” (2001, p. 2)

that “not for their touchy-feely traits, but as men and women willing to wade into the most troublesome,
perplexing, and sometimes frightening situations at the head of the pack. These are managers willing to take the

heat, accept risks and make difficult decisions under fire.” But what sort of power does this type of leader need in

order to achieve such a high level of performance? The answer cannot be found until one taps into the historical

context of where organizations have been and where they are headed: from agricultural, to industrial, to
information, to knowledge to finally, imagination.

Irrefutably, in order to prosper in the 21
st
century, business organizations must transform themselves. The new

management paradigm, however, should not be a complex one. It should actually be quite simple; one that has

been fueling human beings for over 2,000 years and one that has proven to be effective with all cultures across the

globe, and people of all ages, especially in times of extensive changes and chaos. Leaders will have to tap into
the power of… imagination!

In this new century, successful leaders will have to become storytellers. Not only are we seduced by stories

(that’s why we like books, movies and theater), but we must invariably place stories above price and quality. We

often justify a lack of or excess of those attributes with stories. We always have a story for why we must pay the
high cost for a Starbucks coffee, or for a high-priced Apple computer, for a higher cost FedEx shipment or

skyrocketing tuitions at colleges and universities. Yet, all the organizations listed above have leaders that knew

how to tell their story, not only to their peers and subordinates, but also to the public, thereby becoming somewhat
of a celebrity in the process.

Therefore, it is my belief that today’s leaders must possess the power of storytelling. I’m not about to advocate an

eighth type of power (actually, why not?), but to convey, at least for the time being, that the power of charisma,
along with the power of information should be the predominant types of power leaders should master. No longer

do legitimate and coercive powers hold the edge. On the contrary, in a business world full of deceit and greed,

unless leaders have a good story to tell, no one will be willing to follow. In the end, how do you know if you are

a leader? Not by any of the power traits discussed here, but by simply looking back and finding out if there is
anyone following you. If so, then you are a leader. If not, then you might want to go back to read Dr. Seuss all

over again to learn the art and science of telling your story.

References

Benton, D.A. (2003). Executive Charisma, New York City, NY: McGraw-Hill,

Goncalves, M. (2012). The Knowledge Tornado, 2
nd

Ed, New York City, NY: ASME Press.

Harden, Blaine (2012). Escape from Camp 14: One Man’s Remarkable Odyssey from North Korea to Freedom in the

West, New York City, NY: Viking Adult.

Kotter, J. (1985). Power and Influence, New York City, NY: Free Press.

Montana, P. and Charnov, B. (2008). Management, New York City, NY: Barron’s Educational Series.

Rolf, J. (1999). The Dream Society, New York City, NY: McGraw-Hill.

Stevens, M. (2001). Extreme Management: What They Teach at Harvard Business School’s Advanced Management

Program, New York City, NY: Warner Business Books.

Select 3 well known leaders they feel is powerful. The leaders can be real, fictional, historical, present, famous, or otherwise.

To complete the activity, compare and contrast the 3 leaders for their power type. See the module slide show that includes the 7 well known power types. Identify which power type is exhibited by each of your selected leaders. Compare and contrast how each leader uses their power effectively.

Web link (Links to an external site.)

 to explanation of Power Types 

Infographic (Links to an external site.)

 of Power Types