Power and Control

downtownbeeMechanics

Nov 18, 2013 (3 years and 10 months ago)

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Chapter 9:

Power and Control

By
Muhammet Said
Dinç

Contents


Discuss the arguments in support of
strategic choice
for
managers


Distinguish between
power

and
authority


Describe how an
individual

and
group

gains power


Define
politics



Explain the
power
-
control model

of how
structures

emerge


Describe the
power
-
control interpretation
of
technology
and

environment’s role
in structure


Explain the
power
-
control view
of structural change


Examine how
power
and

politics
interact

within
organizations


Discuss at what levels in the organization the
five
contingencies

are likely to have their strongest influence.



Power
-

Control View


In the previous chapters,
strategy, size
,
technology
and

environment

were
explained as
independent determinants
of
structure.


While each of these
contingency variables
could explain
some

of the variations to be
found in organizational structures, none
could explain
all

of the variations identified.


Four factors explain only 50
-
60% of the
variability in structure.

Power
-

Control View (cont.)


Power and control may contribute to
explaining variations in structure which can
not be explained by
other means
.


The
power
-
control view
states that an
organizations’ structure at any given time
reflects

the
interests

of
those

in
power

who
select a structure that will, to the maximum
degree possible, maintain and enhance their
influence and
control

and permit them to
implement their policies.

Power
-

Control View (cont.)


Effective management is not powerless;
power

is necessary in order
to move
the
organization towards
its goals
.


But
misuse

of power can lead to
dysfunctional

consequences.

Strategic Choice and the early
challenge to contingency


John Child
realized that the
contingencies

did not
explain
all

the
variance

that was found in
organizations.


Child’s
strategic choice
argument is
that while there are limitations on
managers’
discretion

to make
decisions, there is still scope for them
to make choices favorable to
themselves.





Strategic Choice and the early
challenge to contingency (cont.)


The contingencies do not compel managers to
implement certain structures. Rather they
limit

the
choices

that managers have.


Child’s argument can be condensed into
four basic
points:

1.
Decision makers
have more
autonomy

than that
implied by those arguing for the dominance of
environmental, technological or other forces.


We would not expect organizations facing
similar

environments

or using the
same technology
to be
structured identically. The structures of Ford, Toyota,
General Motors and Renault, Citroen.


Strategic Choice and the early
challenge to contingency (cont.)


2. Organizational
effectiveness

should be
construed as a
range

instead of a point.


Managers make choices that meet a
generalized

criterion of effectiveness.


Decision makers may be content with varying levels
of organizational effectiveness, so long as they all
meet
minimum satisfactory level
.


The range between
maximizing

and
acceptable

creates an area in which managers can use their
discretion.

Strategic Choice and the early
challenge to contingency (cont.)

3. Organizations often have power to
manipulate

and control their environments.


Organizations are not always powerless in the face of
their environments.


Managers

of large companies are able to create
demand for their products and
control

their
competitive environments.

4.
Perceptions

and
evaluations of events
are an
important
intervening

link between
environments and the actions of organizations.


People do not always
perceive

environmental
characteristics the
same way
. Threat
-

opportunity




Strategic Choice and the early
challenge to contingency (cont.)


The ability and authority to define the threats facing an
organization provides a strong power base.


Although there are
constraints
which limit
management decision making,
strategic choice
reaffirms that organizational
decision makers
have
a degree of
discretionary

latitude in choosing
their strategies and market domains.


The Role of Rational Choice in
Organizations


The contingency perspective
-

which states
that
structure

will change to reflect changes
in strategy, size, technology and
environment
-

is based on a number of
assumptions

about organizational decision
making.


(1)Decision making process assumes that


there is agreement between decision makers as to the
nature

of the problem,


a comprehensive search for
alternative

solutions has
been made,

The Role of Rational Choice in
Organizations (cont.)


the most
appropriate

solution has been arrived at,


decisions are capable of
implementation

without
modification or resistance.


(2) Decision makers are rational with a
commitment to
rationality

which is belief that
decisions are
goal
-
directed

and
consistent
.


(3) Decisions regarding
structure

are made by
those

charged with the responsibility for making
decisions. Generally, coalition of top
management.





The Role of Rational Choice in
Organizations (cont.)


(4) Decision makers always act in the best
interests

of the organization.


Self
-
interests are ignored by decision makers for the
good of the organization.


Power
-

control supporters offer another
set of
assumptions

about organizational
decision making. They propose that
processes are characterized by

1. Non
-
rationality 3. Dominant coalitions

2. Divergent interests 4. Power


Non
-
rationality


Decision makers are human beings and thus have
human frailties and
limitations
.


Their choice of goals depends on their
perception

of
circumstances


They do not always
pursue

systematically the goals they
hold


They make choices with
incomplete

information


They seldom conduct an exhaustive search for
alternatives


They often preconceived ideas as to the nature of
problems and the decisions to be made

Non
-
rationality
(cont.)


Defining
nature

and cause of problems facing an
organization may be difficult as they are often
embedded within complex environments and
organizational processes.


Decision makers reduce options to a few decision
criteria

which they consider to be important.


Their choice of criteria and selection of
alternatives

will reflect their self interests, their
ideologies, belief systems vs.


It will also reflect the realities of what is capable of
being implemented.

Non
-
rationality
(cont.)


So, decision makers’ selection of best solution is
not
optimum

choice but one that meets minimum
criteria.


Non rationality
is a process of decision making
that
does not
follow

the principles of
logical

deduction

and decision optimization.

Divergent Interests


The realities of organizational decision making tell
us that decision makers often have
their own
agendas
and interests which they pursue when
making decisions.


Interests of decision maker and interests of
organization
rarely

entirely
coincides
.


“Rational decision making assumes that decision
makers focus exclusively on the
interests of the
organization
. “


Figure 9.1 depicts reality.

Divergent Interests (cont.)

Divergent Interests (cont.)


Modern management techniques aim to
merge
the interests of the decision maker and those of
the organization, thus
reducing

the influence of
the manager’s self interest.


This may be achieved in a number of ways.


Reward systems are often aimed at inducing decisions
which benefit the organization. Rewarding sales staff and
top management.


Dominant Coalitions


The individuals who make up the
organization coalesce into groups with
similar interests or values.


These are called coalitions and they flourish
largely because of the differences of opinion
surrounding goals, strategy, organizational
effectiveness.


The most visible coalitions form along
departmental lines.

Dominant Coalitions (cont.)


In functional units, employees in the marketing department,
members of accounting, finance and supply chain
management have their coalitions.


Plant and middle managers, top management and board of
directors will have their coalitions.


Although coalitions may form around any number of
issues, the
dominant coalition
is the one that has
power to affect structure.


In small company, the dominant coalition and owner are
typically one and same.


In large organizations, top management usually dominates.


Any coalition that can control the resources can become
dominant.

Power and Authority


Authority

is the
right to act
, or
command

others to
act, towards the attainment of organizational goals.


This right derives its
legitimacy

from authority figure’s
position

in the organization. That is, authority goes
with the job.


Power

is an individual’s capacity
to influence
decisions.


As such, authority contributes to an individual’s
power; that is, the ability to influence, based on
individual’s legitimate position, can affect decisions, but
one
does not
require
authority

to have such
influence
.

Power and Authority (cont.)

Power and Authority (cont.)


Figure 9.2A indicates that there are
levels

in an
organization and that the right to contribute to
decision making
increases

as one moves up the
hierarchy.



Think the
cone

in figure 9.2B as an organization.


The centre of the cone will be called the
power core
.


The closer one is to the power core, the more influence
one has to affect decisions.


Functional groupings in A become wedges in the cone.
This is seen in figure 9.3 which is shown from above.


Each wedge of the cone represents a functional area.

Power and Authority (cont.)

Power and Authority (cont.)


The cone analogy allows us to consider the following
two facts
:

1. The
higher

one moves in an organization (an increase in
authority), the
closer

one automatically moves towards the
power core.

2. It is
not necessary
to have authority to wield power, because
one can move horizontally inward towards the power
core without moving up the hierarchy.



Members of centrally placed unions, who have
little
authority
in the organization, are often
very powerful
because of their ability to
stop

production. Secretaries
and high place managers.


Contingencies and the nature of
the organization



A further problem for contingency
theory is that organizations are open
systems, which engage in interactions
with their environment.


Environmental influences
may act as
major limitations on decision making,
as well as being a
source

of ideas and
opportunity.

Contingencies and the nature of
the organization (cont.)


Influence

of existing organizational
structures in
management thinking
:


Legacy

systems are the existing systems, rules,
procedures, roles, responsibilities and ways of
doing things that are accepted practice within
an organization.


Organizational structures often reflect
past

practices rather than current needs.


The existence of legacy systems leads to
large

organizations being
slow

to
react

to change.


Contingencies and the nature of
the organization (cont.)


Influence

of
institutional

pressures in
management thinking
:


A further example of institutional forces is the
need to obtain quality endorsement (e.g. ISO
9000) with its resultant influence on
organizational practices.


Influence

of
management fashion
and

fads

in
management thinking
:


Many of these books are persuasively written,
often by consultants seeking to promote their
own businesses.



Contingencies and the nature of
the organization (cont.)


Jack Welch's approach to running General
Electric, a large conglomerate based in the
United States, has had a major influence on
approaches to strategy.


The above examples highlight the
influence

of
social trends
on management.


If managers felt confident that their
organizations were effective, perhaps they
would be
more resistant
to
fashions

in
management thought
.



The roads to power



How does an
individual

or
group

gain power?


This section will consider the way in which
power derives from the structure of the
organization.


Those individuals or departments performing
the more critical tasks, or who are able to
convince

others within the organization that
their tasks are
more critical
, will have a natural
advantage

in the power
-
acquisition game.

The roads to power (cont.)


There are
three roads
to the
acquisition of power:


Hierarchical authority


Control of resources


Network centrality

Hierarchical Authority


Formal authority
is a source of power.


Individuals in managerial positions can
influence through
formal decree
.


Subordinates accept this influence as a right
inherent

in the manager's position.


But, many managers find their formal influence
over people or decisions extremely
limited

because of their
dependence
on

others
within
the organization.


The power of a supervisor is obviously
less

than that of
a general manager.

Hierarchical Authority (cont.)


Those with hierarchical authority have
diminished

in number over the past
20

years as hierarchies have
flattened
.


There are
fewer

managers in most organizations


There has been a trend to
devolve

greater
decision
-
making responsibility to
those

actually
undertaking the tasks.


But, in spite of these limitations, those
higher in the hierarchy have
greater power
than those lower down.


Control of Resources


If you have something that others want, it
gives you potential power over them.


But the mere control of a resource is no
guarantee that it will enhance your power.


The resource must be both scarce and
important to the organization.


In most organizations, cleaners have little power.
Why?


Airline pilots

Control of Resources (cont.)


A resource for which there is no close
substitute

has greater scarcity than one that
has high substitutability.


Skills provide an example:
Design engineers
at
aerospace firms provide a powerful coalition
because it would be virtually impossible to
replace their skills in the short term.


Media owners
see radio and television
personalities as scarce and critical resources
responsible for generating high earnings for
which there is no close substitute.

Network Centrality


Positions within the organization whose
main function is to coordinate information
flows and the work of others may be a
source of power.


Those individuals or groups in a position of
network centrality
gain power because
their position allows them to integrate
other functions or to reduce organizational
inefficiencies or uncertainties.

Network Centrality (cont.)


It also provides them with privileged access
to wide sources of information which may
be used selectively to influence decisions.


In consumer products companies,
brand
managers
and in other industries,
project
managers

and
coordinators


Structural Decision Making as A
Political Process


Structural decisions
are often
the result
of
political

activity.


Organizational politics involves
activities

to
acquire, develop and use
power

and other
resources to obtain a preferred
outcome

when there is uncertainty or disagreement
about choices.



Role of
dominant coalitions
gives us some
indication of the role of politics in organizations.


Structural Decision Making as A
Political Process (cont.)


Not everyone
in the organization is involved in
political activity
at any one time, although it is
likely that everyone has engaged in it at
some
time in their career.


Surveys show that the
higher

a person is in
management, the
more

likely he/she is to use
politics

as part of their job.


Those
lower

in the organization can face a
more constrained set of options, which can be
guided by established procedures and
practices.


Structural Decision Making as A
Political Process (cont.)


Five

areas can be identified in which structure
creates
political arenas
in organizations:


Position in the hierarchy
:
Status
, and therefore
influence, is closely attached to the position of a
department head in the organization's hierarchy.
Finance department head’s answer.


Resource allocation:

Resources are allocated to
departments or divisions as part of a
budget
. The
better
funded

the department, the
more status
it
has and the more likely it is to influence decisions.

Structural Decision Making as A
Political Process (cont.)


Interdepartmental coordination:
Relationships
between departments are part of organizational
life.


At the
lower level
, these relationships are
often
routine

and characterized by established
rules and practices. Further up the management
hier
archy, relationships between departments
are less well defined:
conflict



Responsibility exceeding authority
:
A principle of
sound management is that
authority

should
always equal
responsibility
. Senior managers are
far more likely to delegate responsibility but
withhold the authority.

Structural Decision Making as A
Political Process (cont.)


Structural change
:
All
structural
change leads to
managers and departments
redefining

their
authority and power relationships. This
inevitably creates those who gain and those
who lose.

Structural Decision Making as A
Political Process (cont.)


The following describe the way that
political
tactics

are used:


Building coalitions:
Coalition building relies on
developing and maintaining mutually strong
relationships with other people. These may be
based on
liking
,
trust

and
respect

and shared
interest and desired outcomes.


Defining the nature of the problem:
All decisions
are aimed at solving problems.

But in many
cases
identifying
the problem is not easy.


Structural Decision Making as A
Political Process (cont.)


Enhancing legitimacy and expertise:
A manager's
or department's power is greatly
enhanced

when they do their job well and when they have
a good reputation for task
knowledge

and
achievement
.


Making preferences explicit, but keeping power
implicit:
Politics requires that preferences be
known

to others. The best political players are
those who have the courage to reveal their
preferred outcome, then try to
convince

others
that their point of view is correct.

Structural Decision Making as A
Political Process (cont.)


Expanding networks of influence:
Politics involves
trying to boost the number of people who
support

you and
minimize

the number against
you. Alliances can be built or expanded by such
means as


hiring,


transfers


promo
tions


relationship building.

The Power
-
Control Model

Implications Based on the
Power
-
Control View


The power
-
control perspective into
implications for the
structuring

of
organizations.


Technology and environment


Power
-
control advocates argue that an
organization's structure, at any given time, will be
one that allows
those

in power to maintain the
control they have.


In terms of technology and environment, therefore,
the
dominant coalition
can be expected to seek
routine

technologies and operate in environments
which present
little

uncertainty

to the organization.

Implications Based on the
Power
-
Control View (cont.)


So through choosing a
stable

environmental
domain and
routine
technologies, top
management can keep a fairly tight hold on
power.


Stability and mechanistic structures


The argument made by power
-
control
advocates is that when
change

occurs, it is in
effect a mini
-
revolution.


They further suggest that it is likely to occur
only as a result of a political
struggle

in which
new power relationships evolve.

Implications Based on the
Power
-
Control View (cont.)


The
power
-
control view of structure
predicts that not
only will structures be relatively stable over time
but
mechanistic

structures will be the most
numerous.


If stability, routine technology and centralized
control are sought, it seems logical that mechanistic
structures will
dominate
.

Implications Based on the
Power
-
Control View (cont.)


Complexity


Increased differentiation

horizontally, vertically
or spatially

leads

to difficulties in coordination
and control.


Management would prefer, therefore, all other
things being equal, to have
low complexity
.


It has been noted that
information technology
can permit the development of more elaborate
and complex structures without necessarily
forsaking management's control.

Implications Based on the
Power
-
Control View (cont.)


Formalization


Those in power will influence the extent of
rules and regulations controlling employees
work.


Because control is a desired end for those in
power, organizations will have a
high degree
of
formalization.


Centralization


Centralization is preferred when mistakes are
very
costly,

when temporary external threats to
the organization exist.




The Contingencies and Their
levels of Influence

The Contingencies and Their
levels of Influence (cont.)


The influence of
size

is
multidimensional
.


It affects the way in which organizations are
structured and managed at
all levels
of the
organization.


The influence of
strategy

is mostly felt at
the
top

and the
middle

of the organization.


Technology
, was found to have its greatest
impact at the
individual

and
work
-
group

level.



The Contingencies and Their
levels of Influence (cont.)


Environment

would have its greatest
structural impact upon those in the
middle

of the organization's hierarchy.


This is because middle managers bear the
greater part of the task of adjusting to
environmental change.


Power

will have its greatest structural
impact at the
top

of the organization.