Power in Business

Does a senior management team command the power to reject the collective intelligence of the organisation below it? The answer may lie equally in the beliefs of the employees as in the practices of the management team.

Metcalf and Urwick talk of the reaction to power as a “natural urge” to regain an equilibrium that has been disturbed by a favour bestowed on the encumbered. This reaction in essence validates the power relationship and as Stacey put it, a gesture is not a valid gesture without a response.

Many management teams provide leadership thus giving legitimacy and goals to the organisation and in return the employees do their beckoning without resistance. Salancik and Pfeffer propose that power go to those who can cope with the company’s most critical problems and uncertainties. The power can shift but it will always go to those who are topically providing solutions to the current problems. They claim that this shift of power is what aligns the organisation to its environmental realities as the people who cope with the external threats / problems are the ones who get the power. Power however, is derived from being able to perform activities that others can’t do but need done.

PowerInBusinessBy this definition, many companies have a major power base in the top management structure. Various board members know everyone in the industry and can get valuable contracts and finance far easier than anyone else in the organisation. Some directors are still the only individuals who know every machine and its problems and they can always find replacements if the workload demands it. A newly acquired subsidiary management team has power in that they understand the new technologies that they bring to the table.

This is why there is a continuous power struggle within organisations. The senior management team is trying to hold onto power that they obtained when they provided solutions to the organisation’s problems at an earlier time. As these problems have shifted, the team has not been able to continuously provide solutions so their power base is being eroded.

To counter this erosion, the focus has been re-directed to the areas where the team does have solutions and can therefore hang onto their power-base. The gratitude of the employees towards the management team, for leading them to this point, re-enforces the management’s power and subsequent control of the situation at hand.

The diagram above shows how this cycle of power-use reinforces itself by validation from the organisation.