Sources of Power

November 4, 2014

powerNo sooner had we published WP1095  Power and Authority than one of our regular correspondent pointed out we had missed the concept of ‘structural power’.  Whilst originally seen as being relevant to the discussion of power differences between sovereign nations, the concepts also apply to organisations where the characteristics of a situation can affect or determine power. Important structural sources of power include knowledge, resources, decision making and networks.

Knowledge as Power: Organisations are information processors that must use knowledge to produce goods and services. Intellectual capital represents the knowledge, know-how, and competency that exist in the organisation which can provide an organisation with a competitive edge in the marketplace. Within an organisation, the concept of knowledge as power means that individuals, teams, groups, or departments that possess knowledge that is crucial in attaining the organisation’s goals have power, but only if they use the power to advance the interested of their organisation – hording knowledge to the detriment of the organisation is destructive and self defeating. Outside the organisation, the situation is reversed; protecting the organisations intellectual property is vital to maintaining its competitive power in the market.

Control of Resources as Power: Organisations need a variety of resources, including money, human resources, equipment, materials, and customers to survive. The importance of specific resources to an organisation’s success and the difficulty in obtaining them vary from situation to situation. The departments, groups, or individuals who can provide essential or difficult-to-obtain resources acquire more power in the organisation than others, as do external suppliers in a market where the particular resource is scarce.

Decision making as Power: The decision making process in an organisation creates more or less power differences among individuals or groups. Managers exercise considerable power in an organisation simply because of their decision making ability. Although decision making is an important aspect of power in every organisation, cultural differences make for some interesting differences in the relationship.

Networks as Power: The existence of structural and situational power depends not only on access to information, resources and decision making, but also on the ability to get cooperation in carrying out tasks. Managers and individuals that have connecting links with other individuals and managers in the organisation and beyond will be more powerful than those who don’t. The power generated by social media networks is a phenomena that is still emerging and is not well understood.

An additional ‘power source’ is ‘peer pressure’ – the power held by a group over its individual members.

The White Paper has been updated to include these concepts and can be downloaded from: WP1095  Power and Authority

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The powerful illusion of control

March 28, 2010

There have been a series of posts on the Mosaicproject blog discussing the illusion of control and the limitations of statistical analysis for predicting or controlling the future. The key posts are:

Another dimension to the illusion of control, identified in a study by Nathanael Fast and Deborah Gruenfeld at Stanford Graduate School of Business, Niro Sivanathan at the London Business School and Adam Galinsky at the Kellogg School of Management at Northwestern University, show that power can literally ‘go to one’s head’, causing individuals who have power to think they have more personal control over outcomes than they, in fact, do. Across three experiments, using two different instantiations of power, the researchers found that power led to perceived control over outcomes that were either uncontrollable or unrelated to the power.

Galinksy reported, “In each experiment, whether the participant recalled power by an experience of holding power or it was manipulated by randomly assigning participants to Manager-Subordinate roles, it led to perceived control over outcomes that were beyond the reach of the individual. Furthermore, the notion of being able to control a ‘chance’ result led to unrealistic optimism and inflated self-esteem.”

The authors note that positive illusions can be adaptive, helping power holders make the seemingly impossible possible. But the relationship between power and illusory control might also contribute directly to losses in power, by causing leaders to make poor choices. They conclude that “the illusion of personal control might be one of the ways in which power often leads to its own demise.”

These results, reported in Psychological Science, a journal of the Association for Psychological Science, have implications for how power, once attained, is maintained or lost. From an organisational perspective, the ability of knowledgeable technical managers to effectively advise upwards is a powerful counterbalance to unreasonable hubris [for more on the report see: Power And The Illusion Of Control].

My next book, Advising Upwards: A Framework for Understanding and Engaging Senior Management Stakeholders seeks to define the skills and knowledge needed to make sure important information is passed up the chain to senior managers.