(1) There are eight major sources of power: legitimate, reward, coercive, expert, referent, charisma, information, and affiliative.
(2) Legitimate Power. Legitimate power comes from a person's formal position in an organization and the authority that accompanies that position. The contractual relationship between employees and managers, for example, grants managers legitimate power to influence certain kinds of behaviour. However, this kind of power may be limited by the formal contract - for example, when an employee refuses to do anything more than what the specific job description dictates. Thus, using a "do it because I'm the boss" approach may limit a manager's capacity to lead.
(3) Reward Power. Reward power stems from a person's ability to bestow rewards. This, too, is an organizationally based source of power because companies generally grant managers the right to assign formal rewards, such as bonuses, days off, and promotions. Managers can also use social rewards, such as praise and recognition. Effective leaders learn that the creative use of informal rewards together with formal ones enhances their ability to lead. For example, at Buckman Laboratories, an international chemical producer, managers have a formal financial bonus system they can use to reward good performance. They also have small boards in each department where employees can post a note of thanks or recognition for the help they received or the good job someone did.
(4) Coercive Power. Coercive power, another organizationally based source of power, is derived from a leader's control over punishments or the capacity to deny rewards. Leaders who demote, berate, withhold an expected pay increase, or threaten someone with a poor job assignment are using coercive power. Physical coercion was common in many businesses prior to the 20th century, while psychological and emotional coercion are more commonly used forms of negative influence today. Linda Wachner, CEO of clothing manufacturer Warnaco and one of Fortune magazine's toughest bosses, once called a group of executives "eunuchs" in a business meeting, and told the new company president he had to fire some people "so they'll understand you're serious. Although regulations and laws limit a leader's ability to use coercive power, it is still all too common in many business settings. However, the use of punishment to gain compliance has the negative side effect of creating hostility and resentment toward the punisher and possibly reduced dedication to an organization. While some still cling to the model of the hard-nosed executive boss, many CEOs see the use of coercion diminishing in favour of more positive sources of power.
(5) Expert Power. Expert power is derived from a person's special knowledge or expertise in a particular area. The mechanic fixing a piece of equipment would probably have more expert power in that technical area than would a CEO. Professors and researchers rely mostly on expert power. Managers who wish also to be leaders learn to develop and use this personal source of power more than the formal sources.
(6) Referent Power. Referent power results when one person identifies with and admires another. Referent power cannot be granted by organizations; it is a personal source of power you develop on your own. Through friendly communication, sharing of information, and mutual rewarding, close interpersonal relations and even friendships develop. In such relationships, the employee may want to please the manager or some other person simply because it gives both of them pleasure or satisfaction. We do things for our friends, simply because we like them, that we won't do for others.
(7) Charisma. People with charisma, another personal source of power, seem to inspire admiration, respect, loyalty, and a desire to emulate, based on some intangible set of personality traits. Charismatic leaders are often distinguished by two characteristics: They are usually excellent communicators, and they make people feel more secure and more powerful in themselves. Like referent power, charisma cannot be granted by an organization.
(8) Information Power. Information power requires having access to important information that is not common knowledge, or having the ability to control the flow of information to and from others. The information may come from formal organizational sources or informal reciprocal relationships. People at all levels of an organization can have this source of power; indeed, it is not uncommon for a CEO's secretary to be one of the most influential and powerful employees in the company. Information power may be organizational or personal.
(9) Affiliative Power. Afflliative power comes due to a person's association with someone else who has some source of power. It is "borrowed" from that person and works only when those being influenced are aware of the association and recognize the power of the person from whom the power is being "borrowed."
1. Arrange the statements in the order they appear in the text (paragraphs 2 Ė 9).
a) Personal power that results when one person identifies with and admires another.
b) An organizationally based source of power derived from a leaderís control over punishments or the capacity to deny rewards.
c) Power that is a result of having access to important information that is not common knowledge, or of having the ability to control the flow of information to and from others.
d) Power that is a result of a personís association with someone else who has some source of power.
e) The influence that comes from a personís formal position in an organization and the authority that accompanies that position.
f) The ability to inspire admiration, respect, loyalty, and a desire to emulate, based on some intangible set of personality traits.
g) Power or influence derived from a personís special knowledge or expertise in a particular area.
h) Organizational power that stems from a personís ability to bestow rewards.
3. Are these statements true or false? Correct the false ones.
a) The official contract between employees and managers may restrict managersí legitimate power.
b) Using a "do it because I'm the boss" approach may broaden a manager's capacity to lead.
c) Managers cannot use social rewards.
d) The creative use of informal rewards together with formal ones improves leadersí ability to lead.
e) Leaders who promote, praise, or give an expected pay increase are using coercive power.
f) Psychological and emotional coercion is rarely used today.
g) Because regulations and laws restrict a leader's ability to employ coercive power, it is unusual in most business settings.
h) The use of punishment may create antagonism and anger toward the punisher and reduce commitment to an organization.
i) Managers who wish to be lead≠ers learn to develop and employ expert power.
j) By means of friendly interpersonal relations, the employee may want to please the manager or some other person.
k) Charismatic leaders are rarely good communicators, but they make people feel more secure and more powerful in themselves.
l) It is not usual for a CEO's secretary to be one of the most influential and powerful employees in the company.
m) Afflliative power works only when a person is aware of the association with someone else who has some source of power and recognizes the power of that person.
4. Answer the questions.
a) What does legitimate power come from?
b) Can an employee refuse to do what a manager orders?
c) Why is reward power considered an organizationally based source of power?
d) What formal rewards can managers assign?
e) What kind of formal reward is used at Buckman Laboratories?
f) What is coercive power derived from?
g) How do managers use coercive power?
h) Is physical coercion widespread now?
i) What example does the text give to illustrate coercive power?
j) Is the use of coercion on the increase now?
k) What does expert power come from?
l) Can you exemplify expert power?
m) When does referent power arise?
n) Why may the employee want to please the manager or some other person?
o) Is charisma an organizationally based source of power? Why?
p) What are two main features of a charismatic leader?
q) What characteristics does a person with information power have?