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StuDocu is not sponsored or endorsed by any college or university Chapter 13 - Conflict, Power, and Politics Organizational Behaviour and Analysis (University of Victoria) StuDocu is not sponsored or endorsed by any college or university Chapter 13 - Conflict, Power, and Politics Organizational Behaviour and Analysis (University of Victoria) Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Chapter 13 - Conflict, Power, and Politics This chapter discusses the nature of conflict and the use of power and political tactics to manage and reduce conflict among individuals and groups. It explores the nature of intergroup conflict, characteristics of organizations that contribute to conflict, the use of a political versus a rational of organization to manage conflicting interests, and some tactics for reducing conflict and enhancing collaboration. It also examines individual and organizational power, the vertical and horizontal sources of power for managers and other employees as well as how power is used to attain organizational goals. This chapter also examines the trend toward empowerment and sharing power with lower-level employees. The final part of this chapter looks at politics as a mechanism of power and influence to achieve organizational goals, how managers can increase their power and various political tactics for using power to influence others and accomplish desired goals. A merger gone terribly awry. ➔ During the summer of 2013, executives from Omnicom and Publicis Groupe SA announced in Paris that the companies would be merging to create the largest advertising agency in the world. ➔ By the close of 2013 the deal hadn’t been finalized. ➔ The company couldn’t agree on who would be the acquirer and who would be acquired. ➔ Both CEOs had strong personalities, and communicating details about the merger grew increasingly complicated. ➔ By May of 2014, the deal fell apart because of disagreements over roles and responsibilities. Each side wanted to have more power. ★ Blackberry suffered due to infighting over the strategic goals of the company. Individuals and groups use power and political activity to handle their differences and manage the inevitable conflicts that arise. Too much conflict can be harmful to an organization. But, it can also be a positive force because it:
1. Challenges the status quo 2. Encourages new ideas and approaches 3. Leads to needed change Conflict is not necessarily a negative force. It results from normal ⭐ human interaction. Within organizations, individuals and groups frequently have different interests and goals they ★ wish to achieve Managers can effectively use power and politics to manage conflict, get the most out of employees, enhance job satisfaction and team identification, achieve important goals, and realize high organizational performance .
manage and reduce conflict among individuals and groups. 1 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Interdepartmental Conflict in Organizations Intergroup conflict among departments and groups in organizations and requires the following three ingredients 1. Group identification - employees have to perceive themselves as part of an identifiable group or department 2. Observable group differences - groups may be located on different floors, different social or educational backgrounds, work in different departments 3. Frustration - if one group achieves its goal, the other will not; it will be blocked. Doesn’t need to be severe and only needs to be anticipated to set off conflict. Intergroup conflict will appear when one group tries to advance its position in relation to other groups and can be defined as:
- The behavior that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group’s goal achievement or expectations. Conflict - groups clash directly, that they are in fundamental opposition. Competition - rivalry among groups in the pursuit of a common prize, whereas conflict presumes direct interference with goal achievement. ⭐⭐ Conflict is like competition but more severe !! ⭐⭐ Intergroup conflict within an organization can occur horizontally across departments or vertically between different ➔ For example the production department may have a dispute with the quality control department because new quality procedures reduce production efficiency. ➔ R&D often conflict with finance managers because finance managers’ pressure to control costs reduces funding for R&D projects. ➔ Vertical conflict may occur when employees clash with bosses about new work methods, reward systems, or job assignments. ➔ Unions vs. management ➔ Franchise owners vs HQ - Many fast food franchise owners have clashed with their perspective HQ because of the increase of company-owned stores in neighborhoods that compete directly with franchisees. ➔ Conflict can occur between different divisions or business units within an organization, such as between the trading and investment banking division and the retail banking division at Morgan Stanley. ◆ Traders and investment banking employees have typically looked down on the retail business, seeing themselves as the ‘elite’ of wall street. ◆ Banks are under pressure by shareholders to increase profits by finding ways for retail and investment banking to cooperate. Morgan Stanley has made a number 2 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 of changes intended to increase collaboration and communication between the two divisions. ➔ Conflicts between regional and business division managers, different divisions, or between divisions and HQ are common in the global arena due to the complexities of international business. Sources of Conflict
The sources of intergroup conflict are goal incompatibility, differentiation, task interdependence, and limited resources. Characteristics of organizational relationships: ➔ Organizational structure ➔ Contingency factors of environment ➔ Size
➔ Technology ➔ Strategy and goals These characteristics in turn help shape the extent to which a ⭐ rational model of behavior versus a political model of behavior is used to accomplish objectives. Goal Incompatibility - The goals of each department reflect the specific objectives members are trying to achieve. The achievement of one department’s goals often interferes with another department’s goals, leading to conflict. ➔ University police have a goal of creating security so they lock all the gates on the weekends. However this impedes researcher’s progress. But, if scientists come and go as they please, then security is ignored and campus police goals are not being met. ➔ The IT department is frequently in conflict with managers of business departments. Business managers want new devices or new systems without fully understanding that the CIO needs to ensure that they don’t jeopardize the security of the organization’s overall IT systems. Marketing and manufacturing conflict is greatest b/c these ⭐⭐ departments are frequently at odds. Marketing strives to increase the breadth of the product line to meet customer taste for variety. This translates to short production runs for manufacturing leading to higher costs. Typical areas of goal conflict between the two departments are: quality control, cost control and new products or services. 3 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 ✸✸Goal incompatibility is probably the greatest cause of intergroup conflict in organizations. Differentiation - the differences in cognitive and emotional orientations among managers in different functional departments. Functional specialization requires people with specific education, skills, attitudes and time horizons. ➔ People join a sales forces b/c they have an aptitude for it → after becoming members, they are influenced by the departmental norms and values. %Departments / divisions differ in values, attitudes and standards of behaviors. These subculture differences lead to conflict. ➔ Examples the differences between a sales manager and an R&D scientist. SM is outgoing and warm. R&D is reserved and inclined only to discuss his current projects. SM may be annoyed by the fact that the scientist isn’t friendly and has more work autonomy. The scientist may be uncomfortable because the he perceives the SM as pushy and needing immediate answers to problems that take a long time to investigate. Task Interdependence - task interdependence refers to the dependence of one unit on another for materials, resources, or information. The three types that we discussed in Chapter 7 were pooled, sequential, and reciprocal interdependence.
As interdependence increases, the potential for conflict increases as well. ➔ Pooled interdependence: conflict is at a minimum. ➔ Sequential and reciprocal interdependence require employees to spend time coordinating and sharing information - they must spend time coordinating and sharing information. Must communicate frequently. Differences in attitudes and goals will surface. ➔ Conflict will likely occur when agreement is not reached about coordination of services to each other. ➔ Greater interdependence = greater pressure for a response b/c departmental work has to wait on other departments. Limited Resources - competition for percieved limited resources among groups is another source of conflict. Examples: ➔ Money, facilities, staff, resources, human resources Groups want to increase their resources so they can achieve their goals. This creates conflict. Managers may develop strategies to obtain resources. Some strategies include: ➔ Inflating budgets ➔ Working behind the scenes Resources also symbolize power and influence within an organization Ability to obtain resources enhances prestige. Departments believe they have a legitimate claim on resources - exercising that claim causes conflict. 4 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Limited resource conflict occurs frequently between government, NGO, and membership organizations. ➔ Ex: many unions today fight each other for membership just as much, if not more than, they do corporate management. ➔ Conflict between the various branches of the U.S. armed forces arises as they fight for their share of a reduced military budget. ◆ Former U.S. defense secretary Chuck Hagel recommended cutting the U.S. Army to its smallest size since WWII. This and other cuts triggered the most intense conflict (between branches) in two decades. Typical defense budget breakdown as follows: ● 30% Air Force ● 30-35% Navy and Marine Corps ● 25% Army
Marine officials proposed that they focus on quick response actions which they believe will be the type of military operations the U.S. will need in the coming years. Army are also developing the same strategy which would see retooling procedures such as placing Army helios on Navy ships. This puts the Army in direct conflict with the Marines. The Army Chief believes his branch needs to deploy troops quickly in the opening days of a military conflict. The Marine Chief believes that America doesn’t need a second land army nor a second Marine Corps.
Rational Versus Political Model The degree of goal incompatibility, differentiation, interdependence, and competition for limited resources determines whether a rational or political model of behavior is used within the organization. Rational Model ➔ When goals are in alignment, there is little differentiation, departments are characterized by pooled interdependence, and resources seem abundant, managers can use a rational model of organization. ➔ It’s an idealistic model that isn’t fully achievable in the real world. ➔ Managers strive to use the model whenever possible ➔ In a rational organization behavior isn’t random or accidental. ➔ Goals are clear and choices are logical ➔ When a decision is needed, the goal is defined, alternatives are defined, choice with the highest probability of success is chosen ➔ Characterized by centralized power & control, extensive information systems, and efficiency orientation. Political Model ➔ Differences are great 5 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384
➔ Organization groups have separate interests, goals and values ➔ Disagreement and conflict are common ➔ Power and influence are needed to reach decisions ➔ Groups will engage in the push and pull of debate to decide goals and reach decisions, ➔ Information is ambiguous and incomplete. ➔ The political model describes the way organizations operate much of the time. ➔ It prevails because b/c each department has different interests it wants met and different goals it wants to achieve. ➔ Purely rational procedures don’t work for many circumstances. Both models are used in an organization and neither characterizes things fully. Each will be used some of the time. Managers strive to adopt rational procedures but find that politics is needed to accomplish objectives. When managers fail to effectively apply the political model conflict can escalate and prevent the organization from achieving important outcomes. Example: ➔ Premio Foods - the CEO and VP of operations tried to use a rational model but discovered that a political model was needed. ➔ The VP suggested implementing a new computerized system that would overhaul the company’s outdated method of forecasting and ordering. Would require changes in every department. ➔ Would save annual cash flow by 500,000 and reduce waste by 150,000 / year. ➔ Even though the numbers were clear the CEO hesitated because of strong objections from his senior managers. ➔ Eventually the CEO decided to implement the program. However, senior managers would show up late or skip meetings held by the VP about implementation altogether. This was because she failed to build a coalition to support the new system. ➔ CEO had to salvage the project by forming a team of senior managers to discuss the new system and get their input on how it should work. Most organizations have at least moderate conflict among departments or other organizational groups. Here are the top ten problems created when conflict becomes too strong within an organization 1. Communication break down 2. Performance and productivity decrease 3. Resources and effort are wasted 6 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 4. Morale declines; ill will and bad feeling increase 5. Breakdowns in planning and coordination occur 6. Problems are not solved and processes are not implemented 7. Company loses its focus on customers and profits 8. Disputes and the use of negative politics increase 9. Job related stress and workplace tension increase 10. Employees see and follow a poor example set by managers Good managers strive to minimize conflict and prevent it from hurting organizational performance and goal attainment. Effective conflict management can have a direct, positive effect on team and organizational performance. Managers should consciously apply a variety of techniques to overcome conflict by stimulating cooperation and collaboration among departments to support the attainment of organizational goals.
Tactics for Enhancing Collaboration include the following: Tactics for Enhancing Collaboration 1. Create integration devices task forces, project managers and boundary spanners can be used as integration devices. Bring together representatives from conflicting departments in joint problem- solving teams - effective way to enhance collaboration b/c reps learn to understand each other’s point of view. Can be assigned to achieve cooperation and collaboration by meeting with members of the respective departments and exchanging information. The integrator must understand each group’s problems. Must move both toward a mutually acceptable solution. Teams and task forces reduce conflict/increase cooperation b/c they integrate people from different departments. Labor Management Teams - designed to increase worker participation and provide a cooperative model for solving union-management problems.
Examples: International Speciality Products Corp. in Kentucky set up a leadership team of two managers and two union members. Each of plants 7 operating areas is jointly led by a management rep and a union rep. This system had lowered costs while increasing quality and profitability. 7 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 2. Use confrontation and negotiation Confrontation - parties engaged in conflict directly engage one another and try to work out their differences. Negotiation - the bargaining process that often occurs during confrontation and enables the parties to systematically reach a solution.
These techniques bring together appointed reps from the departments together to work out a serious dispute. This technique will involve some risk. There is no guarantee that conversations won’t veer off track or that emotions won’t get out of control. If members are able to resolve disagreements based on face-to-face interactions, they will gain a new respect for one another. Future collaboration becomes easier. This technique can create a solid foundation for permanent attitude change. They are successful when managers create a:
With a win-win situation you define the problem as mutual , communicating openly and avoiding threats. Understanding can be changed while the dispute is resolved. win-lose situation - each side tries to defeat one another.
Creating a win-lose situation will result in a breakdown of negotiations. One type of negotiation tactic used to resolve disputes between employees and management is collective bargaining - Bargaining process accomplished through a union and results in an agreement that specifies each party’s responsibilities for the next two or three years. 3. Schedule intergroup consultation Used when interdepartmental conflict is severe and enduring and members are suspicious and uncooperative. Top management intervenes as third parties to help resolve the conflict or they bring in third party consultants. This process is called
. The technique was developed by psychologists Robert Blake, Jane Mouton and Richard Walton. Department members attend a workshop which may last for several days, away from day-to-day work problems. This approach is similar to the organization development approach. Separate conflicting groups. Each group is invited to make a list of perceptions of itself and the other group. Group reps publicially share these perceptions. Groups discuss results together. Can be quite demanding for everyone involved. If handled correctly, these sessions can help departmental employees understand each other much better. Can lead to improved attitudes and better working relationships for years to come. 4. Create shared mission and superordinate goals. Another strategy is for management to create a shared mission and establish superordinate goals that require cooperation among departments. Organizations that have strong constructive cultures are likely to have a united cooperative workforce. Studies show that when employees from different departments see that their goals are linked, they will openly share resources and 8 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 information. To be effect superordinate goals must be substantial and employees must have the time and incentives to work cooperatively. 5. Practice member rotation.
The advantage: individuals become submerged in the values, attitudes, problems and goals of the other department. They can also explain the position, attitudes, values, problems and goals of their original department to their new colleagues. This enables frank accurate exchange of views and information. It works slowly to resolve conflict. Can eventually change the underlying attitudes and perceptions that promote conflict.
➔ Ben Harowitz, co-founder of venture capital firm Andereessen Harowitz, used what he calls the Freaky Friday Management Technique to solve a difficult conflict between the Sales engineering and CS departments. When the two departments went to war, Harowitz was at a loss. Both teams were made up of first-rate people. Both were led by excellent managers. After watching the movie Freaky Friday, he decided that he would have managers of both departments switch places. After a week in each other’s departments, both managers understood the core issues of the dispute and were able to quickly implement solutions. Power and Organizations
Power is an intangible force in an organization; felt not seen. Power - the potential ability of one person or department to influence other people or departments to carry out orders or to do something they would not otherwise have done; the ability to achieve goals or outcomes that power holders desire. The achievement of desired outcomes is the basis of the definition used here: power is the ability of one person or department in an organization to influence other people to bring about desired outcomes. It is the potential to influence others within the organization with the goal of attaining desired outcomes for power holders. Powerful managers are able to get a bigger budget, favorable production schedules or more control over the organization’s agenda. It only exists in a relationship of two or more people. Can be exercised vertically or horizontally. The source of power is derived from an exchange relationship where one person / department / organization provides scarce / valuable resources to another person / department / organization. Its dynamic is based out of a relationship of dependence. ➔ Example: Matthew Weiner had tremendous power in his relationship with AMC due to the success of his show, Mad Men which until recently had very little original programming. They were dependent on the advertising revenues and prestige the show brought to the network This allowed Weiner to walk away with a three-year deal worth 30 million and the network dropped some of their demands for budget cuts and advertising slots. 9
lOMoARcPSD|4752384 Individual Versus Organizational Power Popular literature often describes power as a personal characteristic. A frequent topic: how one person can influence or dominate other person. Managers have 5 sources of power: 1. Legitimate Power - is the authority granted by the organization to the formal management position a manager holds. 2. Reward Power - stems from the ability to besow rewards - a promotion, raise, or pat on the back. - to other people. 3. Coercive Power - The authority to punish or recommend punishment 4. Expert Power - a person’s skill or knowledge about the tasks being performed. 5. Referent power - derived from personal characteristics: people admire and like the manager and want to be like the manager out of respect or admiration. Each of these may be used by individuals within an organization. Power in organizations - usually due to structural characteristics; they’re large complex systems containing hundreds to thousands of people. These systems have a formal hierarchy. Some positions are simply more important. Some positions have greater access to more information and resources. Some positions are more critical for the organization. ➔ Executive assistants to CEOs have tremendous power - direct access to the top executive, have more information than others, control who gets to see the boss and who doesn’t. Power Vs. Authority Anyone in an organization can exercise power to achieve desired outcomes. ➔ Discovery Channel wanted to extend its brand. Tom Hicks began pushing for a focus on the Internet. He organized a grassroots campaign that eventually persuaded the CEO to focus on Internet publishing. Hicks had power within the organization. He was put in charge of Discovery Channel Online. The concept of formal authority is related to power but narrower in scope Authority - a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships. Three properties define authority:
1. Authority is vested in organizational positions . People have authority because of the positions they hold, not because of personal characteristics or resources. 2.
. Subordinates comply because they believe position holders have a legitimate right to exercise authority 3.
. Authority exists along the formal chain of command, and positions at the top of the hierarchy are bested with more formal authority than are positions at the bottom. Formal authority is exercised downward, but organizational power can be exercised in any direction (up / down / horizontally). Managers can have formal authority, but very little power. 10 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 ➔ Kevin Sharer failed to build credibility with his new colleagues and his ideas and suggestions went unheeded despite his impressive job title of Executive Vice President of Marketing at telecommunications company, MCI. Vertical Sources of Power All employees along the vertical hierarchy have access to some sources of power. People throughout the organization often obtain power disproportionate to their formal positions and can exert influence in an upward direction as Tom Hicks did at the Discovery Channel. There are four major sources of vertical power 1. Formal position, ⭐⭐ 2. Resources, 3. Control of information and 4. Network centrality. Formal Position - Certain rights, responsibilities and prerogatives accrue to top positions. People throughout the organization accept the legitimate right of top managers to set goals, make decisions, and direct activities; legitimate power. Senior managers often use symbols and language to perpetuate their legitimate power. ➔ New administrator at a hospital in San Francisco symbolized his authority by issuing a newsletter and airing a 24/7 welcoming video. The amount of power provided to middle managers and lower-level participants can be built into the organization’s structural design. It’s important to allocate power to middle managers and staff is important because it allows them to be productive. Allowing people to make their own decisions increases their power. Power is increased when a position encourages contact with high-level people. Access to powerful people and the development of a relationship with them provide a strong base of influence. ➔ D’Andra Galarza is treated with kid gloves by people and try to get information out of her because she is the executive assistant for a president at NBCUniversal. The total amount of power in an organization can be increased by designing tasks and interactions along the hierarchy so everyone can exert more influence. If the distribution of power is skewed too heavily to the top, research indicates that the organization will be less effective. Resources - Organisations allocate huge amounts of resources: Buildings, salaries, equipment / supplies; new resources are allocated in the form of a budget.
These resources are allocated downward from top managers who often own stock. This gives them property rights over allocation. Today employees in many organizations also share in ownership which increases their power. In most cases, top managers control resources, and control their distribution. They can be used as rewards or punishments. Resource allocation creates a dependency relationship. Lower-level participants depend on top managers for the financial and physical resources need to perform their tasks. 11 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Top management can exchange resources in the form of salaries and bonuses, personnel, promotions, and physical facilities for compliance with the outcomes they desire. Control of Information - The Control of information can be a significant source of power. Managers recognize that information is a primary business resource and that by controlling what information is collected, how it is interpreted, and how it is shared, they can influence how decisions are made.
Information can be released as needed to shape the decisions of other people. ➔ Clark LTD - Senior IT manager controlled information that was given to the board. This influenced the board’s decision to eliminate the existing computer systems of the business units and move all software onto one IT platform. She knew that this was the only way to bring costs in-line and that department managers would likely resist. The management services group was asked to recommend a system. All had to go through Kenny to get their views expressed, but she disagreed with them. Kenny shaped the boards thinking towards selecting the system preferred by her rather than the management group. Middle managers and lower-level employees may also have access to information that can increase their power. Top executives depend on people throughout the organization for information about problems or opportunities. Individuals down the hierarchical chain of command may manipulate information they provide top managers in order to influence decision making. Network Centrality Network Centrality - means being centrally located in the organization and having access to information and people that are critical to the company’s success. Managers as well as lower-level employees are more effective and more influential when they put themselves at the center of a communication network. ➔ Abraham Lincoln is considered to be one of the greatest U.S. presidents partly because he built relationships and listened carefully to a broad range of people both inside and outside of his immediate circle when the nation was so bitterly divided over the Civil War. He included people that did not agree with him and were critical of his plans and his goals.
People at all levels of the hierarchy can use the ideal of network centrality to accomplish goals and be more successful. People can increase their network centrality by becoming knowledgeable and expert about certain activities or by taking on difficult tasks and requiring specialized knowledge that makes them indispensable to managers above them. Location can help because some locations are the center of things. Central locations allow people to be visible to key people and become part of important interaction networks.
12 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Top leaders often increase their power by surrounding themselves with a group of loyal executives. Top executives can use their central positions to build alliances and exercise substantial power when they have a management team that is fully in support of their decisions and actions. Smart managers also actively work to build bridges and win over opponents. ➔ When Gary Loveman became COO of Harrah’s, he knew that it was critical to build a strong relationship with the CFO who was initially resentful of his appointment. Building positive relationship led to goal achievement which led to being appointed CEO. This idea works for lower level employees as well. People have higher power when they have relationships and connections with higher-ups. The Power of Empowerment In forward thinking organizations, top managers want lower-level employees to have greater power - they can do their jobs more effectively. They intentionally push power down the hierarchy and share it with employees - so they can do achieve their goals. Empowerment - power sharing, the delegation of power or authority to subordinates in an organization . Improves motivation, morale, and prevents petty rivalries. “When people feel powerless, they behave in petty ways,” Rosabeth Moss-Kanter “They become rule-minded and are over controlling because they are trying to grab hold of some little piece of the world that they do control.” Empowering employees involves giving them three elements that enable them to act more freely to accomplish their jobs :1. Information ,2. knowledge and 3. power. 1.
. In companies where employees are fully empowered, all employees have access to all financial and operational information. 2.
. Companies use training programs and other development tools to help people acquire the knowledge and skills they need to contribute to organizational performance. 3.
. Empowered employees have the authority to directly influence work procedures and organizational performance, such as through quality circles or self-directed work teams. Many of today’s organizations are implementing empowerment programs. There are several organizations that push empowerment to the max. ➔ Morning star, the world’s largest tomato processor. No one has a boss, accountability is to the customer and the team rather than to a manager, there are no titles or promotions, anyone can spend the company’s money and compensation is decided by peers. Horizontal Sources of Power
VPs are all at the same level on an organizational chart, but don’t have equal power. Horizontal power is not defined by the formal hierarchy or the organization chart. 13 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Each department makes a unique contribution to organizational success and some departments will contribute more. In most firms, sales has the most power and production is also quite powerful. Both are usually more important than R&D or HR. A UK study found that production, finance, and marketing had the greatest influence on strategic decisions compared to R&D and HR. Power shifts among departments depending on circumstances. Recently finance and ethics and compliance officers are gaining power. Finance reduces costs and ethics compliance officers reduce uncertainty. Horizontal power - hard to measure - differences not defined on organizational chart. Strategic Contingencies Strategic Contingencies - events both inside and outside an organization that are essential for attaining organizational goals. Departments involved with strategic contingencies tend to have great power because they solve problems and crisis for the organization. ➔ If an organization faces an intense threat from lawsuits and regulations, the legal department will gain power and influence over organizational decisions because it copes with such as threat. Similar to the resource dependence model. Departments or organizations most responsible for dealing with key resource issues and dependencies in the environment will become most powerful. ➔ The NFL - bowed to the power of the cable companies and arranged CBS and NBC to simultaneously broadcast along with the NFL network a highly anticipated 2007 game. Power Sources - Jeffery Pfeffer and Gerald Salncik, among others, have been instrumental in conducting research on the strategic contingencies theory. Their finding indicate that a department rated as powerful may possess one or more of the characteristics of the five power sources.
➔ Ex: the power of theatrical stagehands. They have a very specialized, hard to replace skill set. If they walk out, the show cannot go on. In a sequential interdependent relationship, the department on the receiving end is in a lower power position. A department that has many other departments dependent upon it is in a high power position. A department that is dependent on another department is in a low power position.
organizations. Departments that provide financial resources have something other departments want. Money generates dependency. 14 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Departments that generate income for the organization have greater power. An ability to provide financial resources also explains why certain departments are power in other organizations such as universities. Power accrues to departments that bring in or provide resources that are highly valued by an organization. Power derived from acquiring resources is used to obtain more resources, which can be employed to produce more power - the rich get richer.
One measure - the extent to which the work of the department affects the final output of the organization. ➔ Production department is more central and usually has more power than staff groups. Centrality is associated with power because it reflects the contribution made to the organization. ➔ Corporate finance department of a bank has more power than the stock research department. 4 Non Substitutability Nonsubstitutability - a department’s function cannot be performed by another readily available resource. (Ex. stagehands). If an organization has no alternative sources of skill and information, a department's power will be greater. - may be one reason why top managers use consultants. Consultants might be used as substitutes for staff people to reduce the power of staff groups. ➔ When computers first came on the scene not too many people had programming knowledge, so programmers held a lot of power. However, over a period of 10 years, computer programming became a more common activity. People could be substituted easily and the power of the programmers dropped.
Elements in the environment can change swiftly and can be unpredictable and complex. In the face of uncertainty, little information is available to managers on appropriate courses of action. Departments that decrease uncertainty will increase their power When market and research personnel accurately forecast trends, they increase their power. Sometimes uncertainty can be reduced by taking quick and appropriate action after an an unpredictable event. Departments can cope with critical uncertainties by 1. Obtaining prior information 2. Prevention and 3. Absorption Obtaining prior information - a department can reduce an organization’s uncertainty by forecasting an event. Prevention - predicting and forestalling a negative event Absorption - a department that takes action after a negative event has occurred in order to blunt negative consequences. ➔ In-house legal departments have grown in power. Sometimes the general council is paid more than the division president. 15 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 ◆ Legal departments at hospitals like Carilion Health System are in high power position. They fought off a U.S. Department of Justice antitrust lawsuit, negotiated a successful merger with the only other hospital in Roanoke and collecting past due bills. The City of Roanoke devotes one day a week to the hospital. In one fiscal year they sued nearly 10,000 people, garnished 4000 wages, and placed liens on 4000 homes. The legal department absorbed a critical uncertainty by fighting off the antitrust lawsuit and helping the hospital grow in size and power. The backlash from the negative press means that the public relations department has an opportunity to increase its power as well. Horizontal power relationships in organizations change as strategic contingencies change.
Politics is also intangible. Most managers: Have a negative view towards politics Think political behavior occurs more often at upper rather than lower organizational levels Common in almost every organization Political behavior arises in certain decision domains but is absent from others. (structural change vs. handling employee grievances).
The darker view of politics is widely held by laypeople. In organizations where this darker aspect of politics is perceived, employees experience higher levels of anxiety. The inappropriate use of politics can lead to low employee morale. However, the appropriate use of politics can serve organizational goals.
Political behavior can be either a positive or negative force. When to use Political Activity Politics is a mechanism for arriving at consensus when uncertainty is high and there is disagreement over goals or problem priorities. The political model is associated with conflict over goals, problems or priorities. Most visible when managers confront nonprogrammed decisions. 16 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 Resource allocation also has a tendency to become a political issue. The three domains of political activity in most organizations are: 1. ⭐ Structural change, 2. Management succession and 3. Resource allocation Structural reorganizations strike at the heart of power and authority relationships and a major reorganization can lead to an explosion of political activity. Managers actively bargain and negotiate to maintain the power bases they currently have. Hiring new executives has great political significance - particularly at the top of an organization. Networks of trust, communication and cooperation among executives is important. Hiring decisions can generate uncertainty discussion and disagreement. ➔ Managers can use hiring and promotion to strengthen network alliances and coalitions by putting their own people in prominent positions. Resource-allocations decisions encompass all resources required for organizational performance - includes: salaries, budgets, employees, facilities, equipments, and use of the company airplane. Using Soft Power and Politics
Power in organizations - not a phenomenon of the individual. It’s related to the resources departments command, the role they play and environmental contingencies. Position and responsibility rather than personality and style determines a manager’s ability to influence outcomes. Power is used through individual political behavior. It’s important to look at structural components and individual behavior. Comes from larger organizational forms and processes, but involves individual-level activities and skills. Managers with political skill are more effective at influencing others and thus getting what they want for both the organization and their own careers. They have honed their abilities to observe and understand patterns of interaction and influence within the organization. They are skilled at developing relationships with a broad network of people. Can adapt their behavior and approach to diverse people and situations. They understand that influence is about relationships. Managers can develop political competence and learn how to use a wide variety of tactics. Some tactics rely on hard power. Hard power - power that stems largely from a person’s position of authority. This is the kind of power that enables a supervisor to influence subordinates with the use of rewards and punishments, allows a manager to issue orders and expect them to be obeyed, or lets a domineering CEO force through their decisions without regard for what anyone else thinks. Effective managers use soft power Soft power - based on personal characteristics and building relationships. 17 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 ➔ Jeff Immelt, CEO of GE considers himself a failure if he exercises his formal authority more than seven or eight times a year. The rest of the time, Immelt is using a softer approach to persuade and influence others and to resolve conflicting ideas and opinions. ➔ Even US military officials consider relationship building important. In a study of 49 professional negotiations over a nine-year period ⭐ of time, researchers found that most effective negotiations spent 400 percent more time than their less-effective counterparts looking for areas of mutual benefit and shared interest, rather than just trying to force their own agenda.
➔ Stoppages on an assembly line, quality demand of a new product, Once the uncertainty has been identified, the department can take action to cope with it. This will take time due to the process of trial and error. 2 create dependencies - Dependencies are another source of power. Another equally effective strategy is to reduce dependency on other departments by acquiring necessary information or skills when possible.
acquirer resources for an organization will be powerful. ➔ University departments that acquirer external funding which contributes to overhead. 4 Satisfy strategic contingencies - some elements in the external environment and within the organization are especially important for organizational success. A contingency could be a critical event, a task for which there are no substitutes, or a central task that is interdependent with many others in the organization. The allocation of power in an organization is not random.
1 Build Coalitions and expand networks 2 Assign loyal people to key positions. 3 Use reciprocity 4 Enhance legitimacy and expertise 5 Make a direct appeal --------------- In class discussion 18 Downloaded by Buxoro Davlat Tibbiyot Instituti (anasullaev.bsmi@gmail.com) lOMoARcPSD|4752384 How to manage conflicts between new and old business? BCG matrix – How do you allocate your resources? It’s not a set deal. It’s kind of like a life cycle. Cash cow- something creates the majority profits of a company. – maintain revenue stream Dog- A product is not doing well. Stop putting resources in dog” Question-There’s an opportunity for a product to make profits in the future. The Agency Theory – A conflict of interest in an organization between a CEO/ manager and a stock owner. From YouTube --- https://www.youtube.com/watch?v=jCr23nUT6v8 So, how to solve the problem? Monitoring or compensating? By linking the needs of the ceo with the need of the organization we create a win-win A factory worker on the assembly line is in a low power position and should accept that he or she will have little influence over what happens? Do you agree? 19
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