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
2. Divergent interests
3. Dominant coalitions
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
hierarchy, 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
promotions
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.
