MPO Final: Chapter 13: Power and Politics AND Chapter 14: Negotiation

Coercive Power A power base that is dependent on fear of the negative results from failing to comply.

Reward Power - Compliance achieved based on the ability to distribute rewards that others view as valuable.

Legitimate Power: The power a person receives as a result of his or her position in the formal hierarchy of an organization. 

Expert power - influence based on special skills or knowledge

Referent Power - Influence based on identification with a person who has desirable resources or personal traits

Personal power comes from unique characteristics (not formal power).

• Expert Power - is influence wielded as a result of expertise, special skill or knowledge.  As jobs become specialized, we become increasingly dependent on experts to achieve goals.
• Examples: Doctors, computer techs
• So what? Can hoard power, knowledge translation, irreplaceable 

Expert power comes from one’s experiences, skills or knowledge. As we gain experience in particular areas, and become thought leaders in those areas, we begin to gather expert power that can be utilized to get others to help us meet our goals. For example, the Project Manager who is an expert at solving particularly challenging problems to ensure a project stays on track.Referent Power  is based on identification with a person who has desirable resources or personal traits.  Referent power develops out of admiration and a desire to be like that person.  Examples: Celebrities in commercialsSo what? Interpersonal skills,  people who will vouch for youReferent power comes from being trusted and respected.  We can gain referent power when others trust what we do and respect us for how we handle situations. 

For example, the Human Resource Associate who is known for ensuring employees are treated fairly and coming to the rescue of those who are not.

Formal power is based on an individual's position in the organization.  It can come from the ability to coerce, reward or from formal authority.

Coercive power depends on fear of the negative results from failing to comply.  It  rests on the application, or the threat of application of physical sanctions such as the infliction of pain, frustration thought restriction of movement or the controlling of force of basic physiological or safety needs. At the organizational level, A has coercive power over B if A can dismiss, suspend, or demote B, assuming B values his or her job. If A can assign B work activities B finds unpleasant, or treat B in a manner B finds embarrassing, A possesses coercive power over B. Coercive power can also come from withholding key information. People in an organization who have data or knowledge others need can make those others dependent on them.Coercive power is conveyed through fear of losing one’s job, being demoted, receiving a poor performance review, having prime projects taken away, etc. This power is gotten through threatening others. For example, the VP of Sales who threatens sales folks to meet their goals or get replaced.

Reward Power The opposite of coercive power is reward power, with which people comply because it produces positive benefits; someone who can distribute rewards others view as valuable will have power over them. These rewards can be either financial—such as controlling pay rates, raises, and bonuses—or nonfinancial, including recognition, promotions, interesting work assignments,friendly colleagues, and preferred work shifts or sales territories.7Reward power is conveyed through rewarding individuals for compliance with one’s wishes. This may be done through giving bonuses, raises, a promotion, extra time off from work, etc. For example, the supervisor who provides employees comp time when they meet an objective she sets for a project.Legitimate Power In formal groups and organizations, probably the most common access to one or more of the power bases is through legitimate power. It represents the formal authority to control and use organizational resourcesbased on structural position in the organization.

Legitimate power is broader than the power to coerce and reward. Specifically, it includes members’ acceptance of the authority of a position. We associate power so closely with the concept of hierarchy that just drawing longer lines in an organization chart leads people to infer the leaders are especially powerful, and when a powerful executive is described, people tend to put the person at a higher position when drawing an organization chart.8 When school principals, bank presidents, or army captains speak (assuming their directives are viewed as within the authority of their positions), teachers, tellers, and first lieutenants listen and usually comply.Legitimate power comes from having a position of power in an organization, such as being the boss or a key member of a leadership team. This power comes when employees in the organization recognize the authority of the individual. For example, the CEO who determines the overall direction of the company and the resource needs of the company.

Research suggests pretty clearly that the personal sources of power are most effective. Both expert and referent power are positively related to employees’ satisfaction with supervision, their organizational commitment, and their performance, whereas reward and legitimate power seem to be unrelated to these outcomes. One source of formal power—coercive power—actually can backfire in that it is negatively related to employee satisfaction and commitment.9Consider Steve Stoute’s company, Translation, which matches pop-star spokespersons with corporations that want to promote their brands. Stoute has paired Gwen Stefani with HP, Justin Timberlake with McDonald’s, Beyoncé Knowles with Tommy Hilfiger, and Jay-Z with Reebok. Stoute’s business seems to be all about referent power. His firm’s work aims to use the credibility of these artists and performers to reach youth culture.10 In other words, people buy products associated with cool figures because they wish to identify with and emulate them.

COERCIVE POWER.Coercive power rests in the ability of a manager to force an employee to comply with an order through the threat of punishment. Coercive power typically leads to short-term compliance, but in the long-run produces dysfunctional behavior.Coercion reduces employees' satisfaction with their jobs, leading to lack of commitment and general employee withdrawal. In the United States, Canada, and Western Europe, coercive power has seen a decline in the last 50 years. Several reasons contribute to this, ranging from the legal erosion of employment-at-will and the awareness of employee violence or other forms of retaliatory behavior.Equally important as an effect on the receding popularity of coercion as a basis of power has been the influence of quality management theorists, such as Philip Crosby and W. Edwards Deming. They suggested that there is a decline in productivity and creativity when coercive power is employed. The use of coercive power results in an atmosphere of insecurity or fear. In spite of this insight, coercion as a base of power continues to play a role even in those organizations influenced by theories of quality management.In times of economic crisis or threats to the survival of the organization at large, coercion may come to the forefront. Coercive power may also materialize as organizations attempt to streamline their operations for maximum efficiency. If employees must be fired, those who fail to conform to the organizational goals for survival will be the most likely candidates for termination. The threat of termination for failure to comply, in turn, is coercive power.

LEGITIMATE POWER.Legitimate power rests in the belief among employees that their manager has the right to give orders based on his or her position. For example, at the scene of a crime, people usually comply with the orders of a uniformed police officer based simply on their shared belief that he or she has the predetermined authority to give such orders. In a corporate setting, employees comply with the orders of a manager who relies on legitimate power based on the position in the organizational hierarchy that the manager holds. Yet, although employees may comply based on legitimate power, they may not feel a sense of commitment or cooperation.

REWARD POWER.Reward power, as the name implies, rests on the ability of a manager to give some sort of reward to employees. These rewards can range from monetary compensation to improved work schedules. Reward power often does not need monetary or other tangible compensation to work when managers can convey various intangible benefits as rewards.Huey describes Sam Walton, founder of Wal-Mart Stores, Inc., as an active user of reward power. Walton relies heavily on these intangible awards, indicating that "nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They are absolutely free-and worth a fortune".When reward power is used in a flexible manner, it can prove to be a strong motivator, as Crosby, Deming, and others have shown. Still, when organizations rely too rigidly on rewards, the system can backfire. Employees may be tempted to unethically or even illegally meet the quotas to which overly rigid reward systems may be tied.Another problem associated with rewards as a base for power is the possibility that the rewards will divert employees' attention from their jobs and focus their attention instead on the rewards dangled before them.

REFERENT POWER.Referent power derives from employees' respect for a manager and their desire to identify with or emulate him or her. In referent power, the manager leads by example. Referent power rests heavily on trust. It often influences employees who may not be particularly aware that they are modeling their behavior on that of the manager and using what they presume he or she would do in such a situation as a point of reference.The concept of empowerment in large part rests on referent power. Referent power may take considerable time to develop and thus may not prove particularly effective in a workforce with a rapid turnover of personnel.One common error in applying referent power in cross-cultural situations, however, comes in misunderstanding the ways in which employees identify with their superiors. Since identification with one's superior in the United States is hampered by symbols of legitimate power (for example, titles or dress), those who advocate its use encourage managers to dress down to the level of their employees and use terms such as "facilitator" and "coach" coupled with "associates" and "group members" rather than "boss" and "subordinates."In societies such as Argentina or Mexico, symbols of legitimate power may not readily hamper identification, whereas American-style egalitarianism may diminish the respect employees feel for the manager. In short, U.S. employees are likely to identify with managers by personally liking them and feeling liked in return, whereas Argentine and Mexican employees are likely to identify with managers by respecting them and feeling respected in return. Thus, referent power may be more cross-culturally variable than the other four bases of power laid out by French and Raven.Imberman describes how specialized training is now used in the grocery industry to train Latino immigrants in the democratic supervisory techniques of U.S. managers. In the past, when these men and women were promoted to supervisory positions, they tended to rely heavily on the Latino model of authoritarianism under which they were raised. The managerial style hindered their ability to effectively supervise employees or to garner the respect they were seeking. To remedy this situation, specialized training programs are now utilized. The end result is effective and confident supervisors, motivated workers, higher productivity, less waste, and better customer service.

EXPERT POWER.Expert power rests on the belief of employees that an individual has a particularly high level of knowledge or highly specialized skill set. Managers may be accorded authority based on the perception of their greater knowledge of the tasks at hand than their employees. Interestingly, in expert power, the superior may not rank higher than the other persons in a formal sense. Thus, when an equipment repair person comes to the CEO's office to fix a malfunctioning piece of machinery, no question exists that the CEO outranks the repair person; yet regarding the specific task of getting the machine operational, the CEO is likely to follow the orders of the repair person.Expert power has within it a built-in point of weakness: as a point of power, expertise diminishes as knowledge is shared. If a manager shares knowledge or skill instruction with his or her employees, in time they will acquire a similar knowledge base or skill set. As the employees grow to equal the manager's knowledge or skills, their respect for the superiority of his expertise diminishes.The result is either that the manager's authority diminishes or that the manager intentionally chooses not to share his or her knowledge base or skill set with the employees. The former choice weakens the manager's authority over time, while the latter weakens the organization's effectiveness over time.

Structural - Leaders emphasize rationality, analysis, logic, facts and data.  They are likely to believe strongly in the importance of clear structure and well developed management systems.  A good leader is someone who thinks clearly, makes good decisions and has good analytic skills and can design structures and systems that get the jobs done.

The structural frame focuses on the architecture of the organization.  This includes goals, structure, technology, roles and relationships and coordination of them.  Think organization chart here.  Responsibilities, division of labor, rules, policies, procedures, systems, and hierarchies which coordinate an organization’s diverse activities into a unified effort relate to this frame.  The challenge for organizations and their leaders involves designing, maintaining, and aligning structural forms with current circumstances, tasks, technology, the environment, and goals.  When structure does not line up, problems arise.  Reorganization or redesign may help remedy the structural misalignment.  Rational analysis leads to the development and implementation of work roles and tasks and the appropriate coordination and integration of individual and group efforts.  The metaphor for the structural frame:  factory or machine.

Human Resource leaders emphasize the importance of people.  They endorse the view that the central task of management is to develop a good fit between people and organizations.  They believe in the importance of coaching, participation, motivation, teamwork and good interpersonal relations.  A good leader is a facilitator and participative manager who supports and empowers others.

The human resource frame emphasizes understanding people and their relationships.  Individuals have needs, feelings, fears, prejudices, skills, and development opportunities.  This lens enables one to focus on and understand the fit between the individual and the organization.  By attending to people, the focus of this frame, the organization can meet individual needs and train the individual to meet organizational needs.  The job gets done by persons who feel good about themselves and their work.  The metaphor for the human resource frame:  family.

Political leaders believe that mangers and leaders live in a world of conflict and scarce resources.  The central task of management is to mobilize the resources needed to advocate and fight for the unit's or the organization's goals and objectives.  Political leaders emphasize the importance of building a power base: allies, networks, coalitions.  A good leader is an advocate and negotiator who understands politics and is comfortable with conflict.

The political frame sees organizations as jungles, arenas, or contests.  This frame emphasizes power, competition, and winning scarce resources.  Diverse values, beliefs, interests, behaviors, and skills provides the rich context for the allocation of power and resources.  People set agenda, bargain, negotiate, build coalitions, compromise and coerce, and manage conflict.  Think competing interests, struggles for power, and who gets what and how.  Political skill and acumen craft solutions.  Such realities of organizational life can be toxic or sources of creativity and innovation.  Effective management and leadership guide the proper disbursement of power and influence and determine organizational effectiveness.  The metaphor for the political frame:  jungle.

Symbolic leaders believe that the essential task of management is to provide vision and inspiration.  They rely on personal charisma and a flair for drama to get people excited and committed to the organizational mission.  A good leader is a prophet and visionary, who uses symbols, tells stories and frames experiences in a way that give people hope and meaning. 

symbolic frame captures organizational life as drama and treats organizations as theatre, temples, or carnivals.  This frame focuses on meaning and faith.  This context engages the heart and head of the members and it focuses on ritual, ceremony, story, play and culture.  Members’ roles play out in the drama of everyday efforts of the organization.  Meaning matters more than results.  Events and processes have importance more for expression than production.  The faith built up and meaning shared by members infuses passion, creativity, and soul.  Rules, policies, and managerial authority matter less in this frame.  Instead, culture, symbols, and spirit provide this frame’s pathway to organizational effectiveness.  The focus of this frame challenges leaders to create and maintain faith, beauty, and meaning.  The metaphor for the symbolic frame:  theatre, temple, or carnival.

The frames help change agents conceptualize different approaches to an issue.

To show there are different types of orientations.

Depending on the circumstances, one approach may be more appropriate than another. Or, most likely, several approaches in combination will be most successful.

olman & Deal’s frames can be used at the planning stage of a change initiative to help diagnose organizational needs, to identify institutional challenges and contexts, and to devise appopriate actions (e.g., ‘For this initiative, we need to be sure to address the political aspects because…’). The frames also can be used to rethink and reframe unsuccessful change initiatives (e.g., ‘This initiative failed because we didn’t appropriately address the human resource frame.’).

Optimization - Wrong tool gets in the way, right tool makes the job easier.Possess a tool – but know how to use it well.

The four frames identified and briefly discussed above pave the way for reframing. 

Perspective - With each of the four frames, the interested organizational observer can view the same situation in at least four ways.

Structural Framework - Social architect whose leadership style is analysis and design - focus on structure, strategy, environment, implementation, experimentation, and adaptation.

Human Resource Framework - Catalyst and servant whose leadership style is support, advocate, and empowerment - visible and accessible; they empower, increase participation, support, share information, and move decision-making down into the organization.

Political Framework - Advocate, whose leadership style is coalition and building - clarify what they want and what they can get; they assess the distribution of power and interests; they build linkages to other stakeholders; use persuasion first, then use negotiation and coercion only if necessary.

Symbolic Framework - Prophet, whose leadership style is inspiration, view organizations as a stage or theater to play certain roles and give impressions; these leaders use symbols to capture attention; they try to frame experience by providing plausible interpretations of experiences; they discover and communicate a vision.

• 1. Preparation and planning
• 2. Definition of Ground rules
• 3. Collaboration and justification
• 4. Bargaining and Problem Solving
• 5. Closure and Implementation

Definition of Ground Rules Once you’ve done your planning and developed a strategy, you’re ready to begin defining with the other party the ground rules and procedures of the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will you follow a specific procedure if an impasse is reached? During this phase, the parties will also exchange their initial proposals or demands.

Clarification and Justification When you have exchanged initial positions, both you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This step needn’t be confrontational. Rather, it’s an opportunity for educating and informing each other on the issues, why they are important, and how you arrived at your initial demands. Provide the other party with any documentation that helps support your position.

Bargaining and Problem Solving The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both par- ties will undoubtedly need to make concessions.

Closure and Implementation The final step in the negotiation process is for- malizing the agreement you have worked out and developing any procedures necessary for implementing and monitoring it. For major negotiations— from labor–management negotiations to bargaining over lease terms to buy- ing a piece of real estate to negotiating a job offer for a senior management position—this requires hammering out the specifics in a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a handshake.

• Moods/Emotions in Negotiation  
• CULTURE IN NEGOTIATION

GENDER DIFFERENCES

Managing a big group of people/expectations

USING ARBITRATOR OR CONCILIATOR IN NEGOTIATION when NECESSARY

An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether there is a negative side depends on how heavy-handed the arbitrator appears. If one party is left feeling over- whelmingly defeated, that party is certain to be dissatisfied and the conflict may resurface at a later time.

A conciliator is a trusted third party who provides an informal communica- tion link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film. As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleones and the other Mafioso families. Comparing conciliation to mediation in terms of effectiveness has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact-finding, interpret messages, and persuade disputants to develop agreements.

Do some research and investigations on the other party before the meeting. Check trade references and outcomes of previous agreements the other party entered into. Use your checklist of non-negotiable to determine if you should proceed with negotiations. It may not be necessary to enter into any negotiation if the other party fails the "non-negotiable" test in advance.

Prepare questions in advance which seek to get clarity on any clauses on documents you have previously received. Get your legal representative to look into and review contracts or agreements. Preparation entails anticipating questions and answering them before you engage. It entails presenting your best case and alternatives when called for hence it is important. There is nothing wrong in preparing for a stalemate position and how to break beyond it.

Go into major meetings with a witness(es) or people who can help with discussion. This could be your Personal Assistant or senior Manager in your team. You may need someone who can give you hints and tips. Someone whom you can use eye contact with to determine whether you should proceed or not. Sometimes when you are alone negotiating with a panel you lose on the basis of numbers as you may have 5 active brains thinking ahead of you.

Do not rush to make the decision - Always look at the negotiating party directly in the eye and avoid being bullied into making a decision here and now. The push must never be just to ensure the agreement is signed off without the parties taking ownership of the decisions they are making. Whenever there is a rush, it must flag within you that there could be something hidden in the agreement. Take your time. You don't have to sign instantly.

Understand the time factor - There is always a time conducive enough for negotiations to take place. You will not negotiate effectively when you are in a hurry or when there is fatigue on either side of the negotiation table. Depending on how tense the negotiations can be, it is healthy to call for a "time out" so that you regain yourself.

Avoid emotional bargaining - Separate your own emotions from the issue being negotiated on. When you become angry or over excited you lose your composure and negotiating power.

Avoid attacking the person but look at the matter under negotiation - There is a tendency to address personalities at the expense of the matter under discussion or negotiation. While it is important to know the kind of person you are negotiating with, the issue on hand supersedes personalities.

Pay attention to detail - In the event that you get documents in the meeting without prior reading, it is important to read the fine print or give a specialist within your team to scrutinize while you discuss. The fine print is usually the source of all problems in any negotiation.

Be prepared for compromise - Before you get into a negotiation process, you should know both your best case and worst case scenarios, the benefits and demerits of each case. You should obviously start the negotiation by putting on the table your best case. As you bargain, a little bit of compromise is necessary but not to go below your worst case scenario. I have heard it said that "in a negotiation, both parties must leave feeling like they won some and lost some".

Never make your desperation apparent to the other party - It is important to do a SWOT analysis of yourself and your team that you are going with. Once you know your strengths, you will not let someone with no deep knowledge of the current issue on the table lead the discussion. Do not expose the weaknesses you may have as the other party will ride on that making your proposal futile.

Be Authentic To Build Credibility and TrustOne guiding principle that is too often neglected in modern negotiation is authenticity. Many people enter into negotiation looking to gain a competitive advantage by concealing information or through outright deceit. While you may achieve a particular desired result through such practices in the short term, you run the risk of tarnishing both your company’s and your own reputation, as well as increasing the odds of a fraudulent inducement claim should the deal go bad. A much better practice is to be honest and authentic. By making it clear that you are a straight shooter who deals in good faith, you are more likely to disarm the other side’s natural defense mechanisms and improve the odds of a productive, long-term business partnership. Moreover, you are creating career insurance for yourself, as companies are far more likely to hire and retain employees who have a reputation for honesty and sincerity over doubletalk and trickery.

• Understand Your Mission
• To engage in a productive negotiating experience, you must have a clear sense of your objectives and desired outcome. To determine these, you must begin by developing a thorough understanding of your departmental and broader corporate mission. Entering into a negotiation without this understanding heightens the risk that your efforts will achieve a narrow set of goals that do not really advance the long-term interests of your company.  By knowing where your company is headed, you can tailor your objectives and negotiating strategy to clear a straighter path to your destination.

• Understand Their Mission
• Knowing where you hope to take your business is an important element of negotiation preparation. However, understanding the mission and short-term goals of the individual on the other side of the table is equally important. Only by understanding what the other party to your negotiation really wants or does not want from the deal can you determine an optimal approach to the discussion. Without this understanding, you risk engaging in an inefficient negotiation at best and an offensive one at worst. Arming yourself with the necessary knowledge and strategic research about the other party can make the difference between closing the deal and falling short of your goal.