Power and Politics

Understanding the concept

Power is the capacity to influence outcomes, while politics concerns how influence is exercised around competing interests. Formal position is only one source of influence. Expertise, relationships and control of scarce resources may shape a capital decision even when the official criteria appear objective.

Power in organizations arises from multiple bases -- legitimate authority, control over rewards or punishments, expertise, and personal referent appeal -- and is amplified by others' dependency on the power holder. Political skill determines whether power is used to build legitimate influence or is seen as self-serving manipulation, which matters greatly in contested resource-allocation decisions.

Legitimate, reward, coercive, expert and referent power arise from different relationships. Dependency increases when a resource is important, scarce and difficult to replace. Political skill can help people understand interests and build cooperation, but does not make manipulation ethically acceptable. An analysis of power should ask whose evidence is heard, whose approval is needed and whose costs are overlooked. Transparent procedures can limit arbitrary influence without eliminating legitimate disagreement.

Core components and theoretical lenses

Use the following distinctions to unpack the chapter's central idea. Each identifies a different aspect of the problem; their relationships matter as much as the labels themselves.

1. 01

   Legitimate, reward, coercive, expert, and referent power bases

2. 02

   Dependency theory of power

3. 03

   Political skill and influence tactics

4. 04

   Coalition building

5. 05

   Perceived fairness of resource allocation

Conceptual constructs

A construct names an idea used to interpret behaviour. It is not directly interchangeable with a survey score or a single incident. In this chapter, the constructs below organize the diagnosis; examine how they could explain the observations before deciding what to change.

• Power bases (French and Raven)
• Dependency
• Political skill
• Organizational politics
• Procedural justice (related)

Observable and measurable indicators

Indicators connect an abstract explanation to something that can be observed. Check the operational definition, reporting period and comparison group. A survey average can conceal differences between teams, and an administrative record can reflect willingness to report as well as underlying behaviour.

• Share of capital budget historically won by each division head
• Frequency of informal lobbying meetings before formal budget reviews
• Employee perception survey on fairness of resource allocation decisions
• Number of cross-division alliances or coalitions formed before major decisions
• CEO/CFO time allocated to each division head outside formal meetings

Reading the case evidence

Separate what the case reports from what you infer. A figure can establish the scale of a problem without establishing its cause. Note what information is absent and how that gap affects your confidence in a recommendation.

Decision alternatives and trade-offs

Alternatives represent different priorities and assumptions. The advantages and limitations below are the existing module's analytical prompts. Compare them against the same evidence rather than choosing first and finding a theory afterward.

Evidence-based discussion

In allocating scarce capital, compare proposals using common criteria and disclose conflicts of interest. Examine whether a powerful sponsor is substituting influence for evidence. Alternatives should be assessed both for expected value and procedural credibility. A decision process that records assumptions and permits challenge can protect trust even when not every division receives funding.

Theory-linked interpretation from the module

Apply French and Raven's power bases to identify what type of power each division head holds (Ramesh: referent/expert via tenure and rapport; Sunita: emerging legitimacy via strategic alignment and coalition-building; Vikram: power via dependency/resource control), and use dependency theory to explain why Vikram's leverage exists despite a weaker business case. Discuss how political skill and procedural transparency can reduce perceived favoritism regardless of the final decision.

Your managerial judgement

How should the CFO recommend allocating the Rs 40 crore given the mix of legitimate strategic criteria and competing power bases (referent, expert, and dependency-based) among the three division heads?

Write a recommendation that identifies a preferred alternative, uses the reported evidence, acknowledges uncertainty and specifies a review point. Another choice can be defensible when its assumptions and trade-offs are made explicit.

Possible consequences

The module offers the following projections for discussion. They depend on implementation and context; they are not guaranteed effects or verified forecasts.

• Short-term: any allocation decision will disappoint at least one powerful division head
• Short-term: a transparent process takes longer, delaying capital deployment
• Long-term: rewarding only relationship-based power over strategic fit can erode meritocratic culture
• Long-term: ignoring Vikram's dependency leverage could lead to subtle operational sabotage or reduced cooperation
• Long-term: how this decision is made shapes future willingness of division heads to build coalitions versus trust formal processes

Reflection questions

1. What type of power does each division head hold, and how does it differ in legitimacy and durability?
2. Why can dependency create power even without formal authority or expertise, as in Vikram's case?
3. How might Sunita's coalition-building among board members be viewed as legitimate influence versus manipulation?
4. What would you do if the highest-ROI project belonged to the division head with the least political capital?

Practice: Know → Analyse → Decide

These are the original module questions. Reading or printing this textbook does not change quiz scores, completion or certificate eligibility.