12th International ConferenceResearch and Development in Mechanical

IndustryRaDMI 2012

September 2012, Vrnjacka Banja, Serbia

Plenary and Invitation Paper

LEADERSHIP AND POWER: SOURCES AND EFFECTS1

Srđan Nikezić2, Sveto Purić3, Bruno Bojić4, Elvedin Grabovica5

2 University of Kragujevac, Faculty of Science, srdjan_nikezic@yahoo.com3 Univerity of Kragujevac, Faculty of Law, svetopuric@yahoo.com

4 Foreign Trade Chamber of Bosnia and Herzegovina, Sarajevo, bruno.bojic@komorabih.ba5 JP Elektroprivreda BiH, Bosnia and Herzegovina, Sarajevo

Abstract: Power is the ability to influence on behavior and performance of others. It is an important resource to which a leader influences and changes behavior among members of the organization. The leader uses power, without he no real influence on the behavior of individuals or groups. Power is usually viewed as a variable of organizational behavior, and organizational behavior is a basic component of organizational contexts, which has implications for all other variables of organizational behavior. As with other concepts, a there is no single definition of power. The literature defines the concept of power in the context of leadership authority and influence, which is understandable, because the explanation of the concept of power include the impact, while the authority is just one of the power sources. Power and leadership can't be viewed without the impact of work motivation that a leader can use in taking position to employees.Keywords: leadership, power, influence, authority, followers.

1. Introduction (definition of power and distinction from other related concepts)

Several definitions can contribute to a better understanding of the concept of power in organizations. Max Weber defined power as "the probability that an actor in social relations is in a position to give his own opinion despite resistance" [Stefanovic, 1997: 361]. White and Bednar define power as "ability" or capacity impacts on people or the process through resource [White

1 The work is part of the research project 41010, funded by the Ministry of Science and Technology of the Republic of Serbia.2

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and Bednar, 1991]. Robbins defines power as "A person's ability to influence on the behavior of person B, and person B to behave as they otherwise would not have acted" [Robbins, 1986]. With this definition Luthans, in principle, also agree [Luthans, 2004].

From the above definitions it follows that the power to influence the ability of one person to other individuals and their behavior, changing it in a positive or negative way . It is the ability of individuals or groups of winning something to do or change in a way that corresponds to the leader. Leader who has the power is in a position to change the behavior of others, to manage them, and in the case of toxic leaders to be manipulator.

The term includes the effect of power, but the two terms are different. The impact is a broad term and means the ability of changing people's behavior, which is characteristic of leadership. Also, different is the concept of power and authority. Authority represents source power. The authority is legitimate right to exert influence and achieve power. Some authors define authority as the official power. However, in contrast to the authority, the power may not be legitimate. There are other sources of power [Stefanovic, 1997: 362].

Chester Barnard, make a real-understand difference between authority and power. Power is exercised in relationships informal authority. Formal authority is interpreted as a way of communicating in the formal organizational structure, whereby associates or members of organizations perform actions in accordance with the wishes of the leaders. Authority has to ensure the realization of collective goals and objectives of the organization, and the power tends to accomplish the individual goal [Barnard, 1971].

To exercise power in the organization requires two conditions:

a) The ability to use a source of power andb) Motivation to accept power.

Practical exercise of power depends on the characteristics of the leader and the situation in which power is realized. On the one hand, there must be leaders willing to make some kind of power, according to the source of power, on the other hand, the willingness of individuals, over whom power is exercised, to accept it for various reasons. The motives for accepting power (reward, promotion, dismissal) are required as a reason for accepting his leadership and competence. In other words, individuals, over whom power is manifest, must be a motive to accept the influence of others [Roth, 2010]. In addition to these concepts is necessary, finally, to define the notion of identity as an important factor in understanding leadership competencies. The identity is experience of our own integrity and individuality in certain social roles, such as leadership, but in life in general. We can't have a sense of identity without any special feeling or without sense of integrity, such as a leadership position, during life's way.

2. The source of leadership power

Power in the organization, respectively the power of leadership, is based on the ability to use some of the available resources, such as: knowledge, information, location, financial resources, human relations, and the like. John French and Bertram Raven identified five classical sources

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Power of positions- remuneration

- punishment - legitimate

Personal power- expert

- reference

Organization Leadership

and their respective types or kinds of power: the power reward, coercive power, legitimate power, referent power and expert power.

John Schermerhorn is, unlike them, identified four leading sources of power: legitimate, rewording, penalties and reference [Schermerhorn, 2009, 321]. The power of the leaders in the enterprise can be classified in the following way: The power of rewarding, punishing power, legitimate power, expert power and referent power [Nikezic, 2009: 169].

A successful leader's, in addition of his/her own vision, must have the charisma to bring together and motivate others to work on a job, but at the same time be able to take into consideration the reality: to identify barriers and work to eliminate them. In addition, he should have the power to influence on others to follow him and his work and conduct the holder to perform the set of tasks. Power, then, is the ability to influence on others to do what the leader wants. It should not be a function of personal satisfaction or interest, but as a function of the organization and employees. Sources of power, according to the Zivadin Stefanovic, can be divided into two groups: those that are based on the position of the leaders in the organization and those who depend on the leader - as a person [Stefanovic, 2003: 260]. In Figure No. 1 is shown the elements of a source of power over leadership positions and personal characteristics.

Picture1: The source of leadership power: position and personal characteristics (modified by: [Kotter, 1990:321])

1) The rewarding power means, "superior" persona that has the power to be awarded by other personalities, other social actors. Awards are not only material nature, but also intangible (praise, support, promotion, etc..). Power derives from the awarding authority, so leaders have right to reward individuals in the organization. Often the leader uses certain awards to make influence on the behavior of their subordinates. Also, it is possible to achieve good effect by award better place or scheduling the job more attractive. Employees can accept like a prize friendly leadership behavior, which can inspiring and desirable them. In this way a leader acts on the internal processes of the individual, thus it controls the motivations, attitudes, and beliefs of its employees.

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2) The punishment power means that "superior" personality, a certain social actors, or leader, has the power to punish other social actors, if this had not complied with the order, or did not achieve defined, perceived goal, in given organizational circumstances. Leader possesses authority, then may fine or penalty recommendation for a certain member of the organization. Punishment can be accomplished in various ways: to terminate benefits, to give him a lower paying job, to cut him need support or deny him for better position, and in extreme cases can give him a fired. The use of this source of power will lead to changes in behavior, if only exist a fear of the consequences. Using leaders penalties apply when employees do not comply with the orders, rules and regulations or do not act in accordance with the policies of the organization. This form of power has a negative impact on the majority of employees and not popular in corporate practice. This is not acceptable behavior for leaders. Experience has shown that in this way controls the external behavior of employees, and not affect on the changes in values, beliefs and attitudes. The leader with punishment can't achieve changes if employees are not motivated to adopt it themselves. This is typical behavior for toxic leaders who are prone to intimidation and following their power.

3) Legitimate power stems from the position occupied by certain social actors and that identifies with the authorizations, formal authority that belongs to an organizational level, a certain place in the social structure of the organization. Legitimate power stems from a formal leadership position in the organization and authority that can rely on legitimate power. It is based on the perception of employees that the leader has a legitimate right to exert influence, because has a position that gives him that right. This power is based on the role of leader of which has been provided by position he has in the organizational structure of the company. Leader who possesses legitimate power is in a position to reward and punish. This means that the legitimate power of the most important types of power in the organization, as a leader who has the legitimate power to rule, also has other sources of power. Legitimate power belongs to the leader, which is in its structure and in its reputation model for others.

4) Expert power is the power of social actors who has the knowledge and professional skills, upon which depend other social actors in their work and the success of enterprises. Leaders of expert power, as owners, have an impact on the basis of knowledge and information in their possession and that are relevant to the work of social actors and enterprises. This power is based on the perception of subordinates that the leader of a professional and competent, expert in their field. If the leader is indeed an expert followers are willing to follow his instructions, suggestions and opinions, to listen and to implement its recommendations and the views presented. Leaders on lower position, managers, have specific, narrow knowledge in the field for which they are responsible. Some top leaders in organizations often do not have sufficient experience in the field of specialty, but they make up that with a knowledge of his subordinates, following his vision of the organization. Expert is a person with a high level of competence in a specific scientific or professional field and good knowledge of certain problems. Expert power leader

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gains in importance with the development of technological processes, the introduction of new organizational forms and new business concept.

5) Reference power includes the impact of a social actor to other social actors even when the reference power leader does not want it, or simply does not require. References on another, on his authority, is focused on consolidating their own attitudes and prove their professional grounding. Referent power comes from the personal characteristics of leaders, not from a position or title. It is based on the identification of the subordinate leader who has the charisma and influence social actors who follow him. That is the power of emulation. So, this power has specific persons, who attract others with his/her personality. This kind of leader is respected and enjoy high confidence. The referent leaders don't have to use other means of control behavior, such as reward or punishment, because his followers are motivated by his/her behavior, which is enough to pursue it. Referent power is used in solving problems in situations that cause followers doubt and indecision. So, the leader who has the power serves as a reference model for the behavior. Undecided individuals to vote or opting follow its behavior.

In practice, there may be a negative influence and power of the reference, in the case when individuals have a hostile attitude towards the person who possesses the power of the reference and try to act contrary to its behavior [Stefanovic, 1997: 363].

In addition to these, the literature and practice, can be seen another source of power, which in the era of the rule of information gain importance. This is the power of information [Roth, 2010]. Under modern conditions, "computerization" has the power in the organization who own information. The power of information is realized information content and force of argument, which derives from its content. The influence of a change in behavior does not depend on the relationship affection or disinclination to the person who owns and imparts information, but on the implications of its content for individuals in the organization.

By John French and Bertram Raven sources power is in the interaction. The same person may use more source power, according to the situation of the power exercised. It is most common among leaders who have formal authority from which it emanates legitimate power, but it is formally entitled to use the power of reward and coercive power. By nature and function of the leverage they have, the leaders are expected to possess the ability to complete the reference and expert power. Bad is the situation if the leader ability to influence is based solely on legitimate power, respectively the right given to him/her by position, and does not have the reference and expert skills.

Leaders can combine the use of power and use that power to the effects that they want to achieve in different organizational circumstances. Followers of the organization can respond to the source of power in three ways: to share their opinion with leaders and enthusiastically finish given tasks, to accept the tasks and execute them, although they do not agree with them, working

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Intentions of person A

Leads to

Attempt to influence

Results in

Behavior of person B

Which satisfied

without the proper enthusiasm, and at the end to try to avoid given instructions and tasks and try on that way to show resistance to the leader.

3. Leading power in organizations

The leading power in the organization can be explained in different ways, like something hard seeing, but crucial for the relations of individuals or social groups. Hence it can be understood that the essential elements of leadership powers are in the social structure and the corresponding relations of individual social actors and social groups. The leading power is, precisely, defined as the capacity of a particular social actors and leaders, to overcome resistance of other social actors and followers, in order to achieve the desired goal, as a form of coercive control, or the index of leading power, which is obtained by comparing the impact of different individuals (A and B) as well as the ability to maintain its control of behavior other social actors. In Figure No. 2 is showing the basic power unit of leadership, which contains two social actors: the leader (A) and followers (B) [Nikezic, 2011: 190].

 

Picture: The elementary unit of leadership power[Nikezic, 2011: 191 ]

The process begins with the intention of a person (the leader) who want to exercise their influence to person B (followers) and results in a particular behavior followers, which, to a greater or lesser extent, corresponding to the initial intentions of the leaders. It can be assumed that there are different influences, or forces present in the unfolding initiated process, such as values, beliefs, norms and assumptions of the participants in the round "use of power", establish of individual centers, distribution of authority and accountability, access to information, the methods of transmission and impact circumstances where the impact is realized. In addition, the followers may be influenced by other social actors and objective organizational conditions that limit the capacity of leader impact. After all, the scope and influence of social actors is determined by a number of organizational factors and relationships that depend on the division of

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labor, the grouping of units, centralization and decentralization and harmonization of systems and linking social actors through the different types of coordination. Basically, the key types of leadership power distribution are: autocratic, authoritarian, democratic, polyarchy, anarchic and polyarchy-democratic. Other combinations are some basic types, with a predominance of the decentralization or centralization, which, among other things, subject to company size, differentiation of product range, environmental conditions, age, type of technology, as well as personal and leadership qualities.

The organization is essential to the authority that derives from the legitimate leadership of power and influence, which is a broader term, as we have already stated, the power, the separate identity of leadership, as well as his integrity and uniqueness. For an organization losing of leadership brand brings identity confusion, insecurity, depression, and even, and defensive reflex reaction followers that are difficult to balance and facilitate further work in the organization. Thus, the loss of identity and the leader loses his power from which "draws" the authority and influence. Stressful and traumatic situations in the organization primarily influence on leader and often bring risk of "renounce of his/her vision" and the need for leaving the organization. Full expense of leadership is the basis of identity to the organization in crisis overcome fear, anxiety, depression, and loss of the followers will to work. Thus, from the perspective of society again defeat back in equilibrium, through identification with the identity of leadership, influence, authority and power. The leadership identity crisis must be identified with the values, culture and beliefs of the organization or the competent authorities abroad. Leadership is often associated with the identity of the great achievements of the organization, membership of the same feelings and values of leaders and followers, undervalued in the country and the world and the leader of the organization, as well as easily recognizable brand that was created by the leader of the organization. All this together produced relative experience of satisfaction and pride, undervalued in the country and abroad. Quick, negative changes, in a short time, create outstanding issues in the organization, financial impoverishment, loss of markets and customers, and poor working conditions for positive change. Identity crisis of leadership goes beyond the creation of a new identity through a process of personal change, based on the situational model that all changed in the environment. The old leadership identity can't be recovered, but the new can be built. Crisis in organizations, especially in countries in transition are an integral part of the change and the creation of new values. For leadership identity is not characteristic consistency, but permanent changes. Thus, at each level of organizations development acquired identity transfer into a new one, so there is no chance for a new twist in the organization without some kind of crisis of the previous state of the "status quo". Leadership identity is constantly evolving, gradually and imperceptibly, or changing rapidly, passing through a tumultuous period after the crisis. Organizations and the leader in a turbulent environment, the transition conditions can only find his way in the common coexistence of leaders and followers who are ready for changes- organizational and personal.

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Quest for leadership qualities through hundreds of studies have shown that an effective leader for honesty and integrity is a key feature. Integrity and honesty ensure for leader respects of ethical norms and also follower trust and belief [Stogdill, 1982].

Northouse and Kirkpatrick and Locke according integrity as one of the key leadership traits.

Integrity is a quality that implies the existence of sincerity and mutual trust between the leaders and followers. Leaders who are holding a series of principles and take responsibility for their own actions have integrity. Leader with integrity wins the trust of others, because he/she can be trusted that will do what is promised. They are loyal to the people they can rely on and are not prone to fraud. In fact, integrity makes leaders as people who can be trusted and people who are trustworthy [Mihailovic, 2011: 133].

4. Structure and distribution of power

Power in the organization is based on various sources that may not be legitimate. Starting from the assumption, we have to considered layout and structure of power in one organization.

Power structure determines the impact and prevalence of some types of power and relationships in the organization between the various forms of power. Schedule or distribution of power expresses the scope of power by certain parts of the organization. Both indicators are significant for organizational behavior and leadership activities within the organization. The leader needs to control the structure and distribution of power, in order to balance the power structure and situational conditions.

Set goals and way for achieving them, as well as the functioning of the organization in that direction, are best guaranteed by the application of legitimate power.

Schedule legitimate power depends on the structure of its design. In the process of designing the organizational structure will be determined by the distribution of legitimate power, in order to establish control and authority [Pfeffer, 1981].

The position that the leader is realized in the structure of an organization defines its power, both in the vertical and the horizontal line. However, the various functions in the organization at the same level may not have the same power. Volume of their power depends on leadership commitment to individual preference functions, and of the ways that the leader sets the causal relationship of certain factors such as: type of organization, type of function, economic indicators, the organization's policy, environment, and so on.

Situational factors that determine the distribution of some types of power in the organization are: leader characteristics, follower characteristics, characteristics of the organization and the characteristics of the environment.

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1) The characteristics of leaders, manifested as a motivational attitude that can be taken up to employees and the relationship with subordinates, will affect the power structure. The strategy of motivational attitudes, set by McGregor's Theory X and Y of motivation, describes the initial influence of leader to followers.

Douglas McGregor, based on the leader's role to provide and organize the factors of production, including human resources, in order to prosperity organization, has developed two theories of human behavior, Theory X and Theory Y. Starting from the theory of two extreme noticed is that there are a range of possible behaviors. They provides in practice as a very complementary set of attitudes.

According to the theory X workers may be described as:

a) individuals, who have a aversion to work, or do not like to do, and avoid it where possible;b) individuals, who do not have the ambition, dislike responsibility, and they should be forced, controlled, directed and punished to the effort invested in achieving the objectives of the organization;c) individuals, who wishing safety, evading responsibility and have relatively little ambition.

According to the theory Y workers can be described as:

a) individuals, who efforts at work consider and accept as a game or a holiday;b) individuals, who like work, and depending on the conditions of work considered as a source of pleasure. In order to achieve organizational goals, the most popular motivators are different types of awards.c) individuals, who accept responsibility if they are so motivated. Therefore, it is necessary to create a work environment (organizational culture) where workers can show and develop their creativity.

Theory X is basically static, rigid and unpopular for workers. Starts with uninterested workers for the fate of organization, which influence on creation of repressive nature measures. Control of the primary and imposed by the managers. If managers have a proper understanding of human nature, then the attitude of the theory Y optimistic, dynamic and democratically oriented. Assumes that workers are hard working, dedicated and to identify with the mission and vision of the organization. Legitimate power will occupy a prominent place in the power structure. Otherwise, there will be resistance to legitimate power, and members of the organization prefer referent, expert power and information.

2) The characteristics of followers manifest as a tendency towards favoring legitimate power through obedience, authority and intimidation. Otherwise, can be developed a motivational attitude among followers who have a need to take responsibility and obligations, and who do not just execute the command, but desire to prove themselves through their own expression of views.

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3) Characteristics of the organization, resulting from the nature of the task, the characteristics of the organizational structure, working conditions, remuneration policies, personnel policies, leadership styles and Structure of the direct impact on the distribution of power in the organization. Key factors are the characteristics of the organizational structure and leadership styles. Formalized structures and authoritarian leadership style favors legitimate power. Democratic style of leadership is legitimate to assume that power is accepted and supported by members of the organization.

4) Characteristics of the environment, implying a significant power structure in the organization via social perceptions about what kind of power should prefer. Undemocratic societies favor the power of coercion. Democratic societies favored reference, expertise and other types of positive power. Legitimate power is unprecedented in non-democratic social system. Socio-political system has the dominant influence on the structure and distribution of power and reflects the characteristics of the organization.

Expert, reference, the power of information and the power of awarding eliminates the power of coercion and are typical of a market-oriented economy, technical and technological progress, market competition and globalization of business.

In defining its powers and resources of the organization shall consider two approaches: resource and interpretive [Nikezic, 2011: 191-192]. In the Resource Access key elements consist of the following positions: social structure of individuals included in order to achieve certain benefits for themselves and other social actors. These individuals are leaders in the organization. Power occurs at the moment when the differences between the social actors are not equal. Some spot members of the company (followers) have an inferior position and depend on other members (leaders) who have the benefits of, or a particular resource. Members who have resources have power and can produce the desired behavior of other individuals. From the point of view of the organization functioning resources contain main force of development, and through them to ensure successful exchange of products, singular identity. Hence, leaders also have control over other social actors or social groups, as well as control over the acquisition of resources or control of the means of acquisition of resources, and therefore certain, very important, the power. Control of resources necessary organization affects the dependency levels of power, authority and level of centralization of communications systems and can change the power structure. Thus, if individuals (leaders), or certain social groups have the resources, or if one of them depends on the method and conditions of supply, continuity of work, the more will be the center of power, with the highest and decisive influence on system operation and behavior of other people's individual and social actors. In Figure no. 3 shows the dependence of the different sources of power [Babic, 1995:77]

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Picture no. 3: The ratio of the different sources of power in the organization

As picture shown: in the first case, a social actor (the leader) has a central role in the organization in relation to the role of individuals in the points B, C, D and E, in the second case, a social actor (the leader) has established interpersonal relationships with followers at points B, C, D and E, which enables active role of leaders and followers in the process of procuring the necessary resources, production and sales.

5. Strategic contingency model

The concept of resource perspective, in addition to the importance of having critical resource in determining the power of individuals and social groups, through ownership or control, and there are certain parts of the power company has difference role in relation to the social environment influence and good functioning as whole. On these characteristics is based strategic contingency model. It is based on the premise that the organization is forced to adapt certain requirements of the environment, its factors that determine success in achieving planned objectives. Given the nature of the changes in the environment, particularly in the modern economy, the organization is facing a great risk and uncertainty. Therefore, the organization is forced to change various strategic options and reduces the maximum uncertainty of the planning and provision regulated movement into the future. In fact, by nature, different positions and roles of individual parts of the enterprise are closer or further away from direct contact with the environment and whose orientation and focus on different areas and different needs. Organizational units who are able to work with the surrounding achieve some control and eliminate possible uncertainties in the company have the most power in the choice-making enterprises. However, the positions of isolated, individual parts of the company are limited by politics and attitudes of leaders as a key center of power from which they derive the structure and character of other powers at different organizational levels and positions.

The concept of strategic contingency based on the strength of individual parts that interact with the environments reduce the level of uncertainty that could adversely affect the operation of the organization and the position of the part, or social actors in relation to other parts, individuals or social groups. In addition, the power of the individual parts affect the company and the possibility of replacement or substitution, thereby executing a certain redistribution of existing

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power, which determines the position of the new parts and the attitude towards the environment and the uncertainty emitted some uncertainty.

Strategic contingency model focuses on the tasks and in the form of problems to be solved, which highlights the personality of the leader as an individual who has the charisma and the effectiveness of leaders. [Hickson, 1971: 216-229] Solving problems is a central task of the leader. Model "helps" to the leader to define techniques of managing, identify what is common to all employees and make orient to solving the problem. The model allows a relatively simple manner with a small number of variables provide power leader in solving problems through specific mechanisms. Power is not defined in any context. In a general sense of power is the ability of others to do what the leader wants, but it should be noted that there are different forms of power: psychological, physical, hypothetically, intellectual, charismatic, and each in its own way affect the leaders and followers.

In strategic contingency model leadership position is determined by success in solving problems. The leading role is associated with the possibility of solving the problem, which followers are unable or able to do. This leader gives great bargaining power. Withdrawal of leaders from the problem solving process can cause the system to collapse. The ability to maintain leadership in a system is caused by the units correlation, social interests and communication infrastructure. [Hickson, 1971: 216-229]

Uncertainty is the driving force, which is the result of a lack of information about future events, so that the alternatives and their results are unpredictable. Leading source of power comes from the ability of leaders to cope with uncertainty. Uncertainty is directly proportional to greater or lesser dependence followers of the leader.

Organizational units are highly structured, mechanized and well-defined tasks and capable to cope with uncertainty. They are more resistant to shocks from the environment. If you are highly specialized organizational units, where staffs have limited knowledge about only one subgroup of operations, and the leader has knowledge of all parts of its operations with a total power of growing knowledge about the operations. This is where the concept of strategic contingency can't promote efficiency, functionality and rationality. These are places where you do not need to develop leadership competencies.

An example of inadequate leadership role of absolutist regimes in the Arab world, where a series of dictators have failed to solve the problem and their place in government is discredited. Information was used in a small circle around a dictator, so power caused by having information always was present lack of information for citizens, or placing partially accurate or completely inaccurate information. These systems operate on no coordination systems and subsystems in the long term should lead to a number of disadvantages, which often can have disastrous consequences.

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Power of uncertainty reduction

Position in the organizational structure

Substitution of activities

Power of the organizational unit in the company

Some forms of power efficient in any situation, in which an individual is sensitive, in the second situation do not give the same results. Power in one situation may not be the government in another. It is necessary to measure and determine how effective the power of the leaders before and after certain situations. It is also necessary to measure the volume and power.

A critical approach to the concept of strategic contingency based on the determination of facts: whether and how the concept of believable and dynamic? To what extent have the subunit independence and power? The fact that two terms make up the core of the concept of power and the problem can't be quantified.

Group strategy, which is held together, can often solve a particular problem when need to face with stress. An example of that are Chilean miners, who were trapped in 2010, but using intellect and will manage to survive. Issues still to be resolved, but leaders may not always be dominant. A simple desire to maintain community groups is an important parameter quantifying and testing. To specific situations that require problem solving, and are relatively simple: an increase in wages, organizational problems, the problem of the organization of enterprises, or the problem of legislation at the national level, can be addressed as strategic concept of contingency. However, for large companies and organizations with a large number of problems, this approach does not always produce good results, because there are many unknown variables. In Figure no. 4 shows a model of strategic contingency. [Nikezic, 2011: 194]

Picture 4: Strategic Contingency Model

Starting from the strategic contingency model, Hickston and his associates continued with researching in practice, given the fact that the power of the subunits is the result of the total power in the organization, because there is a contingent of dependencies between subunits that together face uncertainty. The power of the individual subunits is greater, for various reasons, which he practically tried to prove, and his associates at the polls in breweries in Canada and the United States. [Hinings, 1974] In all breweries were identified by four subunits (production, marketing, research and development, and finance). Dealing with the uncertainty of market conditions are created for the interdependence between the subunits, as the activities carried out continual process. Independent variables were identified as necessary but not sufficient condition

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for the control of the strategic concept of contingency. Together, they determine the variation in the interdependence between the subunits. Some subunits have greater or lesser power. It was noted that financial service has more power than other subunits. Substitution can indirectly affect the power, either by reducing uncertainty or increasing mutual dependence. Reducing uncertainty, for example, can be solved by prevention, by signing long-term contracts of sale.

The present state of market turbulence and great uncertainty in the world economy conditions the application of new theoretical and practical model which takes into account the deep changes in the business. Strategic contingency model was applicable in the conditions of a stable market environment with relatively low uncertainty, since the appearance of the model, but there have been major changes in the production and sale of products and services in the world market, so the theoretical concepts have become a matter of further research and extension base model.

6. Structure power in the organization and process of its use

Power influence on all processes which occur in organization. Leaders acquire and use power to achieve certain performance objectives, and also to strengthen their positions. Every interaction and every social relationship in the organization leadership present exercising leader power. [Gibson, Ivancevich, Donnelly, JR., 1985: 333] Word leadership, starting with the power, can be defined as "the process of using power to achieve interpersonal influence." [Schermerhorn Jr., Hunt, Osborn, 1985: 445]

In the process of decision-making, social actors and organizational units (each function) have a smaller or larger impact. In the structure of power and its use involves coercion, consensus or negotiations. In the process of enforcement of the dominant social group or unit determines the final vote. However, in situations of existence of several centers of power that have the same goals, but different views of their consequences, the final choices are made through consensus. In the process anyway there are different concepts of goals, and interests through trade-offs approaching a particular alternative. The level of agreement processes and structures of power is in the range of normal, manageable, impracticable and crisis conditions. In Fig. No. 5 is shown the structure of power and the process of its use. [Nikezic, 2011: 195]

Power structures

Process

Forcing Forcing Intermediate solutionAutocratic Normal conditions Reproducible Reproducible

Decentralized Crisis conditions Normal conditions Reproducible

Distributed Crisis conditions Unmanageable Normal conditions

Picture 5: The process of using power

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Correlation of the parts

Different objectives

The importance

of the decision

Power and Politics

Power distribution

Lack of resources

Conflicts

Different views on

technology

In continuous business enterprise is not always necessary to demonstrate the use of power. However, there are conditions where it is necessary to use the power of expedient, as in the case of interdependence of some actors (organizational units), diversity orientation (goals), variety of technology concepts, and the scarcity of certain production resources. They will come to the exercise of power (political process) because of the nature of the problem, which produces a conflict, and the importance of the distribution of power. In Figure No. 6 shows the conditions of use of power. [Nikezic, 2011: 196]

Picture 6: Terms of power and politics using in decision-making

Conflicts are phenomena related to processes interaction and group behavior in organizations and in psychology can be defined and identified a number of causes of that regard, various conflicts in which understanding shall consider the shape and nature of group interaction in an organization. Conflicts in the organization express the state of relations between the members of which dominate the appearance of disagreement, confrontation and conflict. They are a threat, but also a challenge and an incentive for change and creation of new organizational equilibrium. They have a nice appearance, but as a normal and legitimate can be resolved and provide an incentive for new settings of broken balance. [Nikezic, Bataveljić, 2012: 339] Conflict causes in organization are different and can be summarized in three main groups of factors. These are communication factors, structural and personal behavior and should be reduced to an acceptable form or resolved in the interest of a successful business. [Nikezic, Kijevcanin, 2010: 100]

Based on an interpretive perspective of power consists of three different approaches depending on the number of dimensions that are taken into account. If the approach is based on the control

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Resources control Political processes Leader ability

Unequal exchanges

Social reality construction

Resource dependence

Cognitive dependence

Resource power Interactive power

Legitimization

Institutionalize

Source power

Through

Power process creation

Create

Power basis

Results

Power form

of resources, then it comes to a one-dimensional approach, which involves a clash or conflict between superiors and subordinates, higher and lower organizational levels. Two dimensional power approach implies that power is activated in case of latent conflicts. This actually means that superior social actors prove their power in such a way as to not allow the conflict through. Here is pushed interest of other social actors (suppression). When, in turn, shaped by the interests of certain social actors inferior or superior individuals by social actors, it is the source of its power in the third dimension, in the process of social construction of reality. This power is called the interpretive power because it is based on controlling the interpretation of reality by those who hold power. [Nikezic, 2009: 172] This concept of power is a key role with superior individuals or social groups, while the inferior individuals (and social groups) accepted way of explaining the real meaning of the world and by those who control their consciousness. Hence there is no resistance, conflicting interests and actions. Acquisition of interpretive power goes through certain stages, such as: occupation of attention, conceptualization, and cognitive dependence. [Nikezic, 2009: 172]

In phase capture attention individual social actors seek certain concentration of other social actors in case of exposure. However, the way how to achieve this depends on several factors, such as the position of social actors, communication skills, behavior and others. In the conceptualization phase of the social actor, a superb individual who has managed to capture the attention of other social actors must interpret requirements, events and phenomena and to determine their meaning. The effect is the fact that the inferior individuals behave in accordance with the requirements of superior social actors, as they, by the way, gives the power you need in case you do not have the power to control key resources. In the third phase, it is necessary to inferior social actors are dependent on interpretation of reality by superior players in the long term. In Figure No. 7 shows the resources and interpretive models of power. [Nikezic, 2009: 172-173]

Picture 7: Resources and interpretive power models in the company

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The main problem for leaders in any organization is the involvement of all employees to do what is necessary to make the organization achieve success in the marketplace. [Cohen, 1984: 301] There are some other reasons why leaders use power as an important part of their overall work. The acquisition and use of power can impact on career advancement, improve business performance, organizational effectiveness, and the total number of employed life. [Kotter, 1979: 1] For certain social actors an additional source of power can be certain political activities, political process. Essence of the political process is determined by three things: focusing on the acquisition and venues of power, focusing on the achievement of personal goals. Based on the mechanism of the process of political strategy, the political struggle is aimed at maintaining and gaining power in the relevant enterprise. These strategies are: information control, selective use of objective criteria, forming various coalitions, finding a sponsor or mentor, dimensioning and use of consultants. [Nikezic, 2009: 183]

In order to work efficiently enterprises, power structures and power sources are subject to certain changes. And while changing the existing power structure changes are done in other organizations components, such as: the distribution of authority, system information, areas of competence and organizational change in status or position. Changing the power structure is a prerequisite for changing the culture, values, beliefs and assumptions. It takes place in two stages: as a redistribution of power and the establishment of a new balance of power, on the basis of the changed social actors and interests in the company.

In the process of distribution of authority takes into account the strategic options the company, the nature of environments, its level of volatility and preference; technological basis, the rate of innovation and the level of technological perfection, differentiation of product range, scope, structure and quality of varieties, the rate of progress and the general tendency of cognitive and symbolic value to comply with the requirements of the management. In accordance with the circumstances, constitutes a structure of power which corresponds with most of mention factors, with emphasis on those organizational roles which overcomes the crisis and provides possible survival and development of enterprises. In the distribution of power and the constitution of organizational structures can appear three extremes: the centralization of power, decentralization and equitable distribution. [Nikezic, 2009: 174] In a centralized management structure has absolute power, and the sole power. It was a total concentration of power. As a key substance authoritarian or bureaucratic ways of management, respectively decision. It is highly formalized, rigid and resistant to changes in the external environment; facing internal dimensions and instruments. In a decentralized power structure is situated on the lower levels of the organization, the operational structure of the company, which, as far as the distribution of power, has a broad-based basis, a number of point of decision-making and coordination, the inverse set a structure in which a number of equal nucleus contradict each other, stepping dysfunctional elements and conflicts of the importance and role of certain areas of work. In large enterprises increases autonomy of power decentralization, independence of certain parts, leads to breaking the vertical chain of command, copying centers of power and strengthening the forces that pushed the

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Centralization

Decentralization

Organizational structure

Highes

t

Levels

Low

est

company into a state of maximum entropy and the loss of synergy effects. Third extreme of the distribution of power means equal power allocation, the same amount of power each organizational level and social actors or groups in the organization. Equitable distribution of power implies a kind of egalitarianism, or equal rights in decision-making, regardless of the status of the position in the structure, knowledge and skills, social actors, the complexity of the role, scope of duties, level of responsibility, skill level or working conditions. For these reasons, a model of egalitarianism, it is not possible in the structure of the company, and the normative power of established and distributed in a pattern of improper scheduling, in proportion to the specific requirements and organizational roles, with avoidance of these extremes, and the establishment of certain natural balance between the individual and organizational levels of structure the level (area of operation). Therefore, companies in the distribution of power used by a model based on the selective importance of certain types of power for individual decisions, operational and organizational functions, reducing the possible gap between the various centers of power and responsibility allocation in proportion to the application of power. On Figure No. 8 is shown a variant of the centralized and decentralized distribution of power by organizational levels of the company. [Nikezic, 2009: 175]

Picture 8: The centralization and decentralization of power

The nature of leadership in the complex conditions of the environment and the organization, and in constant changes, required of leader of a special request: establish the relationship between the Enlightenment leaders of his power and influence. [Michelson] power and influence outside the formal authority of rigid bureaucratic leaders may be more flexible, innovative and flexible. The work can be exciting for followers, and their greater personal happiness. [Kotter, 1985: 3] Kotter believes that in today's complex organizations use formal concept of power (legitimate power), the only source of influencing behavior in the organization, that the organization was on the market more competitive, had responsibility on the market and the organization itself. [Kotter,

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Explicit power

Invisible power

Power

Structure

1985: 11] When there is a high degree of interdependence in the organization of unilateral action is rarely possible. All decisions of any importance, can be slowed down, sabotage or block, because individuals are in such counteractive position. They each have power over the situation. [Kotter, 1985: 18] The higher diversity and greater interdependence gets big differences in the perceptions of individuals. The result is not resolving, but the removal of the problem to be solved. As a result of the high level of interdependence and diversity in the workplace as a natural consequence of the conflicts occur. [Kotter, 1985]

Success mention the concept of power include a clear definition of the objective demands of particular tasks, activities, and organizational levels; choice of appropriate type of power, which is to locate requires expertise or knowledge and skills to plan, organize and coordinate the work of employees and the choice of explicit attributes of power, which should be accepted. Explicit power, rational and practical based, represents a key lever constructed system of power and influence individual and the individual levels of power. It allows: [Nikezic, 2009: 174]

1) the coexistence of different powers,

2) the acceptance of power,

3) institutionalization,

4) legitimization,

5) redistribution.

In Figure No. 9 shows the positions of explicit and "invisible" power.

 

Picture 9: Explicit and "invisible power"

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Positive Partially positiveNegative

Power types

Expert and referent powerLegitimate power and the

power of awardingPunishment power

Power types

Explicit personal leadership attributes of power are knowledge / information, personal charisma and personal effort. Practice shows that the "removed" invisible power can, in certain circumstances, be transposed into a visible, explicit power. On the other hand, the explicit power may become less visible, if it came to power, or replacement of its "reversal". Both are caused by the position of its stakeholders and strengthening government forces prepared. True, the body of an invisible power can have implicit effects that are the product of the values, beliefs, and certain assumptions employed in the company, which can be identified or investigative optics observations made by researchers. A similar situation can be and the impacts of certain stakeholders who are trying in different ways to protect their interests, explicit action, through the lobby or in some other way. The basis for the explicit power or influence is the fact that individuals and social groups directly affect the operation of the company, such as employees, board of directors, shareholders. Certain individuals or social groups have implied status, then an indirect role and influence. These are external stakeholders whose power is not negligible, but it is not decisive. [Stefanovic, 2004: 32]

In making certain changes or prepare redistribution of power is necessary to assess the importance of individual sources of power in the constitution of appropriate behavior of employees, and creating the necessary performance, or the effects of working employees.

A key prediction concerns the assessment of the actual reactions of employees in relation to the planning and corresponding changes. Starting from that point of view, it is possible to expect a reaction, according to the ability to substantially influence the behavior of employees in the company; [Daft, 2001: 479] employees to embrace the idea of change, and to act in accordance with the directions and instructions received from the management, to employees embrace the idea of change, but personally do not agree with the acquired instruments will be implemented without the necessary enthusiasm, and employees do not accept the idea of change and avoid to act on instructions received by its management.

In the first case, the key role of the expert and referent power to influence the creation of a positive attitude towards the staff changes. The attitude of employees is based on trust toward the source of power and often a positive experience from the past. In another case, a key role is legitimate power and the power of incentives. In the third case, a crucial role is played by the power of punishment, which, often, not stimulate but depreciating effects of employees, despite the possible fairness and appropriateness. In Figure no. 10 shows the power and its impact on employees.

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Picture 10: Types of power and their influence on changes

Kipnis has developed several general strategies of influences on leadership, [Kipnis, 1984: 62] and Gary Yuki said 11 patterns influence the leader-follower strategy and define the target in each case. [Yuki, 1981: 11]

The general model of structural change of power and a source of power, in accordance with the requirements of the company, the following relevant elements: the impact of environment, the impact of internal factors and internal relations, the need for change, initiated changes, and implementation. In Figure No. 11 shows the general model of redistribution of power.

 

Picture 11: The general model of redistribution of power

The external requirements include requirement of stakeholder (customer, supplier, financial institution). Global influences that imply other roles and the impact of certain parts of the company, such as marketing, design and goods and services production. The internal requirements are changing roles of individuals or organizational level indicators, reinforced the need for the participation of employees, the application of the concept of shared leadership, empowerment of employees, changed the concept of sharing and integration, merger, acquisition, etc.. In the phase of defining the need for redistribution reassessed its problems, threats and opportunities determine the scope and nature of redistribution and specify the organizational client in order to make changes and adjustments to the role of certain social groups, or of certain segments of the social structure. The initiation stage determines the redistribution of carriers and methods change, time. During the phase of implementation is used strategy of elimination and employees transition in new strength, which support and embrace the new concept of power distribution and power in the company.

7. CONCLUSION

21

Extern

Redistribution requirements

Intern requirements

Initiation of redistribution

Implementation

The power is corruption, manipulation and damage. This is the dark side of power. But, at the same time, power is the basis for the development, the power of the action, power and progress. This paper deals with the power of leadership as a positive force that is used to achieve organizational, group and individual goals. When the power is used in an ethical and appropriate manner then it is positive for the leaders and their followers in the organization, and for society as a whole. Leaders by putting the power required to develop appropriate organizational strength as the basis for the efficient use of power to influence on others. [Michelson]

Leadership by its nature involves the use of various forms of power. Power is used to achieve the effect on the performance of their followers. Political power, based on the legitimate rights and supported by reference and expert power, is the basis for the formation of a charismatic visionary leader, who can provide at the critical moments, not only survival, but also development of the whole society, or a nation, in the most positive sense.

All ideas about leadership, basically refers on people, influences and goals, which have to be achieved. Interpersonal relationships may exist between people and involve the use of power and influence in order to achieve the goal. Influence means that interaction between people can be regulated by power of authority, position and knowledge. [Nikezic, 2012]

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