THE POWER-CONTROL MODEL

POWER OF CONTINGENT VARIABLES

“At best, the four contingent variables (size,technology, environment and strategy) explainonly 50 to 60 percent of the variability instructure.

It is proposed that power and control can explaina good portion of the residual variances.”

MAJOR POWER-CONTROL VARIABLES

PowerPoliticsConflictNetwork CentralityDominant CoalitionsSatisficingBounded Rationality

POWER

Power is usually defined as a personal characteristicbased upon one’s ability to influence or dominateanother person.

The typical types of power ascribed to individualsare:

1. Legitimate position power (authority)2. Coercive power3. Reward power4. Expert power5. Referent (normative) power

ORGANIZATIONAL POWER

Power in organizations is usually the result of structuralcharacteristics. There is a formal hierarchy of positionsthat differ in the importance of the tasks to be performed.

Some positions also have access to more resources or aremore mission-critical to the organization. Power basedupon organizational relationships is vested in the position,not the individual, and comes from both vertical andhorizontal relationships.

VERTICAL SOURCES OF POWER

1. Formal Position: Occupants of a position accrue certain rights, prerogatives, and responsibilities legitimately based upon the priority of the position in the hierarchy. Rights include goal-setting, decision making and directing activities of prescribed others.

VERTICAL POWER II

2. Resources: Organizational resources are allocated downward by top management. Resource allocations can be used for rewards or punishments (also sources of power), or to create dependency

3. Control of Decision Premises and Information: Top managers place constraints on decisions made at lower levels, by defining the decision frame of reference and guidelines for making the decision. They also routinely have access to more information for decision making, and control it.

VERTICAL POWER III

4. Network Centrality: the degree to which a person/ position is located centrally in the organization so as to have greatest access to information and people that are critical to success of the company. Many top executives surround themselves with a network of loyal subordinates with access to a high degree of company information and form alliances with other significant people to wield considerable power in the organization.

HORIZONTAL SOURCES OF POWER

1. Strategic Contingencies: Events and activities that are critical for achieving organizational goals. Units involved with strategic contingencies tend to have more power because they provide strategic value to the organization. For example, if the organization is threatened by significant lawsuits, the legal staff would have significant power and influence over organizational decision making.

HORIZONTAL POWER II

2. Dependency: A unit gains power based upon its relative dependency to other units. The more another unit needs it to complete it mission successfully, the more power the latter has relative to the former unit.

HORIZONTAL POWER III

3. Financial Resources: “The person with the gold makes the rules.” Modern Axiom. Money is a scarce resource that can be converted to many other resources. Control over money is a big source of power to units. It also creates dependencies. Usually departments that generate income for the organization have more power.

HORIZONTAL POWER IV

4. Centrality: degree to which a department’s role is in a primary activity of the organization, especially one that affects the final output.

5. Non-Substitutability: the degree to which a unit’s work cannot be duplicated by another contributes significantly to it’s power in the organization and enhances it’s role in the organization.

HORIZONTAL POWER V

6. Coping with Uncertainty: Many environmental variables can be volatile and change rapidly, creating high levels of uncertainty for the organization. The degree to which the work of a unit contributes to reducing that uncertainty for other units, the more power accrues to the unit. This is usually accomplished by: (1) obtaining important information for others, (2) preventing problems before they occur, and (3) absorption of uncertainty.

ORGANIZATIONAL POLITICS

Organizational politics involves those activities taken within organizations to acquire, develop, and use power and other resources to obtain one’s preferred outcomes in a situation in which there is uncertainty or (a lack of consensus) about choices.

ORGANIZATIONAL CONFLICT

Organizational conflict develops between individualsand groups for the following reasons:

1. Goal incompatibility 2. Differentiation 3. Task interdependence 4. Limited resources

USES OF POLITICAL MODELS

When intergroup conflict is low – a rational decisionmaking process will be followed. That model ischaracterized by:

1. Monitoring the decision environment2. Defining the decision situation3. Specifying decision objectives4. Diagnosing the problem5. Developing alternative solutions6. Evaluating alternatives7. Choosing the best alternative8. Implementing the chosen alternative

USES OF POLITICAL MODELS II

When intergroup conflict is high, the Carnegie modelof decision making prevails. The model suggestsexplicitly recognizes that the preferences and values of managers differ and that conflict between managersand different stakeholder group is inevitable.

Decision making occurs in an uncertain environment where information is often incomplete and ambiguous.Decisions are made by people who are limited by boundedrationality, who satisfice, and who form coalitions to pursue their own interests.

CARNEGIE MODELBounded Rationality: Managers try to be as rationalas possible but are faced with very complex problems,many of which are ambiguous or require shared supportby other organizational members. Managers are limitedby time constraints, incomplete information, and insufficient resources.

Satisficing: managers accept “satisfactory” solutions toorganizational problems rather than pursue “optimal”solutions. They talk to other managers to reduce uncertainty, conduct simple, local searches for alternatives,and use established procedures if appropriate.

COALITIONS

The Carnegie model sees the organization as a coalitionof different interests, in which decision making occursthrough compromise, bargaining and negotiationbetween managers from different functions and areas ofthe organization. Any solution chosen must meet theapproval of the Dominant Coalition.

DOMINANT COALITIONS

Many managers form coalitions to secure their powerbases, and to protect their occupancy of powerful, centralpositions in the organization. The most powerful of thesecoalitions are called Dominant Coalitions, and wield thehighest amounts of power in the organization.

Over time, as interests change, the makeup of the dominantcoalition changes and so does the decision making.

DECISION MAKING

Strategy, SizeTechnology,Environment

Satisficinglevel of

organizationaleffectiveness

Structuralalternatives

Emergentstructure

The decisionwill be made

by the dominantcoalition

The criteria &preferences in

the decision willreflect the self-interest of the

dominant coalition

+

Constraints

DECISION DISCRETION IN THE POWER-CONTROL

MODEL

Organic MechanisticDecision

Discretion

A