OCCURRENCE OF POWER AND INFLUENCE ACTIVITIES

There is some limited empirical evidence that can help set the framework for a discussion of the conditions under which power is used. The evidence comes primarily from two types of studies: examinations of actual decision making, and surveys of managers and executives about their perceptions of power and influence activities in their organizations.

A study of some 33 purchase decisions in 11 firms provides useful background information on the importance of influence in decisions of this type.² The study revealed that, first of all, in 27 of the 33 decisions, there was some disagreement during the decision-making process that required resolution. It also turned out that the more important the decision, the more people involved in it. For decisions of moderate or major importance, almost 20 people on average were involved, while for decisions of less significance, an average of only eight people were involved. With the relatively large number of people involved in a major decision, it is scarcely surprising that differences of opinion emerge. But the real significance of the number is this: think about the task of trying to affect a decision in which 20 or so people are involved. It will clearly be important to carefully map the political terrain, understand the points of view, and spend time and effort on the process. With a smaller number of people involved, one’s attempts at influence can be more ad hoc and still have some chance of success.

From a survey of 428 graduates of a Canadian business school, we learn what types of decisions are perceived to most involve power and influence.³ In Table 2-1, we see that interdepartmental coordination, promotion and transfer decisions, and decisions about facilities and equipment allocation were thought by many respondents to be highly involved with power. By contrast, work appraisals, hiring decisions, personnel policies, and grievances and complaints were less involved with power.

The same survey provides some interesting information about the amount of power and influence required at various hierarchical levels. This is also displayed in Table 2-1. Not surprisingly, the data show that there is a more political climate, involving the more frequent use of power, at the higher organizational levels.

Another study interviewed three managers in each of 30 organizations, including the chief personnel or human resource officer, the chief executive officer, and one lower-level manager.⁴ The data from that study permit us to rank both functional areas and situations in terms of the frequency with which power and influence are used. These rankings are displayed in Table 2-2.

Table 2-2 shows that marketing, sales, and the board of directors are the three areas in which power is most used; by contrast, production and accounting and finance are functional areas in which power is less important. In terms of the importance of power in various situations, reorganizations, personnel changes, and resource allocations entail greater use of power, while establishing individual performance standards and changing rules and procedures involve power and political activity less frequently.

All of these data together suggest that power is more important in major decisions, such as those made at higher organizational levels and those that involve crucial issues like reorganizations and budget allocations; for domains in which performance is more difficult to assess such as staff rather than line production operations; and in instances in which there is likely to be uncertainty and disagreement. We need to understand why these conditions seem to be associated with the use of power and influence. In exploring this subject, we will also discover some of the nuances of power and influence processes in organizations.

INTERDEPENDENCE

Power is used more frequently under conditions of moderate interdependence. With little or no interdependence, there is little or no need to develop power or exercise influence. By the same token, when interdependence is great, people have incentives to work together, forge common goals, and coordinate their activities. If they ignore these incentives, then their organization or group is likely to fail.

My colleague Jerry Salancik and I have defined interdependence as follows:

The essence of organizations is interdependence, and it is not news that all of us need to obtain the assistance of others in order to accomplish our jobs. What is news is that when interdependence exists, our ability to get things done requires us to develop power and the capacity to influence those on whom we depend. If we fail in this effort—either because we don’t recognize we need to do it or because we don’t know how—we will fail to accomplish our goals.

In the first chapter, we saw that Xerox’s Palo Alto Research Center invented the first personal computer, the Alto, and also made “the first graphics-oriented monitor, the first hand-held ‘mouse’ inputting device simple enough for a child, the first word processing program for nonexpert users, and the first local area communications network, the first object-oriented programming language, and the first laser printer.”⁶ There are, of course, a number of reasons why Xerox failed to capitalize commercially on its inventive technology, but one source of difficulty was the relationship of PARC personnel to the rest of Xerox. Bringing a new product to market requires the interdependent activity of many parts of the organization; this interdependence was not recognized at PARC, and even when it was recognized, the people involved did not see the need to develop power and influence. It was presumed that the magnificence of the technology would speak for itself and compel the development and introduction of successful products.

PARC was physically removed from the rest of Xerox—the Xerox of Rochester, New York and Stamford, Connecticut. PARC researchers had a healthy dose of arrogance, which led them to cultivate a we/they attitude toward the rest of Xerox, including SDS, the computer company that Xerox had purchased to help it enter the computer business:

By not appreciating the interdependence involved in a new product launch and the skills required to manage that interdependence, PARC researchers lost out on their ambition to change the world of computing, and Xerox missed some important economic opportunities.

It is especially important to develop power and influence when the people with whom you are interdependent have a different point of view than you, and thus cannot be relied upon to do what you would want. Thus, for example, a study of the process of selecting a dean in 40 colleges located in large state universities found that the greater the interdependence, the greater the amount of political activity on the part of the faculty.⁸ However, when interdependent faculty were in agreement, there was less political activity. The study indicates that interdependence increases the need for exercising influence, but, of course, the exercise of influence is important primarily when those with whom you are interdependent are not going to do what you want anyway.

Interdependence helps us understand the evidence presented in Tables 2-1 and 2-2, which show where power is most used in organizations. There is more interdependence at higher levels in the organization, where tasks are less likely to be either simple or self-contained.⁹ There is more likely to be interdependence in staff positions, in which getting things done almost inevitably requires obtaining the cooperation of others in line management. Interdepartmental coordination is obviously a situation of extreme interdependence, and decisions about reorganizations typically involve a large number of units. Functional units also vary in their interdependence with other units, but it is often the case that sales and marketing stand between engineering or product development, on the one hand, and manufacturing or production on the other.

DIFFERENCES IN POINT OF VIEW

The fact that people are interdependent is not sufficient by itself to create the use of power and influence in organizations. After all, the players on sports teams are interdependent, but we seldom see them stopping to negotiate with each other while the clock is running. If everyone has the same goals and shares the same assumptions about how to achieve those goals, there will be a minimum of conflict. With consensus about what to do and how to do it, there is no need to exercise influence or develop the power to affect others, since they will do what you want in any event.¹⁴

But agreement about how to do it is the key. Goals alone are not a reliable index of political activity in a given situation. At first glance, one might think that goals are fundamental to all action, and that disagreement about goals inevitably leads to the use of power and influence. Although there is no comprehensive evidence on this point, observation suggests that it is not invariably true. There is often intense political activity in business firms, in which there is presumably shared agreement about the goal of making a profit. And, there are frequently cordial compromises in the world of governmental politics, where goals are inconsistent but deals can be struck in which the same means are employed to reach several ends.

The greater the task specialization in the organization, the more likely there will be disagreements. This is simply because, when work is divided into different specialties and units, it is more likely that the organization will have people whose differences in background and training will cause them to take different views of the situation. Lawyers are trained to see the world in one way, engineers another, and accountants yet another. Moreover, holding a particular position in an organization causes one to see the world through the information that comes with that position. Marketers get data on sales and market share, production folks on manufacturing costs and inventory levels. Moreover, different positions often have different incentives—sales maximization, cost minimization, innovation, meeting budgets—and these various incentives provide reasons to see the world differently. The aphorism I often use to describe this situation is: where you stand depends on where you sit.

David Halberstam’s history of Ford Motor Company vividly illustrates how education and functional background can condition the ways in which people view their environment. ¹⁵ The conflict at Ford (and at other automobile companies as well) between finance and engineering was, at its heart, a conflict about how to view the world. Engineers fundamentally see cars and engines as technological challenges, as things to be built. They are interested in developing a technological advantage over their competitors and in being the first to introduce new features. They want to design and build cars that have elements of engineering excellence. Finance analyzes cars less in terms of their aesthetics or their engineering wizardry than in financial terms such as payback period, return on investment, and the amount of capital required to launch new car models or to introduce new technologies of engines or transmissions. The two groups look at the same project from different perspectives, and therefore come, in many instances, to very different conclusions. Ford developed front-wheel drive and numerous other engineering innovations, but it was often one of the last automobile companies to actually put these innovations into its cars. Introducing a totally new transmission and redesigning the car accordingly cost a lot of money, and, unable to prove that such expenditures would produce enough additional revenues to make them profitable, engineering often lost out, at least in the 1960s and 1970s, to finance.

Serious disagreements among people with differing points of view are more likely to emerge in the absence of clear objectives or in the absence of an external threat or competition sufficient to cause subunits to work together. In the 1960s and 1970s, General Motors dominated the automobile industry. It is hard to believe now, but in the late 1950s GM’s biggest concern was antitrust—whether it would be broken up, not whether it could withstand competition. The lack of external competitive pressure, along with its large size and differentiated structure, produced an environment that was prone to organizational politics. John De Lorean noted, for instance, that “objective criteria were not always used to evaluate an executive’s performance.”¹⁶ What seemed to be valued more were being a good team player, not standing out too much, and being loyal to one’s boss. De Lorean provided many details of the extremes to which people went to prove loyalty to their boss: hiring a crane and removing a hotel window so that a refrigerator, too large to get in the door, could be placed in the hotel room of a GM executive who liked late-night snacks; picking up their boss at the airport; organizing retinues of people to meet and accompany the boss on tours; finding out the culinary likes and dislikes of their boss, and making sure that every need or desire was accommodated.

The politicking that occurs in the absence of real competitive pressure rarely promotes the success of the organization. It is, consequently, not surprising that political leaders, whether of nations or organizations, like to find a common enemy or an external threat that they can use to make organizational citizens put aside their differences and work together more effectively. For Apple Computer, for a long while, this was IBM, for the Japanese copier companies at the beginning, it was Xerox, and for U.S. automobile companies today, it is the Japanese. It is not coincidental that crossfunctional communication and coordination in U.S. automobile firms increased as the Japanese competition intensified.

IMPORTANCE OF THE ISSUE

Power is a valuable resource—as such, it is not used wantonly. Rather, those who have power typically conserve it for important issues. In the study I mentioned earlier, which described the effect of resource scarcity on the use of power to allocate those resources, it was impossible to estimate separately the effect that the importance of the decision had on the use of power.¹⁷ Not surprisingly, scarcity and importance were correlated—if something is important, it will be sought by many, making it scarce.

It is necessary to recognize that importance has both a substantive and a symbolic component. We are sometimes perplexed as to why so much effort and energy are expended over seemingly unimportant decisions such as the location or size of one’s office. When Pacific Telephone began building office facilities outside the city of San Francisco and closing down some of its buildings in the city, many executives spent a lot of time trying to ensure that they would remain in the headquarters building rather than be banished to the suburbs. As we will see, the appearance of power can actually provide power, and thus these efforts to maintain the symbols of power are significant.

Because important decisions activate the processes of power and influence, and because at least some people find power and influence aversive, it is not at all uncommon to observe organizations or subunits avoiding important issues. For example, in a study of the New York Times, Argyris described how a decision about a new feature for the newspaper was delayed for almost four years.¹⁸ The management of the newspaper was afraid to open up certain political issues, such as who would be in control and who would gain and lose space in the paper. To avoid these confrontations, it simply delayed making the decision and introducing the feature. A study of political reporting at the Los Angeles Times observed a similar phenomenon.¹⁹²⁰ The newspaper had difficulty coordinating political reporting, particularly of national campaigns, since it was typically split between the national and metropolitan desks. A proposal to create a new, political desk, which would have overall responsibility for campaign coverage, was delayed because of conflicts over space in the paper and status. A political desk was finally established, but it was disbanded as soon as that particular election was over. Reluctance to confront territorial issues caused the Los Angeles paper to avoid an innovation that might have enhanced the coordination and quality of its political reporting.

SOME IMPLICATIONS FOR CAREER PLANNING

On Wednesday, September 1, 1976, W. Richard Goodwin, president and chief executive officer of Johns-Manville Corporation, was forced to resign. While preparing to attend a board meeting in New York, he was surprised by three outside directors who told him that the nine outside directors on the company’s board wanted him out. This event, predating Manville’s difficulties with asbestos litigation and its subsequent bankruptcy, stunned many, including Goodwin. Under his leadership, the corporation’s revenues had risen 91% between 1970 and 1975, and net profits had increased 115% between 1970 and 1974. During the first half of 1976, earnings had set a company record The two inside directors on the board were surprised by the move. Goodwin was apparently well liked by senior corporate management, and he had done a number of things, including moving the company’s headquarters to Denver, to give the organization new life.

Goodwin’s rise to the position provides some clues as to why he did not keep his job longer. He received his Ph.D. in experimental psychology (sometimes called “rat psychology” because of its reliance on experiments to uncover principles of learning) at Stanford University. He worked 10 years for the RAND Corporation and its spin-off, the System Development Corporation. He was running his own consulting firm and teaching an evening course for New York University’s business school when he was retained by Manville to provide help on a strategic planning effort. The effort was so successful that he was offered the full-time position of vice president for corporate planning. Some 20 months after assuming that position, he was appointed president. If we consider Goodwin’s career, we see someone who is clearly very smart and highly educated, but who has spent almost his entire working life either in situations in which he worked alone or for himself, or on tasks (such as the design and software development for the Strategic Air Command’s command and control system) that had a high intellectual component. Nothing in his background, experience, or training prepared Goodwin for the task of managing relations with his board of directors, or for the rough-and-tumble world of large company politics. John Schroeder, vice chairman of Morgan Guaranty Trust Company at the time and one of the outside directors who met with Goodwin to tell him he should resign, made the same point:

Contrast the situation of Goodwin at Johns-Manville with that of William Agee at Bendix. In 1981, Agee was also in a struggle with his board of directors, in spite of excellent financial performance. The outcome, however, was somewhat different: “Before Purcell [a director] departed [in August], Agee engineered the resignations of three other outside Bendix directors in a maneuver that wiseacres at the company’s headquarters in Southfield, Michigan came to call ‘the midnight massacre.’”²² Agee graduated from the Harvard Business School and, prior to joining Bendix, had risen rapidly through the financial organization at Boise Cascade. Both his training and his experience left him better prepared for successfully coping with organizational power struggles.

One of the reasons why general management may not be so general—in terms of the ability of high-level managers to move from one organization to another—is that power dynamics differ across oganizations, and certainly across types of organizations. Aptitudes and skills developed in one setting may leave one unprepared for successfully operating in an entirely different context. High-level corporate executives, for instance, often assume deanships of business schools. In two fairly well-known instances, the results were actually quite disastrous. In one instance, the head of Conrail became the dean at Cornell’s business school, and in the other instance, the chief executive officer of a major manufacturing company, widely considered to be a model of effectiveness, took on the deanship at another leading business school. In each case, the executives had come from organizations in which the use of hierarchical authority was more prevalent. Neither had any particular experience dealing with a more collegial, or peer form of governance. In one instance, the person behaved strongly, thereby offending the faculty and being driven out; in the other, the person was overwhelmed by the administrative and political complexities and was ineffective in getting things accomplished. But in both cases, the new deans lacked the ability to get things done, because neither was skilled or experienced at the particular forms of power required by the situation.

These examples illustrate the more general point: your success in an organization depends not only on your intelligence, industriousness, and luck, but also on the match between your political skills and what is required in the position you occupy. Individuals have different skills as well as aptitudes for developing and using power. For some, such activities come naturally—they enjoy it, and are good at it. For others, the idea of engaging in informal influence and the task of worrying about sources of power and how to develop them is anathema. It is not surprising, then, that people rarely prosper in their jobs if their skills and aptitudes don’t match the requirements of the situation.²³

My experience is that most people are neither very self-reflective about this particular dimension of the person-job match nor very realistic in guiding their actions on the basis of it. Most people search for positions in which their particular intellectual competencies and interests will be useful and important. But they seldom analyze jobs in terms of power and influence.

Moreover, it is not the case that jobs that require lots of political aptitude necessarily pay more. Many jobs that primarily entail individual, analytic effort, including those in fields such as consulting, tax law, and investment banking, pay extraordinarily well. The issue is thus not one of trading off an uncomfortable situation for a high salary, but rather, simply of finding a place in which one can do one’s best.