Power is defined as “the possession of control or command over others; authority; ascendancy.” The proper level of control is necessary for an organization to function properly. If there is not a viable, consistent chain of command put in place, and then exercised and adhered to, basic activities cannot take place effectively. There are five different types of power utilized by managers in relation to their subordinates. The first group consists of: reward power, coercive power, and legitimate power. These are related to the structure of the company. The second group consists of referent power and expert power. They pertain primarily to an individuals personal attributes and skills.
In terms of reward power, compensation in the form of increased salary, promotions, performance-based bonuses, added benefits, and executive perks can be highly motivating for employees and is often exchanged for superior results. Coercive power on the other hand plays to the opposite side of human nature, which seeks to avoid pain, punishment, or loss of material objects. In other words, employees that fail to perform may be subject to termination, not receiving the rewards stated above, or may not be promoted to higher positions within the organization. Finally, legitimate power simply gives control to managers based on their job-title and relative position within the firm. However, it should be noted that the power of mangers may be confined to certain divisions, business units, departments, or teams.
When an individual possesses a high skill level and a large body of knowledge in a particular field or subject, it is more likely that his or her subordinates will trust their judgment. Consequently, they will be more accepting, and therefore more willing to agree with decisions and follow instructions. Last but not least, respect for the leader and admiration for their accomplishments, personality, or way of doing things, can result in greater acceptance of the leader by the group, and like the effects of expert power, cause subordinates to more eagerly follow guidance and instructions.
An example of the combination of expert power and referent power leading to success for an organization is Phil Jackson having won ten NBA Championships in the last nineteen years as a head coach. The expert power comes from Jackson having once been a player himself and winning a championship with the New York Knicks. Therefore, the players he manages know that he understands their job from their own perspective. In addition, he is a student of the game of basketball and has helped foster an offensive strategy that has proven consistently successful. Although some consider his style of coaching unorthodox, because he often relies on the Oriental philosophy of letting players work out and solve problems on the court, and his unusual approach of using metaphors to inspire and motivate, his referent power is drawn from the trust engendered in his players who witness first hand how he is able to bring a group of people together to focus on and accomplish a single goal.