Human Resource Knowledge

Power and Politics

Power refers to a capacity that A has to influence the behavior of B so that B acts in accordance with A’s wishes. This definition implies a potential that need not be actualized to be effective and a dependency relationship.

Power may exist but not be used. It is, therefore a capacity or potential. One can have power but not impose it. Probably the most important aspect of power is that it is a function of dependency. The greater B’s dependence on A, the greater is A’s power in the relationship.

A case:

At Merrill Lynch, the huge securities firm, the message is clear: Don’t try to usurp the boss’s authority. Two high-level executives Thomas Patrick and Arshad Zakaria tried it and found themselves out on the street.

The boss in this case is Stan O’Neal the chairman and CEO at Merrill Lynch. And what makes these actions newsworthy is that Patrick and Zakaria were two of O’Neal’s closest confidants. Patrick was executive vice chairman and the second most senior executive in the firm. Zakaria was chairman of global markets and investment banking and a protégé of Patrick. Both Patrick and Zakaria played an active role in persuading Merill’s board of directors that the firm needed major cost cutting and that the O’Neal was the best person to do it.

Chairman O’Neal was named president and chief executive-in-waiting in July 2001. He soon began purging the company of top executives he had seen as potential threats. Patrick and Zakaria were major players in helping O’Neal cut 23,000 jobs and dramatically improve the firm’s profitability. His success led to his official appointment as CEO and chairman in December 2002.

According to insiders, Patrick and Zakaria’s fatal mistake was secretly lobbying board members in the summer of 2003 to have 41 year old Zakaria made successor designate to the 51 year old O’Neal. O’Neal had only been CEO less than a year and he thought the appointment of a successor was certainly premature. When Patrick told O’Neal that he thought Zakaria should be installed as president and heir apparent, O’Neal had had enough. He forced the 60-year-old Patrick to retire. A week later, he fired Zakaria. The message this has sent throughout Merrill Lynch was loud and clear: O’Neal was in power and he was not going to tolerate any challenges to his authority.

In 2004, Fortune magazine noted that O’Neal my be the toughest and some say the most ruthless CEO in America while commenting that he has done much to enhance Merrill Lynch’s reputation and financial standing.

In conclusion, it is easier for most of us to talk about sex or money than it is to talk about power. People who have it deny it, people who want it try not to appear to be seeking it, and those who are good at getting it are secretive about how they got it.

A major theme of this article is that power is a natural process in any group or organization. As such, you need to know how it’s acquired and exercised if you’re going to fully understand organizational behavior. Although you may have heard the phrase that “power corrupts, and absolute power corrupts absolutely”, power is not always bad. Most medicines can kill if taken in the wrong amount and thousands die each year in automobile accidents, but we don’t abandon chemicals or cars because of the dangers associated with them. Rather, we consider danger an incentive to get training and information that will help us these forces productively. The same applies to power. It’s a reality of organizational life and it’s not going to go away Moreover, by learning how power works in organizations, you’ll be better able to use your knowledge to help you be a more effective manager.

Labels: Psychology

posted by Paresh @ 9:58 PM