Cover for Hill/McShane

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chapter 15Managing Through

Power, Influence, and Negotiation

McGraw-Hill/IrwinPrinciples of Management

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Learning Objectives

1. Explain why power and influence are necessary to get things done in organizations.

2. Identify the main sources of managerial power.

3. Discuss the contingencies that influence the magnitude of the manager’s power.

4. Outline the various tactics managers can pursue to increase their influence in an organization.

5. Describe what a manager can do to increase the chance of negotiating effectively.

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Power

• Power – the potential of a person , team, or organization to require others to do certain things.

- Potential is emphasized because people may not have to exercise it in order to get things done

- A prerequisite – another person or group must believe that it is dependent on another person or group

• Countervailing power – power that subordinates have over their superiors

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Question

The possession of power always corrupts the power holder. Do you agree? Explain.

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Organizational Power

• There’s no doubt that there are many greedy executives. Some are obsessed with money while others with power.

• But the lure of power attracts people who often prove to be extremely poor leaders.

• Those who amass the most power do not necessarily prove to be the best performers.

• Very many leaders are simply not effective in basic leadership tasks.

• According to one survey, between 30 and 40 percent of managers failed to give credit to their staff for work, criticized employees behind their back and even blamed them to cover up their own mistakes.Source: www.slowleadership.org, December 6, 2006

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Power Dependence

Person A

Person B Person B’s goals

Pow

er

Cou

nter

vaili

ng p

ower

Val

uabl

e re

sour

ce

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Why is Power Important to management Effectiveness?

• Organizations are political entities in which different people or units control scarce resources

• To meet goals, a manager must realize that he/she is dependent upon others

• Managers must work to create power of his/her own in order to influence others to get things done

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Different Perspectives

• GREED IS GOOD

• BE TOUGH

• ATTACK ONLY WHEN VICTORY IS LIKELY

• BEAT THE ENEMY

• GRRED IS BAD

• BE FAIR

• ACT RATHER THAN REACT

• SEEK HIGHER CONSCIOUSNESS

Sun Tzu Bhagavad GitaOn Financial

Incentives

On Managing Underlings

On Initiative

On the Ultimate Goal

<< >>

<< >>

<< >>

<< >>

Source: Business Week, October 30, 2006

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Sources and Contingencies of Power

Sources of power:

•Hierarchical position

•Expertise

•Control over information

•Network of allies

•Individual attributes

Contingencies of power:

•Substitutability

•Centrality

•Discretion

•Visibility

Influence over organizational

outcomes

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Hierarchical Power

• Legitimate Power – Power deriving from an implicit agreement that people higher in a hierarchy can request certain behaviors of their subordinates

• Power over Rewards and Sanctions – Managers can reward behavior that they deem consistent with company goals and punish those whose performance is below par

• Power over the Allocation of Scarce Resources – “He who has the gold makes the rules.”

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Scarce Resources

Work Space

Plant Equipment

PeopleCapital

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Power Through Information Control

Wheel formation (centralized information flow)

All-channel formation (decentralized information flow)

High information

control

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Attributes for Acquiring and Holding Power

1. Energy, endurance, and physical stamina

2. The ability to focus one’s energy and avoid wasted effort

3. Empathy, which makes it possible to read and understand others

4. Flexibility, particularly with respect to selecting various means to achieve one’s goals

5. The willingness, when necessary, to engage in conflict and confrontation

6. Eloquence-the ability to make points in a logical and evocative fashion

7. Integrity

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Individual Attributes as Sources of Power

Energy

Focus

Ability to tolerate conflict

Integrity

Eloquence

Flexibility

Empathy

Personal Power

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Contingencies of Power

• Substitutability – the availability of alternative resources

• Centrality – the degree and nature of interdependence between the power holder and others

• Discretion – freedom to exercise judgment

• Visibility – the extent to which a power holder is known, or visible, to others

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Influence Tactics

• Silent Authority – occurs when someone complies with a request because of role expectations and the requester’s legitimate hierarchical power

• Assertiveness – applying hierarchical power to influence others

• Network Building – actively seeking and establishing relationships with people who may prove useful in the future

• Exchange – the promise of benefits or resources in exchange for another party’s compliance with your request

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Influence Tactics (cont.)

• Coalition – a group of people that comes together to cooperate in attaining a certain goal

• Ingratiation – attempts to increase the extent to which someone likes you

• Impression Management – the process of actively shaping one’s public image

• Persuasion – the use of reason through factual evidence and logical arguments

• Inoculation Effect – warning an audience you are trying to influence about opposing arguments

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Dave consistently works on flattering his boss in front of others, helping and volunteering for additional work when the boss or coworkers needed, and seeking his boss’s advice on actions. It appears that Dave is utilizing which of these influence tactics? a. Exchangeb. Appealing to a higher authorityc. Assertivenessd. Ingratiation

Question

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A Taxonomy of Influence Tactics

• Reward• Punishment• Positive Expertise• Negative Expertise• Liking, Ingratiation• Gifting, Pre-giving• Debt• Aversive Stimulation

• Moral Appeal• Positive Self-feeling• Positive Altercasting• Negative Altercasting• Altruism• Positive Esteem of

Others• Negative Esteem of

Others

Source: www.workingpsychology.com

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Ingratiation and Influence

High

Low

Low HighExtent of ingratiation

Infl

uen

ce

Moderate levels of ingratiation

produce the most influence

High ingratiation efforts produces resistance and

declining influence

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Consequences of Influence Tactics

Resistance

ComplianceCommitment

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Conflict & Negotiation

• Conflict– a situation that arises when one party perceives that its interests are being opposed or negatively influenced by another party

• Negotiation – an interpersonal decision-making process by which two or more parties try to reach an agreement over an issue that is being disputed

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Negotiation Do’s and Don’ts

• Bone up

• Be prepared to bail

• Fly solo

• Find the kahuna

• Be afraid to ask for the moon

• Disclose salary info

• Burn the bridges

• Overdo it

Do’s Don'ts

Source: Playbook: Best Practices; Business Week Online

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Negotiating Initial Salary

1. Know the going rate

2. Settle on a range, not a number

3. Understand what they’re buying

4. Don’t make the first move

5. Make your case

6. Offer options

Source: The Wall Street Journal, August 22, 2006

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Bargaining Zone Model of Negotiation

Your initial offer point

Your target point

Your resistance

point

Opponent’s resistance

point

Opponent’s initial offer

point

Opponent’s target

point

Area of potential

agreement

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Negotiating Effectively

Situational Factors

Power and Negotiation

Behavioral Factors

Depends On

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Importance of Concessions with Negotiations

1. Enable the parties to move toward the area of potential agreement

2. Symbolize each party’s motivation to bargain in good faith

3. Tell the other party about the relative importance of the negotiating items