Week 6 – Management Notes

Managing the Modern Business Enterprise: Power and Politics in

Organisations

Do great leaders make great managers?

The Concept of Power (1957). Dahl, Robert A. (1)

Power is defined in terms of a relation between people and is expressed in simple symbolic notation.
The relative degree of power held by people, the comparability. Can rank people over their degree
of power (i.e. of senators over legislation).
Power is represented through a variety of theories of limited scope.
Power can be compared between actors if there are comparable subjects for them to be ranked
from.
Conceptualist believes that ‘in principle’ does not cover up difficulties but that with the correct
techniques, observations and measurements can be made of power.
Operationalist states that being able to obtain that kind of information will have little success,
especially if one wants large amount of data to base findings off.
Operationally, power would appear to be many different concepts, depending on the data available.
Due to the limitations of data there must be many different and often non-comparable concepts of
power.
Conceptual ideas of power provide benchmarks/standards with which to compare operational
alternatives which are employed. It helps to highlight any defects within an operational definition of
power.
Defective measures may have to be used, however, knowing the defects allows to create a more
comprehensive image.
Finding the deficiencies may help to invent alternative concepts and research methods that produce
a closer approximation to the theoretical concept itself

Power Is the Great Motivator (2003). McClelland, David C. and Burnham, David H. (2)
Three different types of motivational groups for managers:
 First are affiliative managers, need to be liked more than they need to get things done. Aims
aimed at increasing own popularity, rather than promoting goals of the organisation.
 Second are managers motivated by need to achieve, aren’t worried what people think about
them. Focus on setting goals and reaching them, put their own achievement and recognition
first.
 Third are institutional managers, they are interested in power. Recognise you can only get things
done within an organisation if you have influence over those around you, focus on building
power through influence rather than their own individual achievement. These are the most
effective. They have a greater sense of responsibility, see organisational goals more clearly, and
exhibit more team spirit.
Is a good manager one who is successful? Motivation is the need for achievement, achievement
motive is necessary to attain success.
Manager cannot perform all the tasks necessary for success themselves, they must manage others
within the organisation.
Top managers must have a concern for influencing people (high need for power). However, must be
disciplined and controlled so that it is directed towards helping the organisation, not towards the
manager’s personal aggrandizement.
Need for power ought to be greater than need to be liked.
This motive profile can lead to imperialism and authoritarianism in companies.
The best managers possess two characteristics that act as regulators: greater emotional maturity
(little egotism) and a democratic, coaching managerial style.
Managers of corporations can select those who are likely to be good managers, and train those
already in managerial positions to be more effective with more confidence.

A Garbage Can Model of Organisational Choice (1972). Cohen, Michael D. and March, James G. and
Olsen, Johan P. (3)
Organised anarchies are those characterised by problematic preferences, unclear technology, and
fluid participation.
A theory of organised anarchy will describe a portion of almost any organisation’s activities, but not
all.
First phenomena critical to understanding anarchy: Organisations make choices without consistent,
shared goals – this ambiguity is common in complex organisations.
Second phenomena: how member of an organisation is activated, understand attention patterns
since not everyone is attending to everything all the time.
The garbage can process is one in which problems, solutions, and participants move from one choice
opportunity to another in such a way that the nature of the choice, time it takes, and problems it
solves depend on a relatively complicated intermeshing of elements.
These elements include: mix of choices available at any one time; the mix of problems that have
access to the organisation; the mix of solutions looking for problems and the outside demands on
the decision makers.
Choices are made only when the shifting combinations of problems, solutions, and decision makers
happen to make action possible.
Four factors have substantial effects on the operation of the garbage can process: the organisation’s
net energy load and energy distribution, its decision structure, and problem access structure.

Making Fast Strategic Decisions in High-Velocity Environments (1989). Eisenhardt, Kathleen M. (4)
Fast decision makers use more, not less, information than slow decision makers.
Fast DMers develop more alternatives and use a two-tiered advice process.
Conflict resolution and integration among strategic decision and tactical plans are also critical to the
pace of decision making.
Fast decisions based on this pattern of behaviours lead to superior performance.
The link between fast strategic DM to effective firm performance.
Politics seems to slow DM.
However, neither of these addresses how executives decide quickly.
Centralised DM is not necessarily fast, but a layered advice process, emphasising input from
experienced counsellors, is fast.
Conflict resolution is critical to decision speed, but conflict per se is not.
Integration among strategic decisions and between decisions and tactical plans speeds, not slows,
DM. Such integration allows DMers to cope with the anxiety of high-stakes decision making.
Fast DM allows DMers to keep pace with change and is linked to strong performance.
The link between fast decisions and several factors: use of real-time information, multiple
alternatives, counsellors, consensus with qualification, and decision integration.
Decision characteristics are important, however, there are recurring interaction patterns among
executives that also influence strategic decision making, and firm performance.
This view emphasises a complex perspective on cognition.
People are boundedly rational but are also capable of engaging in sensible problem-solving
strategies to help compensate for their limitations.
Emotion is integral to high-stakes DM.
Frustration, distrust, and loyalty shaped organisational politics.
Confidence and anxiety are key factors in influencing the pace of decision closure.

Organisational Escalation and Exit: Lessons from Shoreham Nuclear Power Plant (1993). Ross, Jerry
and Staw, Barry M. (5)
Organisational escalation decisions may involve numerous variables.
Determinants of escalation:
 Project determinants – objective aspects of a project, such as closing costs, its salvage value, the
causes of setbacks to its completion, and the economic merits of pursuing or dropping it.
 Psychological determinants – includes “reinforcement traps”, such as difficulties withdrawing
from a previously rewarded activity; individual motivations; decision-making errors (trying to
recoup sunk costs); and biases in information processing (tendencies to slant data towards pre-
existing beliefs).
 Social determinants – interpersonal processes that may lead to excess commitment, modelling
of others’ behaviour in similar circumstances, and cultural norms favouring consistent, or strong,
leadership.
 Organisational determinants – variables such as level of political support for a project within an
organisation, the level of economic and technical ‘side-bets’ incurred by the organisation with
respect to the project, and the extent of the project’s institutionalism within the organisation –
how tied it is to the firm’s values and objectives.
Psychological and social variables were important in the beginning and middle phases of the
escalation episode, but not influential in the final stage.
Project variables were an important force for commitment at both the earliest and latest stages of
the episode.
Proposition 3: The earlier organisational determinants occur in an escalation episode, the more
likely there will be LT commitment to a course of action.
Proposition 4: The more external political forces become aligned with a project, the more difficult it
will be for the initiating organisation to withdraw from the course of action.
Proposition 5: The more ambiguous and changing the economics of a project, the more difficult it
will be for an organisation to extricate itself from the selected course of action.
Proposition 6: When the potential losses of a project become so large that withdrawal might lead to
bankruptcy, an organisation becomes increasingly committed to the losing endeavour.
Proposition 7: Escalation problems are especially likely to occur when managers venture far from
their areas of expertise or when technological changes cause such major changes in an
organisational context that previously learned procedures and decision checks are no longer
applicable.
It may be possible for an organisation to withdraw from a late-stage escalation episode by
deinstitutionalising a project – separating it from the major goals and purposes of the organisation.
Was thought firms either had to withdraw from a losing project or remain in the course of action,
perhaps until bankruptcy or an organisational death occurs. However, there is a middle ground, it is
possible for an entity to become a permanently failing organisation, continuing to survive in a
negative situation, perhaps by absorbing resources from third parties or generating enough revenue
to offset continuing losses. Is possible if substantial reserves of capital and legitimacy.
Also possible for constituents within its environment to prevent the organisation from failing
(government agencies etc.).
Proposition 8: When external constituents are successful in preventing the closing of a losing project
or service, the unsuccessful firm or department may become a permanently failing organisation.
Proposition 9: Changes in top management can reduce psychological and social sources of
commitment, thus increasing the propensity for withdrawal from a losing course of action.
Proposition 10: Efforts to deinstitutionalise a project, or to separate it from the central goals and
purposes of an enterprise, can reduce organisational determinants of commitment, thereby
increasing the propensity for withdrawal.
Proposition 11: Appeals to favouring organisational constituencies (for new loans and support) can
change a project’s economics so that withdrawal is not so costly and thus more likely to be chosen as
an alternative.
Proposition 12: Threats to persevere in a losing course of action can influence opposing
constituencies to change a project’s economics, thus making it less costly (and more likely) for
withdrawal to occur.

Toward a Behavioural Theory of Charismatic Leadership in Organisational Settings (1987). Conger,

Jay A. and Kanungo, Rabindra N. (6)
Followers perceive the charismatic leader as one who possesses superhuman qualities and accept
unconditionally the leader’s mission and directives for action.
Charismatic leadership is hard to define due to its elusive nature and the mystical connotation of the
term.
There is a lack of systematic conceptual framework, thus difficult to define and operationalise
charisma and to identify variables that influence its development.
Charisma is viewed as both a set of dispositional attributions by followers and as a set of leaders’
manifest behaviours.
Linked as leaders’ behaviours form the basis of followers’ attributions.
The behavioural and dispositional attributes require independent empirical confirmation.
To see whether a convergent and discriminant validity exist there should be an attribute checklist.
The implications for management are that if the behavioural components of charismatic leadership
can be isolated, perhaps it could be possible to develop these attributes in managers.
Potential managers could be selected on the level of charismatic leadership they have; that is if
charismatic leadership is key to the organisation.

The Social Scientific Study of Leadership: Quo Vadis? (1997). House, Robert J. and Aditya, Ram N.
(7)
Relationship between leaders and their immediate followers (Bass 1990). Ignores the kind of
organisation and culture in which leaders function, the relationships between leaders and superiors,
external constituencies, peers, and the kind of product or service provided by the leader’s
organisation.
Limitations to prominent theories is that they are mostly authored by American scholars, so do not
know if the theories can be generalised to other cultures.
Transformational theory asserts that effective leadership involves personalised consideration
towards subordinates.
Cognitive resource theory assumes that reactions to stress are universal.
Contingency theory led to the development of cognitive resource theory.
Weber’s conceptualisation of charisma and path-goal theory led to conceptualisation of the 1976
Theory of Charismatic Leadership, which contributed to Value-Based Leadership Theory.
Problem with current studies is that it focuses excessively upon the superior-subordinate
relationships of organisational and environmental variables that are crucial to effective leadership
performance.
The diverse management styles by which leader behaviours are enacted have been largely ignored.
Due to this, much understanding about leadership is not easily operationalised in practical settings.

Social Capital, Intellectual Capital, and the Organisational Advantage (1998). Nahapiet, Janine and
Ghoshal, Sumantra. (8)
Kogut and Zander proposed “that a firm be understood as a social community specialising in the
speed and efficiency in the creation and transfer of knowledge” (Kogut and Zander, 1996).
This contrasts the established transaction cost theory that is grounded in the assumption of human
opportunism and the resulting conditions of market failure (Williamson, 1975).
For strategy theory there is the movement away from the theme of value appropriation to one of
value creation (Moran and Ghoshal, 1996).
The capabilities of organisations for creating and sharing knowledge derive from a range of factors,
including the special facility organisations have for the creation and transfer of tacit knowledge; the
organising principles by which individual and functional expertise are structured, coordinated, and
communicated, and through which individuals cooperate; and the nature of organisations as social
communities.
Their theory is rooted in concept of social capital.
Intellectual capital deeply embedded in social relations and in the structures. This view contrasts
with the relatively individualistic and acontextual perspectives that characterise more transactional
approaches for explaining the existence and contribution of firms.
Argument consistent with resource-based theory. Competitive advantage rooted in the unique
constellation of resources for each firm: physical, human, and organisational (Barney, 1991).
Firms tend to be more successful if they encourage the development of strong personal and team
relationships, high levels of personal trust, norm-based control, and strong connections across
porous boundaries (Alvesson, 1991, 1992).

Decision Making: It’s Not What You Think (2001). Mintzberg, H and Westley, F. (9)
Three models of decision making: seeing first; doing first; and thinking first.
All three necessary for a healthy organisation.
Thinking first works best when the issue is clear, the data reliable and the world structured. Seeing
first is necessary when many elements must be combined into a creative solution – the organisation
must break away from the conventional, encourage communication across boundaries. Doing first is
preferred when the situation is novel and confusing, and things need to be worked out – often in a
new industry, or an old one thrown into turmoil by a new technology.

What makes a leader? (2004). Goleman, Daniel. (10)

Truly effective leaders are distinguished by a high degree of emotional intelligence (EI), which
includes self-awareness (knowing one’s emotions, strengths and weaknesses), self-regulation
(controlling or redirecting destructive impulses or emotions), motivation (being driven to achieve for
the sake of achievement), empathy (considering others’ feelings, especially when making decisions),
and social skills (managing relationships to move people in the right directions).
A direct tie between emotional intelligence and measurable business results.
There are ‘threshold capabilities’ (IQ, technical skills etc.), these are the entry requirements for
executive positions.
Emotional intelligence can be learnt.

Power: A Radical View (1974). Lukes, Steven. (11)

One-dimensional view of power offers a clear-cut paradigm for the behavioural study of DM power
by political actors but takes over the bias of the political system and is blind to ways in which its
political agenda is controlled.
The two-dimensional view points the way to examining bias and control, it views them too narrowly;
it lacks a sociological perspective within which to examine, not only DM and non-DM power, but also
ways to suppress latent conflicts within society.

Sustaining the Ivory Tower: Oxbridge Formal Dining as Organisational Ritual (2009). Di Domenico,
MariaLaura and Phillips, Nelson. (12)
This form of dining plays a key role in organisational cohesion, demarcation, and continuity. Serves
as a central organising principle, having social, political, and pedagogic facets.
Creates social stability, provides historical continuity, reaffirms hierarchy and bureaucratic order,
perpetuates exclusivity and reverence – provides a space for organisational politicking, relationship-
building, and information exchange.
Example of organisational ritual.
It entrenches people, outsiders find it more difficult to obtain access or further their
research/agenda if they are perceived to be from a different – or the ‘wrong’ background – same is
true for organisations.

Autonomy, Interdependence, and Social Control: NASA and the Space Shuttle Challenger (1990).
Vaughan, Diane. (13)
Cumulative failures in management procedures and technical design, that if corrected may have
prevented the tragedy.
Analysis of the process of discovery, monitoring, investigation, and sanctioning indicates regulatory
effectiveness was inhibited by the autonomy and interdependence of NASA and its regulators.
Suggests autonomy and interdependence are applicable to intraorganisational regulatory
relationships.
The failure of one component interacts with others, triggering a complex set of interactions that can
precipitate a technical system accident of catastrophic potential.
Normally a build-up of previous events, long incubation periods characterised by several discrepant
events.
“Failures of foresight”.
However, a long incubation period is advantageous as it could allow regulatory agents to intervene,
possibly avoiding the problem. Effective regulation may reduce probability that a technical failure
will occur.
Problems obscured by organisational patterns (Turner, 1976, 1978).
When there is regulatory failure, this is thought of as an organisational-technical system accident.
The organisational system obstructed discovery, monitoring, and investigation of safety hazards.
Interdependence reduced the probability that risky technical and managerial systems would be
identified and corrected.
Trade-offs of regulators, negative and positive effects of autonomy and interdependence.
If both positive and negative consequences are systematically associated with intra- and
interorganisational relationships, then regulators cannot be relied upon.
Any system runs a risk of failure when human actors are involved.
Intra- and interorganisational relations are characterised by structurally engendered weaknesses
that contribute to accidents.

Why Should Anyone Be Led by You? (2006). Goffee, Rob and Jones, Gareth. (14)
Followers want authenticity, community, significance, and excitement from their leaders.
Leaders who come across as real, who create a sense of togetherness, who help create meaningful
work, and who make it interesting.