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🏢Power and Politics in Organizations

Types of Power in Organizations

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Why This Matters

Power isn't just about who has the corner office—it's the invisible currency that determines how decisions get made, who influences whom, and why some people can mobilize entire teams while others struggle to get a single email answered. You're being tested on your ability to recognize how power operates, where it comes from, and why different power bases produce different outcomes in organizational settings. Understanding these distinctions helps you analyze case studies, predict organizational behavior, and craft strategies for navigating workplace politics.

The key insight here is that power falls into two broad camps: position-based power (what your role grants you) and personal power (what you bring as an individual). The most effective leaders combine both, but each type has distinct advantages, limitations, and risks. Don't just memorize the definitions—know which power types are sustainable, which backfire when overused, and how they interact in real organizational scenarios.


Position-Based Power: Authority from the Org Chart

These power types flow from your formal role in the hierarchy. They exist because the organization says they do—which means they can disappear the moment your title changes.

Legitimate Power

  • Derived from formal position—your title (manager, director, VP) grants you the right to make certain decisions and direct others' work
  • Depends on perceived legitimacy—subordinates must accept your authority as rightful; without buy-in, legitimate power becomes hollow
  • Bounded by organizational structure—policies, reporting lines, and scope of role all limit where this power applies

Positional Power

  • Emphasizes decision-making authority—goes beyond title to include resource allocation, hiring, and strategic choices within your domain
  • Overlaps with legitimate power but focuses on what you can actually do rather than just your formal standing
  • Vulnerable to informal challenges—employees with expert or referent power can undermine positional authority if organizational culture permits it

Structural Power

  • Arises from shaping systems themselves—the ability to design policies, processes, and organizational architecture that determine how others operate
  • Influences power distribution—those who control structure decide who gets access to resources, information, and decision-making channels
  • Requires deep organizational knowledge—effectiveness depends on understanding how formal and informal systems actually function

Compare: Legitimate Power vs. Structural Power—both stem from organizational design, but legitimate power operates within the existing structure while structural power shapes that structure. If an exam question asks about long-term organizational change, structural power is your answer; for day-to-day management authority, think legitimate power.


Incentive-Based Power: Carrots and Sticks

These power types work through consequences—either promising benefits or threatening penalties. They're transactional by nature, which makes them effective for short-term compliance but risky for long-term engagement.

Reward Power

  • Based on ability to provide valued incentives—promotions, bonuses, recognition, preferred assignments, or access to development opportunities
  • Motivates alignment with organizational goals—employees perform to earn rewards, creating clear behavioral incentives
  • Diminishes if perceived as unfair—inconsistent or arbitrary rewards breed cynicism and undermine this power base entirely

Coercive Power

  • Stems from ability to impose penalties—demotions, poor evaluations, undesirable assignments, or termination threats
  • Produces compliance through fear—effective for immediate behavior change but does not generate commitment
  • Damages relationships when overused—creates resentment, reduces psychological safety, and often drives talent away

Compare: Reward Power vs. Coercive Power—both are transactional and depend on controlling consequences, but reward power builds toward goals while coercive power pushes away from undesired behavior. Exam tip: if asked about sustainable motivation, reward power wins; if asked about toxic workplace dynamics, coercive power is usually the culprit.


Knowledge-Based Power: What You Know and Control

These power types derive from possessing something others need—expertise or information. They're particularly valuable in knowledge economies and can operate independently of formal hierarchy.

Expert Power

  • Based on specialized knowledge or skills—technical expertise, industry experience, or unique problem-solving abilities that others lack
  • Enhances credibility and influence—people seek out experts for guidance, giving them informal authority regardless of title
  • Must be perceived as genuine—effectiveness depends entirely on others believing in your expertise; credentials help, but demonstrated competence matters more

Informational Power

  • Derived from access to valuable information—knowing what's happening, what's coming, or what others don't yet understand
  • Strategic tool in negotiations—sharing or withholding information at the right moment can shift outcomes dramatically
  • Depends on relevance and accuracy—outdated or unreliable information quickly erodes this power base

Compare: Expert Power vs. Informational Power—expert power comes from what you understand, while informational power comes from what you know is happening. A data scientist has expert power; the executive assistant who knows about the upcoming merger has informational power. Both influence decisions, but through different mechanisms.


Relationship-Based Power: Who You Are and Who You Know

These power types emerge from your personal qualities and social connections. They're the hardest to acquire quickly but often the most durable—no one can take away your reputation or relationships by changing an org chart.

Referent Power

  • Arises from personal traits others admire—charisma, integrity, likability, and interpersonal warmth that make people want to follow you
  • Inspires loyalty and commitment—team members go above and beyond not because they have to, but because they respect and identify with you
  • Built through trust and consistency—can't be faked; requires genuine positive interactions over time

Personal Power

  • Derived from individual qualities and character—confidence, emotional intelligence, authenticity, and self-awareness that enhance influence regardless of title
  • Transcends formal authority—effective whether you're the CEO or a first-year analyst
  • Developed through self-awareness—requires honest reflection and deliberate personal growth

Connection Power

  • Based on networks and relationships—access to people who have resources, information, or influence you need
  • Facilitates collaboration and support—strong connectors can mobilize cross-functional teams, secure buy-in, and open doors
  • Effectiveness scales with network quality—both breadth (how many connections) and depth (how strong those relationships are) matter

Compare: Referent Power vs. Connection Power—referent power comes from who you are while connection power comes from who you know. A beloved team leader has referent power; a well-networked strategist has connection power. For FRQs on influence without authority, both are strong examples, but referent power emphasizes personal qualities while connection power emphasizes social capital.


Quick Reference Table

ConceptBest Examples
Position-based powerLegitimate Power, Positional Power, Structural Power
Incentive-based powerReward Power, Coercive Power
Knowledge-based powerExpert Power, Informational Power
Relationship-based powerReferent Power, Personal Power, Connection Power
Sustainable long-term influenceExpert Power, Referent Power, Personal Power
High risk of backfiringCoercive Power
Independent of formal hierarchyExpert Power, Referent Power, Connection Power, Informational Power
Tied to organizational roleLegitimate Power, Positional Power, Reward Power, Coercive Power

Self-Check Questions

  1. Which two power types are most likely to remain effective if someone loses their formal title, and why?

  2. A manager consistently uses threats of poor performance reviews to ensure compliance. What power type is this, what are its likely long-term consequences, and what alternative power base might produce better results?

  3. Compare and contrast expert power and informational power: how do their sources differ, and in what organizational situations would each be most valuable?

  4. An employee has no direct reports but consistently influences major decisions because senior leaders trust their judgment and seek their input. Which power types best explain this influence?

  5. If an FRQ asks you to recommend how a new leader should build influence in an unfamiliar organization, which power types would you prioritize developing first, and which would take longer to establish? Explain your reasoning.