Five Bases of Power

Steven Cesare, Ph.D.

A business owner from California contacted me the other day to discuss continued organizational success. In response to impressive, sustained growth in revenue, profit, and head count, the business owner had decided to add the first non-family member to the company management team as the Controller.

A position of this stature, to a growing company, is critical across multiple dimensions: workload, expertise, culture, expenditure, systems, and team building. The new Controller would assume many of the company financial, administrative, and information technology responsibilities that heretofore were the sole domains of the family members. Thus, their individual scopes of work would be significantly relaxed thereby allowing them to focus on other business initiatives, and maybe even have some more free time to spend with their families. Growth is a good thing.

The new Controller position would certainly require various types of adjustment for the family members: trusting someone with intimate knowledge of the company’s financial status, adding a different personality to the management team, and clarifying the organizational culture to accommodate growth-inspired change. With those dynamics as pretext, I gently introduced the concept of “power” to the family members to pique their awareness of probable, if not inevitable, issues that would have to be addressed.

French and Raven (1959) identified five bases of power that to this day, still saturate organizational life, family relationships, and interpersonal rapport.

Reward Power: Based on someone’s ability to offer or deny tangible, social, emotional, or financial benefits to others for doing what is wanted or expected of them. Examples of reward power include: giving pay raises, position promotions, rewards and recognition, higher-quality resources (e.g., truck, computer, cell phone), and social inclusion.
Coercive Power: Use of force to gain compliance from another; applying physical, social, emotional, political, or economic pressure onto someone to do something that he/she does not desire to do, lest negative consequences be levied onto him/her. Examples of coercive power include: demotion, criticism, bullying, undesirable work assignments, weekend on-call schedule, ostracism.
Legitimate Power: Application of rewards, punishment, and influence based on position in an authority hierarchy. Each ascendant position on an organizational chart (or team, group, or family structure) has more legitimate power than subservient positions.
Expert Power: Possession of specialized knowledge, skills, experience, or expertise that are desirable. Examples include: a Controller who knows GAAP principles, tax audit procedures, and BOSS software; a bi-lingual office worker; a field employee with a specific credential (e.g., QAL, Arborist, Backflow).
Referent Power: A role model whom others wish to respect, follow, and emulate. Examples include: a Construction Manager who worked his way up from Laborer, a charismatic leader, a sincere and ethical business owner known for integrity.

My introduction of this topic was intended to inform the family members that the new Controller would obviously bring Expert Power into the management team, but also to be aware of other power subtleties that may become manifest over time. Subtleties that would have to be coached, reinforced, or disciplined to either improve or sustain management team norms as well as the organizational culture.

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