1 Economics and Organisations - Week 8 Power and conflict in organisations Best readings are: Gareth Jones Mary Jo Hatch Morgan – Images of Organisation.

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Economics and Organisations - Week 8

Power and conflict in organisations

Best readings are:

Gareth Jones

Mary Jo Hatch

Morgan – Images of Organisation

Reading pack on networks

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Defining Power in Organisations

• Robert Dahl “A has power over B to the extent that he can get B to do something that B would not otherwise do”

• “Organisation power is the mechanism through which conflict gets resolved”

• It is “the ability of one person or group to overcome resistance by others and to resolve conflict and achieve a desired outcome”

• “Power is control of relevant resources”• “To increase power an individual or group must:

– Decrease dependence on others– Increase others dependence on self (group)”

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Power and Authority

• Pfeffer has a resource-based view of power, in which organisation structure determines who controls critical resources.

• ‘Authority’ derives from an individual’s position in the hierarchy.

• Authority is thus directed downwards in an organisation whereas other forms of power are multidirectional.

• Authority is power that is legitimised by the legal, structural and cultural foundations on which an organisation is based.

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Authority in Practice

• The exercise of authority has fewer costs; organisation members implicitly accept the authority relationships when joining.

• Where other forms of power are needed by those in authority the organisational structure is under threat

• Authority usually visible by symbols, such as:– Titles and ways by which people are addressed– Location, size, furnishings etc of office– Scale of perks, salaries, bonuses etc.

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Theories of Power in Organisations

• Sociological approaches – who holds power• Political approaches – how a particular decision

was made• Population ecology and Institutional theory –

concerned with the distribution of power• Network approach to power – centrality

• Consider four political approaches

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Strategic Contingencies Theory

• Power derives from the ability to provide something that the organisation values highly, such as a particular skill, valuable contacts, knowledge

• Pfeffer views this as control over uncertainty, Hickson, Hinings et al, stress power comes from control of uncertainty not uncertainty itself

• See example in Hatch re maintenance engineers in cigarette factory

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Resource Dependence Theory

• Power is control over key resources – an extension of Strategic Contingencies

• An organisation may increase its power by controlling more of its resources – buying a supplier; making itself not buying – vertical integration

• Resource Dependence Theory views power as a ‘distribution of opportunities to manage uncertainty’

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Hidden Power or the ‘power to set the agenda’

• Power is ‘controlling the premises of decision making’ – ‘unobtrusive’ power

• Bacharach and Baratz argue one aspect of power is the ability to ensure that certain issues are not raised – power is used to suppress certain issues.

• E.g. Profits could be increased by cutting costs either/or by increasing sales. If Sales Dept are powerful they ignore the possibility of cutting costs – they want their lavish expenses!

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Feminist Critique of Power

• Feminists drawing on Marx argue that power is used to marginalise the powerless

• Postmodernists attack this position by attempting to ‘give voice to the silenced’

• Feminist view sees power being exercised in all situations of domination/submission

• Gender seen as the ‘patterned, socially produced distinctions between male and female’

• Power seen to be exercised on basis of gender and stereotypes of male/female

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Male/Female Stereotypes

Male Female

Logical Intuitive

Rational Emotional

Aggressive Submissive

Exploitative Empathetic

Strategic Spontaneous

Independent Nurturing

Competitive Co-operative

“Leader and decision “Loyal supporter and

maker” follower”

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Power and Networks

• Organisations seen as ‘Networks’• Network ‘is a set of relations or ties among

actors’ – individuals or organisations• All the actors in an organisation can be

represented in various networks, such as: work flow, communication, friendships

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Background to Networks

Three factors have greatly increased the interest in network analysis in last 20 years

• The emergence of ‘New Competition’ – e.g. Third Italy

• Recent technological advances – instant data exchange, new production techniques, ERPS

• Maturing theoretical study of networks – mathematical and conceptual

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Substantive Themes within network Analysis

• Power within organisations can be understood in terms of relationships within a network

• Power between organisations, particularly where there are many small organisations

• Relationships between companies, suppliers, customers – not simply ‘arms-length’ contracts – strategic alliances

• As a means of structuring within an organisation, particularly for developments and new initiatives – flatter structures

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Power and centrality in networks

• Power can be represented by position within the net work – ‘Centrality’

• Within an organisation many networks can exist, e.g. information flows, work flows, friendships, senior executives

• Centrality can be an analytical tool to identify and measure power

• For measures of centrality in more detail, see John Scott

15Centrality?

A B

C

D A B

C

D

E F

G

H I

J

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Measures of Centrality - Degree

• Degree – the number of points to which a point is adjacent

• A central point has high degree• This is a measure of local centrality• Multiple points with same degree• Can be modified into a relative measure

– Degree of 25 out of 100 nodes– Degree of 25 out of 50 nodes

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Measures of Centrality - Closeness

• ‘Geodesic’ represents the shortest path between two points on a sociograph

• Closeness is the sum of all the geodesics for one point

• Closeness – This measures the shortest distance between one point and every other point

• The point that has the lowest closeness measure is most central

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Measures of centrality - Betweenness

• Betweenness – The extent to which a particular point lies between all the other points in the sociograph

• ‘A point is dependent on another if the paths that connect it to other points pass through this point’

• Betweenness reflects being a broker or ‘gatekeeper’

• Calculation is techically complex – powerful computer programs

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Test of Centrality and Power

• Study by Brass and Burkhart of 140 non-supervisory workers, their supervisors and high level managers

• All three measures of Centrality were calculated• Power also measured by direct questioning • Three ‘units of reference’ used: sub-unit,

department and entire organisation

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Results from Brass & Burkhart

• All degree measures correlated significantly with supervisors’ power ratings

• Most of closeness and betweenness measures also significantly correlated

• Department was most significant unit of reference

• Simple degree measures performed better than more complex measures

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Tactics for playing power politics

• Increasing Indispensability– Increasing non-substitutability– Increasing centrality

• Associating with powerful managers• Building and managing coalitions• Influencing decision making

– Controlling agenda– Bringing in an outside expert

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Conflict in Organisations

• Conflict is ‘the clash that occurs when the goal-directed behaviour of one groups blocks or thwarts the goals of another’

• Organisation conflict “is an overt struggle between two or more groups in an organisation… It usually centres on a state or action that favours one social actor over others”

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Brief History of Conflict

• Conflict is Dysfunctional. Early theorists argued that conflict is wholly dysfunctional. Conflict should be overcome, and theorists suggested means to do this

• Conflict is Natural. Lou Pondy (1967) Conflict may be unpleasant but it is an inevitable part of any organisation

• Conflict is Functional. Pondy further suggested that some aspects of conflict can be positive, e.g. conflict is psychologically healthy

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Stimulate conflict

Optimal conflict

Reduce conflict

Low level of conflict high

Per

form

ance

leve

lOptimal Levels of Conflict

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Interunit Conflict

• Humans employ psychological defence mechanisms to avoid open conflict

• Many opportunities for open conflict are not taken

• Walton and Dutton have a model for identifying/predicting interunit conflict

26Walton and Dutton Model

Context Local Conditions Observable indices

environment group characteristics open hostility

Strategy goal incompatibility distrust/disrespect

technology task interdependence info distortion

social culture rewards and performance ‘we v they’ rhetoric

culture common resources lack of cooperation

physical structure status incongruity avoid interaction

jurisdictional ambiguity

communication obstacles

individual differences

27Pondy’s Model of Organisational Conflict

Stage 1: Latent

Conflict

Stage 2: Perceived Conflict

Stage 3:

Felt Conflict

Stage 4: Manifest Conflict

Stage 5: Conflict

Aftermath

Sources of Conflict:

•Interdependence

•Difference in goals

•Bureaucratic factors

•Incompatible performance criteria

•Competition for resources

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Other Theories for Conflict

• Marxist theories - class-based - workers v capital(ists)

• Leads to Braverman - ‘deskilling’ hypothesis i.e. systematic fragmentation and specialisation of work giving more power to management

• Labour-market theories - Primary and Secondary markets for labour. In primary wages and conditions are good; whereas in secondary, both are poor

• Organisational contradictions - units adapting to different environments; contradictions with past

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Concluding Comments

• Power and conflict are vast and complex subjects

• Vital to an understanding of how organisations operate

• Different theories interpret ‘facts’ in different ways

• Need to read!!