5 sources of power in organizations

Well Fargo: Power, Politics, and Culture

Ashley Tunstall

Strayer University

Well Fargo: Power, Politics, and Culture

Influence of Politics and Power

It can be stated that power and politics has a major impact in the role of business. These two components affects the decision making process all the way down to how employees interact with each other. According to Zeiger (n.d.), the impact of power depends solely on the employees use of power –negative or positive- that influence their workplace; whereas, politics directly influence the power and determine the overall culture of the workplace.

Well Fargo is an organization that encourages productivity. Burger (2014) suggests that Well Fargo has implemented a consumerization of IT support framework that helps customers, clients and employees navigating the system of the company. Sharon Murphy, the director of Team Member Infrastructure Services, implemented this framework to specifically help employees become more productive. The new framework supports end-user computing, run the bank 24/7 customer support call center, runs technology connections, and supports the market data services (Burger, 2014). Technology is critical for Wells Fargo to operate. If the technology is not working, then customer cannot succeed financially because they do not have the tools they need to help.

With the power of changing a framework, Well Fargo is trying to change the dynamics of the company. Positive power builds employees confidence and motivates them to perform at a higher level. By introducing the new framework, Well Fargo is establishing strong performance and gaining employee’s respect with new innovative ideas. Burger (2014) states of an employee’s desktop or laptop is not working, then the market data is not getting to the appreciate place in time which their team members cannot be productive.

Sources of Power

There are five sources of power in an organization: legitimate, expert, referent, coercive and reward (Merchant, 2017).

1. Legitimate Power : is known as positional power that resulting from the position a person holds in a company hierarchy. With this type of power, management can uses their position to require employees to do their jobs. Mangers can influence the employee to do their jobs because they are the boss and the employee will continue to do their work in order to keep employment.

2. Expert Power : knowledge is the key component. This power is derived from individuals possessing knowledge and expertise in a specific area/field. Leaders in the organization uses this power to influence employee’s productivity based on problem solving systems. The ideas, opinions and decisions of individuals with expert power are held in high standards by other employees and are highly influential. Leaders can use expert power to influence productivity because of trust and knowledge. Employees will never question if the direction of the individual with expert power is wrong. They will be able to lead.

3. Referent Power : this power derived from the interpersonal relationships that develop with other people in the organization. According to Merchant (2017), individuals with referent power has respect and is like by their coworkers. This power derives when individuals have charisma, and charismatic individuals influence others through admiration, respect and trust. Also, employees who have connections with the CEO can generate power over others. Leaders can use this power to influence employees based on peer to peer influence.

4. Coercive Power : power that is established by delivering threats, punishments or sanctions. Coercive power can influence employees to do their work. A leader or manager has the ability to punish, terminate or reprimand other employees. In order to avoid the negative consequences of coercive power, employees will continue to do their jobs and stay employed.

5. Reward Power : power is arises from the individuals who are capable of influencing the allocation of enticements and incentives within an organization. When awards are involved, employees tend to increase productivity. A lot of people work to get incentives. Mangers or leaders can increase productivity just by offering reward programs for employees to do their essential job duties correctly.

Leadership Behavior and Culture

Leadership behavior and culture are a direct correlation to the organization culture. For instance, behavior is socially learned and can spread. According to Watkin (2013), culture is observable patterns of behaviors in the organization, while organizational culture is the civilization of the workplace. Cultures are energetic because they shift, incrementally and constantly, in response to external and internal changes. Leaders have the ability to influence the organizational culture. The culture of the organization should always be learning and developing from its leaders. For instance, employee satisfaction is higher when employees are given the power to voice their concerns. When leaders give some type of power to the employees, it turns to gain productivity. Employee’s feels valued and appreciated when they have some type of voice within their organization. However, when leaders do not have the respect of the employees, they have a negative power. This type of leader encourages employees with threats and punishment, or shows favoritism to particular employees rather than recognizing the hard work of multiple employees (Watkins, 2013). This type of leadership behavior develops a culture where the employee performs poorly, and has the highest turnover rates in an organization.

Leadership Influence

Leadership behavior is highly important to the culture of the organization. It’s just like the term, “Monkey see, Monkey Do.” Leaders have the ability to mold the organization. Burger (2014) states leaders with Well Fargo have good authentic leadership that enforces the job functions daily to all employees. Well Fargo has consultative and accessible executives who aim to get opinions from all employees across the organization. This allows the leaders to be part of the team and work together with all employees to gain trust. The complexity of leadership influence is the interaction of all employees across the board. However, this can harm the organization when one employee has a negative experience with any member of the organization. According Watkins (2013) leadership is indeed complex and there is not one style of leadership that is the best approach for all leadership positions. Complexity leadership theory is a concept that identifies the complexity of interrelations and interdependence between people and its environment compared with other approaches with leadership styles. Leaders have to first break the complex things into simple things for the employees to understand. Leaders should take care in getting talented people on board and should build a bridge of trust and then put faith and weight behind them while executing.

Executive Summary

Overall, power and politics has shaped the organizational culture. Leadership behavior has the essences and potential to change the culture of the organization. With leadership and their power, they have the ability to influence the employees within the organization. A leader must build and maintain trust within the organization by creating a culture that supports the core value of the organization.

References

Burger, K (2014). How Wells Fargo is improving employee’s experience and productivity. Retrieved from http://www.banktech.com/management-strategies/how-wells-fargo-is-improving-employees-experience---and-productivity/d/d-id/1317908

Merchant, P. (2017). 5 sources of power in organization. Retrieved from http://smallbusiness.chron.com/5-sources-power-organizations-14467.html

Watkins, M. D. (2013). What is organizational culture? And why should we care? Retrieved from https://hbr.org/2013/05/what-is-organizational-culture

Zeiger, S. (n.d.). The impact of power and politics in organizational productivity. Retrieved from http://smallbusiness.chron.com/impact-power-politics-organizational-productivity-35942.html

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