Forms of Power in Organizational Management

The Five Forms of Power

• Coercive Power: The ability to influence others through force, threats, or punishment, making them comply against their will to avoid negative consequences.
• Reward Power: The capacity to offer incentives, such as monetary rewards, promotions, time off, or other benefits, to motivate others to do something they might not want to do.
• Legitimate Power: The authority granted to an individual based on their title, role, or position within an organization, giving them the right to make decisions and take actions.
• Referent Power: The power derived from a person's charisma, personality, and attitude, earning them admiration and loyalty from others, who are willing to follow their lead.
• Expert Power: The influence gained through specialized knowledge, skills, and expertise in a specific field or area, making one's opinions and advice valuable and trustworthy.

Forms of Power

• Coercive power: the use of force to make someone do something against their will to avoid a negative consequence
• Reward power: the ability to provide monetary incentives, promotions, time off, etc. to get others to do things they do not wish to do
• Legitimate power: power bestowed upon an employee by an organisation, based on their title and role
• Referent power: power derived from a person's own charisma, where people admire and are willing to follow the leader
• Expert power: power gained through expertise, knowledge and information in a particular field

Principles of Good Corporate Governance

Principle 1: Discipline

• Behaving according to universally accepted behaviour

Principle 2: Transparency

• Making an organisation's information available to employees and the public

Principle 3: Accountability

• Having systems in place to ensure stakeholders can clearly see what decision-makers are doing

Principle 4: Responsibility

• Board members acting responsibly to all stakeholders and ensuring corrective action is visible

Principle 5: Independence

• Composition of the board and stakeholders to avoid potential conflict

Principle 6: Fairness

• Having systems in place for checks and balances, and respect for all

Principle 7: Social Responsibility

• Ensuring the organisation is aware of social issues and maintains high ethical standards