Managing
Business
Relationships
Dr. Vesselin Blagoev
1
Power and exchange at
interpersonal, organisational
and societal levels
Power is “the capacity of an individual
or group to affect the outcome of any
situation so that access is achieved to
whatever resources which are scarce
and desired within a society or a part of
that society”
T. J. Watson (2002) in MBR (2004) p.5.
2
or……..

“The capacity of individuals to
overcome resistance on the part of
others, to exert their will and to
produce results consistent with their
interests and objectives.”
D. Buchanan & A. Huczynski (2004) p.828.
3
Power as a property of
relationships
Power may be seen as deriving from
formal sources i.e. outside of personal
characteristics, i.e.
position power - authority based on
organisational post /title.
However it is accepted that such power
still needs to be legitimated to secure
compliance or commitment
4
Sources of power

Reward and Coercive Power – You have the ability to
administer punishment or reward (one increases bases of
power and the other decreases them)

Negative Coercive Power – Child doing what told not to do

Referent Power – Others want to be like you

Legitimate Power – Others believe you have the right

Expert Power – Others see you as an expert

Information or Persuasive Power – Others see you as
persuasive or logical
5
Informal sources of power
Are these that derive from



relationships but relate more to
personal attributes, for example:
Expert power
Referent power
Charismatic power (an extreme
version of referent)
6
Power and exchange at
interpersonal, organisational
and societal levels
The interpersonal dimension of power
 The ways in which some people are able to
get other people do things they would not
otherwise do
I
I
I
I

am bigger
am smarter
am richer
have charisma
7
Power and exchange at
interpersonal, organisational
and societal levels
Organisational structural-cultural
dimension of power

The pattern of relationships within an
organisation whereby rules, hierarchy
and cultural norms, that people have
agreed with by joining the organisation,
make it normal or reasonable for some
people to do things they would not
otherwise do
8
Power and exchange at
interpersonal, organisational
and societal levels
Societal structural-cultural
dimension of power

The pattern of relationships and
understandings generally prevailing in
a society that mean, 1st - that certain
people have material capacity to exert
pressures on others, and 2nd –there is
legitimacy given to practices whereby
certain people force other to do …
9
Power and exchange at
interpersonal, organisational
and societal levels
This concept is very complex

The essence could be interpreted as the
capacity of individuals or groups to
affect outcomes of situations to their
advantage. It is clear that these outcomes
typically relate to the distribution of
whatever resources which are scarce and
valued by the society
10
11
Management



Management: The function of
forecasting, planning, organising and
controlling the organisation into the long
term
Managing: the regular actions to keep the
company into the long-term path achieving
the planned goals and overcoming problems
Managers: ……
12
People’s goals, etc.
The managers and employees
have their own goals, priorities and
ambitions.

How does it reflect in their behaviour in
the organisation?
13
Micropolitics-1
Micropolitical conflicts occur as a
result of competition for scarce
resources (positions, budgets, wages,
floor space)
Younger employees
 Woman coalitions
 Old boys

14
Micropolitics-2


Conflicts are inevitable, because
human beings (strategic animals)
strive to establish who they are, partly
satisfying their material needs
They have to cooperate with others
and in the same time – compete with
them
15
Micropolitics-2


The division of labor in the
organizations and the allocation of
people in different sub-units
(different budgets, importance,...).
The people in the unit cooperate to
challenge “the other units”.
Competition within the sub-units: who’ll
be the head of the unit
16
Micropolitics-3


Ambiguity exists when the meaning of the
situation is unclear and confuses, and is
therefore open to a variety of interpretations.
Is my friend best for the job?
Uncertainty exists when the understanding
of a future situation or an event is unclear or
confused and therefore open to a variety of
interpretations. This brings strategic
dimensions: which strategy to choose?
17
Micropolitics-4

High degree of ambiguity and
uncertainty in any organisation’s
development. No one has the “full facts”
of any situation, no one can predict
100% what will come out after a
particular course of actions is taken. So
the managers need to cooperate, trade
with others in the organisation to get
their support and “share of risk”
18
Strategic contingency
theory of power
The contingency matters :
 Help the company in difficult times and
you’ll have better chances for promotion
 If the dept helps the company get out of
the mess – it becomes “more important”
 Remember that all these are subject of
interpretation
19
Strategic contingency
theory of power
A sub-unit of an organization will have
greater relative power of influence
within the organization the more it:



(a) is central to the organization’s workflow
(b) cannot be substituted by another unit
(c) reduces uncertainties perceived to be of
strategic significance to the organization
20
Some cases
What kind of power they have or
they exert :

Simeon
21
Some cases
What kind of power they have or
they exert :
Simeon
 Volen Siderov

22
Some cases
What kind of power they have or
they exert :
 Simeon
 Volen Siderov
 George W. Bush
23