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Free «Leadership Challenge: Using Sources of Powers» Essay Sample

Using sources of power ethically

The chief executive officer (C.E.O.) of any company is the senior most officer in the management structure. There are seven types of power namely structural, prestige, ownership, and expert (Daily & Johnson, 1997). All of top management has these powers.

Structural power

This power is also known as legitimate or hierarchal power. This power resides in the position occupied in the organization and not with a particular individual. Everyone in the organization recognizes this power because of its position in the organizational hierarchy.

Prestige power

Prestige power is derived from one’s status or level of prestige. CEO’s occupy positions of prime importance in organizations and thus are members of the managerial elite. It is because of their status that they show others (both to those within and outside the firm) their importance.

Ownership power

This is the third type of power a CEO has. CEO’s who represent their companies both in the management team and as shareholders have this added power. Being significant shareholders, they are able to influence important decisions as owners of the firms. These CEO’s then end up being more powerful than those who have no ownership interest in the firm.

Expert power

CEO’s with exposure to several functions perfect very well their managerial, predictability and leadership skills among others. They know everything there is to know about a company and its operations i.e. its challenges or problems, structures, production ability, guiding principles etc. This offers them the chance to obtain links in a extensive array of areas both within and without the firm (BrainMass Inc., 2010). This gives them the additional expert power that CEO’s with limited functions do not have.

Reward power

A CEO can at any time increase one’s salary or give a promotion.

Coercive power

A CEO has the power to punish any employee.

Referent power

All staff and people working in other organizations usually want to be in good books with the CEO and thus they become too good in their relations with her. This gives her referent power as she can easily influence individuals (Anderson & Thompson, 2004).

In the recent past, companies like Enron, WorldCom, Tyco and Imclone have been in scandals over unethical issues. The CEO’s of these companies corruptly enriched themselves stole from the public and treated their employees inhumanely (Daily & Johnson, 1997). If the above sources of power are used and exercised correctly, then there will be smooth running of one’s organization and such scandals can be avoided.

Individuals possess different character traits and according to Barrick & Mount (1991), there are five major ones. These are openness, conscientiousness, extraversion, agreeableness and neuroticism.

a) Openness- the degree to which one is curious, original, intellectual, creative and open to new ideas. People here quickly adapt to new situations and thus do better when unforeseen changes crop up (LePine, (2003), are highly motivated to learn, do better in training, in new organizations they constantly ask for feedback to know how they are doing and unlike those low in openness, they are more likely to open their own business.

b) Conscientiousness- the degree to which one is organized, systematic, punctual, achievement oriented and dependable. This predicts one’s performance across all jobs as people here are highly motivated, have lower levels of absenteeism and have successful careers. People with this trait are more likely to start their own businesses as compared to those who are not conscientious. Also their businesses are more likely to thrive (Certo & Certo, (2005).

C) Extraversion- the degree to which one is outgoing, talkative and sociable. People with this trait are good managers, sales people, are effective in job interviews, adjust easier to new jobs, actively seek feedback and build effective relationships which help in their leadership and adjustment to new jobs.  However, they do not do well in jobs that do not allow for social interaction and tend to be more absent at work tending to their friends needs.

d) Agreeableness- the degree to which one is affable, tolerant, sensitive, trusting, kind and warm. People with this trait get along with others, consistently help others at work, are less likely to retaliate when treated unfairly, have the ability to show empathy and give people the benefit of the doubt and are effective leaders as they create fair environments. However, agreeable people are more likely to avoid conflict missing an opportunity for constructive change. People low in agreeableness tend to quit their jobs unexpectedly especially after conflict with their peers or boss.

E) Neuroticism- the degree to which one is anxious, irritable, temperamental and moody. Being high in this causes one to be more likely to experience stress and depression on a habitual basis, have emotional adjustment problems,  experience more problems at work and have relationship difficulties. They are less likely to have someone go to them for advice or help. These people always want to leave their jobs as they are unhappy in their jobs but do not necessarily leave. They have lower levels of success (measured in occupational status and income) and tend to create unfair conditions when in managerial positions.

The roles of these individual differences are to enable a firm take a specific leadership direction. These different character traits are important for any firm’s success as different character traits (input/ ingredients) are required from different people to achieve planned for success.

All CEO’s have one or more of these powers and together with their different character traits, can use them to avoid the various operational, administrative, and ethical problems experienced by these companies.

Operational problems

The transformers and electric posts that serve your firm keep being stolen. The CEO can use influence tactics and talk to the area chief of police to ensure tighter security. The source of power behind this is referent powers.

Administrative problem

If there is tension, lack of cooperation from the staff members, low productivity the CEO can decide to do favors for them, give special rewards, set a more conducive environment to work, set deadlines, threaten to sack them etc. Sources of power behind these are expert, referent, structural and reward powers.

Ethical problem

The sales manager has only been promoting those who do what he says, never challenge him, those who never speak their mind giving recommendations and those who secretly inform him of staff behaviour. I recommend that the CEO use the influence tactic of warning him against such unethical practices and threaten to fire him in case he repeats it. The form of power behind this is coercive power.


With all the power in the organization and community, it is important that CEO’s ensure honest performance and tight control of company finance, internal audits, assets and employees. One should ensure that everyone in his staff is ethical in their dealings and wrong doers should be punished and serve as examples to everyone.


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