The Basis of Power and It’s Role in Organizational Behavior
Power plays an integral part in organizational behavior (OB), so defining power is crucial to its study. Power refers to the ability and capacity to influence the behaviors of others and/or the course of events. Power is a complex and sometimes complicated notion. It can have both negative and positive effects on us, and it is unique in that power manifests differently in different people. Within the context of OB, power is an amalgamation of internal and external competency. Internal power is represented by the innate qualities of personal power, while external power is represented in a position or title that grants a person power over others. In both cases, anyone in the organizational hierarchy can represent a form or multiple forms of power (Eatough, 2022).
To break down power even further, we look to the bases of power. Authority figures in an organization are known to hold formal power. Formal power works well in hierarchical organizations like Amazon or the military because subordinates (Eatough, 2022) recognize it. Formal power gives a person certain authority within a firm or organization, and that authority lasts for as long as the role is held. Within this bracket, we also find coercive power, which depends on fear of negative results when someone fails to comply. The other side of this, reward power, is the distribution of rewards that others deem valuable. Organizational leaders engaging in reward power are granted the ability (by superiors) to offer benefits and/or rewards in exchange for achieving certain results. Some examples of reward power are promotions, raises, public praise and/or benefits. While this form of power may assist in result fulfillment, it may not ensure loyalty or commitment from staff and employees (Eatough, 2022). The third form of power in this group is legitimate power. Legitimate power emanates from individuals in executive positions in the formal hierarchy of an organization. Legitimate power also derives from the exemplary skill sets required for such roles. This type of power is designated and, therefore, can also be taken away. Innate power, on the other hand, is distinctive and personal.
Personal power can be found in any position, even when one holds no formal power in the organization. The first example of personal power is evideny by expert power. This expert power results from knowledge, experience, and/or specific skills, degrees, and licenses. The other form of personal power is referent power. Referent power is born from admiration and respect. In other words, a person can hold influence over others if that person has desirable personal traits and/or resources (Eatough, 2022). Because power does not always equate to influence, it is essential to report that the most powerful leaders engage in supportive, uplifting, and encouraging communication (Kuhel, 2017). These behaviors and characteristics can lead to effective and successful outcomes. Therefore, we must briefly add to the discussion the vast and significant differences between being a power leader and an effective leader.
According to Forbes Council Member Beth Kuhel (2017), if influence is shared with nine people, that influence increases ninefold as that leader’s influence spreads. Influence leaders seek to identify common interests, and they are privy to the benefits of compromise. Influence leaders also tend to be more likeable because they endeavor to understand other people’s perspectives and seek solutions that benefit everyone. Some other admirable characteristics of influence leaders are their ability to encourage calculated risks, adopt the get-up-and-try-again mentality, and thrive in ways that explore innovative solutions.
Power leaders act contrarily by gravitating toward control, among other things. Studies have shown that power leaders are attention seekers who lead by intimidation and fear, and they can also be righteous and act privileged. Because they are more comfortable around like-minded people, their teams tend to be less innovative (Kuhel, 2017). This behavior can undermine a company or organization’s culture and moral compass.
Another crucial topic when discussing organizational power is the gender differences in leadership positions and board seats. In recent years, companies have increased gender parity, but they did so, not by replacing men with women; they expanded the numbers to include women (Kuhel, 2017). According to Kuhel (2017), two-thirds of seats that went to women in 2022 were newly added positions. At this pace, it would take the better part of 10–30 years to reach gender equality. Currently, there is still a gross underrepresentation of women executives in American organizations, and this could be a direct outcome of social stereotypes. This disparity emphasizes the glass ceiling that many women face under the scrutiny of discrimination.
Gender Differences in Power
Men are not the only ones responsible for the vast array of gender differences in power. Feelings of inadequacy, fear, upbringing, history, and more can cast shadows on the confidence of women. It has been a long-instilled stereotype that power equals masculinity (Buchanan & Badham, 2020). Gender not only shapes power, but it also divides it. Gender inequalities may be the most persistent existing patterns in the distribution of power in our time (Koester, 2015). To look forward, we must first look back. Not so long ago, the characteristics of women were obedient, accommodating, and quiet, while men were perceived to be in control, outspoken, and able to impose their will (the latter of which was especially true toward women). These stereotypes are notoriously responsible for perpetuating power inequalities in organizations, politics, the military, executive boards, and more. Historically, all of these institutions have been dominated by men, mostly white men, which is also tailored to the elite men’s self-imposed status. This has led to and has been quite evident (politically) in recent years in two types of power: men’s power over women and the power of the most “masculine” men over everyone (Koester, 2015). This describes the fundamental motives of how we perceive what power is to begin with. To define power in modern-day conversation, we conclude that power is getting someone to do what we want them to do. This unto itself may be representative of the male experience. Exposure may include, but is not limited to, dominance and hostility. And yet still, they (men) tend to build social relationships with like-minded individuals, quite often for purposes of individual gain and/or ulterior motives (Giacomin, Tskhay, & Rule, 2021). If women can be the backbone of the household, then they can be a force of empowerment in the workplace, especially in leadership positions, for a variety of reasons.
There is a famous quote that sums it up: “It is hard to be a woman. You must think like a man, act like a lady, look like a young girl, and work like a horse” (Quotes Gram, n.d.). Most women can relate to this saying and have much to say about it. The bottom line is that where there are women in the workplace, there is judgment. Women have, notoriously, been evaluated by their looks instead of their intellect. And studies have shown the discrimination goes far deeper. Some explanations for the lack of women in leadership positions include but are not limited to organization dynamics, competitive self-selection, human capital differences, evolutionary forces, and discrimination (Giacomin, Tskhay, & Rule, 2021). Observations of the past show us that we are not only being judged for being women, but how we look also plays a part in our underrepresentation in leadership positions. The prejudice toward females in leadership positions is demonstrated in role congruity theory.
Role congruity theory suggests that a group will be positively evaluated when perceived characteristics like behaviors, traits, and skills, within a job role is aligned with that group’s typical social roles. Prejudice stems from women being perceived as less capable than men to fulfill leadership roles and evaluating behavior that fulfills the prescriptions of a leader role less favorably when it is enacted by a woman (Eagly, & Karau, 2002). If men cannot adopt a more positive attitude toward women in leadership roles, research suggests that their organizations will not reap the benefits the female approach brings to business.
Recent studies show that women have an alternative view of what it means to be in a place of power (Giacomin, Tskhay, & Rule, 2021). To define it, we look to empower and transform ourselves and others. This is an example of referent power, which is based on identifying with a person who has desirable personal traits and/or resources. Referent power thrives and evolves from a place of admiration and respect. This might give us an edge in executive roles in any company and/or organization. Having special forms of influence on decision-making because of our particular social status provides a new and fresh perspective. Koester (2015) gives an excellent example of women working toward peace in Liberia. They (the women) were able to achieve elevated levels of trust among opposing factions by accentuating their non-threatening roles as sisters, mothers, and wives (Koester, 2015). According to Board Bound, the Women’s Leadership Foundation, studies provide proof of the value that women bring to leadership positions and board seats. Further to this data, boards with one or more women performed better than boards with all men (Choudhury, 2014). Validation and recognition come from real-world experience. For example, Adam Contos, the CEO of RE/MAX, was quoted in 2022 as saying, “We don’t need to just talk about the importance of women in leadership positions; we need to demonstrate that it’s important.” Two of our four C-Suite executives are female; over 40% of our board is female, and even at the network level, we’re close to 50/50 in terms of agents and franchise ownership.” Yuval Wasserman, CEO of Advanced Energy, was quoted (2021) as saying, “Before having women on the board, as part of the team, the conversations were highly focused on results: ‘What have you done for me lately.’ Now the conversations are not only about what you have done for me lately but also about, ‘How did you get there? So suddenly, we have broader and deeper conversations…. And I think it became a healthier, more rounded, and more rich discussion.”
Data shows us favorable results in advocating for women on corporate boards; for instance, global companies with more than one woman perform better than those without any women, with 3.5 percentage points of excess compound returns per year, higher price and book valuations, and superior stock price performance (Choudhury, 2014). Women leaders reflect and represent the communities they serve, so the more we see this group represented, the better for business and those communities.
How Having Women with Greater Power on a Board Changes Firm Performance
Women have positive impacts on how boards perform tasks. These include, but are not limited to, positive outcomes for the bottom line, being solution-oriented, solving problems and overcoming challenges, increased diligence, and better communication. Women have shown a proclivity toward strategy development, management monitoring, and improving corporate social responsibility. They also bring an essential element to the executive branch that did not exist before them: insight into the female client. Women also present strong effort norms that in turn intensify the board’s effort norms, and boards with women experience more cohesiveness (Choudhury, 2014). Suffice it to say that female additions to executive boards and power positions also improve an organization’s reputation.
Why A Quota System to Promote Gender Diversity is a Good Idea
Research continues to show that the more women in a company, the more profitable it is. With this data, the conclusion must be drawn that businesses and organizations, the economy, and society should be vested in the talent in front of them, women. While a quota system would put an end to the “old boys club” mentality by opening up executive board seats and management positions to qualifying females, it is not so easy to implement. And it is important to note that while gender equality quotas may be deemed necessary during the time it takes to eradicate prejudice and discrimination (Turan, 2018), said quotas would need to be lifted in accordance with equal opportunity mandates and the constitutional right of equality for all. While we agree that quotas could/would help gender inequality and bias in management positions, quotas can and are viewed as violations of perceptions of justice at the individual level, even though they cultivate fairness in terms of gender-appointed positions (He & Kaplan, 2019). Another concern quotas can create is further resentment and discrimination of women by those men who feel unjustly overlooked. Men out rule and outrank women in most organizations and firms, which can undermine quota effectiveness in giving women more access to leadership roles and board seats. Luckily, Fortune 500 and 1000 companies are recognizing the value that women on boards bring to their companies and are setting their own quotas for their company’s offices in the United States and abroad.
Why Some Countries Have More Gender-Diverse Boards Than Others
Research and real-world experience have repeatedly shown us that more gender-diverse boards are more successful. In 2012, the 30% Club was founded and launched based on the mission to reach at least 30% representation of all women on boards and c-suites globally. Most recently, this has been surpassed as more global businesses, including J.P. Morgan Asset Management, BlackRock, and Standard Life to name just a few, have publicly shown their support for this mission (Fetherolf, 2020). Here are just some examples of corporate entities joining this cultural revolution. David Solomon, Goldman Sachs’ CEO announced in January 2020 that they would not take any company public unless there was at least one diverse board candidate with a focus on women. He also stated that IPOs where women served on the board performed significantly better than their all-male counterparts. This data has been backed by a study published in the Harvard Business Review, which found that “female board members helped balance the overconfidence of male CEOs, and the result was improved decision-making for the business. The report correlated CEOs’ overconfidence with overestimation of returns and underestimation of risk, both of which can diminish shareholder value. Inclusion of women, they found, improved the quality of board deliberations, and different perspectives increased the information available for exploring and resolving complex issues. They also observed that female directors are more independent in their views since their backgrounds are devoid of ‘old boy network’ connections” (Fetherolf, 2020). Over the past three years, global trends have reflected a steady increase in female board members, with some countries leading the pack. Regulations vary from country to country, with Europe holding the most stringent gender quota mandates (D’Hoop-Azar, Sancho, Martens, & Papolis, 2017). The stricter the guidelines and regulations for diverse board members seem to present the most equality, as is evident in Norway, Sweden, and the United Kingdom. Contrary to this, the countries with the fewest regulations, like the United States, Japan, South Korea, Greece, and Russia, to name just a handful, show the least representation. It should be noted that the United States is currently leading the charge in changing views and acceptance of the importance and value of women board members (D’Hoop-Azar, Sancho, Martens, & Papolis, 2017). The numbers speak volumes. Women add value to the organizational structure and bring perspective to positions of power that are to be admired.
Support and Summation for Why Women Should Have More Power
People’s responses to power bases are as varied as individual personalities and perceptions, but the facts, data, and statistics are transparent. Studies correlate more diverse boards with higher performance. Women in positions of power act as role models for future generations. Women empower women not just in career advancement, but they also leave significant impressions for greater societal norms and gender and pay equality. The achievements of women in positions of power are meaningful and profound. Women help change workplace policies to the benefit of both women and men because they bring balance to communication, problem solving, and discussions. Women also break the barriers of past discrimination by creating environments that represent what can be achieved by those who are determined, persistent, and hard-working. Being natural-born caretakers, women can maneuver through most, if not all, challenges with an open mind and a proclivity toward positive and successful outcomes. These qualities and so many more are a great argument for why women are natural-born leaders and how most can handle positions of power in business and any other organizational opportunity.
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