Five Bases of Power

A popular and useful distinction is made between five bases of power: legitimate, reward, coercive, expert, and referent. (See Figure 12.1.) Each involves a different approach to influencing others and has advantages and drawbacks. Let’s learn more.

Legitimate PowerThis base of power is what most people think of as authority and is anchored to one’s formal position. Thus, managers who obtain compliance primarily because of their formal authority to make decisions have legitimate power. Legitimate power may be expressed either positively or negatively.

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FIGURE 12.1THE FIVE BASES OF POWER

•Positive legitimate power focuses constructively on job performance.

EXAMPLEThe HP board utilized this form of power when it ousted CEO Mark Hurd for inappropriately using company funds and sexually harassing a contractor with whom he had an affair.⁶

•Negative legitimate power, in contrast, tends to be threatening and demeaning to those being influenced, if not simply an exercise in building the power holder’s ego.

EXAMPLEMany US politicians have used their legislative position power to name various “monuments” after themselves, from the Charles Rangel Center for Public Service (New York) to the Ted Stevens Airport (Alaska). The late Robert Byrd from West Virginia had more than 30 monuments named after him.⁷

Yet other instances of legitimate power or authority mix positive and negative aspects. Can you think of an example?

Reward PowerIndividuals or organizations have reward power if they can obtain compliance by promising or granting rewards. Pay-for-performance plans and positive reinforcement practices attempt to exploit reward power.

EXAMPLEWhen Exide Batteries provided quality products and services that were attractive to Walmart, it was rewarded with more than $100 million of annual business. But when Walmart withdrew its business and went to a competitor, Exide was forced into bankruptcy.⁸

Coercive PowerThe ability to make threats of punishment and deliver actual punishment gives an individual coercive power.

EXAMPLEThe Federal Trade Commission filed and won a lawsuit against Roll International, the owner of popular beverages Fiji Water and Pom Wonderful. The FTC charged that the company made false health claims about the pomegranates in its Pom Wonderful juice. The company must now stop making such claims about its products.⁹

Expert PowerValued knowledge or information gives an individual expert power over those who need such knowledge or information. The power of supervisors is enhanced because they know about work assignments and schedules before their employees do.

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EXAMPLEConsulting firm Promontory Financial Group is composed mainly of former government regulators of the US financial industry, such as Mary Shapiro, former head of the Securities and Exchange Commission. The firm helps banks challenge rules and influence reforms, such as the Volker Rule that, among other things, puts curbs on risky trading by banks. One bank executive said that “they sometimes hired Promontory to appease regulators, who think highly of the firm’s expertise.” Given that the executives at Promontory are themselves former regulators, it is no surprise they have the knowledge to influence today’s regulators. However, they boost their expert power significantly by also drawing heavily on their relationships or referent power from their previous positions in government.¹⁰ This issue is much bigger than the Promontory Group, as a recent report by the Sunlight Foundation indicated that the number of “lobbyists with former government experience has nearly quadrupled since 1998. . . . Those revolving door lobbyists, mostly from Captial Hill, accounted for nearly all of the huge growth in lobbying revenue during that period, which increased to $1.32 billion [in 2012] from $703 million in 1998.”¹¹

Referent PowerReferent power comes into play when one’s personal characteristics and social relationships become the reason for compliance. Charisma is commonly associated with referent power, but one does not need to be the life of the party to possess referent power. In Asian cultures, for instance, characteristics such as age, gender, or family name are sources of social status and referent power. One often-overlooked and underestimated source of referent power is your network of relationships.

EXAMPLESay a coworker calls and asks if you can help her with a project. You tell her that you don’t have the knowledge or skill yourself, but that Susan, a member of another department who you happen to know, can provide the help your coworker requires. You make the introduction. Because you introduced your coworker to somebody who helped her, you have referent power by virtue of your relationships.

Some residential solar companies are using the referent power of customers’ relationships (e.g., their families and friends), to market and sell their products via home parties, like Tupperware and MaryKay have done successfully for years.

Referent power drives the success of a number of marketing schemes, as with companies like Tupperware and MaryKay, which use independent contractors to throw home parties to display and sell goods to friends and families. More recently, the solar power industry is using referent power (including companies like SunWize, SmartPower, and SolarCity) to expand its business. Like Tupperware, they assume that “the best sales people are often enthusiastic customers willing to share their experiences with friends and neighbors—and perhaps earn a referral fee on any sales that result.”¹² The solar companies have found that this approach is both an easier and more effective means for finding new customers. This shows that people are more trusting of and therefore more easily influenced by people they know.

One’s reputation is another example of referent power. Many companies hire new CEOs, in part, to reap the benefits of the executive’s reputation. Ford Motor Company, for example, hired Alan Mulally as CEO because of his stellar reputation and success at Boeing.

Now that you’ve learned about the five bases of power, complete Self-Assessment 12.1 to identify which bases of power you commonly use. Answering the associated questions will help you understand how the various forms of power can both help and hurt you when trying to influence others.

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