Which type of power is based on a persons position in the formal organizational hierarchy?

Power has been an important aspect of human civilization since time immemorial. Power might be physical, political or social.

In the context of business as well, power dynamics tend to influence decisions and people transactions heavily. So defining power can be difficult as it is understood and interpreted in several ways however power can definitely not be called a force which gets you what you want.

Power basically emanates from position or authority which can influence people both positively and negatively.

For simplicity and understanding purposes power is usually classified into following categories:

1. Coercive Power- This kind of power involves the usage of threat to make people do what one desires. In the organizational set up, it translates into threatening someone with transfer, firing, demotions etc. it basically forces people to submit to one’s demand for the fear of losing something.
2. Reward Power- As the name suggests, this type of power uses rewards, perks, new projects or training opportunities, better roles and monetary benefits to influence people. However an interesting aspect of this type of power is that, it is not powerful enough in itself, as decisions related to rewards do not rest solely with the person promising them, because in organizations, a lot of other people come into play like senior managers and board.
3. Legitimate Power- This power emanates from an official position held by someone, be it in an organization, beurocracy or government etc. The duration of this power is short lived as a person can use it only till the time he/she holds that position, as well as, the scope of the power is small as it is strictly defined by the position held.
4. Expert Power- This is a personal kind of power which owes its genesis to the skills and expertise possessed by an individual, which is of higher quality and not easily available. In such a situation, the person can exercise the power of knowledge to influence people. Since, it is very person specific and skills can be enhanced with time; it has more credibility and respect.
5. Referent Power- This is a power wielded by celebrities and film stars as they have huge following amongst masses who like them, identify with them and follow them. Hence, they exert lasting influence on a large number of people for a large number of decisions; like from what car to buy to which candidate to choose for a higher office in the country.

So, power can be defined in a number of ways however what is important is the usage of the power by people who possess it. Within the organizational context the power dynamics and equations need to be carefully managed as they have a huge impact on the motivation and engagement level of employees. It also defines the organization’s culture in general and people transactions within the organization in particular.

A very hierarchy and power driven organization finds it difficult to accommodate new and innovative ideas, any change is vehemently refused, egos clash and lesser opportunities are made available for the high performers, thus delaying organizational growth. On the other hand, in an organization which is flat in structure, people are encouraged to innovate and explore, thus bringing in new concepts and ideas to accelerate organizational growth and expansion.

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Power in leadership helps teams reach greater levels of performance. Having the ability to lead and motivate others is valuable for anyone in a managerial position to inspire their teams to reach big goals.

Powerful leaders are usually extremely persuasive. In general, power is often seen as connected to credibility and influence. When you're influencing people, you capture their minds and hearts and move them to action.

If you have this power, it's essential that you understand that [it] was given to you – and can be taken away. Don't abuse it.

-Nicole Lipkin, author, What Keeps Leaders Up At Night

But not everyone knows what to do with power once they have it. 

"Power tends to get to people's heads," says Nicole Lipkin, author of What Keeps Leaders Up At Night. "We're not really trained to handle power well."

In 1959, psychologists John French and Bertram Raven developed a framework for understanding different types of power. In her book, Lipkin writes about these concepts and why it's important for leaders to understand what type they're using.

1. Legitimate Power

Legitimate power happens when someone is in a higher position, giving them control over others.

"If you have this power, it's essential that you understand that [it] was given to you – and can be taken away. Don't abuse it," Lipkin says.

2. Coercive Power

There's really no time or space for coercive power in the workplace, Lipkin notes. No matter how good of a leader you are, fear likely won't win respect and loyalty from your employees now or in the long run. 

"Ultimately, you can't build credibility with coercive influence – [it can be] like bullying in the workplace," she says.

3. Expert Power

This power comes directly from your top-level skills and years of experience. Once you hold expert knowledge, your peers will likely regard you as such.

"If [someone] holds an MBA and a Ph.D. in statistical analysis, her colleagues and reports are more inclined to accede to her expertise," Lipkin says. "This gives [her] a great deal of influence."

The great thing about this type of power is that no one can take it away from you. It's the knowledge that you hold. However, to remain an expert, you need to continue learning and improving.

4. Informational Power

This is a short-term power that doesn't necessarily influence or build credibility.

For example, a project manager may have all the information for a specific project, giving them "informational power." But it's hard for a person to keep this power for long, as eventually this information will be released. This should not be a long-term strategy.

5. Power of Reward

This power is held by those who can motivate people to respond to win raises, promotions, and awards. For example, managers hold a certain amount of reward power if they administer performance reviews that determine raises and bonuses for their underlings.

"When you start talking financial livelihood, power takes on a whole new meaning," Lipkin says. 

6. Connection Power

This power creates influence by proxy and often results from solid networking skills. You can attain this type of power by gaining favor and being a resource to people.

"If I have a connection with someone you want to get to, that's going to give me power. That's politics in a way," Lipkin says. "People employing this power build important coalitions with others."

7. Referent Power

No matter what type of leader you are, referent power is one of the most valuable kinds of power. It's all about how you build and develop relationships.

"This power depends on personal traits and values, such as honesty, integrity, and trustworthiness," Lipkin notes. "People with high referent power can highly influence anyone who admires and respects them."

The Takeaway

When people perceive you as powerful, they will more naturally rely on you. There's a lot you can achieve through that influence. Each of these types of power has advantages and disadvantages. As a leader, it's essential to understand the types of power in order to inspire and motivate others, while building trust and credibility with your team and beyond. 

A version of this article was originally published on June 17, 2013.

Photo: Getty Images

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