CORPORATE POWER AND LEGITIMACY IN BUSINESS
CORPORATE POWER AND LEGITIMACY
The Concept of Power in Business
Max Weber: defined power as “The probability that one actor within a social relationship will be in a position to carry out his own will despite resistance."
Pfeffer: "The potential ability to influence behavior, to change the course of events, to overcome resistance, and to get people to do things that they would not otherwise do."
Power is the force or strength to act. Business power is the force behind an act by a company, industry, or sector.
Its primary source is a grant of authority from society, stemming from the social contract, to convert resources efficiently into needed goods and services.
It is legitimate when it is exercised rightfully, or in keeping with the social contract.
The concept of power needs to be distinguished from authority and influence.
Authority is the right to direct others and ask them to do things which they would not otherwise do, but it is legitimate and is exercised in the working of organizations.
Authority is different from power because of its legitimacy and acceptance in an organizational contex.
Influence is conceived as more broader and it is the ability to alter actions of other people in general ways by changing their satisfaction criteria and thus improve their performance.
Leadership is broader than power and indicates a willingness on the part of the follower to follow in the absence of authority.
Corporations have tremendous power of to change society through their actions. Corporate power has an impact on society at two levels. i On the surface level it is the direct cause of visible, immediate changes. ii On the deeper level it shapes society over time through the aggregate, indirect, and unforseen changes of industrial growth.
corporate power is exercised in seven spheres corresponding to the key business environments described in earlier (here power over individuals is included in place of the internal environment).
1 Economic power comes from
The Concept of Power in Business
Max Weber: defined power as “The probability that one actor within a social relationship will be in a position to carry out his own will despite resistance."
Pfeffer: "The potential ability to influence behavior, to change the course of events, to overcome resistance, and to get people to do things that they would not otherwise do."
Power is the force or strength to act. Business power is the force behind an act by a company, industry, or sector.
Its primary source is a grant of authority from society, stemming from the social contract, to convert resources efficiently into needed goods and services.
It is legitimate when it is exercised rightfully, or in keeping with the social contract.
The concept of power needs to be distinguished from authority and influence.
Authority is the right to direct others and ask them to do things which they would not otherwise do, but it is legitimate and is exercised in the working of organizations.
Authority is different from power because of its legitimacy and acceptance in an organizational contex.
Influence is conceived as more broader and it is the ability to alter actions of other people in general ways by changing their satisfaction criteria and thus improve their performance.
Leadership is broader than power and indicates a willingness on the part of the follower to follow in the absence of authority.
Corporations have tremendous power of to change society through their actions. Corporate power has an impact on society at two levels. i On the surface level it is the direct cause of visible, immediate changes. ii On the deeper level it shapes society over time through the aggregate, indirect, and unforseen changes of industrial growth.
corporate power is exercised in seven spheres corresponding to the key business environments described in earlier (here power over individuals is included in place of the internal environment).
1 Economic power comes from