Power, Influence, and Decision-Making in Organizations
Power vs. Influence
Power (pushes, imposed by authority) vs. Influence (persuades, does not require authority)
Bases of Power
- Personal
- Source of expertise/ability
- Admiration and desire to please
- Positional/Formal
- Fear of negative (punishment)
- Hope for positive (reward)
- Legitimate
- Relational
- Source of resources
- Positions in network
Types of Influence
- Interpersonal
- Influencing individuals and group members
- Procedural
- Managing the rules or procedures used to exchange information and aggregate individual preferences
Cialdini’s 6 Principles of Interpersonal Influence
- Liking: People like those who like them.
- People like to comply with friends. Influence through similarity or praise.
- Reciprocity: People repay.
- People feel obligated to give back the form of behavior they receive.
- Social Proof: People follow similar people.
- People will follow if their peers are following.
- Consistency:
- People align with their commitments.
- Authority: People listen to experts.
- Establish your own expertise, have a degree, or wear a uniform.
- Scarcity: People want whatever there is less of.
Additional Tactics of Interpersonal Influence
- Establish your credibility
- Frame on common ground
- Provide evidence
- Connect emotionally
- Build coalitions
Procedural Influence Tactics
Influencing the rules to affect the decision-making of the whole group:
- Controlling the agenda
- Influencing group norms
- Who speaks when
- Shaping how decisions are made (majority vs. unanimity)
- Who sits where
Decision-Making Models
- Rational Model: Rational approach to decision-making.
- Transparent reasoning, high-quality decisions.
- Normative Model/Bounded Reality: People have less information, search less, and settle for less optimal solutions.
- Bounded rationality: There are constraints in research for making the decision.
- Satisficing decision is “good enough”.
- Garbage Can Model: Rolling the dice with sloppiness.
Decision-Making Biases
- Biases: Inclination towards or against something.
- Biases about Self
- Self-serving bias
- Egocentric bias: See self as contributing more
- Self-uniqueness
- Illusion of control
- Overconfidence
- Biases about Others
- Halo effect/Fork-tailed effect
- Primacy effect: The first thing we learn affects us
- Negativity effect: Put a lot of weight on negative information about others
- Fundamental attribution error: Attribute behavior to personality
- Confirmation bias
- Heuristics: Shortcuts that can lead to errors.
- Availability bias
- Hindsight bias: Believe something is inevitable
- Base rate fallacy: Choose to rely on a single data point
- Insensitivity to sample size: Assume small samples, not representatives
- Representativeness: Make judgments from stereotypes
- Anchoring: Influenced by the first information received
Decisional Balance Sheet
Create a pro/con list with the following categories:
- Utilitarian gain/loss for self
- Utilitarian gain/loss for others
- Approval/disapproval of self
- Approval/disapproval from others
Case Study: Best of Intentions
This case is about whether employees who are qualified but may not be received well by employees due to their gender or race.
Programmed vs. Nonprogrammed Decision-Making
- Programmed
- Past problems with clear past solutions
- Nonprogrammed
- A new problem never resolved before
Group Decision-Making Advantages
- Resources: Combined skills and knowledge
- Motivational: Working as a group motivates people.
Group Decision-Making Disadvantages
- Inefficient: Process loss from wasted discussion
- Communication Problems: Emotional conflicts can bog down decisions
- Information Underutilization: Group discussions are not always good at eliciting information.
- Struggle to pool all knowledge together
Approaches to Decision-Making
- Leader Oriented
- Very efficient
- Only uses some of the team resources
- Group Technique – Majority Rules
- A quick way to include all members’ opinions and produce high-quality decisions
- Voting can prematurely close discussion and lead to a lack of commitment from losers
- Consensus
- Best way to fully utilize team resources
- Super time-consuming
Group Decision-Making Techniques
- Brainstorming
- Nominal group technique: Generating and evaluating alternative solutions
- Delphi technique: Strictly email
Pitfalls
- Groupthink
- Group polarization
- Abilene: Everyone agreeing for the sake of reaching a consensus
Case Study: Cardiotronics
An older employee who is good at his job is too slow. What do you do?
Conflict Types
- Task Conflict: Disagreement about tasks/ideas.
- Helpful conflict
- Relationship Conflict
- Harmful conflict
Conditions of Conflict
- Communication
- Barriers can be personal, physical, or language-based
- Structure
- Different/unclear goals
- Limited resources (conflict between groups or within groups)
- Personal Variables
Conflict Stages
- Potential opposition
- Cognition and personalization
- Intentions, conflict management styles
- Solved with assertiveness or cooperativeness
- Situational factors
- Behavior
- Intentions differ from behavior
- Outcomes
- Functional is good; dysfunctional isn’t
Conflict Styles
- Competing
- Individuals trying to satisfy their own interests
- Accommodating
- Appeasement, giving up
- Collaborating
- Searching for mutually beneficial solutions
- Avoiding
- Compromising
Case Study: Karen Leary
Ted wants a private office for Taiwanese clients, but Karen sees it as entitled and not embracing team culture.
Distributive Bargaining
Seeks to divide a strict amount of resources, always win/lose, parties fundamentally oppose, competitive and short-term.
- Primary Tactics: Strategies to claim the most value for self.
- Extreme first offers, tiny concessions, persuasion
Integrative Bargaining
Seeks a win-win, parties not fundamentally opposed, cooperative and long-term focused.
- Primary Tactics: Problem-solving for creating joint value or maximizing joint outcomes/utilities.
BATNA
Best Alternative To Negotiated Agreement
Bargaining Zone (ZOPA)
Zone of Possible Agreement: Range between reservation prices
Case Study: Movie Deal
Producer vs. director