MMS714 MMS714: Sports Economics (La Trobe University) Sports Economics (La Trobe University)
MMS714 MMS714: Sports Economics (La Trobe University) Sports Economics (La Trobe University)
MMS714
Power and
Politics in
Organizational
Behaviour
MMS714 – Sports Organisational
Behaviour
Table of Contents
Executive Summary.......................................................2
Introduction...................................................................3
Different sources of power...........................................5
Analysis of People using power....................................8
Conflict and issues due to use of power.....................10
Motivation behind uses of power..............................12
Conclusion....................................................................14
Reference List..............................................................16
Executive Summary
Scope:
1. To determine core challenges in the case study
2. Understanding the culture of the organisation
3. Different power sources and effect on the organisation
4. Cause and management of conflict
Limitations of Study:
1. Lack of substantial forecasting figures for supporting the subject.
2. Better understanding through real work environment simulation.
Introduction
GoSports Inc is a national sports retailer, headquartered in Philadelphia, PA. It
was founded in 1973 with a single neighbourhood store and has grown to
become a Fortune 500 corporation with roughly over 300 stores established
across the 48 states in the USA. GoSport’s unique selling point is the ability to
provide the customer with any sports equipment under one roof. But with this
there was constant pressure for maintaining a lean operation and having the
lowest possible inventory. Over the past few years, GoSports has witnessed a
considerable decrease in profits and not to forget a rising tension in the work
environment and culture majorly due to friction in the upper management.
Edward Sutton was the founder of the company, his three children had
inherited GoSports after his demise. The oldest, Michael, and the youngest,
Jeannie were members of the board, whereas the middle sister, Sarah, was
director of finance. Most of the employees, especially a large segment in the
top-level management were from greater Philadelphia area had started as
seasonal employees during high school this was the trend preferred for human
resourcing. Staffing requirements for filling top positions was done internally
too
Over the years, GoSports had experienced a substantial decline in sales and
revenue. Substantial factors in this can be attributed to the shift toward online
shopping, which benefited companies with smaller operations and lack of
capitalising market opportunities. Further to complicate current matters there
as been a divide in the top-level management of the organization, repeated
disagreements over the years regarding the strategic direction of the company,
with varying coalitions attempting to steer GoSports in one direction or the
other. Due to the pertaining problems especially disagreements and personal
feuds have hampered decision making and thus, the majority of the board
members decided to put an end to the existing culture of internal recruitment
and hired James Park as their new CEO in hope of revalorization of the culture
and to see GoSports back to its glory days. While the stakeholders and lower
level employees appreciated the bold move there were many powerful
factions not happy about the hire.
Soon after James Park took on the role of CEO, he realised that the decision of
herring him was not unanimous and many people in powerful positions were
vying his position. Feeling threatened with the new CEO and his credentials as
a successful sports entrepreneur and manager, resisted any idea of change and
were stern on their idea of strengthening their respective departments was the
only way to turn things around for GoSports, some even tried to manipulate
information trying to sabotage Park’s plans. James Park had to face the issues
of residing company culture and the power and politics related to it. His main
nemesis was Luc Livingston, who was the head of operations and had spent his
entire career at GoSports. He gave weightage to personal ambition over the
organization’s need and many other top executives were unhappy and
frustrated with him.
In his initial two weeks he met with all the employees and executives
collectively and personal noting the minute details and politics of the
organization. Not all the meetings were fruitful and many resisted giving away
any important information. James Park formulated a strategy which saw
involvement and support of top, middle and bottom level of the organization
to rejuvenate the work culture of the organization. James with his rich
knowledge and experience knew that was the only way to save the company.
Highly determined and with many in the GoSports taking him in their trust he
presents his ideas to the board members on the future of GoSports.
Pre-existing Culture of the Organization:
1. Most of the higher-level managers started have been with the company
since the start of their career as s season employee during high school.
2. Preference of similar personalities & interest at workplace and majority
of them belonging to the same place, Philadelphia.
3. Authority, hierarchy and favouritism were the ways in which the
organisation was ruled.
4. Constant disagreement at the top level over the strategic decisions and
battle for internal control of the organisation, leading to misdirection of
objectives and the company.
5. Inability to pounce on new market opportunities caused by the concerns
going on. (competitors seizing the opportunities as visible gaps in
GoSports structure)
6. Shareholder’s and employees are in favour of the new CEO park but
there are some top-level executives that are not happy about his hire.
7. Resistance of change by fellow departments head who strongly believe
in strengthening their own departments is the best way to revitalise the
organisation.
Legitimate Power
This is the type of power that comes along with holding of a position.
Legitimate power comes along with the position and vanishes too when the
person vacates that position. It is not permanent. But this type of power can be
exercised by managers in situations where their virtue holds legitimacy. It
holds very close resemblance to the idea of legitimacy of authority, which has
been talked about for a long period of time by Weber, Henderson, & Parsons,
(1947). In formal organizations legitimate power is largely a relationship
between offices held by people in high positions rather than between
employees. A top-level executive holds the power to legitimately prescribe
behaviour sets for this staff and they in turn are gratified to accept these
norms. Many a times it is noted that age, sex, clan or cultural upbringing of the
manager determines the broad areas within which he may prescribe various
behaviours. (Raven & John R. P. French, 1958).
Reward Power
People in leadership positions are vested with the ability to reward people
with incentives which might be financial or emotional in nature depending
upon the motivation factor for the employee being rewarded. Pay rises,
compliments or more responsibilities are some commonly used techniques by
managers. Though this power is limited in nature and the outcome totally
depends on how it is perceived. Further, all leadership positions in an
organization do not have the same level of reward power in their possession
(Skinner & Stewart, 2017). Reward power often leads to better performances,
but studies also indicate that this has a diminishing effect in the long run at
perceiver’s end and constant rewarding also leads to stagnation. The
expectation of the rewards is also higher every time making it a financially
burden. Mabey (2001), also states that in modern day organizational
management also give some reward power to the employees over their
managers using 360-degree feedback mechanism. This type of power can be
easily noticed being used rigorously towards the players by managers,
stakeholders, sponsors to help stimuli the winning motivation but as discussed
above this doesn’t seem to work all the time as it depends on the kind of
motivators which are driving the athletes.
Coercive Power
Coercive power is very direct and tricky but nonetheless utmost effective.
Many a times this type of power source is abused by managers and
unnecessary or extreme use will have a downward spiral effect on the work
environment. Punishment, sanction and handing over undesired work are
some types of coercive power. In sports organization which are heavily
depended on volunteers using more of coercive power to get things done will
lead to unwanted increase in employee turnover rate (Skinner & Stewart,
2017). Thus, mangers are advised to use this power cautiously and many
organizations also put clear definitive policies on staff treatment (Lunenburg,
n.d.).
Expert Power
This source of power arises out of the personal traits of a person. As the term
suggests an expert personality has the knowledge, skill and sound judgment
for people to believe and follow the leader. The head coach of a sports team
having expert knowledge will only posses’ expert power when the teammates
and his assisting coaching staff believe in his skill set and respect it. Without
that it will result in disobedience and bad behaviour (Leadership and Power:
Two Important Factors for Effective Coaching., n.d.). The person seeking
expert power should also be trustworthy above having exceptional skills in his/
her field. And the experts are deemed to have the expertise only in their field
of work or study not outside them (Luthans, 2011).
Referent Power
This power is the ability of a person or a manger to influence his follower’s
behaviour because they admire his charismatic personality and seem to
identify strongly with the manager. The power tailors itself out of admiration
and the desire to be like a person. Referent power comes with a great deal of
responsibility as a likeable person lacking integrity may abuse the power and
use for personal advantage. Research reflects that influential sports
personalities ranging from famous athletes to managers and commentators
hold immense amount of referent power in influencing people. Huge
corporates use this by endorsing these personalities. For e.g. – Michael Jordan
and Serena Williams have the power to influence people’s choice of active
sports shoes and tennis gear (International Marketing ResearchE-book, 2005).
Informational Power
This source was added by Raven six year after the introduction of the base
model of social power. Raven emphasised that information can change
behaviour. It is the ability of an influencer to bring about change with the help
of useful information (Current studies in social psychology, 1965). Information
power arises out of a person or group holding vital information that others
require for their objectives. Just simply possessing critical information is not
vital enough, it is what the person plans to do or does with it. Comparing to
other personal sources of power this is a more transitory kind of power and it
is either transferred or diluted once a person passes on the information
(Feldman, 2014).
his creative genius by his subordinates and possess expert power. He also
possesses referent power as many employees consider him the most
approachable in the upper male echelon also Park noticed that Robert really
cared for the organization and the employees.
Sarah Sutton – Sarah joined GoSports recently after being appointed as the
head of Finance Department. She has abundance of relevant work experience
with numerous leading financial consultancy firms. Sarah is worried about her
father’s legacy as the problems at GoSports worsen. She uses her legitimate
power in the company by successfully convincing the board to hire someone
from outside as Grimm’s successor. She also has expert power due to her
previous accolades and she proved it again at GoSports by imposing tighter
budgets and increasing operation efficiency of the departments She also gives
Park vital information on the icy relationship between Michael and Harkin.
James Park – James Park is newly appointed CEO replacing H. Grimm. He
previously owned a successful sports and events management company, which
he later sold to his partner. He well networked in the sports industry to having
worked for an international sports enterprise for 17 years, making him an
expert in his field. He is known for his charming personality and charisma. He is
also possessing sound relation building ability and people are comfortable in
talking to Park making him a good communicator too. These factors enable
him to hold referent power.
10
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Like the situation in GoSports where Luc Livingston and Michael Sutton
try to concentrate power limited to their positions in the organization
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13
Conclusion
James Park being appointed as CEO along his wealth of experience and
accomplishments, at a time where there seems to be a power shift towards
executives of the organisation (Sarah Sutton, Robert Harkin & Jeannie Sutton)
who have the ambitions and survival of the organisational as their prime
motive. The organization is in desperate need of leadership who can
turnaround the current scenarios of centralised power with Luc Livingston &
Michael Sutton, the latter being a deserted leader in the work operation of
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GoSports and only at the position due to family name that leads to Luc who is
the head of operations who is an active figure in the work environment of the
organization. Though the prime reasons for the current state of GoSports
points bluntly towards the leadership and management style Luc lacks. He
enforces a very autocrat style of leadership which can become unpleasant to
work in as it curbs freedom of work and speech at a workplace. (Sameer
Limbare, 2012) Decision making is highly centralised with no signs of group
dynamics and cohesion, which is highly needed in a dynamic industry like that
of sports retail where completion is vast, and opportunities limited whereas,
the newly appointed CEO is more developer type of leader which keeps the
interests and growth of others and the organization before anything. (Tetteh-
Opai & Omoregie, 2015)
James is also the most powerful person in the presented situation. And, is the
suitable kind of leader for revitalization of the stagnant culture of the
organization, the employees and top executives too take him in confidence. He
is a relation builder and developer asserting leader with being conscientious he
can formulate group cohesion and take a structured organization to its past
glory. Studies demonstrate a key relation between success in sports
organizations and group cohesion (Intoppa, n.d.). He is also the most powerful
due to his position of CEO and should try resolving conflict created by Luc and
Michael for the betterment of the organization. He can use Luc’s knowledge
and expertise as he has been working with the organisation from his early
school days, he knows the company inside out.
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