Power & PoliticsWhen The Tail Wags The Dog

VinayakAkhil Vaibhav

Facts• Prem Chopra was the executive VC of Poornima Ltd. • It was a holding company which had 3 other subsidiaries dealing with

switchgears, transformers and motors. Vikram Talwar was the managing head at Motors India Ltd.

• Chopra & Talwar had not been seeing eye to eye on a number of policy matters.

• Seven years ago, Chopra had been in a dominating position and had transferred Talwar out of the head office at Calcutta to Bombay and placed him in Motors India Ltd, putting him on a flight to nowhere

• This move of his was viewed upon by many as one which would make him get rid of Talwar for good as Motors India was considered to be a graveyard for CEO’s as it’s balance sheet was red since time immemorial . However, this was not totally true.

• Over the years, the shareholder had benefitted from their investments in Poornima Ltd.

• One day Chopra was visited by Vikram Talwar and 3 members of his core management team at Motors India, just hours before a management committee meeting as well as a Company Board Meeting later on during the day.

• Talwar told him that his friends had bought a majority stake in Poornima ltd. And would form a consortium which would give them controlling rights, then he made him an offer with two options:

1. The sale of Motor India to Talwar and his associates.

2. Talwar to surrender his controlling stake in the holding company.• This left Chopra taken aback. Meanwhile, Vallabh Mishra, an

institutional nominee had called him up and informed him that they were in a situation which compelled them to sell an institutional stake to a consortium.

INSTANCES OF POWER• Chopra had used his legitimate power to transfer Talwar out of

his head office at Calcutta.• Talwar had used reward power to motivate his employees at

Motors India.• Chopra believed that Talwar had expert power in managing

Motors India.• Talwar had used coalition building as a power tactic in order to

make Chopra do what he had wanted.• Talwar had also used pressure tactics to compel Chopra to make a

decision out of the 2 options put forth by him.• Talwar had also used the power tactic of rational persuasion to

make Chopra understand the situation he was dealing with.

INSTANCES OF POLITICS• Talwar had used politics by means of association and coalition

with 3 other members his core management team at Motors India to exert pressure on Mr. Chopra and thereby asked him to conform to the options set forth by him.

• Mr. Chopra had used politics by transferring Mr. Talwar out of the head office at Calcutta and thereby getting rid of him since they did not see each other eye to eye on a number of policy matters

• Mr. Talwar had used politics to his benefit in the organization by motivating associated in his organization by focusing on to buy shares of poornima and for a consort for the deal

POLITICSPolitics in the organization is defined as “activities that are not required as a part of ones formal role in the organization, but that influence or attempt to influence the distribution of advantages and disadvantages within the organization

There are 2 types of political behaviours: legitimate and illegitimate

Legitimate: Refers to normal everyday politics

Illegitimate: Refers to violation of implied rules of the game

When politics is seen as a threat and consistently responded to with defensiveness, negative outcomes are sure to surface eventually.

Factors contributing to political behaviour

Individual factors

>High machiavellenistic personality

>Organizational investment

>Perceived job alternatives

Organisational factors

>Promotional opportunities

>Low trust

>Unclear performance evaluation system

>Self serving senior managers

Has Chopra misused power when he killed two birds with one stone?

• Power refers to a capacity that A has to influence the behaviour of B so that B acts in accordance with A’s wishes

• Bases of power- Formal Power: formal power is based on an individual’s position in an organisation. Formal power can come from the ability to coerce or reward or from formal authority.

• Coercive power: When A can dismiss, suspend or demote B or when A can assign work activities to B which he finds unpleasant, A possesses coercive power over B.

• Legitimate power: in organizations, the most frequent access to one or more of the power bases is one of structural position. This is called legitimate power. It represents the formal authority to control and use organizational resources.

• According to P.M Podsakoff and C.A. Schrieshe, “coercive power can backfire in that it is negatively related to employee satisfaction and commitment.”

• Power tactics - Pressure: Using warnings, repeated demands and threats. • Abuse of power: Two dimensions, (a)disrespect for individual dignity and (b)

interference with job performance or deserved rewards.

Thank you