Organizational Theory Design and Change Chapter 14

1 CHAPTER 14: MANAGING CONFLICT, POWER, AND POLITICS

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CHAPTER 14 MANAGING CONFLICT, POWER, AND POLITICS TEACHING OBJECTIVES

1. To explain that conflict is inevitable, because stakeholders compete for resources and their goals

often conflict. (14.1)

2. To examine Pondy’s model of conflict and its five stages: latent, perceived, felt, manifest, and

conflict aftermath. (14.2)

3. To consider ways to manage conflict by making changes in structure, increasing integration, and

clearly defining authority relationships. (14.3)

4. To discuss how conflict can be managed by changing attitudes, attitudinal structuring, a procedural

system, a third-party negotiator, and employee rotation. (14.3)

5. To explain how power enables individuals or subunits to resolve a conflict in their favor. (14.4)

6. To examine the seven sources of power: authority, control over resources, control over information,

nonsubstitutability, centrality, control over uncertainty, and control over decision-making premises.

(14.5) 7. To consider how organizational politics can increase power. (14.6)

8. To address the costs and benefits of organizational politics. (14.6)

CHAPTER SUMMARY This chapter examines conflict, power, and politics in the organizational setting. Although stakeholders

cooperate to contribute resources, they compete for resources. Conflict arises when one group pursues its

goals at the expense of another. Research shows that some conflict is good to overcome inertia, but

beyond a certain point, conflict hurts organizational effectiveness.

Pondy’s model of conflict consists of five sequential stages: latent conflict, perceived conflict, felt

conflict, manifest conflict, and conflict aftermath. The potential for conflict exists due to

interdependence, subunit orientations, bureaucratic factors, incompatible performance criteria, and

competition for scarce resources. Conflict should be managed before it reaches the manifest conflict

stage. Conflict is manifest by either open or passive aggressiveness. Manifest conflict reduces

communication and leads to poor conflict aftermath. Conflict can be managed by structural changes,

increasing integration, establishing a procedural system for grievances, attitudinal structuring, and using

a third-party negotiator.

Power influences how conflicts are resolved. There are seven sources of organizational power: authority,

control over resources, control over information, nonsubstitutability, centrality, control over uncertainty,

and unobtrusive power.

Organizational politics increase power. There are tactics for playing politics: increasing indispensability

by increasing nonsubstitutability and centrality, associating with powerful managers, building and

managing coalitions, and influencing decision-making by controlling the agenda and bringing in outside

consultants. An organization must manage the balance of power to ensure that power and politics are

beneficial, not harmful.


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CHAPTER OUTLINE 14.1 What Is Organizational Conflict?

Stakeholders compete for the resources that an organization produces. Shareholders want dividends,

employees want raises. An organization must manage both cooperation and competition among

stakeholders to grow and survive. All stakeholders have a common goal of organizational survival, but

not all goals are identical. (Fig. 14.1)

Organizational conflict occurs when a stakeholder group pursues its interests at the expense of other

stakeholders. Given the different goals of stakeholders, organizational conflict is inevitable. Conflict is

associated with negative images, such as unions getting angry and violent, but some conflict can improve

effectiveness. When conflict passes a certain point, it hurts an organization. (Fig. 14.2)

Q. How can conflict improve effectiveness?

A. Conflict can overcome inertia and introduce change, because conflict requires an organization to

reassess its views. Different views are considered, and the quality of decision-making is improved.

Beyond a certain point, conflict hurts the organization and causes decline. Managers spend time

bargaining, rather than making decisions. An organization in decline cannot afford to spend time on

decision-making, because it needs a quick response to recover its position. Groups battle for their

interests, no agreement is reached, and the organization floats along, falling prey to inertia.

Organizations need to control conflict.

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• Refer to discussion question 1 here to discuss the beneficial aspects of conflict.

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14.2 Pondy’s Model of Organizational Conflict Pondy’s model shows five sequential stages of conflict: latent conflict, perceived conflict, felt conflict,

manifest conflict, and conflict aftermath. (Fig. 14.3)

Stage 1: Latent Conflict

No conflict is present, but the potential for conflict exists due to the nature of operations. Pondy contends

that all conflict emerges due to subunit orientations. There are five potential sources of conflict among

subunits:

1. Interdependence: As organizations grow and differentiate, subunits want autonomy. Marketing

wants to design advertising. Desires for autonomy conflict with the organization’s aspirations for

cooperation. As task interdependence increases—that is, moves from pooled to sequential to

reciprocal—the potential for conflict increases. Conflict occurs at the individual, functional, and


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divisional levels. If functions were not interdependent, conflict would not exist. Functions would

simply perform their tasks. Manufacturing would not care what engineering did.

2. Differences in goals and priorities exist among different functions. Manufacturing wants to lower

costs. Marketing wants to increase sales. Incompatible goals create conflict.

Organizational Insight 14.1: Conflict Causes Slow Change at Kodak Kodak experienced declining performance and hired Christopher Steffen, who had successfully turned

around Chrysler and Honeywell, as Chief Operating Officer.

Q. Why did Steffen resign from Kodak?

A. Steffen resigned from Kodak because his problem-solving approach conflicted with the top

managers’. He favored a revolutionary approach with radical changes, such as large layoffs. The CEO

and his team favored an evolutionary approach and incremental changes. Kodak’s team defeated Steffen,

so he resigned.

3. Bureaucratic factors: Status inconsistencies can result in conflict. Line functions often clash with

staff functions.

Q. Distinguish between line and staff functions. Why do they conflict?

A. A line function, such as production, is directly responsible for producing the outputs. Staff functions,

such as accounting and human resources, support the line function. Conflict arises when line employees

consider themselves more important than staff employees, putting their own interests first.

4. Incompatible performance criteria for subunits lead to conflict. If an organization rewards cost

control, engineering does not comply with marketing’s request for a new product design.

Organizational Insight 14.2: How Rewards Produced Conflict at CS First Boston A merger between First Boston and Credit Suisse resulted in conflict. There was no synergy to capitalize

on transatlantic investment banking. Conflict led to high management turnover.

Q. Why didn’t CS First Boston manage the conflict? What caused the conflict to escalate?

A. First Boston tolerated conflict, because each unit had no effect on the other. Task interdependence

was low. Conflict escalated when the American unit achieved record profits but no bonuses, because the

London division lost money. This unfair decision prompted senior managers to leave First Boston and

work for competitors, like Merrill Lynch.

5. Competition for scarce resources leads to conflict. Subunits compete for their share of resources.

Increased funding allows a division to grow.

Stage 2: Perceived Conflict

When a subunit perceives its goals to be obstructed, conflict enters the second stage. Each group seeks

the source of the conflict and finds reasons for problems. Marketing blames poor sales on poor

manufacturing quality. Manufacturing says that marketing is not advertising effectively. Conflict

escalates as subunits fight over the origin of the problem.


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Stage 3: Felt Conflict

Subunits develop polarized attitudes of us-versus-them. Cooperation between subunits declines as well as

organizational effectiveness. Conflict escalates as subunits argue, and small problems escalate to huge,

difficult-to-manage, conflicts.

Stage 4: Manifest Conflict

Subunits deliberately impede other subunits. People aggressively promote their own interests at the

expense of others.

Once conflict is manifest, coordination between managers and subunits deteriorates, resulting in a

decline in effectiveness. Managers should prevent conflict from reaching the manifest stage to avoid a

communication breakdown and a poor conflict aftermath.

Stage 5: Conflict Aftermath

Every conflict has a conflict aftermath that influences conflict resolution in the future. If resolved before

the manifest stage, conflict will result in a positive aftermath. If conflict resolution takes a long time or

doesn’t occur, future relationships and the culture will be damaged.

Q. What organizational conflicts have you experienced that went through all five stages. Did anyone

experience open aggression? How did the organization’s structure contribute to the problem?

A. Answers will vary. Open aggression leaves bad impressions, but amicable solutions promote good

relations.

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• Refer to discussion question 2 here for an example of conflict in an R&D laboratory.

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14.3 Managing Conflict: Conflict Resolution Strategies Managing conflict is a priority, because conflict impairs organizational culture. Culture is an important

way to control behavior. Organizations must balance the need for conflict to overcome inertia and

promote learning with the prevention and escalation of harmful conflict.

Conflict management techniques depend on problem source. CS First Boston needed a changed rewards

system. Kodak needed a changed top-management team. An organization reduces conflict by structural

and attitudinal changes.

Acting at the Level of Structure

Managers can resolve conflict by changing task relationships:

1. An organization may change organizational structures. A functional structure causes problems, such as

communication and measurability problems.


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Q. What structure is appropriate to assign overhead costs more accurately? What structure reduces

product development time?

A. A product structure assigns overhead costs more accurately. A functional structure does not reflect the

contributions of various functions to a product. A product team structure speeds up product development.

2. Increasing integration can overcome conflicts over resources and subunit orientations. Integrating

mechanisms include task forces, teams, and integrating roles.

3. Flattening the hierarchy and decentralizing authority give employees decision-making power and

makes them accountable. Authority relationships must be defined. Conflict is reduced because

employees know their superiors. In a tall hierarchy, 10 people may need to sign off on a proposal.

Acting at the Level of Attitudes and Individuals

Different divisions and functions have different ideas about accomplishing organizational goals.

Managers can prevent the us-versus-them attitudes.

Q. What can managers do?

A. They can establish procedures to voice complaints. Procedures play a large role in managing conflicts

between managers and unions. Bargaining consists of attitudinal structuring, a process to convince

management and labor they have much in common. A third-party negotiator, such as a senior manager

in an integrating role or an outside consultant, can mediate.

Rotating employees, a tool used by the Japanese, manages conflict by changing attitudes. Long held

attitudes may necessitate a change in those mired in conflict through transfer, promotion, or firing.

Top-management may be replaced to overcome inertia and change attitudes. The CEO influences

attitudes by setting the values and culture, influencing the attitudes of other managers, and having the

power to resolve subunit conflict.

Strong CEOs listen to opinions and build consensus. Weak CEOs fail to manage conflict, so strong

coalitions fight for their goals at the expense of the weaker subunits. As fighting escalates, conflict

becomes harmful.

• Refer to discussion question 5 here to discuss the effects of structure on power.

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Managerial Implications: Conflict Managers should analyze structure to identify potential sources of conflict and redesign it. If conflict

cannot be eliminated, a manager should intervene quickly to resolve the conflict. Managers should

choose a way of handling the conflict that matches the source of conflict to achieve a good conflict

aftermath.

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14.4 What Is Organizational Power? Organizational power is the tool used to resolve the conflict. It is the ability to defeat the opposition in

accomplishing a goal. Marketing gets production to run an extra batch of goods; production would not

have run this batch, so an element of coercion is involved.

The power of different coalitions to influence decision-making determines how conflict gets resolved and

which subunits benefit. Conflict and power are interrelated. Conflict arises because groups need to

cooperate but compete for resources. Groups use power to resolve conflict in their favor.

Notes________________________________________________________________________________

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• Refer to discussion question 3 here to discuss the importance of maintaining a balance of power.

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14.5 Sources of Organizational Power Individuals, groups, and divisions seek power to influence others. There are seven sources of power:

authority; control over resources; control over information; nonsubstitutability; centrality; control over

uncertainty; controlling the premises of decision-making, and unobtrusive power. (Fig. 14.4)

Authority is the most obvious source of power. Because it is legitimate power stemming from an

organization’s legal and cultural foundations, it is the ultimate source of power. The legal charter permits

the board of directors, the agent of shareholders, to grant a CEO the power to use resources to create

value. The CEO has the power to grant authority to other managers, who give power to subordinates.

Employees accept the legal right of the organization to control their behavior. Authority is distributed

differently in various organizations. Centralization has top managers retain authority, and

decentralization delegates authority to lower levels.

Q. If centralization discourages coalitions, why would an organization decentralize?

A. A highly centralized organization makes few significant decisions, because everyone is afraid to take

responsibility. Employees just agree with superiors, which hurts organizational effectiveness.

Many managers try to retain control. Out of fear of losing authority, the manager limits information to

subordinates, making it hard for them to make decisions. Decentralizing authority does not mean a loss of

authority, because the supervisor is still responsible for subordinates. Intentional decentralization is

called empowerment, giving employees decision-making freedom and motivating them to create value.

Organizations need to empower both individuals and divisions.

Control over resources gives subunits power. At a pharmaceutical company, R&D scientists have

power. Money is the ultimate resource, as it buys other resources. Top managers have ultimate power

because they allocate resources. The ability to generate resources also increases power. Divisions that

produce revenue have power.


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Control over information, access to and control over the information flow, is a source of power. By

choosing the information others receive, an individual influences their opinions. Those who select

information are called “gatekeepers.” People in specialized roles have power stemming from the control

over information. Patients take the word of doctors.

Nonsubstitutability means that no one else can perform an individual or subunit task, giving power.

Centrality refers to those who make decisions and functions needed for resource flows. Centrality is a

source of power. An organization’s strategy determines which subunit is central.

Q. Which function is central for a low-cost strategy? How about a differentiation strategy?

A. The manufacturing function is central for a low-cost strategy. For differentiation, R&D or marketing

is central.

Control over uncertainty: A subunit with control over the primary source of contingencies has power.

Doctors have power in hospitals because they treat patients, the major source of uncertainty.

Contingencies change over time, causing functions to rise and fall. Right after World War II,

manufacturing was the most important function, as firms concentrated on developing production

techniques. Once manufacturing became routine, companies had to sell products, so marketing became

important in the 1960s. With the 1970s came a recession, so finance became important.

Unobtrusive Power: Controlling the Premises of Decision-Making

A dominant coalition has the power to control decision-making to resolve conflict in their favor. This is

known as unobtrusive power, because other subunits do not know the coalition has influence.

A coalition’s power stems from the ability to control the assumptions, goals, and norms to evaluate

alternatives. If marketing is the dominant coalition, cost cutting will not get much attention.

Notes________________________________________________________________________________

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• Refer to discussion question 4 here to review the concept of unobtrusive power.

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14.6 Using Power: Organizational Politics Managers try to gain power to use it to their advantage. Organizational politics is the process of

acquiring power and using it to overcome opposition for a desired outcome. To strengthen power,

subunits engage in politics. Many have negative images about politics, like politicians campaigning and

not keeping promises. Politics are an inevitable part of an organization. It is important to understand how

politics work to recognize a skillful politician who gets visible and prestigious assignments.

Tactics for playing politics enable individuals and subunits to attain power to accomplish goals. Such

political tactics, which stem from sources other than authority, include:


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1. Increasing indispensability.

Q. What tactics increase indispensability?

A. Increasing nonsubstitutability and centrality increase indispensability. Individuals with specialized

skills in an area of concern to an organization are indispensable. Centrality rises by accepting

assignments with visibility and developing a network of contacts.

2. Associating with powerful managers. Individuals can work with managers on their way to the top in

hopes of ascending the corporate ladder with them. Top managers become mentors, because

succession planning is an important responsibility.

Q. How can you identify powerful managers?

A. Signs of power include reputation, ability to influence decision-making, and control of important

resources. Symbols of prestige, such as access to corporate jets, indicate power.

Taking advantage of common ties, such as graduating from the same school, is a way of associating with

powerful individuals and becoming indispensable.

Q. Is this political tactic ethical?

A. Answers will vary, but it does creates visibility and individuals won’t ascend the corporate ladder

solely on their political ability; talent counts. Politics offers the opportunity to display talent.

3. Building and managing coalitions. Subunit can join to increase power. Coalitions require a trade-off:

Manufacturing supports finance if finance supports manufacturing. Top managers must establish

good relationships with shareholders and the board. A CEO will fall without board support.

Managers need long-term relationships with stakeholders, such as customers, banks, and suppliers.

External linkages give top managers political power. Internal linkages increase the chance for

promotions. Coalitions change, so managers need to develop coalition-building skills. Co-optation is

a way to manage coalitions, making the opposition part of decision-making.

4. Influencing decision-making. To be successful at politics, power must be coupled with knowing

when and how to use it. Unobtrusive power is the most effective, because people do not realize their

help in accomplishing another group’s goals.

Tactics to make decisions seem like a promotion of organizational interests include controlling the

agenda and bringing in an outside expert. Controlling the agenda allows for issues to be addressed by

significant decision makers. Conflict stays in the latent or felt stage, because dissenters miss the

opportunity to state their views. Managers can bring in a supposedly neutral outsider, but actually the

outside consultant represents the dominant coalition and recommends its solution. Opposing groups agree

because they think the outsider is objective.

The Costs and Benefits of Organizational Politics

Coalitions lobby for their interests because the stakes are high. Stakes include control over resources.

Politics play a role in strategy and structure choices. Politics can improve decision-making, yet more time

could be spent fighting than in making and implementing decisions.


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To achieve the benefits of politics, an organization must create a balance of power in which all parties

recommend solutions and dissenting views are considered. (Fig. 14.5)

The benefit of politics is improved decision-making because coalitions engage in a productive debate

over alternatives. When resources are allocated to groups that can manage contingencies, value is

created.

Benefiting from politics assumes that power is conferred on those who can provide the most benefit.

Power constantly moves through an organization as unsuccessful managers lose power to successful

managers.

Q. What is wrong with this assumption?

A. Unsuccessful managers may retain their power despite poor performance due to control over property

rights. A top-management team can hold all important roles on committees and choose supporters as

members. Some CEOs serve as chairmen of the board, which allows for board control. Other top

managers centralize decision-making and deny promotions to dissenters.

Organizational Insight 14.3: Power Struggles and Corporate Greed at WorldCom This insight details how the board members at WorldCom failed in their oversight role, costing

shareholders billions of dollars. The board members resigned voluntarily and cannot be replaced until

the next general meeting.

Q. Why do CEOs and directors try to keep their positions? What role do large institutional shareholders

play in the balance of power?

A. CEOs and directors want to keep their power and strong property rights. They receive millions of

dollars in salaries, bonuses, and stock options plus private planes and chauffeured cars. Large

institutional shareholders, angry at abuses of power, influence boards to oust ineffective CEOs. They

recommend outside directors less likely to reward poor performance with generous stock options. They

want authority to monitor top managers and create a more equitable balance of power.

When powerful managers silence dissenters, debate declines, checks and balances dwindle, conflict

escalates, inertia increases, and effectiveness declines. The balance of power among stakeholders

determines whether power and politics benefit or harm an organization.

Managerial Implications: Power and Politics Managers should understand the effect of politics on decision-making. Managers should develop a

personal power base to influence decision-making and associate with powerful managers and a mentor to

obtain power. Managers should seek to maintain a power balance between individuals or subunits to

preserve organizational decision-making.

DISCUSSION QUESTIONS AND ANSWERS 1. Why and under what conditions can conflict be good or bad for an organization? Would you expect a

higher level of conflict in a mechanistic or an organic structure? Why?

Conflict can be good for an organization by overcoming inertia. Because different managers and

stakeholders present different views, conflict can improve decision-making and use resources better.


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Without agreement on priorities and resource allocation, conflict causes performance to decline.

Bargaining over decisions keeps decisions from being made. Conflict is higher in a mechanistic structure

because a tall organization loses control over its hierarchy. Loss of control results in conflict; people

have decision-making responsibility, but lack authority and require approval from others. A flatter

organic structure gives lower-level employees decision-making and promotes mutual adjustment. An

organic structure has integrating mechanisms to promote cross-functional cooperation.

2. You have been appointed to manage a large R&D laboratory. You find a high level of conflict

between scientists in the unit. Why might this conflict be arising? How will you try to resolve it?

This conflict results from task interdependence. R&D scientists have reciprocal interdependence; the

actions of one affect the actions of others. Different groups of scientists have different goals and compete

for scarce resources, such as funding. I would implement an organic structure, such as a product team

structure, with decentralized authority and clearly defined authority relationships. Integration should be

increased between groups. I would change attitudes by allowing opinions to be aired.

3. Why is it important to maintain a balance of power between different groups of organizational

stakeholders?

A balance of power is necessary to manage politics and obtain its benefits. This allows for alternative and

dissenting views. A balance helps allocate resources to those who can create the most value. A group

with dominant power can misuse it. Opposing views are suppressed, checks and balances disappear,

conflict escalates, and inertia increases. Effectiveness declines. A balance of power helps achieve the

benefits of power and politics.

4. What is unobtrusive power? Why is it so important?

Unobtrusive power stems from the ability to control the premises of decision-making. Subunits with

similar interests build coalitions to pursue common goals and use their power to influence decision-

making. Unobtrusive power is important because the coalition controls the assumptions, goals, and norms

used to evaluate alternatives. A coalition in favor of differentiation will not consider cost-cutting.

Unobtrusive power is important because others think they are promoting organizational goals, but they

are being manipulated.

5. How can the design of the organization’s structure and culture give some subunits more power?

Structure and culture give some subunits more power through control over resources, information, and

centrality. An organization controls resources if it generates resources. In a pharmaceutical company,

R&D generates resources, so it has power. Structure dictates which subunits receive information. Control

over information can lead to influence over opinions. A subunit is powerful if it is central to the

organization. In a low-cost culture, manufacturing is central.

6. Discuss how you, as manager of the R&D function in a cosmetic products company, might try to

increase your power and the power of your subunit to control more resources in a battle with

marketing and manufacturing.

I would increase the indispensability of the R&D function by increasing nonsubstitutability and

centrality. I would ensure that the function had special knowledge, such as the ingredients to a successful

product. I would make contacts with functions to build a network of supporters. I would be visible to

powerful managers and build a coalition to influence decision-making by controlling the agenda.


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ORGANIZATIONAL THEORY IN ACTION Each small group consists of top managers at a large reputable pharmaceutical company. The company

faces pressures from competition and the government to reduce costs and speed product development.

Groups will discuss how the implementation of cross functional teams will affect the relative power of

each division. They will discuss the conflict that will likely emerge and make recommendations on how

to manage the conflict.

The Ethical Dimension Students debate the ethical implications of CEOs appointing directors who will be evaluating their

performance. Use the WorldCom case to show what can happen under these conditions.

Making the Connection Students will find an example of a conflict that occurred between the managers of a company or between

the managers and other stakeholders. They will identify the source of conflict and how managers are

using their power to influence the decision-making process.

CASE FOR ANALYSIS

The Shakeup in GM’s Hierarchy

Tall hierarchies have problems. With too many levels and managers, GM experienced communication

and motivation problems, leading to conflict and high operating costs. Top management impacts

organizational effectiveness, so top managers were replaced in 1992 with individuals who made tough

design decisions. Under the new CEO, GM laid off 74,009 workers.

Jack Smith flattened the hierarchy by eliminating levels and cutting managers. GM will lay off 50,000

hourly and 24,000 salaried workers. Decisions will be made by managers close to customers. GM hopes

to speed up decision-making, increase responsiveness to customers, and reduce bureaucratic costs.

1. What kind of power did GM’s board use to oust the company’s old management team? Why

were they able to succeed?

The main source of power in this case is authority. The board has full authority to act in the

shareholders’ best interests, which is what they did in this case. They were able to succeed by

empowering managers better, which meant that decisions were made much quicker and with the

customer in mind.

2. How could organizations better achieve a balance of power at the top of the organization to

ensure that politics benefits, rather than harms an organization?

The main issue is that when an organization gets too tall, it is easy to lose sight of what the customer

really wants. When too much power is concentrated at the top, it is often difficult for the

organization to effectively respond to the customer.

ANALYZING THE ORGANIZATION


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Students analyze power and politics in their organization. They identify sources of power and the

subunits that have power from those sources. They determine if politics has been used to resolve

conflicts.

TEACHING SUGGESTIONS

1. Point out that some conflict is good, but becomes bad after a certain point. How can a firm tell what

is the appropriate amount of conflict? Conflict ceases to be good when so much time is spent

negotiating decisions that few actual decisions are made and implemented. An organization can avoid

such conflict by maintaining a balance of power.

2. Review the idea that bureaucracy increases conflict. A flatter structure has more clearly defined

authority relationships because a tall hierarchy has a long chain of command and a smaller span of

control. In a tall, mechanistic structure, people have responsibility for decisions but no actual

authority. They get frustrated by having to seek approval from ten people. A flatter structure allows

people to make decisions and holds them accountable for their actions.

3. To illustrate how conflict can arise, consider a role-play. You will be the CEO of a consumer

electronics company with a functional structure. Ask 16 students to volunteer. Four students are in

marketing, four in engineering, four in finance, and four in manufacturing. These four functions each

have different goals and compete for resources, but they need each other to bring a product to market.

Marketing is the dominant function, so manufacturing’s views were ignored. Show how long time it

takes to decide what product to produce.

Q. What can this company do to manage conflict?

A. It can move to a product team structure, increase integration, and set up a procedural system.

4. To review the sources of power, divide the class into seven groups. The organization is a

pharmaceutical company, trying to produce new drugs and has an organic structure. Assign each

group one of the sources of power: authority, control over resources, control over information,

nonsubstitutability, centrality, control over uncertainty, and control over decision-making premises.

Each group makes a suggestion as to what subunit or stakeholder has power stemming from each

source. The CEO has authority and control over resources. R&D controls resources, because it

generates resources. R&D scientists control information and have nonsubstitutability. R&D has

centrality and control over uncertainty. R&D has built a coalition to control decision-making.

Q. What can weaker functions do to increase power?

A. Functions can increase indispensability by increasing their centrality. They can increase

nonsubstitutability, associating with powerful managers, building coalitions, and influencing decision-

making by controlling the agenda. Students should apply these tactics to specific functions, such as

manufacturing, marketing, and finance.

5. To further illustrate the some conflict is good, have students recall a time when a conflict actually

made the situation better. We can often relate to this when we consider how a conflict in a personal

relationship or a heated discussion with a co-worker actually improved things. This is a good way to

understand the benefits and the dynamics of conflict as it applies to organizations.

6. Discuss with students how to effectively play politics. They need to understand that although it has a

negative connotation, things like being well connected and saying the proper things at a meeting are all a


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part of organizational life. One can’t say, “I don’t play politics” and expect to get too far in most

organizations. Discuss how to play ethically and morally.

Organizational Theory Design and Change Chapter 14

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