- Power defined
- Bases of power
- Motivating ethical behavior
- Organizational structure


[SLIDE 1]

In the context of business ethics, power refers to managers' and leaders' influence over subordinates' behavior and decisions. Exerting power is one way leaders influence ethical behavior. 

There are five bases of power that can be used to influence including (1) reward power, (2) coercive power, (3) legitimate power, (4) expert power, and (5) referent power. Each of the five bases of power can be used to influence individuals in an ethical or unethical way. 


[SLIDE 2]

Reward power refers to influencing someone's behavior by offering something desirable. It could be a promotion, money, status, or something else. An example of reward power is when a sales representative puts an emphasis on selling an item that has a higher commission than other items. 

Coercive power refers to influencing someone's behavior by penalizing actions or behavior. It is the opposite of reward power. An example of coercive power is when a supervisor demands someone work an extra shift and threatens to withhold a promotion if he doesn't agree to do it. 

Legitimate power is the belief that someone is entitled to influence or control others who are obligated to accept it. This form of power is often derived from the titles and positions they possess in the organizations they work for. Many people readily give in to the demands of those wielding legitimate power, even if those demands go against their beliefs and values.


[SLIDE 3]

Expert power is a type of power or influence that is derived from someone's knowledge or expertise. It can also come from the perception that someone possesses knowledge. Expert power is directly correlated with a superior's credibility with subordinates. This credibility typically comes from someone's work history, formal education, and previous honors. 

Referent power occurs when one person's goals or objectives are similar to someone else's. Because two people have similar goals, one person may try to influence the other to take actions so that both of them will reach their goals. The use of power in this arrangement is considered beneficial and some sort of empathy must exist between the two people involved for it to work. 


[SLIDE 4]

A vital role in how well a leader maintains an ethical organization is how well that person motivates subordinates. Motivation is the ability of someone in a leadership position to influence subordinates to meet objectives. An example of motivation is a team leader who offers a reward for the team meeting its sales goals. The threat of punishment can also be used to motivate individuals. For example, a manager may threaten disciplinary action against any subordinate who does not correctly fill out and submit required paperwork. 

Job performance refers to how well an individual performs his or her work duties. Motivation is an important factor in job performance, but doing a good job also requires specific skills and resources. Companies often motivate employees by offering positive incentives to meet objectives. 

Relatedness needs are needs that are satisfied by social and interpersonal relationships. According to Maslow's Hierarchy of Needs, relatedness needs include love, friendship, and a sense of belonging. When searching for employment, people look for environments where they can establish good relationships with their superiors and coworkers.

Growth needs are needs that are satisfied by creative or productive activities. According to Maslow's Hierarchy of Needs, examples of growth needs include esteem and self-actualization. An employee might feel motivated, for example, when he is praised by others for the outcomes of his efforts.


[SLIDE 5]

A centralized organization is an organization where only top-level managers have the authority to make decisions. In centralized organizations, little decision-making authority is delegated to lower levels. This type of structure is best suited to organizations that make high-risk decisions. It is also appropriate for organizations with lower-level managers who do not possess the skills and experience to make high-level decisions. 

In decentralized organizations, the authority to make decisions is delegated as far down the chain of command as possible. Decentralized organizations are essentially the opposite of centralized organizations. They typically have very few rules and are informal. A strength of decentralized organizations is they are usually highly adaptable. This flexibility gives management the ability to react quickly to external change.