Power indicates to the ability that A has to sway the action of B, so that B does in conformity with A’s desire. Power is the social force that allows selected persons to rally others; to manage others to act in unison; and to overcome defiance to leaders’ authority. Power is also a function of dependency; B’s relationship to A when A possesses something that B requires. A person can have power over you only if they control something you desire

Leadership use power as a means of attaining group goals. Leaders achieve goals using power as a means of facilitating their achievement. An example of leader in the corporate world is Warren Buffett. He provides leadership to 300,000 employees with a values-based, hands-off style that gives managers wide leeway and incentivizes them like owners. The result is America’s fifth-most-valuable company (Berkshire Hathaway). His influence extends much further than that. The world looks to the “Oracle of Omaha” for guidance on investing, the economy, taxes, management, philanthropy, and more.

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The differences between leadership and power are:
• Leadership focuses on goal achievement
• goal compatibility – power does not require goal compatibility, merely dependence
• direction of influence – leadership focuses on the downward influence on one’s followers while power is used to gain lateral, downward, and upward influence

The types of power can be separated by formal or personal.

Formal Power:
This is established by an individual’s position in an organization and there are three power bases used to accomplish goal.
1. Coercive power- being dependent on fear of negative results from failing to comply. Example: The sales manager that threatens firing subordinates that failed to hit target.
2. Reward power- compliance achieved based on the ability to distribute rewards that others view as valuable. Example: Manager that gives additional financial incentives to employees that achieve objective.
3. Legitimate power – power a person receives as a result of his position in the formal hierarchy of an organization. Example: The CEO that sets out the company’s overall direction and the resource needs of the company.

Personal power:
This is derived from an individual’s unique characteristics or personality and is considered as more effective.

1. Expert power – influence based on special skills or knowledge. Example: An accountant with professional certifications and multi-years experience on taxation.
2. Referent power- influence based on identification with a person who has desirable resources or personal traits. Example: The manager who treats every employee fairly and justly.


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