There’s one main reason as to why businesses are so successful: the people who run them. The majority of businesses in the world are run by many people who have an ample amount of power. With their power, they are able to significantly influence the way the company operates and the employees. There are 5 main types of power in business and being able to identify them will help you to learn how to effectively handle different business situations.
1. Coercive Power
As the single most primitive power in the workplace, coercive power is essentially when the superior employer threatens the inferior employee with a certain type of punishment if a task or an activity is completed incorrectly or not up to the standard of the employer. Generally this type of power can be quite beneficial in a situation where businesses are threatened or in a crisis. Though it may sound harsh, coercive power can also be effective when cutting personnel.
2. Legitimate Power
In the event of inferior employees realizing that the superior employer is in power, this is known as legitimate power. This could be a result of the title that the individual holds or the sheer impression that the employees have towards are particular person. With the use of legitimate power, a chain of command can be defined.
3. Reward Power
When orders are given by an employer or superior, the employees may be motivated to complete the orders in order to receive a reward or an incentive. Their reward could be a lunch, a promotion, or even an increase of wage.
4. Referent Power
As one of the most common types of power in the workplace, you have probably noticed referent power in your own place of business. This type of power is gained as a result of inferior employees admiring their superior. In order to achieve this type of power, employers or superiors entrust their employees by giving them new responsibilities or allowing them to complete projects on their own. Superiors may also gain referent power if they provide workers with more opportunities as a result of them completing their jobs effectively. If you work in a business where personal relationships can be developed, referent power is your best bet.
5. Expert Power
Depending on the level of expertise and knowledge that a person has of a certain industry or project, they may receive expert power from people who know less than they do. As an example, if a college class is being taught by a substitute that has previously worked in the industry that they are learning about, they would receive expert power.
Keith Miller has over 25 years of experience as a CEO and serial entrepreneur. As an entrepreneur, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.