Power has been an important aspect of human civilization since time immemorial. Power might be physical, political or social.

In the context of business as well, power dynamics tend to influence decisions and people transactions heavily. So defining power can be difficult as it is understood and interpreted in several ways however power can definitely not be called a force which gets you what you want.

Power basically emanates from position or authority which can influence people both positively and negatively.

For simplicity and understanding purposes power is usually classified into following categories:

1. Coercive Power- This kind of power involves the usage of threat to make people do what one desires. In the organizational set up, it translates into threatening someone with transfer, firing, demotions etc. it basically forces people to submit to one’s demand for the fear of losing something.

2. Reward Power- As the name suggests, this type of power uses rewards, perks, new projects or training opportunities, better roles and monetary benefits to influence people. However an interesting aspect of this type of power is that, it is not powerful enough in itself, as decisions related to rewards do not rest solely with the person promising them, because in organizations, a lot of other people come into play like senior managers and board.

3. Legitimate Power- This power emanates from an official position held by someone, be it in an organization, beurocracy or government etc. The duration of this power is short lived as a person can use it only till the time he/she holds that position, as well as, the scope of the power is small as it is strictly defined by the position held.

4. Expert Power- This is a personal kind of power which owes its genesis to the skills and expertise possessed by an individual, which is of higher quality and not easily available. In such a situation, the person can exercise the power of knowledge to influence people. Since, it is very person specific and skills can be enhanced with time; it has more credibility and respect.

5. Referent Power- This is a power wielded by celebrities and film stars as they have huge following amongst masses who like them, identify with them and follow them. Hence, they exert lasting influence on a large number of people for a large number of decisions; like from what car to buy to which candidate to choose for a higher office in the country.

So, power can be defined in a number of ways however what is important is the usage of the power by people who possess it. Within the organizational context the power dynamics and equations need to be carefully managed as they have a huge impact on the motivation and engagement level of employees. It also defines the organization’s culture in general and people transactions within the organization in particular.

A very hierarchy and power driven organization finds it difficult to accommodate new and innovative ideas, any change is vehemently refused, egos clash and lesser opportunities are made available for the high performers, thus delaying organizational growth. On the other hand, in an organization which is flat in structure, people are encouraged to innovate and explore, thus bringing in new concepts and ideas to accelerate organizational growth and expansion.