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Posted on September 20th, 2012, by

Traditionally, power and politics are closely intertwined in organizations. At the same time, power often defines politics of organizations, even though politics can serve to interests of a limited group of people only. To put it more precisely, power is mainly exercised by top executives of organizations, while in such companies as Enron or Wal-Mart, top executives have practically unlimited power and it is top executives who define the development of organizations and their politics. Such a situation, when the power belongs to a few people there is a risk of misusing power and conducting policies which contradict to interests of shareholders, employees and other people involved in the functioning of the organization, but its top executives her pursuit their own profits and ready to use all possible means to maximize their revenues.

In this respect, the example of Enron is particularly noteworthy because the company’s top executives have hidden the true situation in the company and the position of the company in the market. The leaders of Enron had all the power in the organization and they not only encouraged but they implemented the policy of deception of shareholders, business partners and the entire society as they attempted to hide their problems and to show that Enron was a prosperous and highly prospective company (Blind Faith, 2008). In such a situation, the power formal leaders of the organization possessed probably produced a negative impact on their politics and decision making process.

They felt their superiority and believed they could manipulate with information to avoid the ruin of their company, but, in actuality, some of them have managed to retire successfully, while employees lost their jobs and shareholders a considerable part of their revenues.

Another example of the close interrelationship between power and politics is Wal-Mart. The company is one of the leaders in the retail industry, but its politics traditionally evokes a severe criticism because of the ignorance of interests of employees and customers. To put it more precisely, the top executives of Wal-Mart were often criticized from the part of unions because of the ignorance of interests of employees (Frank, 2006). In this respect, it should be said that the personnel turnover is very high at Wal-Mart, but the organization, namely its top-executives focus on the maximization of revenues of the company, instead of the improvement of conditions of work or the introduction of some social programs concerning their employees.

In such a way, it is obvious that power, if it is unlimited, can have a negative impact on the politics of the organization. On the other hand, it is necessary to realize the fact that the role of leadership is particularly important in the process of development of ethical politics.

Moreover, leaders should avoid misusing power they have. Otherwise, there is a risk of the rise of a strong opposition to formal leaders.

What is meant here is the fact that employees, suffering from the misuse of power by formal leaders, are likely to oppose to their politics. In such a situation, informal leaders can appear who will head employees in their opposition to formal authorities.

Thus, taking into account all above mentioned, it is possible to conclude that politics is, to a significant extent, affected by the power since people, who concentrate the power in their hand, define the politics of the organization. In such a situation, leaders should be wise to conduct balanced politics which meet interests of the organization and employees, as well as customers.

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