Case Study – Abuse of Power in Contemporary Organisations – Anas Alam Faizli
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Case Study – Abuse of Power in Contemporary Organisations

Abuse on keeping talent pool thin

This report will exhibit further case study and example of an organizational abuse of power.

South and Matejka (1990) observe that “weak performing superiors avoid selecting individuals who will threaten their status and contrast their own substandard performance.  Suprisingly, they seem able to do this rather well.”  This can be categorized as a hierarchical abuse of power where the superior deliberately abuse his authority and does not serve the best interest of the organization to look for the best subordinates to safe guard their own interest.

Adams (1996) supported this case and quoted that “One of your jobs as a superior is to identify and promote new superiors. Ideally, each new superior should be less qualified than you. Otherwise that new superior will try to take your job or make you look dumb. It’s in your best interest to keep the talent pool as thin as possible, just as the people who promoted you have done”.  Such abuse is inherent and happened in many big organizations across the globe.

Abuse on union member employees

Theodore and Mehta (2005) had written a report on the abuse of powers by organizations where organizations used tactics to weaken the union support within voting unit.  According to the National Labour Relations Board, organizations used such abusive tactics:

  1. Threatening employees with loss of jobs or benefits if they join or vote for a union.
  2. Threatening to close the plant if employees are represented by a union.
  3. Promising benefits to discourage their union support.
  4. Transferring, laying off, terminating, or assigning more difficult task to employees if engaged with union.

 This is clearly an explicit abusive and an illegal tactics used by organizations in order to safeguard its interest.  Employees are often in a difficult situation as some abuse implemented by the organization can be disguised in other form within the organization.  The organization is always in a better position to exhibit that the employee is taken action due to his or her performance and not because of his or her union’s affiliation.  Such abuse is immoral and rampantly occurring in many organizations.

 Abuse on financial statement reliability and content

Emshwiller and Smith (2001) have written a report on how Officers of Enron Corporation separated the entity of partnership where the officers and the partners are kept off from the financial statements.  Enron officers have deliberately worked very hard to only minimally disclose its financial reports to its maximum in order to disguise its current financial standing.  In a clear case of power abuse, Enron officers has misled investors, operated outside public views and led to Enron’s fall.  This corporate scandal and other example such as WorldCom and Arthur Enderson where corporations abuse its power have eroded public trust in corporations.  Despite the various actions taken by regulators and government officers such abuse continues to take place in the corporate scene.

 Abuse of power by police and public service officers

Abuse of power can become an epidemic where it permeates all sectors and levels of society.  Such is made reference by the Chief of Police of Mexico City where he is quoted as saying, “For as long as I can remember, the police has harmed everyone who lives in this city and this country with some act of corruption or inefficiency or inability” (Althaus, 2000).  Public service in Mexico has been simply as a way to wealth, where power is being abused to serve own benefit.  (Althaus, 2000).  The abuse of power in Mexico is extensive and is already embedded within the society.  A radical and massive change close to a revolution would be required if there is any intention to reform the scenario towards a better corporate governance.

 Abuse of power by in safety incident reports manipulation

ABC Engineering in the latest safety report indicated from the year 2005 to 2011 they only had one lost time incident, however when probed further the organization apparently had six similar incidents.  The other five incidents are however reported as under labour services and is not direct employees under them.  All the five which was involved in the incidents was later discharged from service after recovery.  Most of them are no longer able to perform their previous set of skills due to their injury which can be permanent or temporary and also their job records.  This is clear abuse of power by the organization in order to ensure clean safety record which is a pre requisite to winning international bids vehemently violates the human and professional rights of the workers involved.

 Complex Organization and Positive Power

 Over time as organization grows in size, it becomes more and more complex.  Thus, recommendations and solutions will have to be delicately implemented to have better effect on organizations.  Complex organization offer different challenges where the outcome is different despite coming from the same starting conditions.  It involves from results on the interactions of the elements in the organization.  In a complex organization small decisions can have surprising unintended effects.  It is then in order to managing power, politics and decision making in organizations, it is pivotal that sense making of the complex organization is made and forecasted result is analyzed prior to executing an action.

 Clegg et. al., (2010) suggested that one of the first step to managing power is by using and building positive ethical power and also by corporate governance.  What does that mean?  Positive power means using power to achieve things that would have never been achieved if otherwise.  Managing with power is recognizing, diagnosing and respecting the diversity of interests for people in the organization and listening to the subordinates.  At the same time, modifying the instruction and choosing appropriate strategies and tactics to accomplish the action.  However, sometimes even after doing all that, power is still considered as using authority against a person’s will.   Regardless, coercive power should always be the last resort.

 Recommendations for Synergizing and Affecting better Organizations

Corporate governance

Corporate governance is an effort to balance control between the stakeholders, superiors and directors of an organization where every decision embed a check and balance action.  Post Enron era has bring the voluntary adoption of corporate governance reforms by American corporations where the era of a heightened scrutiny of corporate accountability. Such reforms include increasing the proportion of independent directors on the board as majority, establishing auditors and corporate governance committees, and also separating Chief Executive Officer (CEO) and board chair positions (Xia, 2007).  All this corporate governance measures helps minimize the abuse of power and ensure organization to be more transparent.

 Grievances procedure and whistle blower protection

Grievances procedure and whistle blower protection program can be introduced as part of organization efforts to curb abuse of power in an organization.  Whistle blower is a person who report alleged illegal or dishonest activity in an organization and in this case power abuser.  This would allow employees to report abuse of power to the higher rung management in the organization without fear of being reprimanded or penalized by doing so.  Superiors would also be affected and will always be more tactful as they are avenues where subordinates can report improper use of authority by the superiors.  Faunce (2007) feel that whistle blowers are employee attempting to apply ethical principles in the face of obstacles.

 Audit system and audit trail documentation

Audit system is also a strong measure that can be used to curb abuse of power.  Imagine if every decision made by a superior requires justification?  This would definitely force the person to be tactful and ensure all decision complies towards the organization’s in-house corporate governance.  Transparency is also promoted and the rooms for organizational abuse of power would be thinner and smaller.  Audit implemented in various sector of industries have proven to be a success factors in keeping integrity at place and abuse of power by organizations at bay.

 Job rotation for managers and superiors

Job rotation for managers and superiors that has been doing the same scope for a longer period of years is also pivotal to ensure that the person does not become engulfed in the position of power and begin to manifest corrupt and abusive practices.  This is among the steps taken by the United States of America in curbing abuse of power by its president and limiting its incumbency to a maximum of two terms.

 Power check and balance

A study made using sample from 1083 Standard &Poor’s 1500 companies from January 2002 to December 2004, infer that CEO power and organization performance is a factor in adaptation of governance reforms, but the resolution varies from an organization to another.  Organizations having CEO with more absolute power is less likely to embrace governance reforms that can affect their power (Xia, 2007).  Hence, a good check and balance between executive directors and non-executive directors should be established to ensure that power and authority in the organization is well balanced and keeps in check.

 Conclusion and Summary

 The review of literature has connoted the relationship and linkage between the main context of power and authority, total institutions, ethical and rationality, CSR in managing power, politics and decision-making in organization.

 Case studies from research and experience has been inferred to show abuse of power in organizations where weak superiors hires non threatening subordinates, organizations which mistreat their employees which is active in union groups, Enron financial cover ups, Mexican police and government officials and also ABC Engineering removal of employees involved in safety incidents.

 Suggested recommendations to inhibit and curb abuse of power in organizations has been made such as voluntary adoption of corporate governance, balance of power between executive and non executive board members, introduction of grievances / complaint report and whistle blower protection and committee, audit system, transparency and job rotation scheme.

 Recommended actions and resolutions are strong impetus and are generic which can be implemented for various organizations throughout the industry across the globe and within the layers of organization from the lowest rung employee to the CEO and board of directors.  Power has always been attractive as it confers the ability to achieve individual’s goals, the organization’s philosophy, execution plan, individual performance, salary, bonus and incentives and many others.  However, if power is not managed properly will proved detrimental to the organization which can lead to court cases and legal actions, subsequently leading to losses and failure to the organization’s objective of maximizing shareholder wealth and profits.

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