Power and influence are two very important characteristics to have in order to be an effective leader. In class we defined power and the capacity to influence, and influence as all about action and power in motion in an attempt to influence someone. In order to distinguish between the two we explained it like this, power is like when you are at the top of a ski slope just looking down (potential energy). Influence is all about motion, or kinetic energy. This is the energy being released when skiing down the hill.
Richard Grasso worked his way from the lowest of the low in the New York Stock Exchange to becoming CEO years later. He was the kind of man that knew all the ins and outs of the NYSE. We discussed in class where power comes from and can relate these sources to Grasso and his success within the walls of the stock exchange. The 5 sources of power are referent, expert, coercive, reward, and legitimate. I personally think that Grasso uses coercive power because he was known to come off as intimidating and was “very good at destroying people.” Referent power also applies to Grasso because he was very good and maintaining interpersonal relationship with people. He believes that surrounding yourself with people that have similar interest will keep you on your toes. This is interesting because he could be the complete opposite of this and come off as a prick to everyone. A final source is expert power. Grasso has been working at the NYSE since he was 22. He knew what kept the stock exchange running. With many years of experience he had something no one else had, and that’s, knowledge.
You make several points, but I want to know what is your stance on the $140 million he was paid? Is that enough compensation for his knowledge that no one else had? Also you talk about what we discussed in class, but I personally think that towards the end Grasso was not good at maintaining personal relationships. He began to use people for his own means and they feared him. So I think as his authority rose, the value he placed on relationships went down, unless those relationships helped his authority rose. Another interesting thought is if a man has enough legitimate power, does he really need that much referent power? He can easily punish and reward, so do you really need to be charismatic?
ReplyDeleteI agree with you in that he was very powerful and had tons of knowledge. I don't think his use of power was appropriate. Everyone seems to forget that the CEO is not what makes a company function. It is a TEAM effort and no matter what anyone says one man cannot run the entire show. Why not take his $140 million and split it among the other hard working men and women that actually day in and day out make things happen, not just sit in some corner office staring at the New York landscape. The CEO is a modern day figurine. They have too much power and when something goes wrong like Enron and Worldcom the weasels run for the hills and cry wolf when Americans want to hold them accountable. We need power reform in this country and we need it bad.
ReplyDeleteI agree with what you said about the types of power he used. I think that he used coercive power the most because like you said he could destroy people. But in order to have the power to destroy people, he had to have the personal relationships and connections, in which case he had referent power. I think he also had expert power but he used this the least of the three.
ReplyDeleteI love your use of potential and kinetic energy to describe power and influence. Grasso in the beginning was a man among the power and valued his interpersonal relationships, but I feel like as he got greedier and successful his relationships were worth less to him. He would say he would destroy someone, and that shows no regard for personal relationships. I feel like his biggest tool was his expert power. It takes a long time to become a expert at anything and he put the time and effort in to learn the Stock Exchange. For anyone to rise to power like he did you have to be an expert of something’s.
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