"The Power Principle", have identified 3 types of interpersonal power, i.e. how does one person gain influence over another. This has tremendous implications for everybody, not just managers, but also investors, or even people in general. The three types of power are:
* Coercive power: you will do so because... I am telling you so! (and if you don't, something bad may happen to you or others!)
* Utility power: you will do so because... I can do something for you! (i.e. quid pro quo, backscratching, and so on)
* Principle-based power: you will do so because... You believe in what I believe (or stand for, or hope to achieve)
The powers can be used for good, or evil. That is not the point tough. Let us analyze each type of interpersonal power, and see how each one works, and how you can tap them.
Coersive Power is the easiest to recognize, easiest to spot, yet probably the weakest, because the moment the coercion is gone, the power is gone as well. Just look at Saddam Hussein and Iraq. The moment American forces toppled him, and most of the officials and security forces decided to hide, the streets decayed into total chaos. Museums and banks are looted, and total anarchy resulted. Iraqis feared Saddam because his secret police are everywhere, and people simply disappear. The moment people know his forces are no more, they erupted, and destroyed government symbols even before the Americans arrived.
Despite what you may think, military does NOT work by coercive power. While it is true that higher rank can order lower rank around, the real principle of military is governed by principle-based power. Most military recruiting uses patriotism, like "Honor, duty, country", to entice you to join up and to get you to stay in, and honor is held above all else. In fact, one of the worst crimes to be accused of in military is "dereliction of duty", in other words, not doing what your principles tell you to do.
One more reason why modern military no longer use "conscription"... it's hard to train soldiers who are not morally motivated. WW2 conscription works because we "know" Germany and Japan to be "evil", because they attacked us, and serving the country, even if conscripted, is the honorable thing to do. Vietnam conscription did not work because we can no longer justify the VC and NVA to be "evil" when they look just the same as the people who we are trying to support, and they didn't exactly attack us, among other problems.
Coersive power can be a physical threat, actual physical violence, or even psychological threat, such as exposing taboos and such. Terrorists use coersive power of fear to influence events. Blackmailers use "shame" tactic to implement power of fear. However, the moment the threat is stopped, there is no more power. Thus, it is at best a short-term solution, and one that can backfire. The longer you use it, the worse the results. Think of it as a bottle of soda, except you're forcing more gas in as well as holding the cap down. Eventually there'd be so much pressure inside that the either the cap flies off any way, or the bottle will burst.
Just look at Iraq, before and after Saddam. It is taking the US a LONG time to get things back under control, by using PBP (your own army have to step up and take over, as it is your own countrymen you are protecting), and sometimes utility power (we're rebuilding the power station and water distribution, you'll have to form a militia to protect them, for your own sake). It took the US forces a while to learn that while killing insurgents helps, it's not the whole answer.
Utility Power, i.e. backscratching, is probably the most applicable in Western societies, i.e. capitalism. You do something for me, I do something for you. One chooses to be under the influence of the other without any sort of force involved. Employment is the most often seen version of utility power, but politics can be as well: vote for me, and I promise this, this, and that for you.
This is definitely better than coercive, because both parties "joned" of their free will. However, the effect of this power is also fleeting. The moment what is being offered for the inflence is no longer acceptable (i.e. either stopped, or a bigger-and-better-deal came along), the influence evaporates. That's why one reason police frowns upon paying informants: you don't know if they're really trying to help, or they're just after the money.
Utility power can be a longer-term solution, and really has no "negative" consequences (i.e. no backfire), unlike coersive power. However, it is not as powerful as principle-based power, because a bigger and better deal can come along at any time. Loyalty at work is a somewhat outdated concept... You work whereever you're paid the best.
An alternate form of utility power is known as "The Godfather Power". I do you a favor now, but I expect to collect sometime in the future.
Principle-based power, or PBP, is the most powerful and long-lasting type of interpersonal power, because it is based on a common belief. Volunteerism and Public Service are based on PBP, because the volunteers believe in the cause, in service the community, and so on. Please note that this is NOT about the morals or religious believes. Principles are common to ALL religions, and beyond. They are universally held truths.
The best leaders in the world used this to gain influence over a LOT of people. Hitler is one example. By tapping into the German pride in the post-WW1 despair, he was able to raise a group of core supporters, and eventually galvanized the German people by appealing to their pride and honor of the German nation. Unfortunately, he also blamed the Jews for everything, and decided to conquer Europe (and nearly succeeded).
I remember reading a story about how the British explorer, needing a team to explore the North Pole, wrote an ad in the paper that's like "... chance of safe return low to nil, fame and recognition upon return..." Little money was offered, yet a LOT of people answered the call. I mean a LOT of people. There's nothing but honor to offer to those who are willing to accompany him, but that was enough.
People join churches because they share the same belief, not necessarily because the church offers them something (utility power).
With principle-based power, there is no "exchange" involved. People voluntarily let you influence them because you share a common belief with them. It's more like "alignment" of your interests and beliefs. As long as you held your course (your principles), and they held the same belief, the power remained undiminished. Unlike the other two types of powers, this one requires little to no "maintainence". Thus, it is the strongest of the three powers here.
Combination of Powers
By combining more than one power as listed above, one can achieve even more than just one power alone.
The South American drug lords have a saying: "plata, o plomo?", translates to "silver or lead?" Or in other words, do you wish to be paid for your cooperation, or should I put a bullet in your head now? That is a combination of coercive power and utility power.
Today's American military use honor and patriotism as principle-based power (PBP) to get you to join up, but also offers a lot of training, lodging, other benefits, as well as a host of retirement benefits and educational benefits (the new G.I. Bill) when you get out (utility power). Army also has a formal justice system to punish any one who got out of line... "court-martial" (coercive power).
Same as the army, businesses combine PBP and Utility Power (i.e. the "mission", as well as the the compensation) to entice the employees to work hard(er). Companies also have formal disciplinary procedures, usually written out in employee manuals, to determine what punishment to mete out if an employee steps out of line, from suspension to termination of employement (coercive power).
Even religion works the same way. While religion teaches what it holds as universal truths, such as the "Ten Commandments" for the Christian/Jewish faith, and asks you to follow those principles (PBP) through examples of the Messiah / Messenger / Prophet, it also promises rewards (utility power) if you follow, and "hell and damnation" if you don't (coercive power).
These powers really work in concert with the other two. By leveraging all three together, you achieve far better results.
What's more, different people respond a bit differently to the three powers based on their personality.
Three kinds of people
People react to the three types of power differently.
People motivated by fear will react best to coercive power. Fear of losing job, fear of being ostracized, fear of death, fear of pain... the list goes on and on.
People motivated by greed will react best to utility power. That's why bribery still works, and kickbacks still exist. And employees will move to companies offering "bigger and better deals".
People motivated by principles will react best to principle-based power, but only to leaders who hold the same principles as s/he does. They need to have honor in themselves, and hold to their principles.
Most of us react to all three powers in our own unique mix, and as times go on the mix will change. When we are very young, we care more about the first two powers, and that will continue through our teenage years. It is not until we're in late high school / early college when we start to develope our principles, and with our growing independence we start to develope our receptiveness to principle-based power and align ourselves with certain causes. Once we entered "the real world" after graduating we became more "practical" and use/receive more utility power and despise coercive power. Later in life, when we want more security, we'd tolerate a bit more coercive power (i.e. nursing homes, retirement communities).
Our upbringing and environment has a lot to do with our receptiveness to the three types of power as well. Many immigrants who came to the US from oppressive countries absolutely despise police due to their experience with coercive power. Western societies value principle power and utility power whereas Eastern societies value more principle power and coercive power, which accounts for some of the differences in the world view.
Another factor in experience is religion. In my experience, there are two kinds of churches (and I mean religions in general, and "churches" within the religion)... those that teach love of God, whatever his name (principle power), and those that teach the fear/wrath of God, whatever his name (coercive power).
The other three kinds of people
If you look at the powers in a different way, you'll see how the three powers influence different kinds of people.
When you have nothing but your life, and even that life way be rather worthless, you are no longer motivated by fear or greed. You only have principles. One reason why most revolutionaries are poor.
On the other end of the scale, if you're rich enough that fear and greed are no longer major factors in your life, then you're into principles as well. One more reason the rich are into philanthropy.
When you're poor and there is no greed to be had (don't know of any better opportunities), then you're motivated by fear, like your family starving, dying, and so on, and a bit of principles.
Once you do know of better life, then you would be motivated by greed, and partially by fear of backsliding. Sometimes, fear and greed can overpower principles.
Have you tried the three types of power on your children? Or have them tried on you?
I am sure you have, and until the children develope a sense of honor and pride, you can only use coercive and utility power. The three types of power end up looking this like:
Coercive power: "Unless you do your homework, you are not allowed ANY TV or game time!" In other words, do it or you will be punished!
Utility power: "If you do your homework for a whole week, you'll get $70." In other words, bribery.
Principle-based power: "Son/daughter, Daddy and mommy would love you no matter what, but for your own sake, you need to do your homework. You need a good education for yourself, so please don't let yourself down."
The last one is hardest to wield, but also the most powerful in the long-run. It appeals to the children's honor in themselves. Thus, you have to develope that honor first, THEN you can apply the power. It requires a lot of setup.
The school system is intolerant of bullies because bullies make their victims feel worthless, which is the antithesis of believing in themselves. And without the belief, you can't apply PBP. The best teachers encourage students by building their confidence, as well as teaching them knowledge. The best teachers apply principle-based power.
When it comes to the B-I triangle, mission is the the foundation of the whole thing. Without a proper mission, the business or investment is doomed to failure, because you cannot appeal to employee's honor (principle-based power), and can only influence them via utility power (compensation) and coercive power (disciplinary actions), which are not that strong and requires maintainence. The stronger the mission, the better the PBP will influence the employees.
The best managers (leadership) use all three powers in concert to influence/inspire their employees. "Team spirit" is nothing but principle-based power applied to concept of a "team", and so are most employee awards. Good pay and benefits (utility power) also help. And finally, a little threat to punish if people get out of line (coercive power) is enough to keep a team running.