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    The CEO of a large company has retained you as a management consultant to look into an area of concern that she has. With all of the recent corporate scandals like Enron, WorldCom, Tyco, and ImClone, she is wondering how she can avoid these sorts of problems within her company. She has asked you to research and prepare a report that summarizes the various kinds of power she has at her disposal and how this power could be effectively utilized to avoid these sorts of problems within her own company.

    1. There are a myriad of leadership models, most of which discuss sources of power. list and explain the sources of power that the CEO of a large company typically has at her disposal.

    2. Describe how these powers can be used to avoid the various operational, administrative, and ethical problems experienced by companies such as Enron, WorldCom, Tyco, and ImClone. Please respond to this question by identifying three specific business problems that can be addressed through the use of "influence tactics." For each specific problem, describe the influence tactic that should be used, the source of power behind that influence tactic, and why you believe that this influence tactic will effectively address that problem. Where does technology play a role in limiting the likelihood of such ethical dilemmas?

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    Solution Preview

    There are a myriad of leadership models, most of which discuss sources of power. Using the model presented in your text and accessing other sources as supporting material,list and explain the sources of power that the CEO of a large company typically has at her disposal.

    The chief executive officer (CEO) is generally regarded as the most powerful organizational member. We rely primarily on guidance from Finkelstein (1992) in identifying and empirically assessing dimensions of CEO power. Finkelstein proposed and empirically validated four power dimensions which he labeled structural, ownership, prestige, and expert power in an examination of top management team, including the CEO. Let us discuss each power one by one:

    Structural Power

    Structural power has also been referred to as hierarchical or legitimate power. The strength of the structural approach to power is that it is captured in one's position within the organization, as opposed to residing with any given individual. Certainly when serving as CEO, structural power in the form of position in the organizational hierarchy is easily recognizable.

    Ownership Power

    A second form of CEO power is ownership power. Power is likely to accrue to those CEOs who maintain ownership positions in the firms they serve since they, in effect, represent both management and shareholders. CEOs with significant shareholdings, as a function of their ability to influence important firm decisions in an ownership capacity, are likely to be more powerful than CEOs without an ownership interest in the firm.(Zald, 1969).

    Prestige Power

    A third source of executive-level power is derived from an individual's level of prestige or status. CEOs who are considered to be members of the managerial elite signal to others their importance, both within and outside the firm (D'Aveni, 1990; Useem, 1979). According to Giddens (1972), CEOs. by definition, are members of the managerial elite since they occupy the ...

    Solution Summary

    There are a myriad of leadership models, most of which discuss sources of power. list and explain the sources of power that the CEO of a large company typically has at her disposal.

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