In the contest between Charles and Bill, the former uses a variety of sources of power to overpower his brother. He first used expert power. Charles attended MIT, a prestigious university, and spent several years as a management consultant. He majored in business, and that gave him an extensive experience on how companies are run. In time, Charles became an expert business manager, and that gave him an upper hand in his struggle with his brother (Mayer & Mayer, 2018). He spent years in Wichita learning the intricacies of the business. In contrast, his brother Bill did not have the time to develop expertise in business management. His father did not mentor him or let him interact closely with his business partners.
Since childhood, he felt inadequate and lived under the shadow of his older brother. He lacked charisma and even confidence. Instead of endeavoring to learn more from his parents, he tended to complain. He could not take matters into his own hands but blamed outside forces, his parents, his brothers, etc. His character also did not develop as fully as that of this brother Charles as evidenced by his toxic nature (Schulman et al., 2017). He often drove his mother to years by his complaints.
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Charles also had referent power. Since childhood, Bill was fixated with Charles. He attended his former alter mater for high school and seemed to worship him. Thus, as the elder brother, Charles appeared to have referential power over his younger brother and used it to his advantage. Charles had the charisma and self-confidence needed to win in the corporate boardroom.
Charles also appears to have information power not accessible to Bill. For instance, Charles had spent more time with their father, and so he knew his friends. Charles used those networks to acquire new companies and gain more power. He joined the John Birch society, and that gave him more influence beyond the company. With that kind of power and information, shareholders could not possibly substitute him for Bill.
Finally, as the CEO, Charles had legitimate and well as coercive power. The source of legitimate power was his position as the CEO of the company (Magee & Galinsky, 2008). He could call meetings and discuss issues that Bill was raising. As the person with the power calling those meetings, he could control the agenda. Also, by virtue of his position, Charles could strip Bill off his responsibilities in the company. Finally, he kept threatening Bill so that he could sell his shares. Those threats disorganized his offensive against Charles. The reward power meant that he could reward those who opposed Bill or frustrated his efforts to take over the company or have his views of translated into concrete strategic action.
In terms of influence, Charles used persuasion very well to win over shareholders and employees. One of the major complaints by Bill against Charles’s management was that he was spending too much money making acquisitions of new companies and supporting political causes instead of paying dividends. However, Charles could counter that accusation by using numbers. He acquired an oil company from his father's friend, and new company became a source of income (Schulman et al., 2017). From the cash, the company expanded further. With time, the company found the decision by Charles prudent because it grew the wealth of the company.
Therefore, based on data alone, it is impossible to say that Charles made a bad decision. The shareholders, therefore, sided with Charles. Also, investing in political causes made sense and shareholders understood it. All big companies in America hire lobbyists to ensure that Congress makes laws that are friendly to their businesses. By investing in political causes, he was buying the much-needed political influence for the sake of business.
Moreover, as their father found out, communism and all forms of socialism are bad for American style capitalism (Schulman et al., 2017). Thus, the continued existence of Koch industries depended on the political direction America made. Therefore, investing in political parties, such as the Republican Party, perfectly made sense.
Inspirational and personal appeals also played a key role. Charles, like his father, has strong convictions. One of those convictions is that certain political and ideological postures are bad for business. For instance, communism and socialism are evil for the private enterprise because they advocate for redistribution of wealth. However, as Charles explained, the strength of America lies with the private enterprise of its people. Many shareholders shared such beliefs and therefore supported Charles, even if that meant using some of the earnings by the company to support political causes that are beneficial for business.
Charles, unlike Bill, is charismatic and likable. He developed that character early in life. The charisma and the power to persuade made him more believable by shareholders. Bill, in contrast, lacked that vital quality and therefore in the eyes of the shareholders, he appeared petty and possibly jealous of his older brother. He lacked the personal appeal necessary to convince shareholders that Charles had a hidden agenda or his decisions ran counter to those of investors or shareholders.
Finally, Charles understood the power of the coalition. In his battle with his brother Bill, he enlisted the help of their older brother, Fred. Although Fred owned significantly fewer shares of the company compared to both Charles and Bill, he nevertheless carried weight. His support proved decisive for Charles.
What led to the victory of Charles over Bill was a combination of power and influence. Power or influence alone was not enough. Charles had solid credentials are a manager. His father started to mentor him to take over early, and he took a keen interest in management as well. He attended a prestigious institution and worked as a management consultant. The experience he gained or gave him expert power. With such credentials, he had expert power over shareholders (Bolden, 2011). He also used his father connections to gain informational power.
The power he had amplified his influence. Shareholders could see that he focused on the long term as opposed to the short term. Indeed, Bill and his ideas concentrated mostly on the short term such as paying higher dividends. However, the long-term survival of the company was more important. Charles could think in the long term mostly due to his business experience under the tutelage of his father and his experience as a consultant.
The cases have taught me several lessons on organizational power. First, power and influence are essential. However, power is amassed gradually. The background of Bill did not provide him enough opportunities to gain essential sources of power. Thus, to increase power, a combination of business training, outside experience, and mentorship are essential. Bill lacked those. Secondly, influence is also amassed gradually, but it depends mostly on power acquired earlier. Finally, an effective manager or CEO must have different sources or power and influence or his management will be weak. If Charles lacked the power described, his brother could easily have defeated him, leading to a management crisis.
References
Bolden, R. (2011). Distributed Leadership in Organizations: A Review of Theory and Research. International Journal of Management Reviews, 13 (3), 251-269. doi:10.1111/j.1468-2370.2011.00306.x
Magee, J. C., & Galinsky, A. D. (2008). 8 Social Hierarchy: The Self ‐ Reinforcing Nature of Power and Status. Academy of Management Annals, 2 (1), 351-398. doi:10.5465/19416520802211628
Mayer, J., & Mayer, J. (2018, October 30). One Koch Brother Forces the Other Out of the Family Business. Retrieved from https://www.newyorker.com/news/news-desk/the-meaning-of-a-koch-brothers-retirement
Schulman, D., Schulman, D., Drum, K., Schulman, D., Kroll, A., Spinelli, D., & Friedman, D. (2017, June 24). Before they attacked Obama, the Koch brothers almost destroyed each other. This is the untold story. Retrieved from https://www.motherjones.com/politics/2014/05/koch-brothers-family-history-sons-of-wichita/2/
