http://www.businessweek.com/articles/2013-11-15/sorry-kids-corporate-power-hasn-t-changed

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Sorry, Kids. Corporate Power Hasn’t Changed


Sorry, Kids. Corporate Power Hasn’t Changed

Photograph by Black Toby/Gallery Stock

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at Stanford University’s Graduate School of Business, where he has taught since 1979. He’s the author or co-author of 13 books, including his latest, Power: Why Some People Have It—and Others Don’t (HarperCollins, 2010).

Today’s work world is increasingly populated by millennials with values presumably different from more-senior employees—more egalitarian, less competitive, more meritocratic, less accepting of hierarchy, and more tolerant of all forms of diversity. And if that’s true, surely companies are changing, which means we need new theories about power and influence to reflect these new cultural realities. Strategically expressing anger, building a power base, or eliminating rivals are considered outmoded ways of getting ahead. Certainly, the reasoning goes, in a world where reputations get created and transmitted quickly and anonymously through ubiquitous social networks, people who resort to such bad behavior will suffer swift retribution.

The typical Silicon Valley recruitment pitch, or something to this effect, reinforces this view: “We’re not political here. We’re young, cool, socially networked, hip, high-technology people focused on building and selling great products. We’re family-friendly, have fewer management levels and less hierarchy, and make decisions collegially.”

Unfortunately there’s not much evidence of change but plenty of testimony to the contrary: the power struggles that beset the founding of Twitter (TWTR), the turnover among CEOs at Hewlett-Packard (HPQ), and the experiences of former Stanford MBA students working in the supposedly egalitarian world of high tech who have lost their jobs or been thrown out of companies they founded notwithstanding their intelligence and good job performance. Meanwhile, relationships with bosses still go a long way to predict people’s career success; organizational gossip lives on; and career derailment still awaits those who fail to master political dynamics.

In sum, the rules of power endure. First, hierarchy remains. Note that many companies such as Facebook (FB) and Google (GOOG) have gone public with dual classes of stock that allow the founders to retain the lion’s share of control, that shared CEO responsibilities are as rare as hens’ teeth, and that most bosses still demand loyalty and—more important—agreement from their subordinates.

Yes, I hear the stories about how companies want diverse opinions and diverse workforces, but the data belie this. Recent research shows that, despite the younger generation’s supposed egalitarian values and ready acceptance of workplace diversity, women from leading MBA programs continue to be offered lower salaries and to progress less rapidly in their careers than their male colleagues.

When status hierarchies exist, people naturally prefer to be at the top rather than the bottom. Rewards accrue disproportionately to those at the top—witness the recent pay kerfuffle over Larry Ellison’s package at Oracle (ORCL). Control over one’s job also rises with hierarchical rank, and as British epidemiologist Sir Michael Marmot has found, job control is positively related to health and longevity. So there’s inevitably competition for promotions.

People like to think well of themselves and also want to be sure they triumph in contests for organizational survival. They tend to believe they are above average and seek to associate themselves as closely as possible with success—basking in the reflected glory of prosperous organizations and leaders. Therefore, what matters most in attracting allies and support is winning, or appearing to win and to be successful. Ends trump means. Witness among many other examples the veneration of Steve Jobs, even though the latter was well known for not being the nicest of bosses. And as for his truthfulness, just consider the phrase “reality distortion field,” as well as the FBI report released after his death that detailed his penchant for not telling the truth.

Unfortunately there is little evidence that self-enhancement is on the wane among the younger generations. If anything, their upbringing and the abundance of narcissism unearthed in a number of studies would suggest self-enhancement motivations exceeding those of their forbears. Illusions of superiority and control seem destined, then, to persist, contributing to the persistence of hierarchical organizational practices.

People are hard-wired to prefer others who are like themselves. Individuals offer jobs and provide help disproportionately to others with whom they share some form of social identity, such as school ties or shared work experiences. Thus, similarity remains a fundamental basis of interpersonal attraction, whether similarity in background, behaviors, or even seemingly irrelevant characteristics such as initials or birthdays. This preference for others similar to us helps produce the social sameness pervasive in the Silicon Valley and elsewhere, and shapes the contour of political networks and alliances.

Competition for status and advancement exists not only over time and across countries but also in virtually all species. In short, whether we like it or not, the rules of power abide largely unchanged. People who ignore these principles do so at their peril.

Note: A version of this article first appeared in the November issue of the Academy of Management Perspectives.

Jeffrey_pfeffer
Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at Stanford University's Graduate School of Business, where he has taught since 1979. He is the author or co-author of 13 books, including his latest, Power: Why Some People Have It—and Others Don't (HarperCollins, 2010).

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