Mod 1 case assignment

Topics: Koch Industries, Koch family, Charles G. Koch Pages: 5 (846 words) Published: April 20, 2015


Power tactics and sources of power
Sherelle N. Rompca
MGT420: Power Influence and Persuasion
Instructor Green
April 19, 2015

Power Tactics and Sources of Power
What were Charles and Bill Koch’s sources of power within Koch Industries? Did they have reward power, coercive power, legitimate power or expert power? Any other sources of power? Charles Koch was in charge due to legitimate power. Being that Fredrick, the eldest son had nothing to do with business left the second eldest, Charles next in line. Due to the fact that his authority was attributed to his “rank” amongst the brothers. This was not the only source of power in my opinion. Being that Charles had earned a degree in chemical engineering, some of the companies/ventures that Koch industries would gain, his knowledge and expertise would be valuable. This expert power I believe gave him an edge in understanding some of the different aspects of the company’s endeavors and how to profit. i.e, crude oil. Referent power, the potential influence one has due to the strength of the relationship between the leaders and subordinates. Being that both Charles and Bill were Koch’s, they were both stakeholders in the company, I would say that this referent power gave them both the ability to influence relationships with subordinates. If an individual possess the ability to control desired resources and benefits. I think many people would be a little easier swayed to “side” with them. This type of power, reward power, gives the individual in charge, in this case, Charles, the ability to promote subordinates, select people for “special assignments” and distribute desired resources. What power tactics did each of them use in their battle for control? Some would say that Bill was always jealous of Charles. Beginning since early childhood. Bill blamed Charles for running their fathers business like a dictator (Schulman, 2014). Ever since joining Koch Industries, Bill had felt like the third wheel and lesser to David and Charles. He was unhappy and obsessed with his role in the company as well as over how his mother planned to distribute her estate. In my opinion he felt inferior to his brother. Legitimizing Tactics. Making requests based on position or authority. Charles was named successor by his father the founder of the family business. Charles used Rational Persuasion. Using logical arguments or factual evidence to influence others. Charles had already done so much with/for the company. It had grown at a staggering rate with Charles leading the way. Consultation. The leader's use of others to participate in the planning. Both Bill and Charles had gotten with other stockholders Personal Appeals. Asking a favor out of friendship and/or professional relationship. Bill had convinced his brother Frederick to back him (Frederick still owned 14.2 percent of the company). Charles teamed up with his father's friend, Texas oilman J. Howard Marshall II, who swapped his 16 percent share in Great Northern for Koch Industries stock. Coalition Tactics. Seeking the aid or support of others to influence the targeted person or group. Charles accused his brother of trying to steal his job or Varner's. He enlisted the help of others to see if Bill would consider selling his shares in Koch industries.

Bill conspired with a small group of shareholders who agreed that the company's board should expand from seven to nine members and take a more active role in overseeing management. Bill used inspirational Appeals. A request or proposal designed to arouse enthusiasm or emotions. He wrote his brother an 11-page letter. Charles was angry. His brother made accusations of him keeping the board in the dark about key corporate matters: "The directors and shareholders must look on helplessly as the corporation's good name is dragged through the mud." Pressure Tactics. Using threats or persistent reminders to influence others. Charles...

References: Anderson, D. A. (1998). Using power and influence tactics for better results. Marine Corps Gazette, 82(12), 37-38
Schulman, D. (2014, Jul). Koch vs. Koch. Mother Jones, 39, 16-27,64,2 
Tomsho, R.,  (1989, Aug 09). Blood feud: Koch family is roiled by sibling squabbling over its oil empire --- fired by his brother, William sues often, helps feds to probe Koch Industries --- haling mother into court. Wall Street Journal [ProQuest]
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