An organization is a hierarchical structure every part of which is coordinated by higher ranks. Generally, managers, directors, and CEO are people who possess power in businesses and corporations. Their main goal is to assure smooth functioning of the organization. This target is achieved by control, governing, supervision of junior employees. While the authority of managers goes without saying, other members of the organization can exercise some sort of power as well.
Power in organizations can be classified due to several criteria. First of all, the power of people who take a leading position is called legitimate power. This is how managers assign duties to their juniors, and CEO controls the overall functioning of the organization. But legitimate power is not the only authority within the organization. Expert power is exercised by employees who possess exceptional or expert knowledge in any particular area. These people are highly valued for their skills and frequently promoted to the higher ranks.
Some employees may exercise power if they are liked or admired by others. This is referent power. Interpersonal relationships in the organization make out certain charismatic employees who influence others and have some amount of power over them.
Higher ranks of the organization can also exercise power via threats or rewards. Coercive power arises when people may impose sanctions and punishments upon the others. This type of power helps to make sure that employees adhere to rules and norms of their company. Reward power is exercised through giving incentives like salary increments and promotions. Such things may greatly motivate employees if they are given for real achievements but they also may strongly discourage staff when distributed on the principle of favoritism.