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ACCA Strategic Professional · Strategic Business Leader · Leadership and organisational culture

At Orsden Bank, a regional manager, Paulo, tells staff that if they miss targets they will lose their bonus and may be reassigned to a branch far from home. Staff comply but privately resent him. Which source of power is Paulo mainly using, and what is a likely consequence?

Paulo is using coercive power, as he relies on threats of lost bonuses and unwelcome reassignment. This usually produces grudging compliance and resentment, not genuine commitment, unlike reward, expert or referent power, which tend to generate more willing cooperation.

  1. ACoercive power, leading to compliance without commitmentCorrect
  2. BReward power, leading to strong internalised commitment
  3. CExpert power, leading to voluntary cooperation
  4. DReferent power, leading to high loyalty

Explanation

Threats of lost bonus and punitive reassignment are coercive power, which typically yields compliance without commitment and resentment. Reward power would involve offering benefits, and referent and expert power produce more willing cooperation.

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