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ACCA Strategic Professional · Strategic Business Leader · Qualities of leadership

Kestrel Ltd's new chief executive, Tomas, tells managers that any who miss the annual targets will be demoted, and he has full authority to do so. Managers meet targets but privately say they do the minimum and resent him. Which analysis best explains the likely outcome in terms of power?

Tomas is using coercive power, based on the threat of demotion. This typically yields grudging compliance and resentment rather than real commitment, which matches managers hitting targets while doing only the minimum and privately resenting him.

  1. ATomas is relying on coercive power, which tends to secure compliance but not commitmentCorrect
  2. BTomas is relying on referent power, which secures strong commitment
  3. CTomas is relying on expert power, which generates voluntary effort
  4. DTomas is relying on reward power, which creates lasting loyalty

Explanation

Threatening demotion is coercive power. It usually produces compliance at best, and often resentment and minimal effort, as seen here. Referent and expert power would produce commitment through admiration or respect, which is absent.

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