Effective leadership in a complex and ambiguous world environment where authority structures are less dominant and organisational boundaries are more fluid requires leaders to be able to build effective and productive relationships with a range of people. The more diffuse nature of power and authority means that leaders are more likely to have to develop the quality of relationships as a means of influencing others. This essay examines how this aspect of leadership practice has been analysed in the research literature. First the essay defines key understandings of influence and power, and the importance of social and economic exchanges in the establishing the influence of the leader. Next the essay considers …show more content…
Power is the ability to get something done if an actor chooses, often defined as influence in this capacity (Lucas & Baxter, 2011). Power, the, is the ability of an actor to influence decisions and resources (Anderson & Berdahl, 2002). Power is purely the authority to change the behaviour of a subject, in some circumstances making them do something they otherwise wouldn’t (Hollander, 2009). Power can be used for right or wrong through the use of force or coercion, and when used offers the subject no other option but to comply (Lucas & Baxter, 2011). Influence is the ability to alter the subject’s perceptions, convinced that what they are doing is right for the cause (Lucas & Baxter, 2011). Influence is purely persuasive in nature and does not any way coerce a subject through sanctions or rewards (Hollander, 2009). The difference between both power and influence is that power is the authority that makes people do things but influence is the ability to change one’s own perception or view and why they need to do the …show more content…
The social exchange theory sets out to explain how a person feels about a relationship pending on their perception of the balance of give-and-take in the relationship, the kind of relationship one believes they deserve, and the opportunity cost of the relationship, can they have a better relationship with someone else (Burke, Sims, Lazzara, & Salas, 2007). The exchanges between parties can, in the most common of cases, be of economic or socioemotional outcomes (Cropanzano, 2005). One outcome of a transaction between two parties is the relational construct of trust (Dirks & Ferrin, 2002). Trust has been identified as a favourable outcome of social exchanges by both Blau (1964) and Holmes (1981). It is seen to be the factor of which relationships are built and this eventuates from reciprocity exchanges rather than negotiations allowing and fostering personal obligations, commitment, and trust that economic rewards do not yield (Cropanzano, 2005). However, as written by Burke, Sims, Lazzara, and Salas (2007) there are differing views on the development of trust in leadership that is based on the exchange of rewards, transactional leadership. There are some articles that state that transactional leadership behaviour does not instil a level of trust between parties (Bass, 1985;