UnderstandingSociety: Power within organizations - The Diigo Meta page

• 31 Jul 12
  

  Todd Suomela

  organizations sociology power internal division sales research

  • The study focuses on three primary groups and one "residual" group that could be identified in all the firms: sales and marketing, production and manufacturing, and research and development. The residual group is "staff services", including finance, personnel, legal, and the executive group.  The research question was to determine which group or unit had the most "power" within the firm.  The interview template asks a series of questions about how the interviewee estimates the power and discretion possessed by various groups within the firm.
  • There is a strong pattern to the results for the fundamental question, which unit has the most power? Perrow finds that "sales" is judged to have the most internal power in 10 out of 12 firms; production is generally second; "finance" is commonly third; and R&D is almost always last.
     
     Perrow's next question is "why" -- why should sales be the most powerful unit within manufacturing firms? His answer turns on facts about the market economy.  The sales operation of a company is the interface between potential consumers and the product created by the firm.
     

     As a result of this strategic position, sales is in a position either to exploit present company capabilities or force a change in these capabilities. The consequences for the other groups are manifold, but sales -- with few sunk costs (capital investment) and little interdependence with other functions that would require major changes in its own structure and operating procedures -- is capable of more flexibility. (65)

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