Final Offer: The Video

 

The final exam question reads:

Power played a significant role in the video "Final Offer". From French and Raven's conceptualization of the bases of power, give examples (from the video) of three different bases of power. Give two examples (from the video) of the Dependency Theory of Power.

There are several ways of looking at this question. I propose that one useful approach might be to look at the major players/actors in this real life drama. By doing so, you ought to be able to examine and describe the relationships, and specifically, the power relationships between these people or groups.

Let's list some of the key parties first:

  • Roger Smith, CEO of General Motors
  • Rod Andrews, Chief Negotiator for GM in Canada
  • Fred, the Shop Foreman at the GM assembly plant in Oshawa
  • Owen Bieber, President of the UAW (United Autoworkers Union)
  • Bob White, Canadian Director of the UAW
  • Other (American) Directors of the UAW
  • Danny Johnson, the amateur weightlifter in the Oshawa plant
  • The Committee Man (shop steward); the union representative on the shop floor in the Oshawa assembly plant
  • The workers in the Oshawa GM assembly plant

Bases of Power (French and Raven)

Now let's use the French and Raven conceptualization to examine the power some of these people have:

  • Legitimate Power: Any of the actors who hold positions of authority in any of the main organizations (in this case, GM, the UAW, and the Canadian branch of the UAW) have varying degrees of power based on legitimacy. For example, Roger Smith holds his positions because he has been hired by the GM Board of Directors. These directors are elected by the shareholders. Hence, some of Roger Smith's power is based on the legitimacy of his position: the shareholders have "given" him the power to "manage" the General Motors Corporation. By virtue of "delegation of authority", Rod Andrews also has power based on legitimacy. Further down the line, Fred the foreman also has power based on legitimacy.

Whatever we have just said about Roger Smith above, may also be said about both Owen Bieber, Bob White, and all the elected union executives who sit on the union's Master Bargaining Committee. Because these people are elected by the union membership, they have power that derives from legitimacy. Their positions and the responsibilities and authority inherent in their positions are defined in the union's constitution. On the union side of things, this legitimacy extends to the Committee Man on the shop floor.

The relationship between Bob and Owen is also interesting when viewed from the perspective of legitimacy-based power. Through the union electoral process, Owen is Bob's superior. That is, Owen has legitimate power over Bob. For example, Owen can determine whether or not Bob can take his Canadian UAW members out on strike. What is interesting in this video is that, at one point, Bob makes it clear that he must defy Owen -- given that he has an overwhelming strike mandate, Bob feels that he cannot obey Owen's suggestions that he not go on strike. However, to defy Owen is to engage in an "illegal" act. We say "illegal", not because it is illegal according to the laws of the land, but because such an act would be contrary to the union's constitution. Such an act would be mutinous. Of course, in the end, this is exactly what happened; the Canadian workers broke away from the UAW to form the CAW (Canadian Auto Workers).

Coercive Power: Power based on coercion is relatively rare in modern corporations. We are given interesting insight into this by Fred the foreman. Fred explains that, "in the old days", foremen used to be able to give workers, who were not performing to the management's satisfaction, more unpleasant jobs as a form of punishment. He then states that union contracts have more or less put an end to this practice (you may wish to consider this example when thinking about politics in the organization -- getting or maintaining the power to direct activities in an organization).

The rarity of coercion-based power in modern organizations can be attributed, in part, to the power of unions in places like Japan, Western Europe, and North America. In the political battle over governance on the shop floor, collective bargaining agreements have largely curtailed managements' abilities to punish workers. This, of course, restricts managements' abilities to influence their workforce (their power is reduced). Unions' justifications for this reduction in managements' power lies in the assertion that workers ought not to be subject to seemingly arbitrary and capricious punishment. Collective bargaining agreements thus put systems of progressive discipline into contract -- both parties, workers and managers, can thus appeal to a system of organizational jurisprudence. Unilateral managerial power has therefore been replaced by bilateral (and trilateral, if government agencies become involved) policy-making power.

  • Reward Power: An interesting perspective on power based on the ability to reward, is how that power is diminished in a unionized environment. In the on-going political battle over how the shop floor is "governed", unions have managed to have promotion and remuneration policies codified in the collective bargaining agreement. The consequence is clear. Since management is curtailed in its ability to reward, its power has also been curtailed. In that sense, neither the management nor the union have reward-based power over the employees insofar as promotions or raises are concerned.

This inability to reward deserving employees (according to most collective agreements, all employees doing the same job are compensated equally, and promotions are based on seniority) is a restraint on "management's right to manage" and an irritant or even a de-motivating factor to individual employees who are particularly diligent or talented. Such collective agreement provisions seemingly violate principles of equity (see Equity Theory of Motivation).  However, from a union perspective, these provisions were intended to ensure equity. That is, these contract provisions are designed to eliminate favoritism. Promotions or raises based on favoritism would also violate principles of equity and lead to the de-motivation predicted by the Equity theory of Motivation.

  • Expert Power: In modern organizations, most influence (power) is expert-based. The workers on the assembly line in the Oshawa GM plant may accede to Fred's (the foreman) requests because of his legitimacy-based power or his coercion-based power, but it is more likely that they respond positively when his requests are based on his perceived expertise in the area of automobile assembly. In fact, we know that when Fred exercised his coercion-based power -- to speed up the line or to force Danny Johnson to move -- the workers resisted and the ultimate response was a grievance filed against the company. However, given that automobiles do, in fact, get made in Oshawa (contrary to the impression we may have been given by the video), we must assume that most of the time, Fred is, in fact, able to manage and "influence" his subordinates.

When Bob White faces the members of the Master Bargaining Committee, part of his power over them is expert-based. Bob is privy to information that they do not have (he has meetings with Rod Andrews at which they are not present). In influencing these people, Bob uses phrases such as "He told me that... [certain actions] would result in the closure of Canadian plants." Given his access to this information, he can influence members of the committee (he has power) to accept his proposal -- the members respond to his expertise.

  • Referent Power: This video does not give too many examples of referent-based power. However, one of the opening comments by the narrator gives perhaps the best summery of referent-based power in this video. As we view workers leaving the Oshawa GM assembly plant, the narrator informs us that Bob White has become somewhat of a hero to these men, and that when he asks them for a strike vote, the result is more or less a foregone conclusion (greater than 90% in favor of strike). As a "hero", Bob White has referent power over these men.

Dependency Theory of Power

The video is replete with examples of the Dependency Theory of Power. The theory states that "Party 'A' has power over party 'B' if 'B' is dependent on 'A'". The conditions of dependency are: importance, scarcity, and non-substitutability.

In our examination of the video, let's begin with the relationship between the UAW (personified by Owen Bieber) and its Canadian division (personified by Bob White). If Bob White is to take the Canadian workers out on strike, he needs access to the UAW's $500,000,000 strike fund -- he is dependent on Owen Bieber. Hence, Owen has power over the Canadian workers. In classic bargaining style, in a conversation with Owen, Bob seeks to minimize Owen's perception of the power he has over the Canadians. In this conversation, Bob informs Owen that he has some financial backing from the Canadian Labor Congress (CLC). In fact, Bob has no such financial support. The statement, however, seeks to disabuse Owen of the notion that he has power over Bob and his Canadian supporters. Bob is stating that there is, in fact, a substitute for Owen's financial resources.

At a macro level, the dependency relationship is played out in negotiations between Bob White and Rod Andrews. For example, Bob contends that General Motors needs the UAW workers to run its factories. Bob is, in essence, saying that he has power over GM. By the same token, Rod uses the dependency relationship when he threatens Bob with the closure of Canadian assembly facilities if Bob's demands are too extravagant. Rod exerts power by clearly delineating the dependence Canadian workers have on the jobs provided by GM's on-going profitability. In their point-counterpoint arguments, Bob and Rod rely on statements which focus on the importance and/or the scarcity of the resources they control.

In the discussions we saw in the video, neither sought to invoke the argument that there were substitute resources available. However, whenever the issue of "contracting out" is discussed during collective bargaining, substitutability is exactly what that argument is all about. Unions usually resist managements' attempts to expand contracting-out provisions in collective agreements for reasons having to do with power. With liberal contracting-out provisions, management can claim less dependence on its unionized workforce (hence, the union has less power). Conversely, unions generally seek to curtail managements' abilities to contract out. The more the union can assert that there is no substitute for the labor its members provide, the more power it will have.

When the workers in the Oshawa plant engage in a wildcat strike (wildcat strikes are illegal strikes during the term of a contract or strikes taken without the mandatory "notice" period as stipulated in labor legislation), they are attempting to exert pressure on GM at the bargaining table. They are demonstrating how dependent GM is on their labor because the shutdown of the plants costs GM millions of dollars in lost productivity.

Within the union itself, dependency is evident in the relationship between the membership and the executive. As democratically elected officials of the union, the executive is dependent on the votes of the rank and file membership for continued tenure. As the narrator informs us, these executives would be back on the assembly line, driving bolts, if they didn't bring the members the kind of collective agreement they were looking for. The members thus have the power to influence the executives' behaviors. The executives, wishing to hold on to their positions would be very reluctant to "sell out" their members by way of an unsatisfactory agreement given their knowledge that doing so would mean their own loss of "privilege".

This vote-dependent power underscores an interesting conundrum faced by most union leaders as they prepare to engage in collective bargaining. In order to show management that they have power, they must have a credible strike threat. Thus, they need to get strong strike vote from the union members. In order to attain this overwhelming support, they often promise their members significant improvements in their terms of employment. However, during the course of negotiations, demands must be modified and often reduced. Then, when the executive finally arrives at an agreement with management that is less than they "promised" their members, they must convince these members that this agreement is indeed the best that they can do. They then face the raised expectations they themselves fostered in their efforts to get out a strong strike vote. In order to maintain their status as union executives, they are again dependent on the votes of the union membership.