Power struggles in companies are common and often lead to a division of the organization, poor performance, and high rates of employee turnover. The Koch Brother have been fighting each on the leadership of their company and power distribution for many years. Their father, Fred, started the company during the early 1900s and made it a successful and profitable organization. He had four sons, Fred, William, Charles, and David, who paired up and battled each other over the years for power and money. Their disputes affected their interaction and ability to work together as they were constantly looking for tactics to outdo each other.
Sources of Power
Charles was the CEO of the company and his power stemmed from his leadership position. As the CEO of Koch Industries, he had legitimate power and could make independent decisions regarding the company. Legitimate power suggests that the individual is designated as the representative of the group. Examples of positions of legitimate power include inherited power, access to a leadership position through elections conducted by a board of members, or other corporate leaders and stakeholders working within the board of directors (Luthan, 2015). Even from attender age, Charles had always been the antagonist in the family and was groomed by his father to take over the Koch Industries after his death.
He studied at MIT and worked for other organization shortly before returning to his family’s company. While working for his company and applying what he had learned at MIT and the consulting firm he had initially worked with, he teamed up with David and managed to increase the company’s success and profits. By teaming up with Charles, David obtained legitimate power. Charles’ efforts managed to mold the company into a global corporation that could compete with other renowned companies in the same industry. His success and ability to run the company well assisted him to build trust among his team members, which also contributed to his power. By being viewed as a great leader, he obtained expert power, which leaders obtain when perceived by other people to have access to knowledge and skills in a specific area, which is relevant to the company or business (Luthan, 2015). Expert power can also be seen in individuals who study and specialize in certain areas that increase their capabilities of handling challenges in the area better than their colleagues can handle them.
Bill also had access to legitimate power despite feeling like a third wheel and struggling to gain the same respect and recognition Charles and David had in the company. He had managed to rise from the position of a salesman to that of the heading the mining subsidiary of the company. He was also recognized as an analytical leader due to his ability to critically analyze every aspect of an issue before making decisions. Despite having legitimate power, he did not have expert power. Most of the individuals who worked with him considered him an over-thinker. His analytical mind made him indecisive and unreliable in business dealings that required fast decision-making skills. He had studied chemical engineering and felt that he was entitled to more power than he was given in the company. He was also jealous of Charles and David because he as required to report to non-family executives regarding his projects (Schulman, 2014). These issues drove his thirst for more power.
The brothers used improper approaches to fight and expose each other to the public. They insulted each other publicly and used private investigators to dig up information that could destroy each other. They also used lawsuits to try to destroy each other, which also affected their company. Bill utilized his influential abilities to try to get shareholders in the company to his side. He applied rational persuasion by presenting them with logical arguments about his advantages over his brothers, data, and facts drawn from the company’s performance history. He also used exchange and consultation tactics, which involved giving his supporters something in exchange for information or their support and consultation approach, which entailed requesting other employees in the company to assist him in convincing stakeholders to support him (Bauer & Erdogan 2012). His methods attracted several people to his team.
He also accused the CEO, Charles, of withholding information from the shareholders as a way of increasing the number of individuals who supported him. He tried to team up with some of the shareholders who supported and Fred in gaining control of the company through proxy fights, but their efforts were not successful. Charles used his effective leadership to gain support from the employees. He worked with David in addressing issues in the company and making critical decisions that supported their growth. He also appealed to several members of the board to maintain their loyalty. He garnered 51% of the company’s support (Bauer & Erdogan, 2012). Eventually, the board decided that Bill’s actions had caused unnecessary tension in the company and voted against him.
I think Charles ability to win the battle stemmed from his ability to retain his leadership position, his method in approaching some of the board members who supported him, and the respect he had earned from his subordinates. Despite Bill’s attempt to tarnish his name, most of the employees and the shareholders had remained loyal to him. His decision not to resort to similar tactics used by Bill such as publicly tarnishing Bill name also presented him as a mature leader him (Bauer & Erdogan 2012). He had been prepared from a young age by his father to take over the leadership of the company. He had also managed to grow the company and increased its ability to compete with other global companies in the same industry.
Charles maturity and effective leadership skills showed that he was focused on promoting the wellbeing of the company and the interests of the stakeholders. Some of the lessons that can be drawn from their experience include the importance of maintaining professionalism to earn people’s respect and power and the importance of keeping the public from private organization issues. Charles was a respected leader and exhibited his maturity through his leadership approaches. Another lesson learned from their interaction was the effects of abusing power. Bill felt entitled to the power that he had at the company and his leadership position because of the company belonged to their family him (Bauer & Erdogan 2012). He failed to recognize the importance of professionalism and publicly insulted his brother to gain recognition.
Power stems from the application of effective leadership approach and retaining professionalism in corporate settings. While Bill might have been right in his accusations against Charles, his tactics were unprofessional and projected him as a selfish and jealous brother. Addressing his issues with his brothers or the board of governance in an official manner might have led to different outcomes.
Luthans, F., Luthans, K. W., & Luthans, B. C. (2015). Chapter 10: Power and Politics. Organizational behavior: An evidence-based approach. Charlotte, North Carolina: Information Age Publishing, pp. 280-287
Bauer, T., & Erdogan, B. (2012). Chapter 13.3: The power to influence. Organizational Behavior. Flatworld Knowledge. Retrieved from https://www.saylor.org/site/textbooks/Organizational%20Behavior.pdf
Schulman, D. (2014, July). Koch vs. Koch. Mother Jones, 39(4), 16–27.