Positional Power in Hierarchies

Abstract

Power is a core concept in the analysis and design of organisations. In this paper we consider positional power in hierarchies. One of the problems with the extant literature on positional power in hierarchies is that it is mainly restricted to the analysis of power in terms of the bare positions of the actors. While such an analysis informs us about the authority structure within an organisation, it ignores the decision-making mechanisms completely. The few studies which take into account the decision-making mechanisms make all use of adaptations of well-established approaches for the analysis of power in non-hierarchical organisations such as the Banzhaf measure; and thus they are all based on the structure of a simple game, i.e. they are 'membership based'. We demonstrate that such an approach is in general inappropriate for characterizing power in hierarchies as it cannot be extended to a class of decision-making mechanisms which allow certain actors to terminate a decision before all other members have been involved. As this kind of sequential decision-making mechanism turns out to be particularly relevant for hierarchies, we suggest an action-based approach - represented by an extensive game form - which can take the features of such mechanisms into account. Based on this approach we introduce a power score and measure that can be applied to ascribe positional power to actors in sequential decision making mechanisms.

Keywords: hierarchies, decision-making mechanism, power, positional power, power measure

JEL Classification: C79, D02, D71