What is power?
By understanding power and how it is structured, we gain insight into inequities in access to capital.
Across Canada, major disparities exist in how capital flows and who gets funded — across all capital types — that leave many behind and limit our potential as a nation.
Power exists within organizations whether we’re aware of it or not. By better understanding power, we can find ways to make systemic changes that improve equitable access to capital and achieve greater impact.
Below, we unpack our considerations in defining power.
Defining power
“Power” is a complex topic. It overlaps or can be conflated with concepts like influence, legitimacy, or authority. At New Power Labs, we use this definition of power:
The ability of an individual or group to influence or exercise control over others and achieve their goals despite possible opposition or resistance. (1)
Or more simply: power is an interpersonal association in which one individual (or group) can cause another individual (or group) to take action.
While this definition may evoke the idea of a powerful person imposing their demands, power can be more subtle (often captured by the term “influence”). It is useful to look deeper at:
sources of power
how power manifests
how concentrated power is
(who, or how many people, hold it)
Power comes from different sources.
Sources of Power
French and Raven described two overarching sources of power. (2)
Formal power
Derived from the position an individual holds in an organization, or that is granted to an individual by the organization.
Legitimate power
a position of authority
in a formal hierarchy,
explicitly granted
Coercive power
An ability to impose sanctions or punishments
Resource power
An ability to control resource allocation
Reward power
An ability to induce or offer rewards
Personal power
Earned by individuals themselves, regardless of whether an organization chooses to grant them power.
Expert power
Based on expertise and credibility
Information or knowledge an individual has or can access
Referent power, based on charisma or persuasiveness
Connections,
or having and being able to mobilize a network
Each category of power stems from particular sources or ways that power can be exercised.
These categories may not be mutually exclusive. For instance, information can be seen as a resource.
Power manifests implicitly and explicitly, and at both the individual and organizational level.
Power evolves when individuals with different levels of power interact in groups, developing into social hierarchies. (3)
Hierarchies can be:
explicit and formal, such as an organizational chart ranking different levels of formal authority,
implicit and informal, such as the interpersonal dynamics that give certain people more influence. (4)
Organizations experience power dynamics based on the interplay of individual versus organizational, and implicit or informal versus explicit or formal power.
Power can be concentrated or distributed, depending on how an organization or group is organized.
Based on these sources of power and how power appears at the individual and organizational level, we can broadly categorize organizations based on how power is distributed within them – whether concentrated or centralized (very few people hold most of the power) or distributed or decentralized (power is held among a much broader set of people) - based on how it manifests formally or informally, and at the individual or organizational level. Finally, power dynamics are the power difference between capital recipients and capital deployers that drive and shape how capital flows in the Canadian social finance ecosystem.
Heavily concentrated
Power is held closely in the hands of a small, homogenous group of people.
Concentrated
Power is held by one particular but varied or larger group or organizational layer (e.g., a senior management team in a functional/bureaucratic organization).
Distributed
Power is held more diffusely by more people across an organization, though some remain more powerful
(e.g., a “flat” hierarchy).
Evenly distributed
Power is held, in different forms by many people, including some outside the organization itself, which may be structured as (or power may manifest through) a network.
So, how does power influence access to capital?
Is there a way for us to work together as a sector to shift the current power dynamics to open more doors and unlock the potential of diverse leaders?
Citations
1. Adapted from the definition found in the Open Education Sociology Dictionary, as a simpler definition focused within organizations. See: “Power.” (2013). In K. Bell (Ed.), Open education sociology dictionary. Retrieved from https://sociologydictionary.org/power/
For a more thorough discussion, see: Poggi, G. (2006). “Power,” in The Cambridge Dictionary of Sociology, Cambridge: Cambridge University Press, pp. 464-469.
2. French, J. R., Raven, B., & Cartwright, D. (1959). The bases of social power. Classics of organization theory, 7, 311-320.
3. Rucker, D. D., Galinsky, A. D., & Magee, J. C. (2018). The agentic–communal model of advantage and disadvantage: How inequality produces similarities in the psychology of Power, social class, gender, and race. In J. M. Olson (Ed.), Advances in experimental social psychology (pp. 71–125). Elsevier Academic Press.
4. Jarrett, M. (2017). The 4 types of organizational politics, Harvard Business Review, 24 April 2017. Retrieved from: https://hbr.org/2017/04/the-4-types-of-organizational-politics