The Pros and Cons of Formal Vs Informal Power in Leadership
Have you ever wondered what types of power leaders hold? The concept of power in leadership is not new, yet it still remains a vital topic in today’s corporate world. There are two types of power that leaders hold; formal power and informal power. Each type has its own set of pros and cons, but which one is more effective in leading an organization? In this article, we explore the differences between formal and informal power in leadership and provide insights on how they affect organizational performance.
Formal Power in Leadership: Pros and Cons
Formal power is the power given by the organization to its leaders based on their position within the company. This power is generally hierarchical, with the CEO or managing director holding the highest level of authority. Formal power comes with several advantages:
Pros
1. Clear Chain of Command
Formal power provides a clear chain of command, making it easier to establish roles, responsibilities, and job functions. Managers are responsible for supervising their subordinates, who report to them, ensuring that work is completed efficiently.
2. Legitimate Decision Making
Leaders who hold formal power have the authority to make decisions that affect the organization. Employees are expected to follow their manager’s orders as part of their job responsibilities.
3. Accountability
Managers who hold formal power are accountable to the organization’s stakeholders. They are responsible for meeting the company’s objectives and delivering results. Accountability is essential in ensuring that all members of the organization work towards the same goal.
However, formal power also has its downsides:
Cons
1. Limited Creativity
Because of the clear chain of command and the hierarchy that comes with formal power, some managers may be reluctant to delegate responsibilities to subordinates. This can lead to stifling creativity and innovation within the organization.
2. Bureaucracy
Formal power can lead to bureaucracy within the organization, with decisions being delayed due to multiple layers of approvals. This can result in a slowing down of organizational processes and may hinder its progress.
3. Limited Flexibility
Because of the hierarchy and the clear chain of command, managers may be less flexible in adapting to changing business environments. This can result in delays in decision-making and may negatively impact the organization’s performance.
Informal Power in Leadership: Pros and Cons
Informal power is not derived from a specific job title or position. Rather, it is based on the leader’s ability to influence others, gain trust and respect, and build relationships with subordinates. There are also advantages and disadvantages to this type of power:
Pros
1. Innovation and Creativity
Leaders who hold informal power tend to value creativity and innovation. They are flexible in their approach and are willing to delegate tasks and responsibilities, allowing subordinates to use their skills and knowledge to their full potential.
2. Strong Relationships
Informal power comes from a leader’s ability to build strong relationships with their subordinates. Leaders who have strong relationships with their team members tend to be more effective in managing them and achieving organizational objectives.
3. Quick Decision Making
Leaders who hold informal power tend to be more willing to take risks. This means that decision-making can be fast and efficient, allowing for the organization to respond quickly to changes in the business environment.
However, there are also downsides to informal power:
Cons
1. Lack of Accountability
Since informal leaders are not accountable to any specific job title or position, it can be challenging to hold them accountable for their decisions. This can be a significant issue when something goes wrong.
2. Resistance to Change
Leaders who hold informal power may be more resistant to change, especially if it threatens their position or status within the organization.
3. Potential for Conflict
Informal power can sometimes lead to conflicts within the organization, as subordinates may feel that some members of the team are given preferential treatment. This can lead to a lack of trust and respect between team members.
Conclusion
When it comes to formal versus informal power in leadership, both have pros and cons. Formal power provides a clear chain of command, legitimate decision-making, and accountability. However, it can limit creativity, result in bureaucracy, and limit flexibility. Informal power, on the other hand, can foster innovation, build strong relationships, and lead to quick decision making. However, it can also lead to a lack of accountability, resistance to change, and potential for conflict.
Ultimately, the effectiveness of a leader depends on their ability to understand and balance the advantages and disadvantages of both formal and informal power. By using a combination of both types of power, leaders can create an environment in which their team can thrive, and the organization can achieve its goals.
