Week 10, Monday Lecture Outline
- I. Power and politics
- II. Individual bases of power
- III. Group bases of power
- IV. Power in action
- Power tends to corrupt, and absolute power corrupts absolutely --
- Power, like a desolating pestilence
Polutes whate'er it touches
-- P.B. Shelley
- Those who have been once intoxicated with power can never willingly
abandon it -- Edmund Burke
- power is the strength of a person's or a group's capacity to influence
- politics is the self-interested use of power
- why do soldiers follow officers' orders?
- reward, coercive, legitimate
- why do students emulate faculty?
- why do CEOs listen to R & D directors?
- resource dependency -- power derived from control over critical resources
- strategic contingencies -- power derived from contingency of other units'
actions on your actions (Lawrence & Lorsch)
- what critical resource do they control?
- what critical contingencies do they control?
- financial planning
- Mergers and acquisitions: struggle for control over corporate assets
- How the game is played: look for target companies that are worth more
broken up than together
- The players: financiers capable of raising enormous capital in a short
amount of time
- LBO = Leveraged BuyOut (i.e., hostile takeover)
- greenmail = bids designed to inflate the value of stock held in a takeover
- junk bonds = high risk securities used to rapidly mobilize capital
- white knights = "friendly" firms who pre-empt bids by hostile firms
- insider trading = illegal use of securities information for personal
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