72 ◾ The Guide to Entrepreneurship: How to Create Wealth for Your Company
To advance organizational objectives, politically skilled leaders form
coalitions to secure their power bases and to protect their occupancy of
powerful, central positions in the organization. The most powerful of these
coalitions is called dominant coalitions,
16
and wields the greatest power in
the organization.
Politically skilled/savvy individuals share some important performance
characteristics, summarized in Figure4.13.
The main trick of politics is to make it appear rational and in the best
interest of the organization (not the political actor). In addition, poli-
tics is best done in the shade. “The rattlesnake that survives is the one
that doesn’t rattle.” Importantly, the founder is above all this maneuver-
ing, possessing authority by virtue of title, knowledge, and voting power.
This is depicted in Szycher’s Founder’s Supremacy Theory, illustrated in
Figure4.14.
4.5.2 Organizational Persona
The founder sets the tone by his or her “imprimatur” on both the political
environment and the persona of the organization. In every respect, the rm
reects the personality of its founder, and the dominant coalition moves the
Characteristics of politically skilled/savvy
• Actively promote their boss
• Correctly identify true power
brokers
• Constantly improve their tech-
nical knowledge
• Volunteer to write meeting
agendas and minutes
• Design and author business
documents dealing with rules,
regulations, procedures, etc.
• Are part of the dominant
coalition
• Publicize their activities as “best
for the company”
• Always seem ready to tackle the
most dicult problems
• Are “doers” not “talkers”
• Develop a reputation for getting
things done on time
• eir solutions to problems are
practical and timely
• Are always there when you
“most need them”
Figure 4.13 Characteristics and Performance Attributes of political cognoscenti.
The Entrepreneurial Environment ◾ 73
company forward via organizational politics. Organizational politics can be
dened as “intentional acts of inuence to enhance, protect and advance the
self-interests of individuals.”
17
The founder decides the organizational persona by his or her initial deci-
sions as presented in Figure4.15.
Founder Supremacy eory
©M Szycher
Founder Authority
Politics Situational Power Influence
“politics in action”
Up
per Management: Strategy
Middle Managemen
t: Tactics
• Raising funds
• Going public
• Change of control
• Promotions
• Assignments
• Resource allocations
• M & A activities
Dominant Coalition
Scarcity
Conflict
Financial environment
Figure 4.14 Founder Supremacy Theory—The founder’s authority trumps all political
maneuvering at the start.
Organizational persona
as determined by founder
• Hunting? Or Fishing?
• Manufacture? Or Outsource?
• Gazelle? Or Turtle?
• Family? Or Harvest?
• Flexibility? Or Control?
• Lifestyle entrepreneur (sacrice income
for relaxed work habits) …………. or ………
• High value builder entrepreneur
Figure 4.15 Organizational persona—What culture “persona” do you want your
organization to adopt?
74 ◾ The Guide to Entrepreneurship: How to Create Wealth for Your Company
Last, the founder decides how the organization will be managed, as
shown in Figure4.16.
4.6 The Dominant Coalition
“Chaos creates opportunity.”
The dominant coalition is a select group of people within an organization—
mostly the executive or senior management team—making all important
decisions regarding the direction and focus of the rm. The term “dominant
coalition” was coined by James Thompson who adopted the work of March
and Cyert
16
in his 1967 book entitled Organizations in Action.
18
In business, coalitions have been present for many years to bring people,
departments within an organization, entire companies, or industries together
for a common purpose. Examples of such purposes include achieving an
important corporate goal, lowering entering a market, regulating an industry
action, or strategic planning. A coalition is an exercise in power, whether in
politics or business.
19
Organizational
atmosphere
Startup Large company
Relaxed, open book Regimented, hierarchical
Informal, empowered Formal, secretive
Customer focused Technology focused
Large option pools
Cash bonuses
Open desks
Individual offices
Carpeted areas
Small cubicles
Figure 4.16 Organization management—The founder must decide how to manage
the startup.
The Entrepreneurial Environment ◾ 75
Many managers form coalitions to (1) secure their power source, (2)
protect their power positions, and (3) wield the maximum amount of
power and inuence. Dominant coalitions are formed through com-
promise, bargaining, and negotiating among managers from different
functions.
20
Figure4.17 summarizes the modus operandi of a typical dominant coalition.
4.6.1 Dominant Coalition as Change Agent
“The great pleasure in life is doing what people say you cannot do.”
—Walter Bagehot
Any proposed change to the status quo, no matter how desirable, will
be ercely resisted at all levels. General Motors, Sears, JC Penney, Wang
Computers, and Polaroid faced the need for dramatic change, but each failed.
Managers pushing for organizational or technological improvements were
ignored or, worse yet, red. These companies could not overcome cultural and
behavioral obstacles or the power structures inherent in their organizations.
The main reasons for organizational resistance to change are presented in
Table4.7.
Authority
Politics
Power
base
Dominant
Coalition
Dominant Coalition
(1) Must be aware of their power
(2) Must be willing to exercise power
(3) Power must be exclusive to the coalition
Iner
tia
Resistance to change
C
ulture
Prepare sta
To accept change
Implement change
“Politics is power in action”
Figure 4.17 Dominant coalition—Visual depiction of how the dominant coalition
operates behind the scenes.
76 ◾ The Guide to Entrepreneurship: How to Create Wealth for Your Company
4.6.1.1 Theory of Change
Kurt Lewin
21
proposed a three-stage theory of effective change commonly
referred to as Unfreeze, Change, Freeze (or Refreeze). The dominant coali-
tion could follow the Lewin sequence, as shown in Table4.8.
Table4.7 Organizational Resistance to Change
• Fear of the unknown
• Renegotiations of employment/psychological contracts
• Inherent “risk avoidance” among people
• Changes in role or power positions
• Age of the staff (older is typically more resistant)
• Need to retrain in new technologies/systems
Table4.8 Productive Change Sequence
• Impetus for change: Create dissatisfaction and crisis
• Fear
• Vision of a better tomorrow
• Opportunity for all to advance
• Unfreeze the system
• Reject old customs and approaches
• Reduce support for old ways
• Separate from past practices
• Reward those engaged in new approach
• Change/psychological conversion
• Rejection of the past
• Separation from the past
• Practice the “new” until new system is internalized and understood
• Refreeze the new ways
• Re-enforce new attitudes
• Reward new behavior patterns
• Be consistent, predictable
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