Why is it said that power relationship in organisations entail a Essay

Why is it said that power relationship in organisations entail a Mutual Dependency Provide examples to illustrate - Essay Example While interdependednce of the power equation began primarily in terms of socialiogy (Emerson 1962), it soon came to be very instrumental in the organizational setups across the developed world. It has now been established without doubt that power is central to organizational structure (Hall 2002). Infact several sources of power have been established within organizations (Morgan 1986). These can broadly be classified as Formal authority or legitimate power- This refers to the common concept that leaders or people in the high ladders of hierarchy have authority and compliance on the part of the subordinates is mandatory. Expert power - This is power secured by the acquiring of skills and expertise in a field, that would be required by others. This is by far the most subjective base in the power model (Podsahoff and Schriesheim. 1985) Yet all these bases of power rely on interaction of groups with each other. While the benefits and disadvantages of each of these bases are still being researched, the fact that they all involve dependency and interrelationships are clear. The concept of interdependency of power is aptly described in the works of (Emerson 1962, 1964) It is vital to have an understanding of the distribution of power along both these axes. While it is relatively easy to grasp the power concept along the vertical axis, even simply by applying the model of power bases described above, power dependency along the horizontal axes is relatively harder to visualize. This however is not a reflection of its operational value in an organization.Hence the mutual dependency pattern is observed along both these axes, more obviously in the horizontal than in the vertical, but is present in both. Several examples of the power dependencies can be observed in an organization setting and we will now go on to have a look at some of them. Power dependency along the vertical axis, egs. University structures where students are clearly lower in the hierarchy ladder, provide a good example of interdependencies along the vertical axis. To a large extent students are responsible for the functioning (both financial andoperational) of universities. While the very existence of universities is with the idea of training and teaching students, it is impossible to conceive of universities without the teaching and management staff. Hence while students depend on teachers for learning, and to that extent are under the power of the teachers, the latter also depend on students for the very running of the institution which provides their livelihoods. In terms of enterprises, a

In finance, risk is best judged in a portfolio context. Is this true Essay - 2

In finance, risk is best judged in a portfolio context. Is this true Why - Essay Example 87). This uncertainty about future value of the assets makes it dangerous for the investors to put all their resources in a single investment opportunity no matter how lucrative it may seem to be. Therefore, it is preferable to spread resources in a collection of stocks as a precaution against total loss of investment due to unpredictable loss. Investors set their investment goals of maximizing their earnings and stabilizing their income from increase in value of their assets between the time of making investment and future period when they anticipate their portfolio to mature (Enrica 2012, p.123). However, the market is full of challenges that investors cannot predict at the time they are making investment. These challenges threaten to thwart investors’ objectives if increasing the value of their assets. Therefore, investors should be cautious in order to avoid losing all of their resources. Some of the risks the investors face in the market include: Liquidity risk, a type of risk that occurs in the event that assets can neither be sold nor bought faster enough to realize the perceived profit or to avert the anticipated decline in its market value (Connor, Goldberg and Robert 2010, p. 187). This scenario may occur when there are no potential buyers for such assets in the market at the current value to enable the owner to make a gain from sale of the assets. Credit risk: this is the risk due to the fact that most of the borrowers may fail to clear their debts in time as the lender had anticipated (Engle 2009, p. 81). Borrowers are required to repay the amount borrowed and some interest within specific period. However, in most cases borrowers fail to meet their targets hence resulting to the decrease in lenders’ earnings as a result of bad debts and expenses incurred when collecting the debts. Foreign investment risk: this is the risk due to the changes in market conditions across different countries that cause the decline in value of transaction i n relation to another country (Sharpe 2007, 104). For example, different currencies have different exchange value across the globe. Similarly, different countries have adopted different accounting procedures in relation to depreciation of assets, stock valuation and so on (Cochrane 2009, p. 323). Therefore, depending on the approach used in the countries involved, international investors will obtain different earning from equivalent value of resources invested. Market risk: This is the probability that the value of the asset portfolio may reduce in value as a result of various aspects affecting demand and supply of that asset (Sharpe 2007, p.111). For example, the nature of market will result to either increase or decrease in value at which the assets are traded in the market. This is whereby the increase in supply of trade commodities results in the decrease of value of those commodities while the decrease in supply followed by the increase in purchasers’ demand will result in the increase in significance for those commodities (Constantinides, Harris, & Stulz 2003, p.301). Operational risk: Different companies or businesses perform better than others though in the same industry due to a number of factors (Connor, Goldberg and Robert 2010, p. 192). For example, some personnel are more