The $$business system,$$ that totality of all businesses in a nation or the world, is said to be one of the most powerful institutions known to humankind. The other major candidates for this honor are typically government and the military. One of the most often repeated accusations about large businesses is that they have too much power. It is also claimed that they abuse this power.

What is business power? It is the ability to produce an effect$$to get things done, to bring about its desired state of affairs. It$$s about business getting its way. Business can exercise its power at the macro level, the industry level, the firm level, and the level of the individual corporate leader.

One way to think about business power is to frame it in terms that analysts have claimed are relevant. John French and Bertram Raven have argued that business has five types of power: coercive power, legitimate power, reward power, referent power, and expert power. Each of these may be thought of from the perspective of a large business.

Coercive power occurs when someone in authority forces someone to do something$$usually with some threat of punishment. Legitimate power exists when a person in the chain of command has a title or position that implies he or she has the right to take some action. Reward power is manifested when a boss uses rewards to get things done. The rewards may be monetary $($pay increases, promotions$)$ but also may be psychological such as praise. Referent power is gained by leaders due to others admiring him or her as a role model. Expert power arises when someone becomes highly regarded due to their superior training and$/$or experience.

Which type of power do businesses display the most? Give an example.

As an employee, with which type of power would you be most concerned?

As a consumer, with which type of power would you be most troubled?

Have you been the $$victim$$ of business power? Explain.

Does business have too much power? Does business abuse its power?