Power In Koch Industries

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Power is defined as the ability to do anything because of one's position. Power, on the other hand, is defined as the capacity to outmaneuver and defeat opposing forces. According to Anderson (1998), the major motivation of individuals striving for power is the ability to control others. For example, the power battle in Koch Industries between Fred Koch's two children is a classic example of how power struggles occur in many commercial organizations. In Koch Industries, different sources of power can be identified. First, Charles Koch has legitimate power (positional power) derived from his position in the company as the CEO. Due to his position, he had the authority to ask for reports from his juniors. Moreover, he used legitimate power to assign duties to his juniors (Tomsho, 1989). The manager also utilized reward power by influencing how incentives were allocated within the organization. For instance, Charles fired some employees while distributing a portion of the company shares to employees who were loyal to him.

Since Charles Koch often used threats to influence the decisions and actions of his juniors, it can also be argued that he used coercive power to control employees who tried to oppose him (Chiu, Balkundi & Weinberg, 2017). People also respected him because of his position as the CEO and ability to cultivate a good relationship with other influential people within his networks. Therefore, he also used referent power (Magee & Frasier, 2014). Moreover, expert power is evident when William, a chemical engineer came up with onion pill, a drug that helps to fight cholesterol.

Power Tactics

To achieve the desired outcomes, individuals adopt different behaviors that help in maintaining their control over others. In the context of Koch Industries, Bill and Charles adopt the following power tactics;

Charles Koch exchange loyalty from his employees with rewards of shares. For instance, he handed over shares to executives who supported him after firing Bill. By making promises to his juniors to receive favors, he continued to control their actions (Anderson, 1998). Moreover, Charles used pressure tactic to intimidate his juniors thereby making them comply with his demands. It can be argued that the executives sided with him during the proxy fight because they feared Charles would act against them. Through this tactic, Charles continued to enjoy his position as the CEO of Koch Industries.

Bill Koch, on the other hand, employed consultation tactic to gain control of the firm. For instance, he consulted his brother Fredrick requesting for his support, although, Fredrick was not much into the affairs of Koch Industries (Lauby, 2005). Consequently, the two opposing sides used coalition tactics to fight for their control over the industry. Bill and Fredrick opposed Charles and David in the proxy fight.

Use or Misuse of Power

Charles Koch won the fight and gained control over Koch Industries due to his many sources of power. Based on his power sources and power tactics, it is evident hat he misused his power to win the proxy fight. Since Bill had only one source of power, that is expert power, Charles took advantage and misuse his many other sources of power like legitimate, coercive, and referent power.


Power is closely linked to leadership positions. It is described differently depending on the various circumstances and conditions under which the type of power is evaluated. Charles Koch misuses his many sources of power to gain control over Koch Industries. For instance, he adopts coercive, legitimate, reward, and referent power to influence the actions of his juniors.


Anderson, D. A. (1998). Using power and influence tactics for better results. Marine Corps Gazette, 82(12), 37-38.

Chiu, C. Y. C., Balkundi, P., & Weinberg, F. J. (2017). When managers become leaders: The role of manager network centralities, social power, and followers' perception of leadership. The Leadership Quarterly, 28(2), 334-348.

Lauby, S. J. (2005). Motivating employees (Vol. 510). American Society for Training and Development.

Magee, J. C., & Frasier, C. W. (2014). Status and power: the principal inputs to influence for public managers. Public Administration Review, 74(3), 307-317.

Tomsho, R. (1989). Blood Feud: Koch family is roiled by sibling squabbling over its oil empire: Fired by his brother, William sues often, helps feds to probe Koch Industries, haling mother into court. Wall Street Journal

May 24, 2023

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