RESOURCE ALLOCATION IN ORGANISATIONS: THE

ROLE OF POWER AND POLITICS

BY
AMIENS ERNEST OSEGHALE (PG/BUS11024)

LECTURER : DR. JOHN OHIORENOYA
COURSE : BUSINESS POLICY AND STRATEGY


A TERM PAPER SUBMITTED TO
THE DEPARTMENT OF BUSINESS ADMINISTRATION,
BENSON IDAHOSA UNIVERSITY.

MAY, 2013

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Abstract
Resource allocation is an essential process that supports the existence of every organization.
It is view as the different ways the available organizations resources (money, equipment,
staff, information etc.) are allocated for the purpose of making things happen through the
interplay of complex sets of organizational influences such as rules, policies, power and
politics etc. Power and politics constitutes Daff (1978) and Lombardo and Mulligan (2003)
political view and political based approach to resource allocation which provide the
foundation for this paper. It was revealed that power is central to organizational life and
underpins the strategy-making process and internal politics plays a vital role resource
allocation Kazmi (2008).


Introduction
The importance of resource allocation activities has long been recognized by
management scholars (Pondy 1970). The resources of any organization are the determinant
of her success or failure, Vancil (1982) noted nothing really happensphysicallyuntil the
resources are expended. Resources are the pivot of any strategy and Collis and Montgomery
(2004) explicitly reemphasized the importance of resources in their submission that resources
are essential elements because decisions about what a firm can do depend on them. Lopez
(2005) contributing to the discourse of the importance of resources, acknowledge it as an
internal organizational power.
Resources can be defined as stock of available factors that are owned or controlled
by the firm (Amit and Schoemaker, 1993). Similarly, resources are seen as the assets of a
company (Hill and Jones, 2008). These assets of any organization are shared to different units
that constitute the organization in carrying out their operations and this sharing process has
been christened resource allocation. Resource allocation connotes the different ways the
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available organizations resources (money, equipment, staff, information etc.) are allocated
for the purpose of making things happen (strategy). Lombardo and Mulligan (2003) in work
enumerated three approaches to resources allocation; they are the rule based approach, the
political based approach and the mixed approach while Daff (1978) identified two views on
the allocation of resources; they are the objective view and political view. The political
approach to resource allocation and political view are the basis for this paper.
Concepts of Resources Allocation, Power and Politics
A clear understanding of the concepts of resources allocation, power and politics are
paramount in addressing the theme of this paper and the exercise will be attempted in this
section. Kazami capture resources allocation as one-time or continuous process of
procurement, commitment and distribution of resources to strategic tasks for the achievement
of organization objectives. This definition is similar to the one given in the introductory
session which viewed resource allocation as the different ways the available organizations
resources (money, equipment, staff, information etc.) are allocated for the purpose of making
things happen (strategy).
From these definitions, a number of distinguishing features of resource allocation are
prominent. Firstly, resource allocation is a distributed activity; many people are involved,
and many choices must be made throughout the organization and secondly, the number of
classification. Kazmi (2008) identified resources to include financial, human, informational
and physical resources. In the same, Schendel and Hofer (1978) in their classification
exercise grouped resources into financial, physical, human, organizational and technological
resources. Collis and Montgomery (2004) classified organizations resources into assets, skills
and capabilities while Hill and Jones (2008) divided resources into two types: tangible and
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intangible. Tangible resources are physical entities, such as land, buildings, plant, equipment,
inventory, and money while intangible resources are nonphysical entities that are created by
managers and other employees, such as brand names; the reputation of the company; the
knowledge that employees have gained through experience; and the intellectual property of
the company, including intellectual property protected through patents, copyrights, and
trademarks. Kazmi (2008) posited that financial and physical resources are mainly allocated
through budgeting that he broadly grouped in three; top down approach, the bottom up
approach (participative) and the mix approach.
The concepts of power and politics have received attention from different disciplines
such as Management, Behavioural Science, Political Science, Sociology and a host of others.
Power and politics are dominating forces within organizations and this could be attributed to
the wide attention it has received from researchers from this diverse background.
Weber (1948:180) defines power as the chance of a man or a number of men to
realize their own will in a communal action even against the resistance of others who are
participating in the action. Pfeffer (1981) defined power as one persons ability to influence
the behaviour of another or to overcome resistance in achieving the desired outcomes. Power
is defined as the ability to influence behavior, to change the course of events, to overcome
resistance, and to get people to do things that they would not otherwise do (Pfeffer,
1992:30). Gardner (1992) captured power as the capacity to bring about certain intended
consequences in the behaviour of others. The dominant theme that runs through these
definitions is the issue of interests of the person exercising the power over others. In the
literatures, five bases of power have been identified and this has given rise to the five types of
power: coercive power (ability to trigger negative outcomes in other individuals lives),
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reward (ability to give rewards to others), legitimate power (position held in organization
expert and referent power), referent (ability to persuade) and expert (skills and abilities)
Politics is the exercise or use of power and the processes, the actions, the
behaviors through which this potential power is utilized and realized. (Pfeffer, 1992:30).
While Danziger (1991) defines politics as competition among individuals, groups, or states
pursuing their interests. Furthermore, Pfeffer (1981: 7) posited that "organizational politics
involves those activities taken within organizations to acquire, develop, and use power and
other resources to obtain one's preferred outcomes in a situation in which there is uncertainty
or dissensus about choices." Politics is concerned with the use of power and relates to
managing coalitions, consensus building, and the creation of commitment to organisational
purpose and mission.

The Role of Power and Politics in Resource Allocation in Organisations
Organisations have been viewed differently by different authors; every organization
contains organised power groupings (Leigh, 2000) and therefore all organizations are
political in nature (Kazmi, 2008). Furthermore, Brass (2002) asserts that organizations are
both cooperative systems of employees working together to achieve goals and political
arenas of individuals and groups with differing interests and Morgan (1996 cited in Iyayi,
2005) painted organizations as loose networks of people with divergent interests who gather
together for the sake of expediency Organisations are coalitions and are made up of
coalitions and coalition building is an important dimension of almost all organization life...
In literature, it has be affirmed that politics exist whenever different groups have different
ideas that they want to see implemented and the individuals in the groups work to see their
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shared ideas moved forward. This view is collaborated by Clegg (1989) that power is central
to organizational life and underpins the strategy-making process. The existence of politics in
organsation brings us to the begging question, what is the role of power and politics in
resource allocation.
Resource allocation assumes a central position in the success of every business as it is
the fulcrum of strategy formulation and implementation. Pettigrew (1973:20) As long as
organizations continue as resource sharing systems where there is an inevitable scarcity of
those resources, political behavior will occur. While according to Clegg, Carter &
Kornberger, (2004: 25) the understanding of strategy necessitates an engagement with
power and politics.
Politics and power affect the way a strategy is formulated and implemented and
hence resource allocation is not an exception. Kazmi (2008) identified internal politics and
influence as one of the factors affecting resource allocation. The different elements in the
hierarchy of objectives: strategic intent, vision, mission, and objectives are affected by the
formation of groups and coalitions which influence the direction that the organisation has to
take. Political considerations affect which type of objectives take precedence over others and
what strategy the firm has to choose.
In organizations, resources are allocated through a decision making process involving
diverse units and departments with differing interests. The interactions between these
institutions are crucial in determining resource allocation outcomes. Kazmi (2008:52)
observed that a dominant group of strategist may wield considerable power so as to set
objectives in consonance with their respective views.
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Politics shapes the resource allocation decisions in organizations, often times the
strategy being followed by organizations is really the outcome of the bargaining and power
politics that go on between important executives or between coalitions within the
organisation and major stakeholders. To support this view, kazmi (2008) maintained that the
relative decisional power of different strategies wield with respect to each other counts in
resource allocation. He gave instances of the strategists in different organizations; in the
public sector he cited politician and bureaucrats while in multinationals he cited parent
company.
Conclusion
Power and politics play a huge role in business in every level of decisions making.
Power in its different form is use to persuade, induce, and coerces individuals or groups in
organization into following certain courses of action. Therefore, resource allocation, are
driven not merely by formal processes, but also by a myriad of interests, conflicts, and
alliances.

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