Power Comparability—Its Contribution to a Theory of Firm Behavior

Although the importance of the interdisciplinary approach to the study of business is well recognized as a means of exploring and applying the knowledge and methodology of social and behavioral science to business activity, the surface has barely been scratched as far as our knowledge of the determinants of business policy and action is concerned. This paper expands, in table form, a model of power measurement developed by a political scientist (Robert A. Dahl), and then applies this power measurement table to business decision making at the board of directors level. We feel that the usefulness of power comparison lies in allowing one to discern which individuals or groups influence decision making in the firm, which, in turn, determines at least the formal basis of firm behavior. In a separate section of the paper the effect of a firm's organizational structure on an individual's power is discussed. This is followed by a discussion of the limitations and contributions of “power comparability” to a theory of firm behavior.