Business Framework Highlight 

“The sole advantage of power is that you can do better” is believed by Baltasar Gracian. Power is much more than pure confidence; it leads to beneficial outcomes. Effective leaders grasp how to wield power and use it to accomplish their goals. 

(Source: Tremoloda 2015)

Today “Netflix” is the market-dominant leader of online video streaming businesses. Netflix gave birth as a DVD rental company that was founded by Marc Randolph and Reed Hastings in 1997. Netflix started a team with 30 people and 925 movies to give on rent. Fostering, in 1998, Netflix launched the webpage and changed the payment mode to 'Monthly Subscription' from the 'Pay per rental' model. In 2006, the widespread use of the internet apart from the TV networks, Netflix launched an online media streaming service (Vania 2019). Nowadays, Netflix dominant the online entertainment streaming business by setting up an online library for subscribers with a series of superhit videos, movies, documentaries, series, and films. Today, Netflix operates 190 countries and generates approximately $15 billion annually, with 125 million subscribers from the United States and global regions (Hub 2019). It is a peek of how Netflix skyrocketed to the mountain peak today.

To be a passionate story, we cannot omit the leader behind the success story of Netflix. Reed Hastings, CEO of Netflix, who changed Big Five personality leadership traits, became friendly, cooperative, and level of neuroticism also increased and possessed "Visionary Brilliance." Hastings used Democratic style, which is to encourage employees more participative and taking feedback and motivating them. Hastings is confident in his leadership power and exclaimed by “Netflix CEO Reed Hastings Takes Pride in Every Decision He Does Not Make” (Venkatraman 2018).

Different Forms of Power 

Power is much more than pure confidence. It is a vital tool for endorsing change within your sphere of influence. To support that, Cangemi stated, "Power is the individual’s capacity to move others, to entice others, to persuade and encourage others to attain specific goals or to engage in specific behavior; it is the capacity to influence and motivate others" (Cangemi 1992). This define as power is a leader’s potential to influence the activities of others toward accomplishing a goal. Without a source of power, there can be no leadership. In 1959, John French and Bertram Raven issued "The bases of social power" which included five distinct types of power (Raven and French 1959).

1. Coercive power - Impose sanctions or punishment to gain compliance

2. Reward power - Provide rewards or recognition to gain compliance

3. Legitimate power - Influence the activities of others based on job title or position

4. Expert power - Respect gained based on skills, expertise or experience

5. Referent power - Positive personal traits or integrity

Upon further study of Netflix’s leaderships, discovering the coercive power and legitimate power is the most applying among five sources of power. Nothing much said about the other powers used by Hastings. 

Coercive power – it is based on the leader having control over what happens if followers do not act as required. It is also problematic and can abuse due to a leader relies on threats, bullying, and "or-else" language to "motivate" those that are beneath them. This power contributed to negative connotations. It can lead to fear, dissatisfaction, and resentment for the people who work for the organization. In operant learning, the person has the power to administer negative reinforcement.  

Legitimate power – it is the typical “command and control” structure that is employed by the Military world. It is ensuring that there is someone to make a decision (good or bad) and that someone is responsible. It represents the formal authority to control and use organizational resources. People tend to associate power with the concept of hierarchy. Legitimate power can be an excellent first step to comply with effective leadership if it imposes with other three types of powers, 

Reed Hastings (Source: Business Insider)

Powers - Effectiveness vs. Pitfalls

Though Hastings successfully acquired Netflix, it does not mean he was a good CEO out of the gate. Hastings is initially an ineffective leader at his first Pure Softwares company. He used Coercive power being as autocratic leaders. He used to criticize his employees for their dumb ideas and used methods like "rolling his eyes."  I disagree with the leaders who believe Coercive powers; the management should use it carefully. If the power has fallen to the wrong hand, it may lead to having unhappy employees, which can be harmful or unmotivated. Finally, they may resign or adopt a “work to rule” attitude. To support the clause, Hastings was admitted at The New Yorker’s TechFest as “I was not doing a very good job as a manager.” (McAlone 2016) for being wrong in his leadership.

Hastings has opened his Netflix’s CEO new chapter by imposing Legitimate power efficiently and create the culture at Netflix is different. Today, Hasting's leadership, driven by unique company culture, become Netflix is famous in Silicon Valley. Hasting contours the Legitimate power by stating zero tolerate either failing employees or brilliant jerks. It urges freedom combined with responsibility and is an honest culture. Netflix employee stated that "If you are not working out for whatever reason, there is no reason to keep you." It has shown that Netflix will not be reluctant to cutthroat the dead weight. Nevertheless, Legitimate power is the best suit for the leader like Reed Hastings, who has success in authentic leadership. I do not think Netflix management will omit to accomplish by reward return upon the success of the individual outcome. This hypothesis precedes employee motivation. By contrast, reward power for a leader is not compulsory since the employee is under a contractual obligation to complete the tasks and already rewarded for this through the salary (Leadership Power 2019).

For immediate success, I strongly agree with Hastings, who belief in Coercive and Legitimate power. However, management could not ignore the correlation of two opposite of different powers (Eg. Increases coercive and referent power in team members' eyes) (Moriarty 2020), and sole leadership power will not be the best resolution for the organization.

Conclusion 

To conclude, power can be useful and pitfall to an organization. The result may vary as positive or negative, depends on the power fallen into the leader's skill and experience-rich hands. The above findings attest that Coercive and Legitimate powers can be either enhance or diminish the effectiveness of the individual leadership styles. If a question raised “Is there one best and preferred source of power?”, the answer will be “Yes” perspective with the alteration of depending on the situation, what you are aiming, and whom you are dealing with.

Reference

Leadership Power (2019) Leadership Power [online] available from <https://www.learnmanagement2.com/leadership%20power.htm> [24 April 2020]

McAlone, N. (2016) Netflix CEO Reed Hastings Explains Why He Was Initially an Ineffective Leader at His First Company, Business Insider - Business Insider Singapore.

Moriarty, T. (2020) 7 Sources of Leadership Power [online] available from <https://www.plantservices.com/articles/2011/06-human-capital-leadership-power/> [23 April 2020]

Netflix Business Model | How Does Netflix Make Money | Business Strategy Hub (2019) available from <https://bstrategyhub.com/netflix-business-model-how-does-netflix-make-money/> [25 April 2020]

Raven, B. and French, J.R.P. (1959) The Bases of Social Power [online] available from <http://www.communicationcache.com/uploads/1/0/8/8/10887248/the_bases_of_social_power_-_chapter_20_-_1959.pdf> [23 April 2020]

Vania, A. (2019) The Success Story Of Netflix And It’s Next Chapter Of Progress | TRooTech [online] available from <https://www.trootech.com/the-success-story-of-netflix/> [23 April 2020]

Venkatraman, R. (2018) Why Netflix CEO Reed Hastings Takes Pride in Every Decision He Does Not Make [online] available from <https://www.inc.com/rohini-venkatraman/why-netflix-ceo-reed-hastings-takes-pride-in-every-decision-he-doesnt-make.html> [24 April 2020]