Organizational Politics:
The Seamy Side of Power

Week 10, Friday

Psychology 360
Outline
I. The nature of organizational politics
II. Examples from the RJR Nabisco case
III. Did anybody win?
The Nature of Organizational
Politics
behavior not approved by the organization
designed to influence others
achieve self-interested goals
Breeding ground for politics
areas where policies are unclear
upper management
RJR Nabisco Examples
scapegoating -- Johnson looking for someone to blame for Premier
alliances-- a) Johnson’s obsequious relations with board members; b) recruitment of financial backers
RJR Nabisco Examples
secrecy -- a) plotting surrounding LBO; b) suppression of Premier test results; c) concealing Johnson’s cut
image building -- Johnson’s obsession with perks
Fallout
Premier failure leaked to press
details of management’s compensation leaked to press
high-gloss style fueled resentment
board ultimately balked at Johnson’s greed
Did Anybody Win?
Winners:
Johnson walked with $53 million
Wall Street firms generated $1 billion in fees
Greeniaus retained as Nabisco chief
Losers:
Cohen fired
Premier killed
RJ Reynolds employees and citizens of Winston-Salem
Contributing factors
wild greed
massive egos
easy availability of capital
the zeitgeist
Copyright © 1996, The Regents of the University of Michigan, All rights reserved.
Revised - November 4, 1996