Management Power and Employee Empowerment: The Case of Uber

Introduction

Power can be defined as the capability of an individual or a group to influence others and make them act in a desirable way. Power is an instrument that can be utilized to produce either favorable or unfavorable outcomes in companies. It is also valid to say that, depending on the way it is used, power can either stimulate positive and productive behaviors in employees or can foster their disengagement. Considering this, organizations must decide wisely how they allocate power among different employees and how they want to approach leader-employee interactions. It can be argued that overly authoritative leadership styles and strictly hierarchical workplace structures in which leaders and superior managers have all the power may be detrimental to enterprises, especially when those in power fail to conduct ethically and professionally. Conversely, employee empowerment and involvement in decision-making may help to create a good organizational climate and culture conducive to better outcomes in multiple areas of performance.

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The present report will focus on the analysis of power relationships in Uber, a digitalized transportation company that was launched in San Francisco in 2009 by Travis Kalanick and Garret Camp. Within ten years after its launch, Uber managed to extend its operations to 77 countries (Nkwabi 2018). According to Jordan (2017), the ability to capitalize on innovative technologies and present-day demographic trends is the main factor defining Uber’s growth. Regardless of significant success, the company’s image has recently suffered due to a bad corporate culture that promoted sexism, harassment, and other forms of misconduct on the part of managers and leaders (Sawyer & Thoroughgood 2017). Such a situation indicates that Uber’s managers may have too much power over their subordinates, which can do a lot of harm to the organization.

Taking into account the case of Uber, the present report will aim to identify the advantages and disadvantages associated with different power relations patterns in companies. The paper will include a discussion of various management power forms that were adopted in Uber under ineffective leadership, as well as their effects on the company’s performance. Consequently, the employee empowerment practices that are currently employed in the company will be evaluated, and their potential impacts will be revealed. Additionally, the links between staff empowerment and motivation will be explained, and, based on that, appropriate recommendations for improvement will be made. Overall, the topic of power abuse and employee empowerment is of great interest because it affects the well-being of every worker regardless of which position in a company they take. The analysis of power forms is important to gain greater insight into the issue and come up with practical solutions that would benefit both firms and employees working for them.

Analysis

Leadership and Types of Management Power in Uber

Power is usually associated with formal authority, yet it may be granted to informal leaders (including lower-level employees) in the organization as well. When speaking of Uber before the resignation of Travis Kalanick, who was accused of unethical conduct and lack of managerial skills, the formal authority took a dominant role there and was closely associated with the company’s hierarchical workplace structure in which each compartment is further divided into the smaller ones (Dudovskiy 2018).

In an organizational hierarchy like this, each of the smaller compartments has a responsible manager who supports its operations and reports activities and outcomes to managers in higher positions. According to Taucean, Tamasila, and Negru-Strauti (2016), in such companies, managers normally utilize formalized communication and information sharing patterns. Considering all these characteristics of Uber’s structure and communication processes, it is valid to say that the type of power that was prevailing in the company was the legitimate power, which “comes from an elected, selected, or appointed position of authority and may be underpinned by social norms” (Taucean, Tamasila & Negru-Strauti 2016, p. 70). Overall, this power relies extensively on the position of an authoritative manager or leader within the hierarchy.

It is also valid to say that some elements of coercive power were present in Uber during the time of Kalanick’s leadership. This type of power uses force, external threats, and various social, emotional, political, and economical means to make subordinates comply (Taucean, Tamasila & Negru-Strauti 2016). Clearly, it is associated with the authoritarian leadership style, which approaches employees as a means to the achievement of certain objectives and goals and frequently utilizes punishment to motivate workers and make them behave (Taucean, Tamasila & Negru-Strauti 2016).

Coercive power is inherently abrasive, and it is frequently (though not always) linked to power abuse. As stated by Singh (2009), bribery is an example of an external threat that serves as a source of coercive power. When speaking of Uber, coercion has been manifested there in multiple instances of workplace harassment and discrimination. In one such case, a victim was threatened to receive a retaliatory performance review from a manager who harassed her (Tippett 2017). Moreover, the fact that the harasser was protected by the organization and did not bear any serious penalty for his actions (Tippett 2017) may indicate that the problem of power abuse was a systematic, cultural phenomenon in Uber.

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While the presence of the formal and the coercive sources of power was apparent in Uber, it does not mean that managers did not and do not also exercise some more favorable power forms: reward power and expert power. The former type implies “the ability of the manager to confer or withhold rewards such as money, privileges, promotion, or status” (Singh 2009, p. 167). Reward systems are employed in all companies to exhort employees to work, and Uber is not an exception. For instance, about a year ago, it has launched a reward program, Uber Pro, to recognize hard-working drivers rendering high-quality services to the company’s customers (Lekach 2018). The program offers upgrades in drivers’ status levels, from partner to diamond, that is associated with distinct amounts of benefits, including discounts for car maintenance, extra earnings, free tuition, priority support, and so forth (Lekach 2018). It is possible to presume that a significant portion of workers would strive to receive those benefits and, thus, would be motivated by Uber’s reward incentives to work more.

As for expert power, it implies that managers are selected for the positions of increased responsibility based on their aptitudes, experiences, and acumen. It means that managers become able to influence subordinates and gain their trust due to superior expertise and knowledge (Singh 2009). The fact that the manager in the previously described harassment incident in Uber was regarded as a “strong performer” by HR managers may indeed indicate that the organization’s managers have a proven ability to perform (Tippett 2017, para. 1). Nevertheless, even if that is the case, the manager’s competence did not excuse his misconduct and abuse of power. Overall, it is possible to say that by providing more power to managers and limiting the power of lower-level workers, Uber generated significant disadvantages that may harm the company’s performance in the long term.

Disadvantages of Uber’s Power Management Approaches: Effects on Corporate Culture

Before discussing the drawbacks of Uber’s management power approach, it is important to analyze why the firm allocated power in such a way in the first place. It is valid to call Uber a primarily profit-oriented and task-oriented enterprise. According to Rüzgar (2018), task management requires proper coordination of organizational activities and operations with the main focus on the administrative sphere and supervision of behaviors aimed to achieve strategic targets and goals. To complete tasks effectively in such large enterprises as Uber, formal management instruments, including standards and work-related procedures, are of tremendous help as they allow reducing uncertainty and risks by promoting a clear sense of how duties must be fulfilled among employees (Rüzgar 2018). Reward and punishment practices also help control the quality of work and, partially, stimulate productivity. Nevertheless, task-oriented leadership, as well as legitimate and coercive sources of power associated with it, has a substantial weakness. When the rules are too strict, and the threats in the workplace environment are excessive, employees may eventually become fearful, demoralized, and less creative (Rüzgar 2018). As a result, the organization will not be capable of attracting and retaining talents.

The lack of employee consideration in Uber is reflected in its previous corporate culture, which the new CEO, Dara Khosrowshahi, currently tries to revive and improve. As it was previously discussed, the company maintained toxic and unethical behaviors of its leaders for a significant time and, according to Sawyer and Thoroughgood (2017), such behaviors were adopted by the organizational leaders’ followers (managers) across all levels who either were naturally prone to obedience or actively participated in damaging activities. It means that when the ethical principles are not embedded in the organizational culture and when leaders’ actions do not serve as a good example, the risk of power abuse among workers in superior positions increases.

In accordance with Herzberg’s dual-factor theory, misuse of power by managers may be regarded as a negative extrinsic hygiene factor. It leads to subordinates’ job dissatisfaction and may interfere with efforts to motivate them (Trenn 2016). Although extrinsic factors are not correlated with employee motivation as such, the improvement of workplace conditions, relationships, and security are necessary to make workers happier and increase their morale. The type of power that allows achieving this is reciprocal power. According to Singh (2009), it comes from fundamental moral principles, human-centeredness, consideration of stakeholder needs, and focus on collaboration instead of patronizing. Reciprocal power requires managers to have a certain mindset aimed to benefit people and put their interests higher than the personal or the organizational ones or, at least, value them equally. In order to exercise this type of management power, Uber will need to employ more efficient HR practices and ensure that selected managers have the necessary personal traits and skills to behave and supervise others ethically. Moreover, the company will need to modify its culture by making it more human-centered and empowering employees across all organizational levels more.

Employee Empowerment

The trend for employee empowerment is gaining increasing importance in the present-day business environment as it is considered to generate multiple advantages for organizations. Referring to previous research findings, Sung and Park (2016) note in their article that employee empowerment leads to improved, innovative behaviors, increased job satisfaction, organizational commitment, team, and organizational performance, and overall better attitudes to work. In addition, Baumgartner (2014) reveals that empowerment enhances results in improved quality of service that, in its turn, may help companies gain greater competitive advantages.

As such, the concept of employee empowerment implies the provision of opportunities for lower-level workers to participate in organizational decision-making. In other words, empowerment means that employees share power that is traditionally possessed by managers in firms. Sung and Park (2016) identify five areas in which employees may be empowered: “information sharing (downward, upward and horizontal communication), upward problem solving (autonomy and responsibility), task autonomy (team-managed or self-managing teams), shaping of attitudes (relationships and roles) and self-management (authority and involvement)” (p. 393). Based on this, it is valid to say that the empowerment of workers usually takes place in organizations with human-oriented cultures and more democratic control measures.

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The main of the abovementioned areas in which Uber endows a significant portion of its employees – partner-drivers – with power is task autonomy. Although Uber drivers cannot be regarded as the company’s employees in the conventional sense of the term, they nevertheless play an essential role in generating profit for Uber and, thus, are included in the present analysis. The sharing economy model implemented by the company implies that drivers utilize their private physical assets (cars) to render services to customers and, therefore, they have a chance to choose the time of work and the overall workload. According to Berger et al. (2018), who studied job satisfaction of Uber drivers in London, the flexible work arrangement is one of the primary reasons for drivers to work for the company, and the majority of them value autonomy more than monetary compensation. However, Berger et al. (2018) also note that in spite of the fact that Uber drivers tend to report higher levels of life satisfaction as self-employed individuals, they are still prone to greater anxiety and stress, which may be linked to below-the-average income outcomes. Overall, it seems that in the case of Uber, work flexibility and autonomy are correlated with significant tradeoffs on the part of partner drivers.

It is possible to presume that individuals who are satisfied with their work-life balance and job are likely to provide higher-quality services. At the same time, it is also valid to say that stressed workers are likely to perform poorly. Nevertheless, it is hard to make any decisive conclusions regarding the effects of Uber drivers’ task autonomy and flexibility on the quality of their service since research evidence on this matter is absent.

Since 2017, when the first negative publicity about Uber’s unethical treatment of workers appeared in mass media, the company launched several initiatives to empower its permanent employees. The company launched Employee Resource Groups (ERGs) dedicated to the promotion of an inclusive corporate environment. Each of the ERGs focuses on the advocacy for the rights of a certain minority group (women, LGBT community, Latino individuals, and so forth) and is managed by employees themselves (Uber Technologies Inc. 2019). In this way, workers now have a platform to express their opinions regarding the situation in the organization and its culture, in particular. Moreover, information sharing and open communication about the existing problems allows forming positive attitudes to the workplace by developing constructive employee-leadership relationships and advancing workers’ roles in the company, making them more involved in the decision-making regarding the corporate culture and other relevant internal processes.

Employee Empowerment and Motivation

It is not clear whether permanent employees in Uber are provided with sufficient autonomy and responsibility in job-related problem-solving activities, whether they are allowed to approach task management in their own unique ways, and which level of authority they have within their teams. Nevertheless, the company has very positive employee reviews at Glassdoor.com. Some workers state that they feel empowered and autonomous, while others praise a favorable, supportive, and collaborative work environment (Uber n.d.). The results of Uber’s employee survey that leaked at the end of 2018 also indicate a relatively good rate of job satisfaction among workers. 58% of individuals reported being excited about their work, 60% – that they have access to resources needed to perform their job well, and 63% – that they feel their work is important and impactful (Meyer 2019).

The abovementioned measures – interest in work, access to knowledge, and sense of meaning – are of great interest in the present analysis since they are interrelated with psychological empowerment defined as “intrinsic task motivation in which individuals feel a sense of control in relation to their work, including meaning, competence (self-efficacy), self-determination and impact” (Sung & Park 2016, p. 392). This definition indicates that such intrinsic motivation factors as achievement, recognition for attainment, employees’ interest in work itself, responsibility, and growth opportunities can be regarded as sources of workers’ informal power (Trenn 2016). By increasing their competence and self-efficacy and engaging in work processes more, employees become able to influence their organizations’ performance. However, such an outcome may be impossible to achieve if the work environment is not supportive and if individuals do not have an interest in their jobs as such.

It is worth noticing that the recent Uber employee survey results demonstrated an improvement in employees’ perceptions and attitudes since the resignation of the company’s former leader, Travis Kalanick (Meyer 2019). Nevertheless, it is valid to say that in order to enhance the situation further – make workers more satisfied, involved in their job, and committed to the company – the emphasis should be made on the psychological empowerment of personnel. The allocation of management power must be aligned with efforts to modify the extrinsic factors in the work environment and to provide more opportunities for employees to realize their potentials.

Recommendations for Improvement and Organizational Policy Development

Traditionally, decentralized decision-making is deemed to be linked to greater employee empowerment (Nassar 2018). However, Ayob and Zainal (2011) state that “the core element of empowerment involves giving employee discretion (or latitude) over certain task-related activities without neglecting the responsibilities that come along with it” (p. 120). It is possible to suggest for Uber’s management to choose between these ways of sharing power with employees considering individual traits of their subordinates, as well as the overall characteristics of departments in which their work.

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Decentralized decision-making may be particularly beneficial in the organizational units where innovation and creativity are important. Decentralization leads to increased innovativeness since it involves open discussion, challenging, and collaborative generation of ideas (Lee, Min & Lee 2016). At the same time, a sufficient level of autonomy and responsibility can benefit employees working across various organizational levels and departments. As Slemp et al. (2018) note, support of employee autonomy on the part of leaders and managers is positively associated with the fulfillment of workers’ basic needs, achievement of greater well-being, and favorable job-related behaviors. Nevertheless, it is essential to take into account whether workers have sufficient expertise and experience to perform their tasks independently. Thus, another important part of employee empowerment is the provision of the necessary information and educational resources to staff members in order to ensure that they feel self-efficient and competent.

Conclusion

Based on the analysis results, it is possible to conclude that employees must be provided with greater power in organizations. However, it does not mean that managers should be deprived of power at all. On the contrary, they play an essential role in the empowerment of workers because, by its very definition, empowerment means the sharing of power among subordinates and the delegation of responsibilities to them. However, it is pivotal to exercise the right power form, and, as it was suggested, reciprocal power is probably one of the most favorable of them since it requires the development of a human-centered organizational culture and the implementation of ethical leadership frameworks.

The previous experience of Uber demonstrated that power abuse by managers and leaders and the lack of subordinates’ power to influence anything at their workplace lead to low employee morale, low staff retention rates, and job dissatisfaction. Due to these negative outcomes, any firm can bear significant losses due to reduced productivity and competitiveness. At the same time, as the company started to enhance its culture and empower team members to speak up and share opinions, their attitudes commenced improving. Thus, the company should continue to empower its employees further by aligning organizational structures and extrinsic environmental factors with the intrinsic ones. In addition, Uber should continue to promote ethical conduct among managers in order to prevent cases of power abuse in the future and teach them how to establish more constructive and motivational power relations with subordinates.

Reference List

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