Power equals influence. It's personal, too, residing within those who wield it. Sometimes a position of authority within an organization lends power to a person, but borrowed power isn't necessarily as effective as power derived from leadership.

Every organization has leaders who hold no positional authority yet somehow wield influence while managers who should be able to command respect flounder.

Small-business owners wanting to enhance their influence and that of their managers should consider the five sources of power in organizations. The first three come with position while the other two are available to anyone.

Legitimate Power Often Increases

Legitimate power comes from a position of authority and increases the higher a manager rises within the organizational hierarchy. Once awarded legitimate power, its wielder has influence because he can set and enforce standards and use and distribute organizational resources.

Managers can build upon a legitimate power base through other sources of power, which transform managers into leaders. Leaders inspire behaviors in others without resorting to their legitimate authority alone.

Coercive Power Is Based in Fear

Coercive power is bestowed on a person through position and is based in fear. Subordinates follow a manager's directives to avoid being suspended or fired. Employees also know that rewards such as raises, plum projects or promotions can be held back if standards of work or behavior are not met.

Coercive power loses some of its effectiveness if administered unfairly. Even so, it is seldom one of the types of power in leadership that managers aspire to most.

Reward Power Teems with Greater Positivity

Reward power comes from a manager's ability to give rewards – not only raises and promotions, but also favorable reviews, shifts, positive attention and mentoring.

If coercive power is the stick, reward power is the carrot. And, when the rewards are genuine and well-deserved, you may even wish to think of the carrots as organic; they're that good.

Expert Power Is Usually Earned

When a person possesses expertise or abilities that others value, that person gains influence. And he can become keenly aware of the importance of power in leadership. Anyone can gain expert power by acquiring skills, knowledge or experience.

Sometimes the power of an expert is perceived as so great that the expert is elevated in the minds of others, as often happens with doctors and attorneys. In a workplace, veterans often have influence though they do not hold any legitimate power.

Referent Power Charms

Referent power also goes by the term "charismatic power." Some experts maintain that everyone possesses some referent power. This point may be debatable, but it's fair to say that the qualities that attract, entertain or rivet some people may leave other people cold.

As a source of power, referent power is unpredictable in this way. It's subjective. But when everybody in an organization is equally enraptured, referent power can be a force to be reckoned with, even if the person lacks technical or intellectual ability.