CORPORATE POWER AND LIFESTYLE
DEFINITION: The authority to get things done; the clout to make decisions with the stroke of a pen.
THE RULES: True power in an organization lies with the top management decision makers-die chief executive officer (CEO), president, chief operating officer (COO), executive vice-presidents (EVP)/divisional presidents, and senior vice presidents (SrVP). Members of this group make up the senior executive level of an organization. In addition to defining, perpetuating and safeguarding the corporate culture, this level sets the strategic direction of the company and makes policy decisions based on this direction. These decisions result in the way the company conducts business. Rarely, if ever are these decisions challenged.
Persons who hold senior level positions have historically risen through line positions-jobs with direct contact with the customer and/or product, i.e., sales, marketing and manufacturing. Senior level executives must have had bottom-line responsibility. It is virtually impossible to get a senior position running a business if you don't know how the business runs. Depending on it's culture, senior level managers may come from inside or outside the organization.
Senior level executive compensation packages are tied directly to the company's performance because these individuals have ultimate profit and loss responsibility. Compensation packages include stock options and million-dollar bonuses. For example, IBM Chairman Louis Gerstner received $12.4 mil in salary plus $4.7 mil in stock options in 1994 for turning the company around (WSJ. March 1995). In addition, executives receive perks such as housing allowances, cars/limos/drivers, entertaining budgets, lots of travel, membership in private clubs, etc. The silent language of material possessions is strongly felt at the senior executive level. Even the most casual
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