case Studies

IN SPORT MANAGEMENT http://dx.doi.org/10.1123/cssm.2014-0039

Volume 4 Case Study 13

A Case Study on Power and Politics in Organizations

Florian Hemme
The University of Texas at Austin

Marlene A. Dixon
Troy University

James Park has been hired as the new CEO by the board of directors of GoSports Inc., a large national sporting
goods retailer, which has been battling economic and internal issues over the previous years. Despite Park’s
experience at the helm of large companies in need of profound strategic and structural change, in his new
position at GoSports he has been “butting heads” with a powerful collective of executives unhappy with the
hire and threatened by the new CEO’s accolades. To complicate matters, rumor has it that the decision to hire
Park was far from unanimous, with various factions vying for control in the company, waiting for a chance to
fill the power vacuum a quick departure by Park would leave behind. After two weeks with the company, Park
is called before the board of directors to report on the progress made and how he plans to return GoSports to
its former glory.

Keywords: power, organizational behavior, organizational politics, organizational performance, group dynamics,
conflict

Two weeks ago, James Park was hired as CEO of GoSports Inc., a major retailer for sporting goods and apparel in
North America, operating over 300 stores in all 48 contiguous states. His task was to revitalize the company’s culture
and breathe new life into the firm’s stagnant operations. However, soon after he started his new job in high spirits, Park
realized that a handful of longtime executives were unhappy with his hire and, apparently threatened by the new CEO’s
accolades, resisted every idea for change. Additionally, various department heads believed that strengthening their
respective divisions was the preferred way for turning around the company; some even actively attempted to subvert
Park’s revitalization efforts by withholding information, lobbying against him, and instructing their subordinates to
“keep doing what we have always done.”
Park knew he was under close scrutiny to show results, as the board of directors had made it clear that they expected
him to live up to his reputation – and the generous signing bonus. To complicate matters, rumor had it that the decision
to hire Park had been far from unanimous. In fact, various factions inside GoSports (including some inside the board
of directors) were vying for control in the company, hoping Park would not last long.

GoSports Inc. and The Sporting Good Retail Industry

GoSports Inc. was founded in 1973 and quickly grew from a small neighborhood store to a national chain. Headquartered
in Philadelphia, PA, the Fortune 500 corporation provided customers with equipment for any sport, ranging from weight
training to fishing. With this diverse product range came increased pressure to maintain a lean operation, and at the same
time be able to meet consumer demand at the lowest inventory possible. After the original founder, Edward Sutton, had

Florian Hemme is with the Department of Kinesiology and Health Education, The University of Texas at Austin, Austin, Texas.
Marlene A. Dixon is with the Department of Sport Management, Troy University, San Antonio, Texas. Address author correspondence
to Florian Hemme at f.hemmesd@gmail.com.

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99
 100  Hemme and Dixon

passed away, his three children took over the company. The oldest, Michael, and youngest, Jeannie, were members of the
board, whereas the middle sister, Sarah, was director of finance. Most executives and high-ranking managers had been
with the company for a long time and worked their way up from the inside (figure 1). In fact, most of them were from
the greater Philadelphia area and had started as seasonal employees during high school. GoSports valued consistency
and familiarity and most of the senior management shared personal interests and hobbies. At the same time, manage-
ment at GoSports largely ruled by authority, emphasis on hierarchy, and favoritism. To complicate matters, there had
been repeated disagreements over the years regarding the strategic direction of the company, with varying coalitions
attempting to steer GoSports in one direction or another. These battles for internal control had not gone unnoticed, and
mid- and low-level management had grown increasingly wary of being caught in the upper echelon’s power plays.
Over the past few years, GoSports had experienced a substantial decline in sales and revenue. Although part of these
losses could be attributed to the overall shift toward online retailing, which favored smaller, specialized operations with
less overhead, the downturn was in large part due to a series of missed opportunities and slow reactions to changing
market conditions. GoSports’ management had proven unable to react to decreased foot traffic at physical stores and
changing consumer preferences. Persistent disagreements and personal issues stymied effective decision making at the
company. Competitors had seized on GoSports’ inability to evolve and had managed to capture significant market share.
As numbers continued to deteriorate, the majority of the board of directors decided the company would benefit from
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an outside executive to revitalize the former industry leader and had pushed for the hire of Park. While shareholders
and employees welcomed the bold move, it was unusual for GoSports to forsake its long-standing tradition of filling
upper executive positions solely from within (Figure 1).

James Park
Charming and charismatic, with a certain penchant for flashiness, Park was well known in the industry for his ability to
develop long-lasting relationships, spot trends, and quickly exploit opportunities. Born and raised in San Francisco, he
attended Stanford University and launched his own sports and event management company in Los Angeles during his
senior year of college. He eventually sold it to his partners after they had been able to establish the company as one of

Figure 1 — Organizational chart.

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 Power and Politics in Organizations   101

the most innovative and well-managed firms in the industry. His success in the highly competitive entertainment capital
of the world made him a premier target for corporate headhunters and he eventually moved into a mid-level executive
position with one of North America’s largest sporting goods manufacturers. During his ensuing 17-year tenure, Park
quickly rose through the ranks and was integral in revitalizing the company, turning it into a multi-billion dollar business.
During that time, Park spent several years working in Europe and Asia, where he still maintained many connections.
Park possessed an astute ability to understand people’s needs and desires and to gather support for his ideas and was
known to quickly deal with those trying to stymie his efforts to guide his companies in a better direction. While lower
and mid-level management often admired him for his approachable demeanor and honesty, fellow high-level executives
had in public referred to him as a “shark” after Park had successfully pushed for organizational change against their
will. At GoSports, the 45-year old Park, replaced 67-year old H. Grimm, who had been with the company for close to
35 years. The younger employees at GoSports welcomed the addition of Park, as many felt that over the years, senior-
ity and personal connections had taken precedence over hard work, creativity, and merit. Many were excited about the
fresh blood and the new vision Park brought with him.

The First Day

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On his first day in the office, Park made it a point to walk around, shake hands, and to get to know employees of all
ranks. Immediately, people noticed how different his warm and approachable presence was from Park’s predecessor
and the cabal of current upper management. One of GoSports’ key account managers later commented, “You can tell
he has been around the block a few times. His entire demeanor is different; he knows what he is talking about. I think
he will be great for us, especially with all of his international experience.” After speaking with a group of executive
assistants, one of them was particularly impressed by Park’s personable nature. She said, “What a charming guy! He
seemed genuinely interested in what people had to say. When I ran into him a little later in the day, he even remembered
my name.” Park even took the time to comment on one of the technology managers’ wall art. “I have had that Phillies
mural for years now and none of the other managers has ever said anything. We chatted about baseball for a couple of
minutes; he seems like a great guy.”
Later that day, Park gave a speech at a “town hall” meeting, the first in company history. Park planned on making
these meetings a regular staple of corporate communication and employee involvement, just like he had done at his
previous employer. His speech was emphatic, passionate, and left an instant impression with most of the employees.

It is an incredible honor to be here today to address you, my team, as your new CEO. First, I would like to thank
the board of directors for putting their trust in me and for the opportunity to be part of a great organization. I would
also like to thank all of you for the warm welcome you have given me this morning. I already have had the chance
to speak to many of you and I hope that I will be able to meet everybody over the next couple of weeks. Today
marks the beginning of a new era here at GoSports and I would like all of you to be a vital part of the process, for
without you there is no GoSports and without your contribution we cannot succeed. It is my first day at work and
I want nothing more than to get started, so let me keep this brief. GoSports faces a great number of challenges. But
with those challenges come opportunities, opportunities we will seize to our fullest advantage. You already have
an experienced management team that has been weathering the storm with you and now it is time to take matters
back in our own hands, assume responsibility for our actions, and take GoSports back to where it belongs, the top.
I pledge that I will always be available to every single one of you for your concerns, ideas, and feedback. We will
broaden our channels of communication and encourage your creativity and your input. Later today, I will meet
with your management team to plan our next steps. You will be kept informed during all stages of the process and
your concerns will be taken into account. You are the power behind the changes we will have to make and I look
forward to walking this path with you.

Park felt elated after that brief speech. He could tell that people liked what they had heard. During the speech,
he had noticed several people nodding their head approvingly and a couple of employees approached him afterward
expressing their personal welcome. GoSports’ employees appeared to take a lot of ownership of their company and
their work. Park hoped to turn their attachment into a willingness to make personal sacrifices for the company.

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 102  Hemme and Dixon

Unfortunately, things turned for the worse later that day when Park met with the rest of the executives. Among them
was Luc Livingston, director of Operations at GoSports and heir apparent to the throne before the board had decided on
Park as the new CEO; Betty Carson, director of Corporate Partnerships and Development; and Robert Harkin, director
of Marketing. Also present was Director of Finance Sarah Sutton, as well as Michael and Jeannie Sutton. Park was
scheduled to meet with the remaining board members the following week. While the majority of the employees and
mid-level managers had given Park a warm welcome, the atmosphere at the executive meeting was frosty. Livingston
opened the discussion by remarking sarcastically, “That was quite the speech you gave there. You better have a good
secretary, now that you gave everybody permission to talk to you at all times of the day. People better still work and
not spend their hours running to you with ludicrous suggestions.”
During the meeting, although never openly questioning Park’s suitability to run GoSports, Livingston had remained
distant and dismissive, almost abrasive. Despite Park’s attempts to keep the conversation upbeat and professional, the
director of Operations appeared to harbor ill will, making petty attempts to show how much more he deserved Park’s job.
At one point during the meeting he remarked, “Why don’t you let us fill you in about how things are done here at GoS-
ports? I am sure you had your way of running business in your previous position, just like we do here. After all, most of
us have been here a long time. Well, except Sarah, she is still learning, too.” Park, not willing to muddy the waters on his
very first day, politely replied by quickly covering some of his past work and then swiftly steering the conversation toward
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GoSports and the challenges ahead. He sensed that little would come out of having a group meeting, which Livingston
would undoubtedly attempt to dominate, and suggested to meet with the other executives and board members individually.

Meeting with Luc Livingston

Luc Livingston, director of Operations, had started out at GoSports as a seasonal employee during high school and interned
at the company’s headquarters during summers while attending the University of Pennsylvania in Philadelphia. He had
joined GoSports after graduating with highest honors and had quickly put his mark on the company’s operations. While
he could be amicable when things were going well, he was known to have a short temper when waters were rough. He
was incredibly skilled at navigating office politics, which enabled him to strike up beneficial relationships with a number
of high-ranking executives early in his career. Under the tutelage of Howard Grimm and the protection of Michael Sutton,
Livingston had been groomed to succeed Grimm whenever the time was right. He was extremely hungry for power and he
had been enraged when he found out that he had been passed over for the job of CEO. He vowed to show everybody that
the board had been pushed to make the wrong decision. He was planning to play along with the hiring of Park, but had
already begun thinking about ways to ensure the new CEO’s quick failure. Unbeknownst to Michael Sutton, Livingston
ultimately desired to be chairman of the board and viewed the CEO spot merely as a stepping stone to that position.
As Park had expected, Livingston provided little to no constructive information during their meeting. However,
he was not foolish enough to blatantly question Park’s authority or overtly express his anger about not being chosen
by the board to become the new CEO. Rather, he spent most of the time touting the achievements of his department,
highlighting his own role in previous successes, and his long history with GoSports:

You see, James, I have been here a long time and I have been fortunate to work with a number of great people.
But let me tell you, I have also seen people fail quickly because they didn’t understand our culture. We are a big
family here and many of us have started from the very bottom and earned our way up. That kind of dedication and
commitment is what has made us so successful and it will be key in our continued success. For example, when I
started here all those years ago, we didn’t know the first thing about operations and how to run a company. Now,
well, I built that success. GoSports needs someone in charge like that; someone who understands its strengths and
weaknesses, someone who understands what it’ll take to focus on the right parts of the equation.

Meeting with Michael Sutton

The oldest of the three Suttons, Michael had always been a part of GoSports. He had no immediate interest in
becoming involved with the actual business side of the company, but enjoyed playing politics and controlling things
from behind the scenes as chairman of the board, a position he effectively inherited from his father. As the founder’s

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 Power and Politics in Organizations   103

oldest son, Michael felt that everybody in the company owed him respect and reverence, and he was still angered that
his sister had managed to convince the board to hire an outsider. While no one at GoSports questioned his commit-
ment to the company and his desire to bring it back to former glory, few were convinced that Sutton spent enough time
actually involving himself in the details of running a successful operation. Furthermore, his close ties with some of the
executives made it hard for the board to remain independent and provide the checks and balances needed to control the
CEO and ensure that shareholder interests were being maintained.
The meeting with Michael Sutton on the following day solidified Park’s first impression of the chairman. Even
though Sutton was jovial, he made no secret of the fact that he would have favored Livingston to succeed Grimm, rather
than hiring an outsider. He repeatedly alluded to Park’s limited knowledge of “how things work” at GoSports and made
it a point to downplay many of the issues that plagued the company. Park could surmise that Sutton had spent little
time in the past actually paying attention to what was going on in the industry. At one point Sutton remarked, “I can’t
possibly keep up with every single detail. I have a lot of contacts, people talk to me all the time, and come to me for
advice and to introduce them to others. I expect things to work the way they should without me looking over people’s
shoulders all the time. After all, they know who they are ultimately working for.”
Most surprisingly, despite Park’s plans to meet with board members and executives individually, Jeannie Sutton, the
chairman’s sister and youngest daughter of the deceased company founder, was also present. Noting Park’s surprise, she
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explained that her brother had asked her to attend so that the new CEO could get a better understanding of “what the family
expects from him.” Jeannie Sutton was not involved in the company’s business beyond her role as board member and had
historically backed her brother, whom she adored, in important decisions, believing he knew what would be best for the
company. Much like her sister Sarah, however, Jeannie had grown wary of Michael’s bullish boardroom tactics. She was
also suspicious of the concentration of power in the hands of a few, mostly male, individuals and had begun to wonder
whether the extremely centralized decision-making process should be abandoned for a more open and inclusive approach.
Additionally, as Michael Sutton repeatedly pointed out, Jeannie had supported her sister Sarah’s push for hiring
Park, indebting her to her brother to “at least show a united front once the new CEO gets here.” She seemed agreeable
enough, yet Park sensed that she was caught in the power struggles between her siblings. She appeared guarded and
did not volunteer much information as to the direction in which she wanted to see the company head. On two occa-
sions, her brother interrupted her attempts to answer Park’s questions, after which she stayed quiet for the remainder
of the conversation.
At one point during the conversation, which was rather a monologue by Sutton, the chairman had talked about his
deceased father, the founder of GoSports:

You know, my father was a great man; he built this company from nothing, right here in Philadelphia. But there are
things he could have done differently. He lacked the vision to really take this organization to the next level, take
risks, be bold. There may have been some hiccups but I still believe we are on the right track. I have been working
hard with director Livingston to position us well with regards to our competitors and I really hope that you have
what it takes to continue down that path. I really suggest you work closely with him, let him show you the ropes. He
has been with us for a long time and he knows what it takes to succeed, both here at GoSports and in this industry.

Park refrained from taking the bait, knowing full well that Livingston had been the one groomed to be next in line
for the CEO position. Instead, he steered the conversation toward what appeared to be calmer waters, outlining some
of his ideas to improve GoSports’ operations and bottom line. Sutton found fault with most of them and repeatedly
told Park that “that won’t work with us here at GoSports.” Trying not to let his frustration show, Park left the meeting
with a sense of foreboding. He knew then that working with the chairman of the board would not turn out to be as easy
as he had hoped.

Meeting with Betty Carson

Betty Carson had joined GoSports after graduating from the University of Pittsburgh. The native Philadelphian was
responsible for negotiating philanthropic support, sponsorships, and cause marketing efforts. Due to her position,
she had access to a vast network of contacts in the industry. Additionally, she was very active in the local community

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 104  Hemme and Dixon

and had recently begun pushing for GoSports to start a formally structured community volunteer program that would
require employees of all ranks to engage with local schools, youth and children’s organizations, and animal shelters.
Reactions to her efforts had been mixed, with most of her fellow senior executives outright rejecting the notion that
they should be working alongside their subordinates. She was unsure how she felt about an outsider being chosen to
become CEO, but also believed that GoSports’ culture had long been deteriorating. In her opinion, fresh blood might
benefit the company and she was also hoping to interest the new CEO in her volunteer project.
Carson appeared to be elated to meet individually with Park. After the obligatory small talk, she steered the con-
versation toward her volunteer project. She told Park about the lack of support she had received for it, mostly because
Livingston and Sutton had quickly denounced the merit of it and others had not considered it important enough to
challenge the two men’s authority. Despite her challenges to get her project off the ground, Carson appeared to arguably
be the most connected of all the executives. She provided Park with several anecdotes that involved members from all
levels at GoSports and outside the company.

Meeting with Robert Harkin

Director of Marketing Robert Harkin had been with the company for over 20 years. He was a longtime confidant of
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Livingston, Grimm, and Michael Sutton, a member of the “old boys’ network” that had been running the company for
over two decades. Despite his close relationships with the other men on the executive floor, though, Harkin believed that
the time had come to initiate drastic change if the company wanted to survive. The current economic environment and
changing consumption habits required emphasis on different aspects of the daily business than a decade ago. Harkin
was under no illusion that GoSports had missed a number of exits on the road to continued and sustained competitive
excellence. Furthermore, he had always tried to put the company’s best interests before personal feelings and relation-
ships. Many employees considered him to be the most approachable of the male upper echelon and the people in his
department admired him for his creative genius. While his connections with Livingston and Grimm had been extremely
beneficial for his own career, he did not believe that Livingston was suitable to run a company like GoSports. Harkin
also recently had begun to question the way that Michael Sutton threw his weight around without actually contributing
to GoSports’ success. Overall, while he distrusted the outsider Park, he felt that the alternative would be even worse.
Harkin was enigmatic during the meeting with the new CEO. He talked at length about the deceased founder of
the company, a man he admired for his tenacity and creativity. Park sensed that Harkin felt a deep sense of loyalty to
GoSports as an organization rather than to the people currently in charge. When Park asked about his vision for the
company, Harkin had evaded the question. He said, “We will always need creative people, people that have the guts to
do big things, things that have not been done yet. I do not know what the future holds but I know that we as an organi-
zation may have to change a few things around if we want to succeed.” Leaving Harkin’s office, Park noticed a number
of plaques, photographs, and framed awards on what appeared to be a department wall of fame. Harkin was in some of
the pictures but most seemed to show other members of the department, often in groups, celebrating previous successes.

Meeting with Sarah Sutton

Sarah Sutton had only recently joined GoSports, after having worked for a number of financial consulting firms. After
her father had passed, she initially had shown little interest in working for the company, but the recent issues and con-
stant, at times public, disagreements had prompted her to abandon her career and join GoSports. She was concerned
about her father’s legacy and felt that her siblings were doing too little to rectify the situation. She was particularly
worried about her brother Michael being too close to Luc Livingston, whom she distrusted. As director of finance
and a member of the founding family, Sarah had successfully pushed the board toward hiring an outsider to replace
Howard Grimm as CEO. In her short time at the company, she had been able to improve the bottom line by imposing
tighter budgets and forcing departments to operate more efficiently. She was well liked and respected for her past as a
financial consultant and many of the female employees welcomed the fact that GoSports finally had a woman in charge
of a department as pivotal as finance.

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 Power and Politics in Organizations   105

Sutton had warmly welcomed Park into her spacious office decorated with several diplomas and tasteful paintings.
Park also noticed a number of awards the director had received during her previous career as a financial analyst and
consultant. She cut right to business, asking Park how his meeting with her siblings had gone. Park was unsure how to
answer. He sensed that Sarah Sutton could be a powerful ally but she was also the chairman’s sister. Equivocally, he
offered, “Your brother seems to care a great deal about this company.” She pondered his response for a moment and
answered, “He does. Unfortunately, he has no idea what he is doing and decided to back somebody who will eventu-
ally run this company into the ground.” Taken aback, Park asked who she was talking about and Sutton spent the rest
of the time warning Park about Luc Livingston. She concluded their meeting by telling Park to make sure to get the
right people on board with his revitalization efforts:

There are a number of great individuals here at GoSports, people that care deeply about this organization and that
are very worried about the direction this organization has taken. Unfortunately, old habits and structures are hard
to dissolve and re-develop for the better. You will be able to count on my support and that of many others but be
prepared to run into problems. Most of the executives have been here a long time and none of them will be too
thrilled about having their roles diminished.

Park thanked her for her advice, but at that point began to question his choice of taking the job. He had heard from
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several of his contacts in the industry that GoSports needed a profound change in corporate culture but he had not
expected the situation to be this dire.

Meeting the Other Executives

Over the course of the next week, Park also met with the other executives and was able to gather valuable informa-
tion about the company and its culture. He learned about the icy relationship between Livingston and Harkin—the
former jealous of the other’s creativity and personal relationships with his peers, and the latter increasingly frustrated
with having to work with someone who did not seem to put the company’s well-being before his own personal
agenda. Park further noted a great deal of frustration among some of the other executives who did not form part
of the inner circle.

The Present Day

Today, two weeks after being named CEO of GoSports, Park had been summoned to report to the board of directors his
plans to turn the company around. He knew what he had to do in order to take GoSports not only back to its former place
atop the industry, but also to unknown spheres yet untapped. He had formulated a strategy that involved the participa-
tion of key members of the executive team, as well as widespread support from mid- and lower-level employees. He
knew it would not be easy. His pitch to the board had to be perfect, his arguments sound, and his rhetoric convincing.
He straightened his tie, grabbed his notes, and headed into the meeting.

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 106  Hemme and Dixon

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