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Position power relies on a formal, legitimate position and title within a well-defined hierarchy System power arises because the person has personal and professional connections to the right people. It is sometimes called ‘network power’ where ‘network’ refers to the networking abilities and connections of the person.
An example could be asking a friend to put in a good word on your behalf to the CEO (whom your friend knows) of an organisation you were hoping to join. You could be accused of ‘working the system’.
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