Lorenzo uses coercive power to meet his goals; if his employees don’t do what he wants them to do, he can lower their pay. This form of leadership does not work if the employees are not afraid of Lorenzo’s punishments. If one of Lorenzo’s employees was independently wealthy and working simply because he or she liked the job, taking away pay would be less of a punishment than changing the work that person does.

Neha, the CEO of Down Home Fashion, has legitimate power at work. Employees are likely to do what Neha says because:

She has a charming personality

She can fire them

They get raises from her

Her job title is CEO