Effective leadership in organizations is predicated not only on technical, but also social competence (Barry & Crant, 2000; Huselid, 1995; Pfeffer & Veiga, 1999; Weick, 1979). Leaders rely heavily on their social interactions and relationships with others to succeed in organizational contexts. As a result, leaders need to be able to establish relationships and alliances to effectively engender acceptance and compliance from others. However, leaders often fail to establish effective alliances and consequently are unable to successfully lead and maintain their power. This dissertation investigates the psychological processes that inhibit the ability of powerholders to effectively form alliances and maintain power. Specifically, I examine the impact illusions of alliance, which I define as the overestimation of the strength of one's alliances with others, on the loss of power. I argue that powerholders who hold illusions of alliance fail to promote and develop effective alliances, and ultimately lose power. Moreover, building from the literature on the psychological effects of power, I also argue that power itself increases the propensity to hold illusions of alliance. This deleterious effect of power might explain why power is often said to lead to its own demise.;In two studies, I found that power increases the propensity to hold illusions of alliance. In Experiment 1, I investigated the impact of self-perceptions of dispositional power on illusions of alliance in long-term project teams that met over several months. As hypothesized, I found that individuals who believed they were dispositionally powerful also tended to hold illusions of alliance. In Experiment 2, to examine the causal role of power on illusions of alliance, I experimentally primed high (or low) power among individuals engaged in long-term project teams and found that individuals primed with high power were more likely to hold illusions of alliance as compared to those primed with low power or controls.;In a separate set of studies, I also found that powerful individuals lose power to the extent that they hold illusions of alliance. In Experiment 3, I developed a task in which three individuals of varying power participated in a coalition building exercise. Participants in the high power role who overestimated their alliances were more frequently excluded from the final coalition. In Experiment 4, to examine the causal role of illusions of alliance, I used a similar coalition building task and manipulated the extent to which the high power actor held illusions of alliance. As in the previous study, high power actors who held illusions of alliance were excluded from the coalition more frequently.;Taken together, these findings address one way in which powerholders fall from positions of power. Specifically, while most accounts of power loss focus on ethical breaches or performance deficiencies, my findings speak to the social and interpersonal dynamics that lead individuals to lose power. I argue that the possession of power increases the propensity to form illusions of alliance, and that such illusions lead to the loss of power. By overestimating the strength of their alliances with others, powerholders fail to effectively form and maintain alliances. In addition to examining the psychological effects of power, these findings have important implications for a number of outcomes critical to leaders and other organizational actors, including selection, turnover, and the development of leadership competencies.
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