This article presents some of the problems that need to be resolved if organization is to be developed to its full potential. Our central argument is that both management and staff typically act on the basis of a false understanding of the nature of power. Power is typically treated as if it were an individual possession, rather than as a relationship between people. Consequently, managers ignore or attempt to deny their ultimate dependence on staff, and use their power coercively. Staff respond with various coun tercoercive strategies. The result is a series of vicious circles which seriously undermine the productive potential of the relationship between management and staff.