An owner’s liquid exit option weakens their organizational power relative to committed insiders

Evidence

From an economic viewpoint it becomes irrational to couple the occupancy of posts to owning property and therefore to the coincidence of combining ownership and capability in one person. The owner retains his potential to threaten, that is, the possibility of withdrawing his funds from the business. But here, from the point of view of the technique of power, he is at a disadvantage in comparison with a person who is already committed and has renounced liquidity. Hence, for potential opponents, the possibility arises of exploiting the owner, since his power to liquidate is too great, compared to that which can be exercised within the organization. — Niklas Luhmann, Trust and Power, 788

Categorization

• XREF: Connects directly to organizational commitment logic: ‘renouncing liquidity’ = sunk-cost commitment that paradoxically increases power, relevant to Stevens’s total dedication giving him authority within Darlington Hall. — connects to: Summary multiple-seizure power can destroy a business without prior adjudication — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process: Basic Problems in…, 1137