machiavellian business

7/30/2019 Machiavellian Business

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A Machiavellian Approach to Modern Business Practices

Garrett Vogenbeck

An Infamous Guide to Gaining and Maintaining Power

The Prince, by Niccol Machiavelli is an infamous book about rising to and maintaining power. It comes with a

tumultuous history. It has guided such notorious leaders as Hitler, Stalin, Lenin, Mussolini, and Napoleon (Christian). It was at

one point on the Catholic Church's list of forbidden books. It was the prison reading for the late hip hop artist Tupac. There has

even been speculation that the devil's nickname of Old Nick came from the name of Niccol Machiavelli (Christian). That

being said, the book has had a profound impact of politics throughout the ages. It is not a book that is antiquated despite the

context within which it was written. It is now continually being studied at the university level, and its application to modern day

business is being analyzed as well. This is a curious situation becomes it comes at a time when business ethics make up a

number of front page headlines. Executives from Enron and other now infamous corporations sit behind bars while several

studies show that business students are more likely to cut corners than those in any other academic discipline. (Keenan and

Sullivan). Therefore this essay must be prefaced with a word on ethics before applying the principles of a book like The Prince

to modern business practices.

Important Ethical Guidelines to Maintain While Examining Machiavellian Principles

Much of Machiavelli's ideas concern rising to power in anyway possible, regardless of the morality behind the methods

used. Machiavelli does not by all means condone acts of evil to attain power. It is shameful behavior void of glory. Of

Agathocles the Sicilian's wicked rise to power, he writes, It cannot be called virtue to kill one's fellow citizens, betray one's

friends, be without faith, without pity, and without religion; by these methods one may indeed gain power, but not glory.

However, Machiavelli's ideal prince, Cesare Borgia, at one point deceived and murdered his enemies. The Prince's focus is on

power as a resource, and not on ethical ways to do so. Some methods described by the protagonists of The Prince can be proven

unethical through the application of Kantian ethical theory. The first categorical imperative of Kantian ethical theory is

universalisability, a theory that an action should not be taken if it cannot become a universal maxim, and the second concerns

the law of nature that a human shall not be used as a means to an end. The deception and murder in The Prince at times

grossly violates these categorical imperatives. One may, however, apply the ethical theory of act utilitarianism to conclude that

Machiavelli's suggestions have an ethical basis. This theory states that an action undertaken to create the greatest good for the

greatest number of people is correct. In the actions ... of princes, writes Machiavelli, the ends justify the means. While

applying the main points of The Prince to modern behavior, one should be mindful of modern codes of ethical standards.


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The Qualities of a Leader

Machiavelli writes of the quality of virt, a word that means more than just virtue does in English. It can mean

ability, skill, energy, forcefulness, strength, ingenuity, courage, or determination (CliffsNotes, Chapter 2). However, Virt

for Machiavelli is virtue not for its own sake but rather for the sake of the reputation it enables princes to acquire.

(Encyclopedia Britannica). These are qualities required for an entrepreneur, or someone who strives to be a leader or innovator

within an organization. Alongside virt are three specific characteristics a leader must exhibit in order to maintain his power.

First, he must rather be stingy than generous. Machiavelli makes the point that by being truly generous, the work will go

unnoticed, and it is necessary to appear generous for the sake of gaining power only. Many companies have damaged

themselves by being lax in their stinginess. Microsoft is an example of a company that did well hoarding its wealth. It used

cookie jar accounting methods to store up revenue for its future (Matsumoto and Bowen) in order to gain competitive

advantages in the market (Microsoft was later investigate by the SEC for this). Machiavelli also stresses the importance of

discipline by noting that it is better to be feared than loved. This is difficult to apply in management, for many employees have

the capacity to move on if a manager is somewhat ruthless in his discipline. A leader also need not be always truthful. Through

deception, a leader can gain status if the ends justify the means. Ian Telford, an internal entrepreneur at the Dow Chemical

Company, at one point spread a false rumor to management teams in order to promote a venture which eventually became

successful (Chakravarthy). The qualities exemplified by The Prince will help one achieve power, albeit in a crafty and

duplicitous manner. Machiavelli stresses the means to attain and keep power, not the morality or ethics behind those means.

Gaining Power By One's Own Ability and Independence

Combined with these qualities, a prince, according to Machiavelli, must be concerned with his own self-being and must

be self confident. In a way, the cutthroat environment of the political scene during the Italian Renaissance resembles the

capitalist free market of today. In order to be successful, one must do things themselves and not rely on others. Machiavelli

gives the example of David, who insisted on using his own weapons to slay Goliath (The Prince, Chapter 13). A successful

leader must have his own weapons to compete in business. Mercenaries, according to Machiavelli, are unreliable and

dangerous, and even more so are auxiliary soldiers. Then so, a leader must have his own people to fight for him. He constantly

brings up his belief that mercenary soldiers were the downfall of Italy and left it in shambles. In the same manner, if a business

relies too much on other companies (such as suppliers or complimenters), without finding competitive advantages of its own,

another company will imitate or absorb that company. In order to have a strong workforce, however, a manager must gain favor

with his employees.


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The Importance of Maintaining Favor With the People

In chapter 10, Machiavelli notes that It is the nature of men to be as much bound by the benefits that they confer as by

those they receive. Just like the fortified German cities described in this chapter, a business will be more able to adapt to

changes in an external market if the management has the full support of the employees. In order for this to occur, Machiavelli

states, a leader must provide his people with adequate provisions. It is enough, Machiavelli states, that the prince simply not be

hated. Appearance is more important than actually being. As stated earlier, a leader must not always be truthful, and therefore

must at least appear in a positive way to his employees. This is one aspect of the book which may be difficult to emulate in the

real world, since accountability for actions in a workplace is a quality of a successful business that is not mentioned whatsoever

in The Prince. Nonetheless, Machiavelli's notion that an institution relies heavily on the common people is spot on when it

comes to managing human resources. Take the example of Howard Schultz, the man behind Starbucks. He was one of the first

to give his employees health benefits and other extravagant perks. This caused his employees to remain loyal and consistent

within the company (Koehn).

Opportunity and The External Environment

Machiavelli writes that a leader may possess all of these qualities, but luck plays a strong role in the rise to power. By

great luck, a leader may attain power without many of these qualities, but it is then harder to hold power. This is true in business

as well. One must not rely on circumstances for his success. The reason luck plays a role is because of the opportunity it opens

up. Machiavelli writes of certain princes that they owed nothing to fortune but the opportunity which gave them matter to be

shaped into what form they thought fit. This statement, in a way, ties together the main points of The Prince with those of the

entrepreneurial process. One must possess the personal and interpersonal qualities required to be a good leader in the first place,

but must also find an opportunity in which to gain advantages over others.

A Word of Caution

It is very important to remember that many principles of business did not exist in Machiavelli's day. Corporate

Responsibility was not as important, nor were there strict regulations over personal actions. As stated before, one may choose to

exemplify the behaviors advertised by Machiavelli, but they must do so at their own risk. It is also important to remember that

in life, there are more important things than simply rising to power.


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Works Cited

Chakravarthy, Bala. Internal Entrepreneurship at the Dow Chemical Company. BA 560 Course Pack, Oregon State

University. July 29, 2003. International Institute for management Development. Lausanne, Switzerland. 2003.

"Niccol Machiavelli." Encyclopdia Britannica. 2008. Encyclopdia Britannica Online. 29 Oct. 2008

.

Gauss, Christian. The Prince: Introduction. 1952. Penguin Group, Inc. New York, New York. 1999.

Keenan, Matthew and Brian K. Sullivan. Duke Probe Shows Failure of Post-Enron Ethics Classes.

May 1, 2007. Bloomber.com. October 28, 2008.

Luigi Ricci. The Prince (translation). 1935. Penguin Group, Inc. New York, New York. 1999.

Magedanz, Stacy. On Machiavelli's The Prince. Wiley Publishing, Inc. Hoboken, New Jersey. 2001.

Matsumoto, Dawn and Robert Bowen. Microsoft's Financial Reporting Strategy. BA 528 Course Pack, Oregon State

University. February 15, 2000. Harvard Business School Publishing. Boston, MA. 1999

Nancy F. Koehn. Howard Schultz and Starbucks Coffee Company. BA 560 Course Pack, Oregon State University..

September 30, 2005. Harvard Business School Publishing. 2001.

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