Machiavellian Business
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Transcript of 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.