Saturday, March 24, 2007

Machiavelli: The Prince - Business Ethics

Machiavelli said that “The first opinion which one forms of a prince, and of his understanding, is by observing the men he has around him; and when they are capable and faithful he may always be considered wise”.

Similarly the selection of the employees in the modern organization is critical as they are the most valuable assets of the organization. Machiavelli proposed that those should be hired who believe in the grandness of the task and greatness of the leader rather than who are simply driven by other factors like money and reputation (Knowledge@Wharton, 2003). As per him the people looking for money and reputation will leave the moment they will get it better somewhere else.

Secondly all the employees and subjects should be armed as the power of prince will considerably increase with their number. This can be easily translated into providing more opportunities to employees in the work place. This will not only prepare them for bigger task but also improve their loyalty toward the organization.

End Justify the Means

The word ‘Machiavellian’ in English is now widely referred as ‘the political doctrine of Machiavelli: any means (however unscrupulous) can be used by a ruler in order to create and maintain his autocratic government’. The book time and time again mentions that it is prudent for a ruler to use cunning and necessary evil activities, either to instigate fear among his opponents or to protect his kingdom.

The philosophy today is as outdated today as media plays an increasing role in public life and people have zero tolerance toward unscrupulousness. Even in the business world anything unethical is looked down upon and there are strict regulations against it.

Time and time again we have witnessed how the companies which adhere to unscrupulous methods to justify the means are punished not only by authorities but also by the stakeholders. Nike has seen customer protest and product boycott against employment of child labor in its vendors factories in South Asia. Wal-Mart is criticized for not allowing its employees to form labor union and making illegal workers clean stores to cut costs.

The biggest of all is the rigorous punishment to CEO’s of Enron and WorldCom who were found guilty in manipulating accounting practices and fattening profits of the company.