Should CEOs Turn to Machiavelli for Business Strategies - Essay Example

?Introduction Strategy plays an important role in the overall success and failure of not only the organizations but for managers also. Successful leaders are considered as excellent strategy makers as they have the ability to visualize the future, assess the threats and prepare the response accordingly. As such it is important for the leaders and CEOs to actually develop better strategies to deal with the competition and uncertain economic environment. This is based upon the assumption that the great leaders and CEOs are not born but they develop their abilities over the period of time through the trial and error method. Machiavelli is considered as one of the Masters of Leadership as his philosophy on leadership offered a different insight into how leaders can be successful and what needs to be done in order to remain successful. What is critical to note that Machiavelli’s Prince has been one of the most controversial books which have been banned by Catholic Church also and still being demonized due to its different interpretations? The strategies prescribed by Machiavelli are often considered as important in terms of how a leader should deal with situations where the organizations are specially facing difficult competition and external environment. Machiavelli therefore serves as an important reference point for leaders and CEOs to develop strategies to deal with the competition and achieve the relative degree of superiority over the competition. (McAlpine) This paper will discuss and argue on whether CEOs should turn to Machiavelli for developing business strategies or not. Machiavelli- the Prince Before discussing as to how the CEOs and leaders should refer to Machiavelli for developing strategies, it is important to first understand and explore the philosophy of Machiavelli and how it relates to strategy. Machiavelli is considered as a political theorist, diplomat as well as historian who wrote the famous book “The Prince” advising young Italian Prince of what he needs to do in order to overcome his opponents and establish his kingdom. As such The Prince is technically the work of advice given to a Prince to manage various aspects of running a State and how to deal with and manage the opponents. The Prince therefore is considered as one of the important works in both philosophy as well as political theory with implications for business strategy also. Such diverse range of application of this book makes it one of the important books in business world. (Boa) The overall strategies as well as advice contained in this book are often considered as immoral in nature. Some of the critics of Prince accuse it of suggesting strategies which may not be morally right under all circumstances. The strategies of deceit are considered as immoral by the critics of this philosophy however, they are considered as important also to work in certain situations. As such the context within which Prince was actually written and advised may justify its philosophy as well as advice for a Prince who lost everything and was in process of recapturing what was his legitimate. As such Machiavelli emphasize on the use of realism rather than idealism while making strategies and executing them in order to remain a successful leader and deal with the competition. The use of realism therefore allows leaders to commit acts which may be considered as immoral or deceitful. Machiavelli and Business Leaders Along with Sun Tzu’s Art of War, Machiavelli’s The Prince has been influential on CEOs and leaders regarding the development of leadership and management insight necessary for CEOs to operate their businesses. CEOs not only use above works to understand how they can improve the overall competitiveness of their enterprises but can also advance their careers using some of the strategies defined in both these books. Over the period of time, CEOs have therefore been using both these works as reference points for understanding the inherent dynamics of competition and how to advance their career. (Legge) In the initial chapters of the book, Machiavelli identifies the overall organization i.e. structure of the organization and what needs to be done under any structure existing within the organization. Though Machiavelli suggests that organizations can be either structured or unstructured however, it may be difficult for the organizations to actually run unstructured set up. For CEOs to be successful, defining a structure of the organization therefore is of significant importance because without a well-defined organizational structure, CEOs may not be successful. If any CEO is facing an environment which is relatively unstructured in nature, it becomes difficult for such leaders to sustain the organization. The focus, initially, therefore shall be on defining the structure which is well suited towards the overall organizational resources and capabilities. (Galie and Bopst) Machiavelli also discusses about the skills and abilities of the leader and gives paramount importance to the skills and abilities. CEOs therefore need to improve their skills and abilities if they are going to survive in a terrain which may harsh for them. In order to become successful, CEOs must develop hard as well as soft skills and also have the capability to actually design and execute the strategic plans. Without the required skills to evaluate the current competition and foreseeing the future, CEOs may not be successful and entirely beneficial for their organizations. CEOs need to make sure that structure developed as a result of the overall efforts is according to the organizational resources and capabilities. Without considering the organizational resources and competencies, it may be relatively difficult for the CEOs to develop a sustainable structure. CEOs therefore need to be aware of what are the competencies and resources of the firm and how such resources can actually be directed towards the sustainability of such structure. One of the key influences of Machiavelli on the modern CEOs and leaders is the emphasis on the strategic planning process. The overall principles identified in the Prince by Machiavelli suggest that in order to become successful, strategic planning is of utmost importance. No CEO will be successful if he or she lacks the ability to plan strategically and become more involved in the overall process of strategic planning. A CEO need to be focused more upon how the strategic planning can be made and what are some of the tools and techniques through which the overall planning process needs to be perfected. (Phillips and McCreadie) Machiavelli also discusses about the implementation side of the strategic planning process also. Besides advocating on the need to have a systematic strategic planning process in place, he suggests that it is the implementation which is relatively difficult and need to be executed with perfection. Machiavelli also suggests that in order to successfully implement the strategic plans it is more important to be flexible and adaptable to different situations. If any CEO is not flexible and adaptable enough to the overall process of change, it may be relatively difficult for such CEOs to successfully execute and implement the strategic plans. Flexibility also means that CEOs and leaders must have the ability to actually to take further input while executing the plans and change them accordingly so that they can suit the overall situation. If CEOs are not flexible, it may be hard for the organizations to survive and grow over the period of time. Flexibility also requires that CEOs must develop the ability to actually continue to monitor and evaluate the external environment. Without actually having the ability to scan the environment and future, CEOs may not have the required level of flexibility and resultantly can damage their own organizations as well as their careers. (Swain) Though the Machiavelli used the word terrain however, converting the same to business language same can be interpreted as business conditions. Any CEO or a leader who is operating within a business environment therefore needs to understand the business conditions and act accordingly. However, in order to make the business conditions more suitable, it is important that the CEOs and Leaders must have the capability and ability to actually influence the overall outcome of such business conditions. The terrain therefore is also considered as an open field where everyone is actually invited to actually compete with each other and achieve the subsequent degree of advantage over others using some of the tactics identified by Machiavelli in his book. A good CEO is therefore considered as someone who understands the terrain and subsequently understands the resources to win over that terrain amid the competition from all other competitors also. As such the knowledge of the conditions as well as the competition is considered as necessary. (Kearns) Considering the idea of liberty and its dependence upon the State, Machiavelli suggests that liberty without state is of no value therefore it is critical for Prince to have a State which can ensure independence and liberty for all. Similarly, for CEOs to become successful, it is important the organization first needs to be successful and in hand. Organization first needs to develop themselves and establish themselves within the market or the environment in which they operate. CEOs therefore first need to establish the authority as well as reputation of the organization in the environment in which they operate. The overall liberty or the degree of freedom of an organization therefore largely depends upon the overall strength of the organization within the market. (Harris, Lock and Rees, Machiavelli, Marketing and Management) This aspect of managing the organization is also related with the acquisition strategy wherein CEOs have to adapt aggressive acquisition strategies to actually expand themselves. Once organizations establish themselves within the markets, it becomes relatively easy for such large firms to actually acquire smaller firms to reduce the overall competition within the market. Specifically those CEOs who are aggressive in nature and are willing to expand through mergers and acquisitions will find the strategies of Machiavelli relatively more important. Those CEOs who are heading growing organizations therefore may need to look for more aggressive takeovers and acquisitions to ensure that organization establishes its foundation within the market while at the same time reducing the overall competition. (Griffin) "One has to remark that men ought either to be well treated or crushed, because they can avenge themselves of lighter injuries, of more serious ones they cannot; therefore the injury that is to be done to a man ought to be of such a kind that one does not stand in fear of revenge" (Machiavelli) The above quote from the Chapter 6 of the Machiavelli’s Prince clearly outlines a path of action for leaders to make hard decisions. CEOs and effective leaders to take difficult decisions in situations where forced takeovers and mergers are made and they need to ensure that only those employees are retained who are of some value and rest of the employees are being fired or downsized in order to ensure that the intended objectives of the merger and takeover are achieved. Machiavelli however also shows the softer side of the leaders and need to be treated well also. In mergers and acquisition scenario, CEOs therefore first must identify those who are of more value to the organization as compared to those who are not. Those who are more valuable for the organization therefore need to be treated well and nurtured within the organization so that they can be helpful for the organizations. (Mann) However, CEOs, in such situations, also need to be aware of using soft as well as hard methods to avoid a greater resistance to change. In such situations, CEOs need to be diplomatic in nature and focus on the end while manipulating the means of achieving that end. As such, it is critical that CEOs and the organizations they lead must be able to use diplomatic ways of managing rest of the employees in a manner where there becomes relatively no resistance to change and rest of the employees work according to the overall organizational plan. Difficult decisions therefore need to be made by the CEOs to manage such situations and follow Machiavelli in such circumstances. (AHMED) Machiavelli and Ethics Machiavelli bases his narrative on the basis of realism rather than idealism therefore any CEO referring to his principles needs to be aware of the related ethical issues which may surface while following the advice of Machiavelli. The recent financial meltdown as well as the earlier corporate scandals actively point out towards the executive greed and excessiveness of the corporations to achieve the desired level of profitability. Besides having any economic reasons, the current financial meltdown is also considered as the way organizations actually followed the strategy of achieving profits at all costs. The executive compensation as well as the way financial organizations actually caused the damage to the economy clearly outlined as to how following Machiavelli can be destructive for the economy as well as for the society as a whole. It also outlines the need for the further check and balances over the way organizations and CEOs actually conduct themselves. Though following Machiavelli may be a right step towards achieving a sustainable future however, excessiveness of this may result into serious negative consequences for the organizations as well as the society as a whole. Over the period of time, it is argued that organizations have shortened their horizon and focused on achieving short term results rather than achieving the long term stability. This focus on the achievement of short term results actually damage the organizations rather than serving them. CEOs therefore need to balance the approach of achieving the short term results while at the same time ensuring long term stability of the organizations. Not achieving such balance may not result into the greater good for the greater number of people and organizations may lose their utility within a society due to damage they may cause. (Harris) Machiavelli advocates the use of any means to maintain and establish a State has long been considered as a reasonable justification for businesses to expand their reach and profits at all costs. This aspect of the advice given by the Machiavelli therefore seem to be one of the guiding principles for modern businesses to actually use and exploit all the resources to establish and maintain their businesses without actually showing concerns for means to achieve this. (Vitell, Lumpkin and Rawwas) This simple proposition however, may have relatively important ethical as well as moral issues which modern organizations as well as CEOs may face. An important change which is taking place within the business world is a renewed focus on the sustainable development. Many pressure groups have emerged recently which are advocating the sustainable use of the planet’s resources and are also making consumers more aware of how their buying decisions may encourage firms to exploit such resources at increasingly rapid pace. There is a growing perception that large global firms are responsible for the rapid consumption of the earth’s resources. The overall ethical position on this issue therefore directly indicates that large organizations are using all the means to achieve their end of gaining more and more profits. This potential gap between achieving profitability by using all means and caring for the earth’s resources pose an important challenge for the modern leaders to decide whether they need to use Machiavellian tactics or not to achieve their objectives. (Joyner and Payne) Shall CEOs refer to Machiavelli? The above discussion clearly suggests that it may be relatively beneficial for the CEOs to actually follow Machiavelli however; following him under all circumstances may not be a suitable strategy. More appropriately, CEOs who are running organizations who need drastic changes and are at that stage of their life cycle where their survival may be difficult can refer to Machiavelli to survive. However, the CEOs of those organizations which are already at the maturity stage of their life cycle and may not require growing at much rapid pace. CEOs also need to take into consideration the ethical issues related with the use of philosophy of Machiavelli. There are serious ethical considerations of the actions which CEOs may take while following the above philosophy and the overall fall back of such strategies may be relatively detrimental for the career of CEOs as well as the organizations itself. Following Machiavelli therefore need to be circumstantial in nature and should be followed where circumstances permit. Using the above principles where business environment is relatively in favor of the business organizations generally may not be suitable. Young CEOs who may be leading growing organizations and have to prove them may in the industry may be actively involved in the following of such strategies. In cases where CEOs are already established within the industry and know the business conditions well may not necessarily use such strategies and follow what is being followed by others in the industry. Conclusion Machiavelli is considered as one of the most influential personalities and his thoughts and writings are considered as equally important in politics as well as business. Written some 500 years ago, Machiavelli’s “The Prince” is considered as one of the important documents on making strategies and achieves the results desired by any Prince. The book is actually a piece of advice for a Prince to advance his State however; the principles outlined in the book are considered as equally important for politics as well as businesses. Machiavelli advocates achieving the end by all means which is often translated as the license for organizations and CEOs to achieve the end result of highest level of profitability by using any means. However, Machiavelli also put greater emphasis on the strategic planning and properly executing them. CEOs therefore need to be aware of the business environment in which they operate and design the strategic plans in a manner which can help organizations to grow and expand. CEOs also get the advice in the shape of acquiring new organizations through acquisitions and mergers in order to grow and establish themselves in the market. However, to make such strategic efforts successful, it is important for CEOs to actually make some difficult and tough decisions. It is also important to note that CEOs must also take into consideration the ethical side of their actions also. The drive to achieve profitability at all costs may have serious ethical issues for the organizations as well as for the society also. Works Cited AHMED, KABIR MOHAMMED. NICCOLO MACHIAVELLI’S ‘THE PRINCE’ AS A STRATEGIC . 2009. 30 November 2013 . Boa, Bernard. "Planning Theory: Sun Tzu and Machiavelli On Strategy." Journal of Business Strategy 16.1 (1995): 16 - 18. Galie, Peter J. and Christopher Bopst. "Machiavelli & Modern Business: Realist Thought in Contemporary Corporate Leadership Manuals." Journal of Business Ethics 65.3 (2006): 235-250. Griffin, Gerald R. Machiavelli on management: playing and winning the corporate power game. New York: Praeger, 1991. Harris, Phil. "Machiavelli and the Global Compass: Ends and Means in Ethics and Leadership." Journal of Business Ethics 93 (2012): 131-138. Harris, Phil, Andrew Lock and Patricia Rees. 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