Maciavellis the Prince

On reviewing the passage from Niccolo Machiavelli's 'The Prince' there are numerous aspects which relate to contemporary issues in management. The business activities of MNC's are clearly represented within the passage through discussions of "entering a new province." The issue of ethical leadership is also highlighted in addressing conspiracies and maintaining "goodwill of the people."

MNC's are greatly affected by the growing issue of globalisation. This is also clearly apparent within the passage. Lane (2008, p1) believes that "globalisation will constitute the juggernaut of the twenty first century." However Samimi et al (2011, p197) describe globalisation as a "broad concept" with "no standard measurement" Within the passage "the prince" can be viewed as a metaphor for a MNC or a manager/leader within a company. Considering this Machiavelli's passage could be viewed as follows:

When a company expands globally it needs to show consideration to the local inhabitants of the country. Managers need to behave ethically in order to maintain goodwill and keep the locals content. Ethical leadership is vital in the success of MNC's.

From this interpretation of the passage relationships can be made with contemporary issues in management. These will be discussed and analysed with focus placed on Globalisation and the business activities of MNC's as well as ethical leadership and corporate social responsibility (CSR)

The passage discusses the issues relating to "entering a new province." This can be viewed as a representation of the business issue of globalisation. "Globalisation is a large set of complex processes aimed to achieve full integration in different fields." (Negrea, p96, 2012) although in "recent years globalisation has come into focus, generating considerable interest" (Suarez-Orozco et al, p1, 2004) this has brought with it a high amount of controversy "globalisation gets a mixed press from consumers." (Euromonitor, 2006a) Appendix 1 shows a table of positives and negative affects of globalisation as outlined by Euromonitor. (2006a) The table shows threat to local producers amongst the negative impacts of globalisation. This can relate to the passage in its message to maintain goodwill amongst local inhabitant when entering a new market. A vital requirement for MNC's entering foreign markets is "laying out expectations clearly." (McFarlin et al, p34, 2010) This includes ensuring local producers have realistic expectations of the impacts their businesses will face.

Starbucks are a good example of a company who has been criticised as misleading. Starbucks website state that they've "always believed that businesses can- and should- have a positive impact on the communities they serve." (Starbuck's, 2012) However, Starbucks have been criticised for "saturating local markets" (Neate, 2009) Causing "small cafes to wither." (Fellner, p3, 2008) This relates closely to Machiavelli's passage as the local businesses "found themselves deceived in their expectations."

HSBC however, pride themselves in being a positive example of a global business. "HSBC supports the communities where we operate by providing employment, making tax contributions, payments to suppliers, and investments in local businesses." (HSBC, 2013a) The bank believes that "understanding cultural differences is fundamental to the bank's engagement with existing and potential customers," (Dawson, p14, 2009) This is represented in the passage with discussions of "satisfying the people and keeping them content." HSBC go further in ensuring they have the goodwill of the inhabitant in entering a new province by differentiating their services according to cultural diversities. HSBC's global website states that they are "managed as a global business, offering clients geographic reach a deep local knowledge." (HSBC, 2013b)

HSBC's current advertising campaigns refer to themselves as "the worlds local bank." (HSBC, 2013b) This reflects on business issues of MNC's and their approach to international products. When launching products and services globally cultural variations need to be considered and adapted to. There have been many recent anti globalisation movement which "may prove to be symptomatic with a change in consumer attitudes." (Euromonitor, 2006b). A widely used method for satisfying cultural variations with a global product is a method referred to as glocalitation. "Glocalisation" is the interface of the global and the local" (Matusitz, 2011) "Glocalisation refers to creating products or services aimed for the global market but adapted to the local cultures." (Robertson, 1992) This is another method relating to Machiavelli's point of "satisfying the people and keeping them content." Appendix 2 outlines Marlborough's international market shares. The vast differences across cultures shows the negative impact on a businesses that are too rigid in their product and unwilling to adapt to local cultures.

As Globalisation becomes common place and companies continue to become more internationalised it is vital for businesses to consider the effects they are having on new markets. Whelan (p709, 2012) states that "Globalisation has increased the power of MNC's." and as a result they "now fulfil various political duties." "There is growing awareness that companies cannot operate in isolation from the wider society in which they are located." (Mallin, p1, 2009) And in order to succeed "they need to consider the interest of groups other then shareholders." (Mallin, p2, 2009) This view relates to the term corporate social responsibility. (CSR) "Corporate social responsibility is a commitment to improve community well-being through discretionary business practices and contributions of corporate resources." (Kotler et al, p3, 2005) Machiavelli's view that "in entering a new province you should have the goodwill of its inhabitants" Supports the need for companies to carefully consider CSR in their business decisions. Machiavelli's passage discusses how Louis XII of France gained possession of Milan and through not maintaining goodwill "Speedily lost it." This shows the impact businesses can face who fail to behave ethically and don't consider CSR of high importance.

Starbucks again are a good example of what can happen when a business goes against its CSR. They "prompted a wave of media criticism" (Bergin, 2012) over a recent European tax bill. According to Peston (2012) the business editor for BBC news

"Starbucks