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To begin with it would be reasonable to provide one of the most famous statements of Niccolo Machiavelli. The statement was mentioned in his famous book “The Prince”. This statement is the following. “For however strong you may be in respect of your army, it is essential that in entering a new Province you should have the good will of its inhabitants. Hence it happened that Louis XII of France, speedily gaining possession of Milan, as speedily lost it; For the very people who had opened the gates to the French King, when they found themselves deceived in their expectations and hopes of future benefits, could not put up with the insolence of their new ruler. I conclude, therefore, that when a prince has the goodwill of the people he must not worry about conspiracies; but when the people are hostile and regard him with hatred he must go in fear of everything and everyone. Well-organized states and wise princes have always taken great pains not to make the nobles despair, and to satisfy the people and keep them content; this is one of the most important tasks a prince must undertake”.

The task of this paper is to critically evaluate how the above passage relates to issues concerning the business activities of Multi-national Companies and the concept of ethical leadership. We believe that the main concept that is concerned in the book is the concept of leadership. The author describes the role and characteristics of leadership in life. However, these characteristics can be extrapolated to a business life.

First of all, we have to provide a definition of the term leadership. In our opinion, one of the most appropriate definitions of this term is the following.

“In its essence, leadership in an organizational role involves (1) establishing a clear vision, (2) sharing (communicating) that vision with others so that they will follow willingly, (3) providing the information, knowledge, and methods to realize that vision, and (4) coordinating and balancing the conflicting interests of all members or stakeholders” (Leadership definition).

Simply speaking, leadership is an ability of some person to unite other persons around some goals and values, influence them and lead to realization of some objectives. Leadership unlike management is rather informal category. In fact, there are the different types of leadership. Among them the following ones may be pointed out: transactional, transformational and the so-called “level 5” type of leadership. These styles differ with the instruments that are used to motivate the employees and delegate tasks to them.

People that are characterized with “level 5” leadership rely on their team that help them to make final decisions. They always claim that success of a company is the result of work of the whole team.

Transactional leadership is characterized by the system of clear instructions, mainly formal relations between the managers and employees, punishment and rewards, based on the result of work. This style of leadership is still popular among the managers. However, as for us, it does not respond to the circumstances of the modern business environment.

Transformational leaders try to reform and change relations inside a group. They focus mainly on motivation of people that follow them. Also, they try to be a great example for them. Their principles and rules are not simple words. Everything is proved on practice.

Some people may think that management and leadership are similar terms. However, there may be significant differences. First of all, management is a formal category, while leadership is not. Managers are usually appointed by special orders, while leaders are formed because of their charisma and personal charm. Relations between a manager and employees are regulated by strict formal rules. On the other hand, relations between a leader and other persons are more personal.

Managers use their formal rights to influence employees. Employees are just forced to listen to them, because they can be fired in other way. Leaders are followed, because they have an ability to unite people and lead them toward a common goal. Employees follow their leaders, because they want so.

Even a simple employee can be a leader, while power of a manager is defined by formal rules. It is simply impossible to be a manager, without a formal order. Finally, leadership can be called as more stable and long-term category. Destiny of a manager usually depends not only on his/her qualifications, but also on desires of shareholders, etc.

To conclude we would like to say the following. Leadership can be considered as an ability of a person to unite other persons and lead them toward some goal. Leadership and management are parallel terms. However, there are a lot of differences between them. Generally, leadership is more informal category. Generally, we can say that a good leader will be always a good manager, while a good manager is not always a leader. It is a great happiness for a company, when a manager and a leader is the same person.

We believe that Machiavelli described the so-called classical leadership in his book. First of all, we would like to provide definition of the term classical leadership. In our opinion, one of the most appropriate definitions of this term is the following.

“Classical leadership is a means in which for a person to use verbal abuse on another in order to get him or her to comply to their standards. Unfortunately, this is all to common in the workplace and online, and it has to stop now. Nearly every business practices it, and it causes high turnover rates, costs the company a plethora of money and low job satisfaction occurs” (What is classical leadership?).

Simply speaking classical leadership is based on physical or mental advantage of one person over the other ones. Such advantage provides the instruments that are used in order to conquer other people. Of course there are different approaches to leadership and different famous scientists had their own.

For example, Plato considered the problem of leadership in his “The Republic”. First of all, he claims that the role of leadership just cannot be overestimated. A leader must be strong and sometimes even cruel person that is able to make wise and unbiased decisions.

Sun Tzu claimed that the following features should be intrinsic to a real leader: intelligence, trustworthiness, humaneness, courage, and sternness.

A leader according to Machiavelli is called a prince. It is quite a strong and even a cruel leader. His main principle is that a goal justifies instruments. On the other hand, a leader should be fair and wise to convince people to follow him.

Finally, the Pareto principle of leadership is used even in business. The key for the leader is to identify the 20 percent work that reaps the 80 percent of the results.

Another important concept that is mentioned in the statement and in the book, in general, is relations between employees inside an organization. This concept is vitally important for multi-national companies, since they have thousands of employees. Such relations are usually described by the term organizational behavior.

Any organization is a difficult mechanism, where production processes, legal schemes, the overall tasks etc are combined with people’s emotions and interests. this organism evolves and lives according to specific principles and laws. It is very important to maintain positive climate inside an organization. It can be done via settling an appropriate organizational behavior.

“Organizational behavior is a set of actions and attitudes of individuals and groups toward one another and toward the organization as a whole, and its effect on the organization's functioning and performance” (Organizational behavior definition).

Simply speaking, organizational behavior is the term that describes relations inside an organization – relations between employees, between employees and managers, relations between managers etc. Also, it would be reasonable to add relations of an organization with all the stakeholders and also partners and even competitors.

Let us define the factors that may influence organizational behavior. Among them the following ones can be pointed out:

The size of an organization. The bigger an organization is – the greatest is the number of its employees. It means that relations between them have a lot of levels and can be really complicated. It is a significant challenge to create an appropriate organizational behavior in a big organization;

The results of an organization’s performance. Bad results create negative corporate climate and environment. Respectively people are not in a good mood to think about some principles of appropriate behavior;

Organizational structure. Quality of organizational behavior depends on a type and quality of organizational structure. In fact, better organizational structure means better organizational behavior;

Industry and a type of performance/business. There are kinds of performance, where employees experience significant pressure and event stresses. That is why it is quite difficult to talk about some culture of organizational behavior in such conditions;

The degree of professionalism of employees. We believe that higher professionalism and higher degree of education mean better quality of organizational behavior. People know the required values, respect them and try to implement on practice;

Active, performance of an organization for the purpose of creating required quality of organizational behavior. As we know organizational behavior may be created via trainings, motivation and even punishment sometimes. Any organization should accept proactive position in this context.

It is important to provide the channels via which organizational behavior may influence performance. In our opinion, among these channels the following ones can be pointed out:

Productivity – the low degree of organizational behavior lowers productivity of employees;

Corporate climate – inappropriate organizational behavior spoils corporate climate inside an organizations. Spoiled relations lower productivity once again;

Inappropriate organizational behavior damages informational flows inside a company. Because of lack and low quality of information, wrong decisions are made and the whole organization suffers;

There are usually conflicts between the managers, shareholders and employees. As a result an organization cannot move to a common goal. This factor slows down development of an organization;

Finally, bad relations and communications with the external stakeholders of an organization spoil company’s corporate image and brand. It is equal to death in the world of tough and aggressive competition.

To conclude with this particular part of our research paper, we would like to say the following. Organizational behavior is behavior that is moved by some particular principles and values that are shared by all the members of an organization in order to maintain good relations and move towards a common goal.

Thus we are talking about some system of values and principles. These values should be percepted by all the employees, attributed to their work and taken as a basis for decisions. When all the requirements are met, we ca talk about job satisfaction of every separate employee and overall success for a company.

“Perception is the process by which people translate sensory impressions into a coherent and unified view of the world around them. Though necessarily based on incomplete and unverified (or unreliable) information, perception is equated with reality for most practical purposes and guides human behavior in general” (Perception definition).

Therefore a process of creation and maintenance of an appropriate organizational behavior usually consists of three stages. First of all, the values and principles of organizational behavior that are promoted by an organization should be percepted by employees. They should receive such information and understand all the requirements.

The next step is realizing how these requirements should be attributed to work and behavior. The following questions should be answered by an employee: what should be changed? how can it be done? how it is going to influence my productivity and work? whether it is good for me?

Finally, percepted requirements should become a basis for all the decisions and work of employees. It will be the first step towards appropriate organizational behavior that will lead to the overall success of an organization, in turn.

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