Federalist #10 in Management #101

Abstract

Business students typically do not read James Madison’s Federalist #10, a seminal work in political theory on the causes of and remedies for factions. I make the case that they should and offer suggestions for teaching and assessment. Factions are a subset of stakeholders that have interests adverse to the organization. Madison cogently argues that the causes of factions are rooted in human nature; therefore, managers should embrace diversity and not try to eliminate factions by surrounding themselves with “yes men.” Rather, he urges managers to focus on organizational design to channel ambition in a positive way and constrain the more corrosive effects of factions. Madison emphasizes a critical lesson for negotiation by focusing on adverse interests rather than positions or characteristics. Beyond these management lessons, Federalist #10 exposes business students to the foundations of American politics and helps to inform the ongoing debate about the relationship between business and government. Finally, Federalist #10 takes business students out of their comfort zone, changing their reading workout and strengthening their ability to learn management lessons from the broader world around them.