principles of Management from Kautilya's Arthashastra - MBA

Principles of Management from

“Kautilya’s Arthashastra”

WelcomeWelcome

Salutations to Chanakya

(The first Management Guru)

CHANAKYA…CHANAKYA…

• Who was he ?Who was he ?• When did he live ?When did he live ?• What did he do ?What did he do ?• Why is he a legend ?Why is he a legend ?

History tell us…History tell us…• Bhramana (Kerala?) born in 3 B.C.Bhramana (Kerala?) born in 3 B.C.• Vishugupta – Kautilya - ChanakyaVishugupta – Kautilya - Chanakya• Youth – Vowed to Pull down Nanda DynastyYouth – Vowed to Pull down Nanda Dynasty• Dasi Putra – Chandragupta – KingDasi Putra – Chandragupta – King• Ashoka – Grandson of ChandraguptaAshoka – Grandson of Chandragupta• Responsible for the defeat of Alexander in Responsible for the defeat of Alexander in

IndiaIndia• Kautilya’s Arthashastra & Chanakya Niti – Kautilya’s Arthashastra & Chanakya Niti –

Documented towards the end of his lifeDocumented towards the end of his life

His uniquenessHis uniqueness• Often quotedOften quoted• His works are still applicableHis works are still applicable• Never did he ruleNever did he rule• German view point – No royal German view point – No royal

clothes or ornamentsclothes or ornaments• Taught his skill to many students Taught his skill to many students

across the globeacross the globe

Is it practical today ?Is it practical today ?• Over 2000 years oldOver 2000 years old• Does it have relevance in today’s Does it have relevance in today’s

ManagementManagement• Its about running a kingdom not Its about running a kingdom not

businessbusiness• How can it solve my particular How can it solve my particular

problemsproblems

Indian System

1. Over 5000 years old

2. Time tested (others perished)

3. Based on..Dharma – Artha – Kama – Moksha

4. West is looking towards India..

Kautilya’s Arthashastra

Kautilya’s ArthashastraKautilya’s Arthashastra• Written in SamskritWritten in Samskrit• Contains 15 books, 150 chapters Contains 15 books, 150 chapters

and 6000 sutras (shlokas)and 6000 sutras (shlokas)• Known as a Book of Economics, Known as a Book of Economics,

state craft, punishments, warfare, state craft, punishments, warfare, strategy etcstrategy etc

• It’s a Book of ‘Total Mangement’It’s a Book of ‘Total Mangement’

What all it contains ?What all it contains ?

• Over 150 topicsOver 150 topics• Internal and foreign Internal and foreign

PolicyPolicy• Civil rulesCivil rules• Military tacticsMilitary tactics• CommerceCommerce• Judicial systemJudicial system• Education systemEducation system

• Measures and Measures and weightsweights

• Selection of Selection of employeesemployees

• Grades of paymentGrades of payment• GemologyGemology• Time managementTime management• MetellguryMetellgury

Where is it used Where is it used presently ?presently ?• Its practical implications nearly lost to Its practical implications nearly lost to

our generationour generation• Shivaji –last recorded king to have used Shivaji –last recorded king to have used

Arthashastra for managing his kingdomArthashastra for managing his kingdom• Army Army • PoliticsPolitics• Management – still to catch up with the Management – still to catch up with the

idea..idea..

Today’s TopicToday’s Topic

Principles of Mangement

from

‘Kautilya’s Arthashastra’

Aspects of Management that will be Aspects of Management that will be covered..covered..

• Definition and the basic elements of Definition and the basic elements of Management Management

• Wealth creation and wealth managementWealth creation and wealth management• Handling employees Handling employees • Pointers on Leadership Pointers on Leadership

Definition and the Basic Definition and the Basic elements of Managementelements of Management

Definition and the Basic elements of ManagementDefinition and the Basic elements of Management

1.1. The means of starting undertakings The means of starting undertakings (assignments/ projects)(assignments/ projects)

2.2. The excellence of men and materials The excellence of men and materials 3.3. Suitable apportionment of place and Suitable apportionment of place and

timetime4.4. Provision against failureProvision against failure5.5. Accomplishment of the workAccomplishment of the work

• (1.15.42)(1.15.42)

Wealth creation and Wealth managementWealth creation and Wealth management

““The objective of any king (leader) or The objective of any king (leader) or state (organization) is to create, state (organization) is to create, expand, protect and enjoy wealth” expand, protect and enjoy wealth” – this has to be based on Dharma.– this has to be based on Dharma.


• ““Be ever active in the management Be ever active in the management of the economy because the root of of the economy because the root of wealth is economic activity; wealth is economic activity; inactivity brings material distress. inactivity brings material distress. Without an active policy, both Without an active policy, both current prosperity and future gains current prosperity and future gains are destroyed” (1.19.35,36)are destroyed” (1.19.35,36)


• ““Wealth will slip away from the Wealth will slip away from the foolish person, who continuously foolish person, who continuously consults the stars; for wealth is the consults the stars; for wealth is the star of wealth; what will the stars star of wealth; what will the stars do? Capable men will certainly do? Capable men will certainly secure wealth at least after a secure wealth at least after a hundred trails” ( 9.4.26)hundred trails” ( 9.4.26)

• Handling Employees..Handling Employees..

Handling EmployeesHandling Employees

• ““In the happiness of the subjects In the happiness of the subjects lies the benefit of the king and in lies the benefit of the king and in what is beneficial to the subjects is what is beneficial to the subjects is his own benefit” – (1.19.34)his own benefit” – (1.19.34)


• Theory of Motivation Theory of Motivation • Sama (counseling),Sama (counseling),• Dana (offering of gifts),Dana (offering of gifts),• Danda (Punishments),Danda (Punishments),• Bheda (creating a split)Bheda (creating a split)


• ““The King severe with rod The King severe with rod (punishment) becomes a terror. A (punishment) becomes a terror. A king with mild rod is despised. The king with mild rod is despised. The king just with the rod is honored” king just with the rod is honored” (1.4.8-10)(1.4.8-10)


• Why to use the rod (punishment) at Why to use the rod (punishment) at all? because -all? because -

• • ““If the rod is not used at all the If the rod is not used at all the

stronger swallows the weak in the stronger swallows the weak in the absence of the wielder of the Rod” absence of the wielder of the Rod” (1.4.13-14)(1.4.13-14)


• ““He (leader) should constantly hold He (leader) should constantly hold an inspection of their works, men an inspection of their works, men being inconstant in their minds” being inconstant in their minds” (2.9.2-3)(2.9.2-3)


• ““A wage is for work done, not for A wage is for work done, not for what is not done” (3.14.8)what is not done” (3.14.8)


Qualities to be tested before appointmentQualities to be tested before appointment1. 1. Technical competence -In that particular field Technical competence -In that particular field

through those person learned in thatthrough those person learned in thatscience.science.

2. Intelligence, perseverance and dexterity2. Intelligence, perseverance and dexterity3. Eloquence, Boldness and presence of mind3. Eloquence, Boldness and presence of mind4. Ability to bear troubles during emergencies4. Ability to bear troubles during emergencies5. Uprightness, friendliness and firmness of devotion 5. Uprightness, friendliness and firmness of devotion

in dealing with othersin dealing with others6. Strength of character 6. Strength of character

• (1.9.3)(1.9.3)


Appointment of traineesAppointment of trainees

A ‘trainable’ person is the one who has the following A ‘trainable’ person is the one who has the following qualitiesqualities

1.Desire to learn1.Desire to learn2.Effective listening ability2.Effective listening ability3.Ability to reflect (think from all angles)3.Ability to reflect (think from all angles)4.Ability to reject false views4.Ability to reject false views5.Intentness on truth not on any person5.Intentness on truth not on any person

(1.5.4-5)(1.5.4-5)

• Pointers on Leadership Pointers on Leadership

Pointers on LeadershipPointers on Leadership

• Be ever active Be ever active • “ “ If the king is energetic, his subjects will If the king is energetic, his subjects will

be equally energetic. If he is slack (and be equally energetic. If he is slack (and lazy in performing his duties) the lazy in performing his duties) the subjects will also be lazy, thereby, eat subjects will also be lazy, thereby, eat into his wealth. Besides, a lazy king will into his wealth. Besides, a lazy king will easily fall into the hands of the enemies. easily fall into the hands of the enemies. Hence the king should himself always be Hence the king should himself always be energetic” (1.19.1-5)energetic” (1.19.1-5)


• ConsultationConsultation • ““All undertakings should be preceded by All undertakings should be preceded by

consultation. Holding a consultation with only consultation. Holding a consultation with only one, he may not be able to reach a decision in one, he may not be able to reach a decision in difficult matters. With more councilors it is difficult matters. With more councilors it is difficult to reach decisions and maintain difficult to reach decisions and maintain secrecy” (1.15.2,35,40)secrecy” (1.15.2,35,40)

• Therefore sit and counsel with those who are Therefore sit and counsel with those who are matured in intellect ( 1.15.20-21)matured in intellect ( 1.15.20-21)


• PowerPower • Power consists of 3 factorsPower consists of 3 factors• 1. Intellectual (Knowledge) Power,1. Intellectual (Knowledge) Power,• 2. Military / money Power 2. Military / money Power • 3. Power of enthusiasm and 3. Power of enthusiasm and

morale.morale.• (R.R page 625)(R.R page 625)


• Be well informed Be well informed

• Collection of information is for –Collection of information is for –

1.1. To know what is not knownTo know what is not known2.2. Finding out the rest in a matter which is partly knownFinding out the rest in a matter which is partly known3.3. Definite Strengthening of what has become knownDefinite Strengthening of what has become known4.4. Removal of doubt in case of 2 possible alternativesRemoval of doubt in case of 2 possible alternatives• (1.15.20-21) (1.15.20-21)


• AccountabilityAccountability

• ““In addition to reporting in detail as well In addition to reporting in detail as well as in aggregate, there is also an individual as in aggregate, there is also an individual accountability for the revenues and the accountability for the revenues and the expenditures” (2.7.24)expenditures” (2.7.24)


• Accounting systems Accounting systems

• ““He (leader) should check the He (leader) should check the accounts for each day, group of 5 accounts for each day, group of 5 days (a week), fortnight, month, days (a week), fortnight, month, four months (quarterly) and a year” four months (quarterly) and a year” (2.7.30)(2.7.30)


• Accounting systems Accounting systems

• ““He should check the income and He should check the income and expenditure with reference to the expenditure with reference to the period, place, time, head of income / period, place, time, head of income / expenditure , source, bringing forward, expenditure , source, bringing forward, quantity, the payer / paid, the person quantity, the payer / paid, the person causing payments to be made, the causing payments to be made, the recorder and the receiver” (2.7.31-32)recorder and the receiver” (2.7.31-32)


• Competition and Strategy Competition and Strategy • (similar to SWOT analysis)(similar to SWOT analysis)

• ““After ascertaining the relative strength After ascertaining the relative strength or weakness of powers, place, time, or weakness of powers, place, time, revolts in rear, losses, expenses, gains revolts in rear, losses, expenses, gains and troubles, of himself and of the and troubles, of himself and of the enemy, the conqueror should march” enemy, the conqueror should march” (9.1.1)(9.1.1)

Tips in planning your lifeTips in planning your life• Discuss money more oftenDiscuss money more often• Start your own businessStart your own business• Protect your nation’s wealthProtect your nation’s wealth• Never forget the prime aim of our Never forget the prime aim of our

lives – to give happiness to otherslives – to give happiness to others

There should be a focused There should be a focused approach to intellectual approach to intellectual property rights and related property rights and related issues. Our ancient knowledge issues. Our ancient knowledge and culture too are part of our and culture too are part of our resource base and needs to resource base and needs to be protected.be protected.

Dr. A.P.J. Abdul KalamDr. A.P.J. Abdul Kalam(President of India)(President of India)

For the sake of the village give up your family; for the sake of country give up the village; for the sake of the world give up the country; for the sake of the lord give up the world…

- Chanakya

AcknowledgementsAcknowledgements• Chinmaya MissionChinmaya Mission• Shyama Shastry (1Shyama Shastry (1stst commentry) commentry)• Dr Kangle (2Dr Kangle (2ndnd Commentry) Commentry)• RangRajan (3RangRajan (3rdrd commentry) commentry)• Various scholars and Management Various scholars and Management

thinkersthinkers

Projects / assignmentsProjects / assignments

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Thank YouThank You

Radhakrishnan PillaiRadhakrishnan Pillai

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