1. Principles of Management
from
“Kautilya’s Arthashastra”
WelcomeWelcome

2. Salutations to Chanakya
(The first Management Guru)

3. 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 ?

4. 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 NandaYouth – Vowed to Pull down Nanda
DynastyDynasty
• Dasi Putra – Chandragupta – KingDasi Putra – Chandragupta – King
• Ashoka – Grandson of ChandraguptaAshoka – Grandson of Chandragupta
• Responsible for the defeat ofResponsible for the defeat of
Alexander in IndiaAlexander in India
• Kautilya’s Arthashastra & ChanakyaKautilya’s Arthashastra & Chanakya
Niti – Documented towards the end ofNiti – Documented towards the end of
his lifehis life

5. 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 royalGerman view point – No royal
clothes or ornamentsclothes or ornaments
• Taught his skill to manyTaught his skill to many
students across the globestudents across the globe

6. Is it practical today ?Is it practical today ?
• Over 2000 years oldOver 2000 years old
• Does it have relevance inDoes it have relevance in
today’s Managementtoday’s Management
• Its about running a kingdom notIts about running a kingdom not
businessbusiness
• How can it solve my particularHow can it solve my particular
problemsproblems

7. 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..

8. Kautilya’s Arthashastra

9. Kautilya’s ArthashastraKautilya’s Arthashastra
• Written in SamskritWritten in Samskrit
• Contains 15 books, 150 chaptersContains 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,state craft, punishments,
warfare, strategy etcwarfare, strategy etc
• It’s a Book of ‘Total Mangement’It’s a Book of ‘Total Mangement’

10. What all it contains ?What all it contains ?
• Over 150 topicsOver 150 topics
• Internal and foreignInternal and foreign
PolicyPolicy
• Civil rulesCivil rules
• Military tacticsMilitary tactics
• CommerceCommerce
• Judicial systemJudicial system
• Education systemEducation system
• Measures andMeasures and
weightsweights
• Selection ofSelection of
employeesemployees
• Grades of paymentGrades of payment
• GemologyGemology
• Time managementTime management
• MetellguryMetellgury

11. Where is it usedWhere is it used
presently ?presently ?
• Its practical implications nearly lostIts practical implications nearly lost
to our generationto our generation
• Shivaji –last recorded king to haveShivaji –last recorded king to have
used Arthashastra for managing hisused Arthashastra for managing his
kingdomkingdom
• ArmyArmy
• PoliticsPolitics
• Management – still to catch up withManagement – still to catch up with
the idea..the idea..

12. Today’s TopicToday’s Topic
Principles of Mangement
from
‘Kautilya’s Arthashastra’

13. Aspects of Management that willAspects of Management that will
be covered..be covered..
• Definition and the basic elements ofDefinition and the basic elements of
ManagementManagement
• Wealth creation and wealth managementWealth creation and wealth management
• Handling employeesHandling employees
• Pointers on LeadershipPointers on Leadership

14. Definition and the BasicDefinition and the Basic
elements of Managementelements of Management

15. Definition and the Basic elements of ManagementDefinition and the Basic elements of Management
1.1. The means of starting undertakingsThe means of starting undertakings
(assignments/ projects)(assignments/ projects)
2.2. The excellence of men andThe excellence of men and
materialsmaterials
3.3. Suitable apportionment of place andSuitable apportionment of place and
timetime
4.4. Provision against failureProvision against failure
5.5. Accomplishment of the workAccomplishment of the work
• (1.15.42)(1.15.42)

16. Wealth creation and Wealth managementWealth creation and Wealth management
““The objective of any king (leader)The objective of any king (leader)
or state (organization) is toor state (organization) is to
create, expand, protect andcreate, expand, protect and
enjoy wealth” – this has to beenjoy wealth” – this has to be
based on Dharma.based on Dharma.

17. Wealth creation and Wealth managementWealth creation and Wealth management
• ““Be ever active in theBe ever active in the
management of the economymanagement of the economy
because the root of wealth isbecause the root of wealth is
economic activity; inactivityeconomic activity; inactivity
brings material distress. Withoutbrings material distress. Without
an active policy, both currentan active policy, both current
prosperity and future gains areprosperity and future gains are
destroyed” (1.19.35,36)destroyed” (1.19.35,36)

18. Wealth creation and Wealth managementWealth creation and Wealth management
• ““Wealth will slip away from theWealth will slip away from the
foolish person, who continuouslyfoolish person, who continuously
consults the stars; for wealth isconsults the stars; for wealth is
the star of wealth; what will thethe star of wealth; what will the
stars do? Capable men willstars do? Capable men will
certainly secure wealth at leastcertainly secure wealth at least
after a hundred trails” ( 9.4.26)after a hundred trails” ( 9.4.26)

19. • Handling Employees..Handling Employees..

20. Handling EmployeesHandling Employees
• ““In the happiness of theIn the happiness of the
subjects lies the benefit of thesubjects lies the benefit of the
king and in what is beneficial toking and in what is beneficial to
the subjects is his own benefit”the subjects is his own benefit”
– (1.19.34)– (1.19.34)

21. Handling EmployeesHandling Employees
• Theory of MotivationTheory 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)

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

23. Handling EmployeesHandling Employees
• Why to use the rod (punishment)Why to use the rod (punishment)
at all? because -at all? because -
•
• ““If the rod is not used at all theIf the rod is not used at all the
stronger swallows the weak instronger swallows the weak in
the absence of the wielder ofthe absence of the wielder of
the Rod” (1.4.13-14)the Rod” (1.4.13-14)

24. Handling EmployeesHandling Employees
• ““He (leader) should constantlyHe (leader) should constantly
hold an inspection of theirhold an inspection of their
works, men being inconstant inworks, men being inconstant in
their minds” (2.9.2-3)their minds” (2.9.2-3)

25. Handling EmployeesHandling Employees
• ““A wage is for work done, notA wage is for work done, not
for what is not done” (3.14.8)for what is not done” (3.14.8)

26. Handling EmployeesHandling Employees
Qualities to be tested before appointmentQualities to be tested before appointment
1. 1. Technical competence -In that particularTechnical competence -In that particular
field through those person learned in thatfield through those person learned in that
science.science.
2. Intelligence, perseverance and dexterity2. Intelligence, perseverance and dexterity
3. Eloquence, Boldness and presence of mind3. Eloquence, Boldness and presence of mind
4. Ability to bear troubles during emergencies4. Ability to bear troubles during emergencies
5. Uprightness, friendliness and firmness of5. Uprightness, friendliness and firmness of
devotion in dealing with othersdevotion in dealing with others
6. Strength of character6. Strength of character
• (1.9.3)(1.9.3)

27. Handling EmployeesHandling Employees
Appointment of traineesAppointment of trainees
A ‘trainable’ person is the one who has theA ‘trainable’ person is the one who has the
following qualitiesfollowing qualities
1.Desire to learn1.Desire to learn
2.Effective listening ability2.Effective listening ability
3.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 views
5.Intentness on truth not on any person5.Intentness on truth not on any person
(1.5.4-5)(1.5.4-5)

28. • Pointers on LeadershipPointers on Leadership

29. Pointers on LeadershipPointers on Leadership
• Be ever activeBe ever active
• ““ If the king is energetic, his subjectsIf the king is energetic, his subjects
will be equally energetic. If he iswill be equally energetic. If he is
slack (and lazy in performing hisslack (and lazy in performing his
duties) the subjects will also be lazy,duties) the subjects will also be lazy,
thereby, eat into his wealth. Besides,thereby, eat into his wealth. Besides,
a lazy king will easily fall into thea lazy king will easily fall into the
hands of the enemies. Hence thehands of the enemies. Hence the
king should himself always beking should himself always be
energetic” (1.19.1-5)energetic” (1.19.1-5)

30. Pointers on LeadershipPointers on Leadership
• ConsultationConsultation
• ““All undertakings should be preceded byAll undertakings should be preceded by
consultation. Holding a consultation withconsultation. Holding a consultation with
only one, he may not be able to reach aonly one, he may not be able to reach a
decision in difficult matters. With moredecision in difficult matters. With more
councilors it is difficult to reach decisionscouncilors it is difficult to reach decisions
and maintain secrecy” (1.15.2,35,40)and maintain secrecy” (1.15.2,35,40)
• Therefore sit and counsel with those whoTherefore sit and counsel with those who
are matured in intellect ( 1.15.20-21)are matured in intellect ( 1.15.20-21)

31. Pointers on LeadershipPointers on Leadership
• PowerPower
• Power consists of 3 factorsPower consists of 3 factors
• 1. Intellectual (Knowledge)1. Intellectual (Knowledge)
Power,Power,
• 2. Military / money Power2. Military / money Power
• 3. Power of enthusiasm and3. Power of enthusiasm and
morale.morale.
• (R.R page 625)(R.R page 625)

32. Pointers on LeadershipPointers on Leadership
• Be well informedBe well informed
• Collection of information is for –Collection of information is for –
1.1. To know what is not knownTo know what is not known
2.2. Finding out the rest in a matter which is partly knownFinding out the rest in a matter which is partly known
3.3. Definite Strengthening of what has become knownDefinite Strengthening of what has become known
4.4. 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)

33. Pointers on LeadershipPointers on Leadership
• AccountabilityAccountability
• ““In addition to reporting in detail as wellIn addition to reporting in detail as well
as in aggregate, there is also an individualas in aggregate, there is also an individual
accountability for the revenues and theaccountability for the revenues and the
expenditures” (2.7.24)expenditures” (2.7.24)

34. Pointers on LeadershipPointers on Leadership
• Accounting systemsAccounting systems
• ““He (leader) should check theHe (leader) should check the
accounts for each day, group ofaccounts for each day, group of
5 days (a week), fortnight,5 days (a week), fortnight,
month, four months (quarterly)month, four months (quarterly)
and a year” (2.7.30)and a year” (2.7.30)

35. Pointers on LeadershipPointers on Leadership
• Accounting systemsAccounting systems
• ““He should check the income andHe should check the income and
expenditure with reference to theexpenditure with reference to the
period, place, time, head of income /period, place, time, head of income /
expenditure , source, bringingexpenditure , source, bringing
forward, quantity, the payer / paid,forward, quantity, the payer / paid,
the person causing payments to bethe person causing payments to be
made, the recorder and the receiver”made, the recorder and the receiver”
(2.7.31-32)(2.7.31-32)

36. Pointers on LeadershipPointers on Leadership
• Competition and StrategyCompetition and Strategy
• (similar to SWOT analysis)(similar to SWOT analysis)
• ““After ascertaining the relativeAfter ascertaining the relative
strength or weakness of powers,strength or weakness of powers,
place, time, revolts in rear, losses,place, time, revolts in rear, losses,
expenses, gains and troubles, ofexpenses, gains and troubles, of
himself and of the enemy, thehimself and of the enemy, the
conqueror should march” (9.1.1)conqueror should march” (9.1.1)

37. 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 ofNever forget the prime aim of
our lives – to give happiness toour lives – to give happiness to
othersothers

38. There should be a focusedThere should be a focused
approach to intellectual propertyapproach to intellectual property
rights and related issues. Ourrights and related issues. Our
ancient knowledge and cultureancient knowledge and culture
too are part of our resource basetoo are part of our resource base
and needs to be protected.and needs to be protected.
Dr. A.P.J. Abdul KalamDr. A.P.J. Abdul Kalam
(President of India)(President of India)

39. 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

40. 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 andVarious scholars and
Management thinkersManagement thinkers

41. Projects / assignmentsProjects / assignments
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‘Kautilya’s Arthashastra by‘Kautilya’s Arthashastra by
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42. Thank YouThank You

43. Radhakrishnan PillaiRadhakrishnan Pillai
ATMA DARSHAN
1/ Vaitey House, Parkway Colony,
L.T. Road, Mulund (E), Mumbai – 400 081
www.atmadarshan.com
radhakrishnan@atmadarshan.com
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