Management History: The relevance of Kautilya’s Arthashastra in contemporary management

Balakrishnan Muniapan
School of Business & Enterprise Swinburne University of Technology, Sarawak Campus Email: mbalakrsna@yahoo.com

Objectives
To create awareness to readers of management on the existence of a 4th Century management literature called the Arthashastra. To explore the relevance of Kautilya’s Arthashastra in contemporary management. To highlight the contributions of ancient Indian history, philosophy & culture to management thought.

. philosophical & historical approach to management. Outside-in & inside-out approaches to the management practice. Scientific approach to humanistic approach – management as an art with no perfect formula. Increase in spiritual.Introduction Changing paradigm of management research – “fathers” of management. Interdisciplinary approach to management.

Kautilya. . Chanakya or Visnugupta Authored Kautilya’s Arthashastra & Chanakya Neeti in the 4th Century BC. Professor of Politics & Economics at Taxila University. Pulled down Nanda Dynasty King maker – Chandragupta Maurya.

Kautilya’s Arthashastra A treatise on political economy. It is often compared to Machiavelli’s The Prince . It is a book on ‘Total Management’. . written in Sanskrit. 150 chapters & 6000 sutras. It contains 15 books. national security issues. administration of justice & economics development policies. It covers three parts namely.

analysis of languages and content analysis or text analysis of a literature.Methodology – Hermeneutics qualitative research methodology used in social science research. a study. understanding and interpretation of ancient or classical literatures. .

. Integrate – modify & integrate the lessons into management practice.Methodology – Hermeneutics Identify – discover the best practices from the literatures. Investigate – analyze the content & context of the text.its relevance to management today. Interpret .

Literature Review Management is culture specific. religious.2003). cultural anthropology. also multidisciplinary: It applies the disciplines of psychology. social psychology.2005). politics. law. philosophical (also historical) studies in management are increasing (Kale & Shrivastava. Chinmayananda (2003) asserted that ancient philosophies needs intelligent re-interpretation to apply effectively in the context of modern times. finance and philosophy (Muniapan. . The interest in spiritual. sociology. economics.

kama & moksha.Literature Review Artha is one of the of life (Purshartha) besides dharma. . Kautilya made references various teachers who include Bharadvaja. In his Arthashastra. Visalaksa. Shamasastry (1909) discovered the text & translated it & R. The earliest Arthashastra can be found from the Ayodhya Kanda of Valmiki Ramayana and in the Santi Parva of the Vyasa Mahabharata. Pisuna and Kaunapadanta.P. R. Kangle (1969) critically edited the text & translated – the basis for latter translations. among others. Manu. Parasara.

Kumar & Rao (1996) conducted a study of value based management from Kautilya’s Arthashastra. however studies specifically in the context of management is limited. Narayana (2002) integrated Kautilya’s Arthashastra into strategic leadership. .Literature Review Several studies have been done on various aspects of Arthashastra by Kautilya. Garde (2003) made a study on Chanakya ‘s (Kautilya) aphorisms on management.

Muniapan & Dass (2008) highlighted the CSR perspective of the Arthashastra. . Muniapan & Shaikh (2007) explored lessons in corporate governance from Kautilya’s Arthashastra in ancient India. organizational design and the role of ethics in ancient India. Radhakrishnan (2005) identified and exposed some of the Kautilyan management fundamentals.Literature Review Sihag (2004) researched Kautilya on the scope and methodology of accounting.

4. Arthasya mUlam rajyam – the basis of resources is kingdom (organization). . Dharmasya mUlam arthah – the basis of righteousness is resources. Indriyajayasya mUlam vinayah – conquering the senses is rooted in training & discipline. RajyamUlam indriyajayah – the organization is rooted in conquering the senses. Sukhasya mUlam dharma – the basis of happiness/prosperity is righteousness (ethics). 5. 2. 3.5 Kautilya’s Aphorisms 1.

the basis of happiness is ethics The first sutra starts with happiness & the purpose of management endeavors is to generate prosperity to the stakeholders. However. the happiness is to be based on ethics/righteousness Similar lessons are also found in the Ramayana.Sukhasya mUlam dharma . other Vedic literatures & Thirukkural.C. Mahabharata (includes the Gita). Confucius also propagated the idea of an ethically run state in the 6th Century B. .

. prajAnam tu priyam hitam (1.34). nAtma priyam hitam rAgya. sukham rAgya.Kautilya on the Happiness of the King (Leader) In the happiness of his people lies the happiness of the king (leader). PrajA sukhe.19. He shall not consider as good only that which pleases him but treat as beneficial to him whatever causes happiness to all people. their welfare is his welfare. prajAnam cha hite hitam.

thereby. The leader of any organization should be able to maintain high standards while running an organization. thatha praja. If the king is energetic. If the leader is slack (and lazy in performing his duties) the subjects will also be lazy. eat into his wealth. Kautilya emphasized the importance of leadership by example. Besides. a lazy king will easily fall into the hands of the enemies. so will be his people (followers) – yatha raja. Hence the king should himself always be energetic.Kautilya on Leadership Kautilya had stated that as a king (leader) is. his subjects will be equally energetic. .

dharma without resources is toothless & resources without dharma is useless. Management must strive to generate resources based on ethical conduct or behavior.Dharmasya mUlam arthah – the basis of ethics is resources According to Kautilya. then lAbha (gain or profit). Subha (goodness or auspiciousness) must come first. Resources will make ethical conduct or behavior possible & vice versa. .

market penetration and diversification strategies. methods & markets. machinery. organization. . money. team or a unit. Further generation of resources requires expansion of the kingdom (organization) not by war (today) but through market & product development. Resources generated by organizations includes manpower development. materials.Arthasya mUlam rajyam – the basis of resources is kingdom To generate resources you need an enterprise.

7. therefore it is necessary to appoint senior leaders or management thinkers and listen to their opinion. One wheel does not support transportation. tesham cha shrunume matam (1.Kautilya on Organizational Management Managing an organization need to be carried out with help of senior leaders or management thinkers. kuruvitam sachivAn tasmAt.9). chakram ekam na pravartate. Sahaya sAdhyam rajAtvam. .

Only a leader who has conquers the organs of his body would be able to put organizational interest first before his self interest. arrogance. feet. nose & skin). tongue. . ears. lobha. genitals. & anus). mouth.RajyamUlam indriyajayah – organization is rooted in the conquest of senses Victory over the senses means control of 5 organ of sense (eyes. This also involves control of 6 enemies within – kAma. infatuation & envy). greed. anger. moha matsara (desires. krodha. & 5 organs of action (hands. also includes mana & harsa (pride & foolhardiness). mada.

The reins. eyes. and the passenger is the self. ears. nose and skin). the driving instrument. Managers s should be aware of their consciousness and use their intelligence to control the mind. the driver is the intelligence. . symbolize the mind. they should not let the mind to be controlled by the senses. the five horses represent the five senses (tongue.The Chariot Model – Katha Upanisad In the chariot of the body.

Bhagavad-Gita. gains/losses. all experiences such as happiness/sorrow. The control of the mind.19 – duty without attachment to the fruits. Chapter 3. victory/defeat.Indriyajayasya mUlam vinayah – conquering the senses is rooted in training The first chapter of Arthashastra is ‘vinaya adhikarikam’ or book on moral training. The conquest of senses is rooted in discipline & training in ethics & morals – should begin from childhood. . hot/cold should be taken with equanimity – brahma bhUtah.

a careful study the Arthashastra will be useful for management effectiveness & expanding business empire. all the way to the border of Persia (Iran).C. Today. extending to Bengal. Mauryan Empire expansion included Afghanistan. .The Impact of Kautilya’s Arthashastra Chandragupta Maurya was considered to be the unifier of India during the 4th Century B. Mauryan Empire was continued by his son Bindusara and by his grandson King Asoka .

financial management and human resource management from Kautilya’s Arthashastra are likely to be undertaken in the near future. .Conclusion There are many concepts from Kautilya’s Arthashastra. More studies in other areas of corporate management such as strategic management. which are still relevant for contempoary management. A deeper study of the book will open many new areas of management concepts. which is yet to be explored by modern management scholars.

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