STRATEGIC MANAGEMENT

PROJECT REPORT

Enriching the Concept of Strategic Leadership Drawing Insights from

Panchatantra and Bhagwat Gita

(23 Aug, 2015)

Indian Institute of Management, Lucknow

Submitted to:
Prof. Sabyasachi Sinha
Submitted By: Group-7, Section A

PGP30177 Hetvi Vashi | PGP30151 Nandita Gupta | PGP30153 Virat Nilangekar | PGP30167 Sakshi Jain
PGP30172 Shwetha Subramanian | PGP30236 Varsha Gidwani

Acknowledgement
We would like to take this opportunity to express our profound gratitude and deep regards to our guide Prof.
Sabyasachi Sinha for his exemplary guidance, monitoring and constant encouragement throughout the course
of this project. The help and guidance given by him shall carry us a long way in the career on which we are
about to embark.
We also take this opportunity to express a deep sense of gratitude to the entire Gyanodaya staff for helping out
in searching for valuable information and resources, which helped us in completing this task through various
stages. We are obliged to our friends for their valuable support and cooperation during the entire period of our
project.

Executive Summary
This report highlights the importance of strategic leadership in business performance and how strategic
leadership knowledge can be enhance by the learnings of Bhagvad Gita and Panchatantra. Strategic skills
arent important not only to achieve growth but also to deal with the tough times, when resources are scarce,
it is equally important to ensure that the resources are directed in the right areas. Various theories have been
developed in last few years based on the learning of Gita and Panchatantra, five of such theories are talked
about in the report.
1. Authentic leadership is a term coined for self-actualized individuals who are transparent in their act, their
leadership style encourages their followers to not only follow but to be their own leaders. Jack Welch,
made GE reach great heights and brought a lot of positive and radial reforms under his leadership.
2. Spiritual leadership derives its concept from Bhagvad Gita where Krishna teaches Arjun how to build
ones character on three foundations of morality, stewardship and community. South west airlines have
adopted the concept of spiritual leadership through various measures.
3. Transformational leadership style focuses on the potential of the team members and motivating them so
as to achieve the goal. Bhagvad Gita requires us to think, act and influence others in ways that promote
the enduring success of the organization.
4. Servant leadership, highlights the qualities of a good leader in giving service to others, taking all aspects
and stakeholders into consideration thus promoting sense of community and delegating power and
sharing risks with team members.
5. Upper Echelon theory highlights the importance of top management in companys performance.
Bhagvad Gita sites the how the directed leadership of Pandavas led them to their desired results while
Kauravas leadership resulted in their own destruction. Strategic leaders acts in way to balance the
tension between success in day to day tasks and success in long term.

Contents
Acknowledgement ............................................................................................................................................. 2
Executive Summary ........................................................................................................................................... 3
Introduction ........................................................................................................................................................ 5
Spiritual Leadership Theory............................................................................................................................... 7
Transformational leadership .............................................................................................................................. 8
Servant Leadership Theory .............................................................................................................................. 10
Upper Echelon Theory ..................................................................................................................................... 12
Conclusion ....................................................................................................................................................... 14
References ........................................................................................................................................................ 15

Introduction
Strategic leadership capabilities include: Absorptive capacity, capacity to change and managerial wisdom
influences strategy. These capabilities helps in undertaking strategic leadership tasks like determining the
grand vision, developing, maintaining and exploiting the competencies, developing human capital,
sustaining effective corporate culture, emphasizing ethical practices and establishing strategic control, all
this helps in achieving sustainable competitive advantages.
Hindu mythological writing Bhagvad Gita mentions the concepts of self-leadership (Self exploration &
development) while stories of Panchatantra gives insight of all the above three mentioned strategic
leadership capabilities. Panchtantra stories inculcated these basic values in Indians since their childhood.
They teach us the basic sense of self control and self-actualization. They also teach us to believe in oneself,
set realistic goals and taking the blame upon our self in case things go wrong.
When an individual works in an organization, several aspects of corporate structure and functions tends to
undermine a persons moral responsibility. Organizational culture and norms, commitment goals and
pressure to conform makes the exercise of personal integrity very difficult. In such a case moral principle
provide a conceptual framework guiding people in making a moral judgement. Bhagvad Gita also underlines
a fact that person has a choice in action but never in its outcome. Many fraudulent acts has taken place in
industry because of the immoral behavior of their leaders, eg. being Satyam is a company which had won
many awards for corporate governance was blamed of forging the bank statement and brining the World
Bank officials. Enron and WorldCom, the telecom behemoth, shocked the business world with their
unethical and illegal operations.
Many leadership theories of present are inspired from the preachings of Bhagvad Gita and Panchatantra.
Few of them are discussed below:

Authentic Leadership
Authentic leadership is a relatively recent term coined for the self-actualized individuals well aware of their
weaknesses, strengths and their emotions towards their colleagues and followers. They act in a transparent
manner at all times, whether in public, in small groups or with individuals. They are never afraid of
admitting their fears and mistakes and exhibit a very positive leadership style. This leadership style is
gaining popularity because it has been observed that the ethics and behavior of a leader greatly influence and
are readily adopted by the followers. These leadership concentrate on two aspects, encouraging the followers
to perform well, as well as encouraging them to not just follow, but be their own leaders.
Authentic leadership encompasses both transactional as well as transformational components of decision
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making of leaders and followers who conduct ethical and moral decision making. There are 3 major kinds of
values which have been identified as relevant to probing authentic leadership. They are:

Moral Values: kindness & selflessness.

Modal Values: morality, truthfulness, dependability & reliability

End Values: safety, fairness, impartiality, and community

The stories of the likes of the Lion and the Rabbit, Fox and the lion etc. in Panchatantra teaches us that the
leader should be impartial and should not think highly of himself, otherwise he can be easily fooled, leading
to not only his but the organizations downfall as well.
Researchers have identified four major behavioral characteristics of authentic transformational leadership
style. They are also known as the 4Is, and are mentioned below:

Idealized influence

Inspirational motivation

Intellectual stimulation

Individualized consideration

The following figure summarizes the effect of the moral and ethical behavior in terms of the 4Is and 3 values
of the leader on his/her followers. The leaders values, emotions and actions affect that of the followers and
ultimately, affects the group ethics. This in turn, again gives a boost to the leader to act and encourage an
even wider team and colleagues, thus ultimately resulting into overall gain.
Under the leadership of Jack Welch, General Electric reached great heights and became one of the most
successful companies in the world. While Jack Welch, himself brought a lot of positive and radical reforms
in the company, at the same time, he always encouraged his employees to come up with new ideas, welcome
changes, think universally, and believe in delivering best results. This was evident as many of the GEs
employees later became CEOs or headed top positions in other businesses.

Figure 1 Authentic leadership model

Spiritual Leadership Theory

Since the 1980s, a lot of attention has been paid to developing new theories that have paid attention to the
emotional, moral and subjective values and qualities such as faith, patience and humility which had thus far
been ignored in leadership theories. Spiritual Leadership leads to improvement of morale, reduction of stress
and leads to increased productivity, employee retention which ultimately leads to better performance at work,
more efficiency and higher stock price.

Figure 2 The Spiritual Leadership Model

Although this is a newly developed field, the concepts have been ingrained since times memorials in Indian
society, as children through Panchatantra that imparts moral values and later, through Gita that teaches us to
apply spirituality in our lives. It defines spirituality as Deivi Astras that is a moral code of values such as
letting go of ones ego, always keeping the goal in mind, working towards the general good. The application
of these techniques enable self-governance and a workplace were the team can function freely without the
leader thus leading to broad accountability. The teachings of the Gita thus similarly redefine leadership. In
the Gita, Krishna inspires Arjun to even fight against his role models, teachers and family though preaching
of spiritual values.
In the Gita, Krishna teaches Arjuna how to build ones character and also the root cause of failure and
methods to avoid it. The battle of Kurukshetra is symbolic of the inner conflict in man. Krishna outlines
qualities of a good leader and human to be merciful, obedient, truthful, equitable, magnanimous,
mild-mannered, clean, simple, charitable and peaceful. He should not be greedy or possessive but instead be
steady and determined and free of the six bad qualities (Kama, Krodh, Lobh, Moha, Mahd and Mathsariya.
(Bhagvad Gita, Chapter 16, Verses 1-3). Kurukshetra is also about mind control. Every manager or
employee, is fighting his own battle, his own Kurukshetra. The Gita helps us to regulate our senses, control
our minds and gain spiritual strength.
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The three foundations for spiritual leadership as defined by Gita are morality, stewardship and community.
Leading organizations such as South West Airlines etc. have responded to the emergence of spiritual
leadership by measures such as increasing the awareness on religious diversity, providing spiritual counsel
to employees, and conducting yoga, feng shui and taichi classes and other stress management practices and
promoting charity by allowing for volunteer activities or granting leave for charity work (Cash & Gray,
2000). The Gita provides a clear guidance on how to implement Spiritual Leadership as the steps taken by
Krishna to inspire Arjun

Krishna embodies in Arjun the need to win the war to win over evil as his ultimate goal. The first step of
spiritual leadership is to incorporate a vision embedded in a corporate culture and ensure widespread
acceptance of the vision amongst all stakeholders. The Gita tells us to develop a visionary perspective in
the work we do. It tells us to develop a sense of larger vision in ones work for the common good.

Commitment to becoming ones best self. This requires renunciation of ones egos and desires. The Gita
advises us to renounce all personal desires and fight free from all mental fevers. This leads to dedication
and results in the right action being done with a sense of complete detachment. This according to Gita
which will lead to killing of Ego and one becoming ones best self.

This automatically leads to the third step of doing well for the larger community and a commitment to
serving others. The larger good would not only include the shareholders but also the less fortunate as
part of CSR activities of the firm. This leads to a sense of mutual trust and concern for not only people
and but also organizational goals and the vision.

This leads to a work environment that encourages openness, fairness, individuality and creativity;
leading to an innovative and creative workspace.

This creates an atmosphere of interpersonal integrity

where no member is threatened by the others. This also leads to encouragement of group unity,
teamwork and sharing all of which leads to achievement of the ultimate goal of the organization

Transformational leadership
Transformational leadership involves building team and developing people who are motivated and skillful
enough to achieve organizations objectives and thus achieving growth. What helps transformational
leadership to stand out from rest of the leadership styles is that it is based on the belief that though goals are
important, the means are more important and focusing on means deployed to achieve goals would help
develop sustainable culture.

Transformational leadership is about delivering extraordinary performance with the help of ordinary group. It
emphasizes on the importance of ethics and values while pursuing the goal. A transformation leader develops
his team members such that he leaves rich legacy behind. James MacGregor Burns describes transformational
leadership as a leadership style that identifies potential of the team members and search for their motivations.
They show trust and confidence in their team. Such leader achieves extraordinary performance from team
members by tying followers motivation with organizations goals.
According to Bass and Avolio (1994) transformational leadership philosophy is based on four pillars.
1) Inspirational Motivation: This principle emphasizes importance of encouraging activities that provide
meaning to the followers. It aims to create team spirit, enthusiasm and optimism in team members. It implies
helping team members understand the vision and emphasizing why it is important to achieve the goals.
Vision inspires team members and thus get them committed to shared goal of the organization.
2) Idealized Influence: It describes performing activities, accumulating knowledge and following principles
that result in followers admiration and respect. It emphasizes moral and ethical behavior on the part of a
leader. Such leader derives its charisma from followers trust in the leaders character and activities.
3) Intellectual Stimulation: it implies encouraging team members to come up with new ideas. It focuses on
finding creative solutions to issues. It develops sense of personal responsibility and creates interest in the
task at hand.
4) Individualized Consideration: It implies giving importance to each member of the team. It is important
for the leader to take into consideration team members needs and growth. The activities should be planned
in such a way that each team member feels value addition. This character requires leader to have high
emotional quotient.

Transformational Leadership and the Teachings of Bhagvad-Gita

Bhagvad Gita provides framework for building up mindset of effective leader. The Guna leadership theory
from Bhagvad Gita explains that there are three Gunas

Sattva (awareness): It emphasizes purity of character. It is free of evil. This guna implies wisdom,
goodness and love for knowledge.

Rajas (dynamism): Rajas implies ego, restlessness, craving, greed and passion.

Tamas (inertness): It implies delusion, ignorance, heedlessness, inertia and confusion

Guna are fundamental constituent of human being. Transformational leaders have dominant Sattvic guna.
For an individual, it is possible to develop Sattvic nature. Comparison of transformational leader
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characteristic and Sattvic performers reveal that

1. Transformational leaders work as agents of change. Bhagavad-Gita states that the world is in a state of
constant flux and change is permanent. So the Sattvic leader has to accommodate such change and not
follow the existing practices without reason.
2. Transformational leaders are courageous. These leaders take risks in order to make sure that objectives
are achieved. Fearlessness is an essential virtue that adorns these individuals. Bhagavad-Gita state that
Sattvic humans perform their actions without any fear.
3. The transformational leaders believe in their team members. Bhagvad Gita states that all living beings
have divine spark in them. Sattvic person knows this and hence respects all human beings. He belived
every person has something good to offer and it can help in achieving the shared objective.
4. The transformational leaders have strong minds. Sattvic persons cast off their weakness of heart when
performing duties. They should remain strong in the face of the odds.
5. Perform duty and set an example for others to follow. The concept of duty is given great importance in
the Bhagavad Gita. Duty in the organizational context goes beyond contractual agreement in the
employment relationship. Both employer and employee need to understand their duties in order to create
good working relationship and harmonious industrial relations.
6. Self-duty: The Bhagavad-Gita stresses that it is important to control mind and regulate ones behavior.
Before leading other, the person would lead his activities and behavior effectively. It involves managing
emotions and self-control. It is necessary to know ones duty and be clear about ones vision.

Servant Leadership Theory

Servant leadership theory has gained interest in recent years. Many organizations have employed servant
leadership principles for organizational management. The most important priority of servant leadership is
service to others, taking all aspects and stakeholders into consideration thus promoting sense of community
and delegating power and sharing risks with team members.
To understand this theory in more detail we take a look at founding principles of the theory.
1. Service to Others: This implies leader taking role of servant when communicating with its followers.
This principle believes that effective team work can be achieved by encouraging collaborative (helping)
approach to the task instead of exercising power or actions which are taken in self-interest. By
displaying humility, the leader tries to bring out greatness in others.
2. Holistic Approach to Work: This principle stands for the belief that work exists for person as much as
person exists for work. It promotes that leader should encourage followers by encouraging them to show
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full potential. This can be achieved by effective sharing of power and risks. This activity also creates
trust among team members.
3. Promoting a Sense of community: Servant theory argues that only collective efforts of all team members
can achieve organizational goals. Hence it is necessary to establish feeling of unity among team
members. Servant leader should take prime role in developing such community culture.
4. Sharing of Power in Decision-Making: This activity encourages followers to realize full potential. Trust
of the leader in team member is a great motivator. It creates sense of responsibility. An effective servant
leader nurtures participatory behavior in the followers and help them become servant leaders.
To effectively execute actions based on above principles the servant leader should have following
characteristics.
1. Listening
2. Empathy
3. Healing
4. Awareness
5. Persuasion
6. Conceptualization
7. Foresight
8. Stewardship
9. Commitment to growth of people
10. Building Community.
Any leadership theory should be supported with empirical evidences. The theory has come under fire from
academicians due to lack of empirical evidences. However, we find some evidences supporting this theory in
the Indian mythology. In Mahabharata, Sri Krishna could have won the war by himself. However, he chose
to become charioteer of Arjun and guided him throughout the war. We believe this is the most befitting
example of effectiveness of Leader becoming a servant. By clarifying moral and physical doubts of Arjun
Sri Krishna helped him realize his true potential. In Bhagvad Gita, it has been said that Work is necessary for
all human beings. Humans cant exist without work. However, it is necessary to perform work as a duty and
not because of self-interest. This argument in Bhagvad Gita also supports the principles of servant theory.
Another key characteristic of servant leadership is a leaders humility. Srikrishna was not concerned with
followers receiving credit for winning the war and establishing moral and dharmic empire. By enabling his
followers, delegating responsibilities to them he made them important players in achieving the goal. Having
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cultivated ideal qualities in the followers Lord Krishna ensured good legacy after him. Essentially by
assuming position of servant to the followers, it became easier for Krishna to transfer knowledge and
guiding followers when they face moral issues in practical scenarios. Such was the instance when Arjuna got
demotivated and Sri Krishna guided him.

Figure 3 Role of servant leadership in knowledge creation

Upper Echelon Theory

The basic concept behind the upper echelon theory is that every firm is mere a reflection of its top
management. It reflects the background, knowledge and expertise of the top people in the firm. The different
situations of the firm such as opportunities, threats, alternatives, outcomes of the decision are seen and
judged by the top management from their individual lenses. This brings a bias in decisions for the firm based
on the values, principles, experience and personalities of the top managers. This theory is very useful for
examining effects of top management teams composition and diversity in knowledge onto the outcomes of
decisions taken. This leads to an inference that to understand the strategy one need to understand the
management first.

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Figure 4 Concept of Upper Echelon Theory

(Source: Adapted from Hambrick and Mason (1984), Finkelstein and Hambrick (1986))

This theory shows that to have an effective and strategic organization the top management should consist of
the people with best knowledge, diverse functional expertise, moral values and ethics. This leads to the
concept of having diverse top management. Cognitive diversity leads to profitability.
The knowledge territory of upper echelon theory can be characterized as fragmented and unchartered owing
to the heterogeneity and behavioral diversity of the executive people. Organizations that wish to attract,
retain, and benefit from diverse talent of its people should always begin with increasing the diversity of their
senior management. Study shows that certain firms after restructuring their top management increasing the
diversity experienced a better performance. This leads to certain characteristics that a person in top
management should have.
1. Directed leader
2. Knowledgeable
3. Action oriented
4. Ethical
5. Having a long term vision
6. Influencing
7. Motivating
8. Modest
The top management should have the long term vision knowing the strengths of every team member. It
should give the credit of success to all the members in the team. It should be able to take the right decisions
at the right point of time. It should be able to influence the right working culture of the organization having
fearlessness, self-control, honesty, accountability, modesty, absence of greed, envy and pride, fairness etc. It
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should think about not just affecting individual life but society as a whole.
In Mahabharata, the ultimate leader was Krishna who envisaged the victory of good over evil which was the
final outcome of the war. Also, leaders such as Pandavas and the diversity of their expertise helped them win
the war. On the other hand, Kauravas were full of vices and this was reflected in the strategic moves that
they took. The directed leadership of Pandavas led them to their desired results while Kauravas leadership
resulted in their own destruction. Pandavas with the directed leadership of Krishna and their own diverse
expertise could win the war.

Conclusion
All these strategic leadership theories discussed above clearly shows the importance of morals and ethics in
achieving success in business. From the age of Mahabharata, where Krishna guided Pandavas for a win over
Kauravas and Panchatantra stories, which are more than two thousand years old, all emphasizes the
importance of strategic leadership qualities for ensuring the balance between short term as well as long term
success. Researchers and academicians have adopted all these learnings from Bhagvad Gita and
Panchatantra and developed theories for todays business leaders to imbibe and guide their followers.

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