Management Practices from

‘Kautilya’s Arthashastra’

(Written by Chanakya,

The world’s first Management Guru)

Who was Chanakya ?Who was Chanakya ?

• Born in 3 B.C.Born in 3 B.C.• Vishugupta – Kautilya – ChanakyaVishugupta – Kautilya – Chanakya• Pulled down Nanda DynastyPulled down Nanda Dynasty• King maker – Chandragupta MauryaKing maker – Chandragupta Maurya• Responsible for the defeat of Alexander Responsible for the defeat of Alexander

in Indiain India• Kautilya’s Arthashastra & Chanakya Niti Kautilya’s Arthashastra & Chanakya Niti

– Documented towards the end of his life– Documented towards the end of his life

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)• Covers over 180 topics. Known as a Covers over 180 topics. Known as a

Book of Economics, state craft, Book of Economics, state craft, Management, warfare, strategy etcManagement, warfare, strategy etc

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

Management Topics in ArthashastraManagement Topics in Arthashastra

• Principles of Principles of ManagementManagement

• Management Management EducationEducation

• Accounting systemsAccounting systems• Corporate Corporate

GovernanceGovernance• Time ManagementTime Management• Leadership SkillsLeadership Skills

• ContractsContracts• Selection of Selection of

EmployeesEmployees• Consulting Consulting • Strategic Strategic

ManagementManagement• Handling competitionHandling competition• Expansion of Expansion of

Territory etcTerritory etc

Sample of Verses related to Management Topics

in

‘Kautilya’s Arthashastra’

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. Deciding suitable place and timeDeciding suitable place and time4.4. Provision against failureProvision against failure5.5. Accomplishment of the workAccomplishment of the work

•   (1.15.42)(1.15.42)

Wealth CreationWealth Creation

• ““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)

Corporate GovernanceCorporate Governance

• ““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)

Selection of EmployeesSelection of Employees

Appointment of traineesAppointment of trainees

A ‘trainable’ person is the one who has the A ‘trainable’ person is the one who has the following qualitiesfollowing qualities  

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)

Handling EmployeesHandling Employees

• 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)

Role of a ConsultantRole of a Consultant

• 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)

Why is information required ?Why is information required ?

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 Finding out the rest in a matter which is partly knownknown

3.3. Definite strengthening of what has become Definite strengthening of what has become knownknown

4.4. Removal of doubt in case of 2 possible Removal of doubt in case of 2 possible alternativesalternatives

• (1.15.20-21) (1.15.20-21)

SWOT AnalysisSWOT Analysis

• ““After ascertaining the relative After 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, of expenses, gains and troubles, of himself and of the enemy, the himself and of the enemy, the conqueror should march” (9.1.1)conqueror should march” (9.1.1)