Arthashastra

Summary of Arthashastra:

Chanakya’s Arthashastra, also known as Kautilya Arthashastra, is a classic of statecraft. It deals with the politics (Raja dharma), leadership, qualities and disciplines required for a Rajarishi – a wise and virtuous king.

According to Kautilya, a Rajarishi is one who has self control, having conquered the inimical temptations of the senses; cultivates the intellect by association with elders, keeps his eyes open through spies; is ever active in promoting the security and welfare of the people; ensures the observance (by the people) of their dharma by authority and example; improves his own discipline by (continuing his) learning in all branches of knowledge; and endears himself to his people by enriching them and doing good to them

Given below are some excerpts on various branches dealt with by him:

Concerning Discipline
Concerning Law
The conduct of courtiers
The end of the six-fold policy
The work of an invader
The conduct of Corporations
Strategic means to capture a fortress
The plan of a treatise
The duties of government superintendents
The removal of thorns
The source of sovereign states
Concerning vices and calamities
Relating to war
Concerning a powerful enemy
Secret means


A brief Description of some concepts in Arthashastra relating to Management :

Science

The Science of Politics is the only Science, which is connected with all sciences
By learning science one can know what being spiritually good and what material well being is
Power of Science: Regular Study makes intellect from which Practical Operation and Self-Control comes respectively
Student of Science should not be disturbed by Lust, Anger, Greed, Price etc.,

Humanity

Keep the mind steady in adversity and in prosperity
Our common duties are, not to hurt living creatures, Truthfulness, Uprightness, Freedom from animosity, being affectionate to others, benevolence etc.,
Avoid doing injury to others
Avoid persons who are harmful and falsehood by nature

Duty

One should observe his regular duties and it will lead him to Heaven and supremeness

Economics

Agriculture and Trade constitutes Economics

Discipline

Security brings Self-discipline
Discipline comes from two ways, Acquired and Inborn

Learning

Science bestows discipline to people who are desirous of learning
Learn science from perfect expounders
Having close consort with elders will improve learning

Self Control

Leader having no control over senses will be ruined
Control over senses will overcome Lust and Anger
Avoid another man's wife and wealth
One should not go beyond his boundaries
One should avoid association with persons who are unrighteous

Pleasure

Enjoy your sensual pleasure without harming your spiritual qualities
Excess of Sensual pleasure will bind you to material miseries

Spiritual

Material is also said to be supreme when it is used for spiritual purposes

Rulership

Rulership can be successfully carried out with the help of associates
Behave like master when you are in position

Decision

Own decisions can be misguided, ask for second opinion

Appointing Staffs

Do not appoint your playmates - they can mistreat you
Appoint your teammates by knowing their loyalty
Before appointing staffs know their qualities and calculate the benefits of them to the company
Appointment of staffs should be done by well versed
Also appoint the person who does not have practical knowledge but conversant of science

Secrets

Secrets should not be discussed in conference even with your Teammates
If secrets are communicated with many you will become subservient to them
If your secrets are exposed to others, you are accustomed to bend towards the opinion of the knower of your secrets

Loyal

Whoever helped you in difficult situations, know them as truthful and loyal.

Retention

If you know that one having good conduct never make him to leave

Testing

Integrity of staffs is proved by secret tests
Rank your staffs according to their ability

Office Discipline

Contact with outsider inside the premises should be avoided
Attendance and movement of employees should be carefully examined
Incoming and outgoing couriers/parcels should be written and checked with proper records along with authentic seal
The usage of MD's room by other person without permission is equivalent to jewel theft and he should be punished

Assistants

Company proprietor should keep trained person and well known as his personal assistant
Loyally proved and hereditarily known can be a personal assistant to the owner of the company

Employment

Hire a person who bear troubles and endowed with energy and power
Employment should be made to who are firmly devoted and having quality of uprightness and friendliness etc.,
Should not recruit a person who does not endowed with character
An employee should have the qualities of eloquence, boldness and should be trained in arts (in respected fields)
An employee always should be easy to hold in check (ex:near work station)
Inquire one about his abilities by tracking his old friends and colleagues (reference check)
By making conversation with one candidate test his eloquence and boldness
Test employees handling situation in the difficult tasks
By undertaking the test make sure of friendliness and firmness of the candidate
Check the character along with other qualities of a trainee
Mostly personal observations will give clear results of a candidate
Know the physical fitness before appointing a person
It is good to have psychometric tests before employing a person
Employ a person who has knowledge in auxilliary sciences
Test the integrity of the candidate by secret tests
The secret tests on piety will show loyalty of the candidate
Person uprightness can be judged by his disinterest over the material gains
Person who is not addicted to recreation can be appointed
Purity of a person can be identified by the test on lust
Loyal persons should be employed in judicial department
Piety persons should be employed in stores and administration department
Loyal and fearless person can be employed as a guardian/over taker of a concern/company (arbitrator)
Those who are proved by loyalty, piety, pureness they can be employed in housekeeping
Person who is loyal, piety and pure can be appointed as chief/manager etc.,
All the secret tests for employing a candidate should be outsourced to an external agency

Spies

Secret agents should be encouraged with money and honour
Secret agents should report only to higher authorities
By proving truthfulness a housekeeper also appointed as a spy
Secret agents can appoint other secret agents by identifying their honesty
Art of association with the people is an important criterion for a spy
The management should employ spy in a profession, which shows dignity and royalty
Spy who makes consequent mistakes in their part should be terminated silently
Spies are responsible to identify bribery

Rules of a Leader / Administrator

Leader always should be active so that employees will be active accordingly
If leader is remiss then followers will also be the same
Employees are more important because they do the work for the leader
By being active leader he is beyond the reach from competitors
The leader always should be energetic
The complete work chart of a day is to be maintained by leader
The work chart of a day is to be divided into eight parts (task per hour)
On the opening hour/day income and expenditure works or financial strategies should be discussed
On the second hour leader should meet the marketing people and representatives
Third hour will be a study hour for a leader
Distribution of tasks to the respective department will be done on the fourth hour
Reading official mails and consultation with secret agents will be done at fifth hour
On the sixth hour he can have a relaxation with some recreations or there may be a consultant meet
On the seventh hour leader should go through/verify the works of administration and housekeeping
The upcoming product review can be discussed with senior officers during eighth hour
Saluting the almighty for the works finished can end the day
When leader is in his room or in his place restrictions should be avoided so that employees can meet him liberally
Leader should work according to the matter of emergency
Leader should deal urgent matters in person
Procrastination of the works can make it harder or even impossible
Leader should always respect the people who having the knowledge
Anger is a self-destructing weapon of a Leader
For leader, benefits to the company are the benefit to him; benefits to him are not the benefit to the company
The basic of material well-being is activeness and material misery is vice versa
Activeness leads only to benefits and inactiveness surely to destruction

Infrastructure

The company should build his own building only by renowned expert builders
The company should be able to escort the employees even in natural calamities
Precautionary measures should be taken against fire etc.,
Every person should have a cabin and they should not leave nor move to others unnecessarily

Heads of Departments

Company should appoint heads for each and every department
Manager of the company will lead the heads of the department
Benefits given to the HOD by the company should not be misused
Avoid the benefit and exemptions to the HOD which cause loss to the Company
According to the needs of the HOD facilities should be made for their work environment
The benefits attained by the projects by HOD should reach the owner of the company
HOD should be impartial to the kinsman staff and other workers
HOD can terminate any employee due to their incapability, with the permission of higher authorities
Company should not provide any recreation facilities, which obstruct the work
HOD should take care of system maintenance and housekeeping for increasing the profit of the company
HOD should have clear knowledge of future obstacles and should take decision to overcome that
HOD should guard the existing projects and should create new and innovative projects
HODs have the power to lay off the staffs for misusing company items/products

Utilisation of Disposables / Unused Places

Unused place in the office should be utilised without affecting the office work
The vacant place can be used as re-creation or pantry areas
Vacant place in the center of the office can be used as a park
Grow trees and make pools for beauty and cleanliness in the vacant place
Company should appoint a security for guarding the premises
Rewards can be granted to securities for their works with devotion and sincerity
Rewards should be given to employees for identifying or informing the misuse of the company

Finance

Finance manager should have the receipts even older than hundred years so that he would not falter in respect of expenditure
Wise manager should show an increase of income and decrease of expenditure
Special allowance should be given to the employees for sudden calamities
Fine should be made to officers who come regularly irregular to the work
The fine is also to delayed work by the senior officer
Fine will be double for junior officer who does not complete the work
Company can cut or reduce the incentive for the delayed works by the officers
There may be excuse for the procrastination of the works for few weeks
An officer of the finance department should check day-to-day, weekly, fortnightly, monthly and annual income and expenditure
Company should check the source of income with the reference of place and time
The officer of accounts can be warned for the imperfect and illegible manner of maintaining entry books of accounts
The loss of account records made by the officer of finance should be fined
The false statement in the entry book is considered to be a theft and the responding officer should be punished under law
Officers can be excused when they admits the mistakes made by them
Company should give incentive to the officers according to the benefit and expenditure on accounts made by them

Recovery of Revenue

Each and every single work of the company depends on the income of the company
Clean activities, suppression on theft, present cash are some of the things which increase the income of a company
Obstruction, lending, loss, damage, misuse, trading are the causes of depletion of the industry
Not attending the faults, ignorance of growths, improper delivery etc., will lead economy to decrease
The failure of concealment made by the officers should be fined
If an officer ordered a consignment, which gave loss, previously, he should be warned and it should be avoided in future
Misappropriation of income by officers should be fined
Late payment, does not pay, deny to pay are the misappropriation of income
Head should regularly inspect and interrogate the person who pays, receives and records the payments
False statement made by any one in the finance department should be punished
If officer denies all charges against him but proved guilty will be liable for punishment
An officer who misappropriate large amount and proved accusation also liable for punishment
Incentive can be given to informers of the accounts misappropriation
Informers of the misappropriations should be motivated by large incentives