“APPLYING KAUTILYA’S ARTHASHASTRA IN

HUMAN RESOURCE MANAGEMENT”

A RESEARCH PAPER

by

SANTOSH BAGWE

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Index

1. Introduction 3

1.1 Historical Background 31.2 Chanakya’s Life 31.3 How Chanakya is different 5

2. Research Topic 6

2.1 Evolution of HRM 62.2 Sutras on HRM in Chanakya’s Arthashastra 112.3 Uniqueness of Chanakya 13

3. Objective 15

4. Scope of the Research 15

5. Limitations of the Research 16

6. Hypothesis 16

7. Terminology 17

8. Chanakya’s identity 21

9. Collection of material 22

10 Analyses 23

10.1 Today’s HRM 2310.2 HR in Chanakya’s Arthashastra 25

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“Arthashastra is nothing but the Science of Government.”

1. Introduction

1.1 Historical Background 1

Management of people and of resources whether for manufacturing products, or for providing services or for administering a state, is a rather complicated task. Not surprisingly, therefore, we find that a plethora of sets of generalizations have been developed on “How to Manage Well to Achieve excellent Results on a Sustainable Basis”. Only a few of these have been total systems covering all the aspects of managing business. Many have been applied to real life situations and used, but not necessarily well documented. The real test of a treatise on management is not just its completeness or just the beauty of its logic, but also the demonstration of its practical application in real life situations, with enduring success.

The well educated Indian, like their counterpart in the Western and now also in the Eastern world, is under the implicit impression that such systematic thinking on management started only in the 20th century. However, given the complexity of managing a kingdom or a country, it would not be surprising if treatises on management were written in the ancient past also. In fact, a search for such management literature in India and in the world yields fruitful results. Some of the well known works that deserve attention are the following:

Author Country Treatise Approx. PeriodMaharshi Vyas India Mahabharata 5000 BCConfucius China Analects 430 BCAristotle Greece Politics 350 BCChanakya India Arthashastra 330 BCVisnusarma India Panchatantra 200 BCManu India Manusmruti 200 BC? India Hitopadesa 200 ADMachiavelli Italy The Prince 1532 AD

1.2 Chanakya’s Life

1Chanakya (350 - 275 BC), also known as Kautilya or Vishnugupta, was a professor (acharya) of political science at the Takshasila University and the Prime Minister of the Emperor Chandragupta Maurya. He is regarded as one of the earliest known political thinkers, economists and king-makers. He was the man to envision the first Indian empire by unification of the then numerous kingdoms in the Indian sub-continent and provide the impetus for fights against the Greek conqueror Alexander. Chanakya is perhaps less well known outside India compared to other social and political philosophers of the world like Confucius and Machiavelli, but is definitely considered to be the first genuine political theorist in Indian history. His foresight and wide knowledge coupled with politics of expediency helped found the mighty Mauryan Empire in India. He compiled his political ideas into 'Arthashastra', one of the world's earliest treatises on

1 http://www.book-of-thoth.com/thebook/index.php/Chanakya

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political thought and social order. His ideas remain popular to this day in India. In Jawaharlal Nehru's Discovery of India, Chanakya has been called the Indian Machiavelli.Nehru [1998, p. 123] describes Chanakya as follows: "He sat with the reins of empire in his hands and looked upon the emperor more as a loved pupil than as master. Simple and austere in his life, uninterested in the pomp and pageantry of high position."

2The centuries to come and the centuries that went by, are recorded in history talking of the great men and legendary characters who shaped time through their vision and exemplary actions. Chanakya, perhaps is the only personality who has been accepted and revered as a genius both by Indian and Western scholars. He is a historical milestone in the making of India amidst tremendous upheavals and myriad’s of reversals. Celebrated as a shrewd statesman and a ruthless administrator, he comes across as the greatest of diplomats of the world. He had the guts to speak his heart out even in front of the rulers, which shows his strong inclination to democratic values and the audacity to put his views through. Although, he lived around the third century BC, his ideas and principles show concurrence and validity in the present day world. Politics was his forte. Diplomacy in a politically charged environment shows his self-confidence and the ability to stay calm in trying situations.

His foresight and wide knowledge coupled with politics of expediency founded the mighty Mauryan Empire in India. He was a great laureate of economics with a glittering intellect to perceive the intricate dynamics of the various economic activities and principles.

The centuries that succeeded him show distinct effects of his thoughts on the way a kingdom is managed and other facets of economic administration. Even today, one of his maxims on taxation is very much alive and calls for adherence by the governments of the world. According to Chanakya, "Taxation should not be a painful process for the people. There should be leniency and caution while deciding the tax structure. Ideally, governments should collect taxes like a honeybee, which sucks just the right amount of honey from the flower so that both can survive. Taxes should be collected in small and not in large proportions".

As a person, Chanakya has been described variously, as a saint, as a ‘ruthless administrator’, as the ‘king maker’, a devoted nationalist, a selfless ascetic and a person devoid of all morals. He created controversy by saying ‘The ends justify the means’ and the ruler should use any means to attain his goals and his actions required no moral sanctions. All his written works namely, ‘Arthashastra’, ‘Nitishastra’ and ‘Chanakyaniti’ were unique because of their rational approach and an unabashed advocacy of real politic. His views were dimensionally novel. He recommended even espionage and the liberal use of provocative agents as machineries of the state. In politics, he even attested the use of false accusations and killings by a king’s secret agent without any ambiguities. The observance of morals and ethics was secondary to the interests of the ruler. Some of his stark views made him into an ambivalent personality for the world.This great statesman and philosopher have been often compared to Machiavelli, Aristotle and Plato, exemplifying his potentiality and influential status. He has been criticized for his ruthlessness and trickery and praised for his profound political wisdom. Chanakya, the timeless man, was in pursuit of truth fearlessly 2000 years ago and was proved right with Vivekanand’s words, "Arise, Awake, Sleep not till the goal is reached".

2 http://www.chanakya.com/chanakya.htm

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1.3 How Chanakya is different

3The Panchatantra consists essentially of 69 case studies compiled by the Guru to reach “management of people” to three grown up sons of a kind in a six month residential training programme. Hitopadesa is a similar treatise that borrows heavily from panchatantra, and has an identical narrative style. But unlike Arthashastra, these two deals only with one aspect of management – managing people. Chanakya’s Arthashastra deals with all the different aspects of managing a kingdom, including management of men. Arthashastra is the earliest known and available treatise of this kind in the history of the world. In Arthashastra, Chanakya deals with all aspects of administering a state – from training and establishing a government hierarchy, selecting people and levying taxes, to laying down laws, to deciding punishment for breaking the law, etc. Incidentally, Chanakya refers to views of several earlier (over 600 years) Indian authorities on management. He then states his own view, giving reason for differing from the earlier views. One presumes that he wrote the Sutras with a view to make it easy for his students of management, in a manner that will prove useful in actual practice

The Chanakya Sutras have the unique distinction of being the principles which have been demonstrated to have been used successfully in practice to achieve good results on a sustainable basis. We do need to look for those principles that are likely to make sense in our own social and work culture. These would hopefully deliver better results for all concerned – the customers, the investors, the employees, the vendors and the society.

Several of the current attempts at developing an Indian ethos in management turn to our philosophical or religious text. Such efforts, though commendable, suffer from three disadvantages. Firstly, the philosophical religious texts were written primarily in the context of doing one’s ordained duties as individual. Secondly, these do not address the many different aspects of managing an enterprise. Thirdly, when we choose the scriptures of any one religion in India, the managers belonging to other religions find it really difficult to accept the concepts which are not to be found in the same form in their own religion. So from amongst these, the one complete system of looking at all aspects of management is Chanakya’s Arthashastra.

3 Page 3 of “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House

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2. Research Topic

2.1 4Evolution of HRM

Workforce management has become increasingly complex. The heritage and growth of the human resource management profession is closely linked to people's attitudes about work, the evolution of employment-related laws and sociological trends. The HR field today recognizes the dynamic relationship between strategy, people, technology and the processes that drive organizations. Although this dynamic relationship appears obvious now, the evolution of the profession has often been slow.

One could argue that the HR field dates back to the first working arrangement between master craftspeople and their apprentices. Before the industrial Revolution, working arrangements involved close relationships between mentors and apprentices dedicated to learning a particular trade. Apprentices were often required to live in the shop or home of the master craftsperson. If an apprentice was injured or sick, the master's family was responsible for restoring the young worker's health and welfare. Master and apprentice shared in good times and bad, in profit and in loss.

The usefulness of this age-old relationship came to an abrupt end with the advent of the Industrial Age. In one powerful stroke, the notion of work moved from guilds and home shops to steam-driven factories. The introduction of the assembly line brought a need for low-skilled employees capable of performing repetitive tasks. Management philosophy at the turn of the century was epitomized by Henry Ford, who often wondered why workers brought their heads to work when all he really needed was their hands and feet.Assembly line production required that large numbers of people come together for work, but these workers were interchangeable and, to some extent, expendable, because few skills were required for most factory jobs. Employers' attentions focused on consumer demands, the speed at which new machines produced goods and the processes that drove production -- concerns that were sometimes placed well ahead of the needs of employees.

The personnel administration movement

By the late 1800s, people problems were a very real concern in the workplace. For the average blue-collar worker, most jobs were low-paying, monotonous and unsafe. Some industries experienced difficulty recruiting and retaining employees because of the poor working conditions workers were exposed to. As the means of production continued to shift from farmlands and guilds to city factories, concerns grew about wages, safety, child labor and 12-hour workdays. Workers began to band together in unions to protect their interests and improve living standards. Government stepped in to provide basic rights and protections for workers.

Forward-thinking employers recognized that productivity was connected to worker satisfaction and involvement and realized they could not meet production schedules with bands of disgruntled employees. In the late 1800s and early 1900s, the personnel profession that grew out of concerns about employee absenteeism and high turnover

4 Michael Losey "HR comes of age - history of human resource management". HR Magazine. FindArticles.com. 07 Jan, 2010.

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attempted to solve worker problems with such basic personnel management functions as employee selection, training and compensation.

It's believed that the first personnel management department began at the National Cash Register Co. (NCR). NCR faced a major strike at the turn of the century but eventually defeated the union after a lockout in 1901. After this difficult union battle, company President John H. Patterson decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety and other employee issues. The department also kept track of pending legislation and court decisions and these first personnel managers provided training for supervisors on new laws and practices.

NCR was not alone in its efforts to address employee grievances. Other employers were looking for management solutions that would alleviate employee disenchantment. Many attempted to ease labor unrest by increasing wages. For example, Ford experienced employee turnover ratios of 380 percent in 1913; in 1914, the company doubled the daily salaries for line workers from $2.50 to $5, even though $2.50 was a fair wage at that time.

Although industrial giants were beginning to understand that they had to do more than just hire and fire if they were going to meet consumer demands for products, most of the objectives of early personnel professionals were one-sided. Business leaders still viewed the work itself as infinitely more important than the people doing it, and production rates remained the top concern. Because employers believed employees would accept more rigid standards if they received extra pay and benefits, most employer-sponsored business solutions were aimed at making employees more efficient. From this mind-set grew scientific management approaches based on the work of Frederick W. Taylor and other experts whose goal was to get people to perform as efficiently as machines.

Of course, such approaches did little to improve worker morale or improve working environments. To counter the growing strength of the labor movement, some employers hired strikebreakers or kept blacklists of union members. Others made workers sign "yellow-dog" contracts -- agreements that they would not join unions. Still others attempted to protect their interests by creating company unions to pre-empt the influence of outside union activities.

Government stepped up to help those who were less fortunate through reforms of work hours, new laws governing the work of children and workers' compensation laws aimed at protecting employees injured on the job. In Congress created the U.S. Department of Labor "to foster, promote and develop the welfare of working people, to improve their working conditions and to enhance their opportunities for profitable employment."

The Labor Department grew rapidly during World War I as the war effort became a national priority. By the war's end, the Labor Department -- through the War Labor Administration (WLA) -- had set numerous policies to ensure that wage, hour or working condition problems did not hinder the war effort and industrial growth. WLA initiatives were model programs but frequently fell short of business needs. They could not meet the challenges that would soon stop the industrial explosion in its tracks.

In 1929, the onset of the Great Depression drastically changed the rules of business. With profits dwindling, employers first eliminated voluntary welfare program, then jobs.

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The government led by President Franklin Roosevelt, provided some assistance by creating jobs ranging from road building to painting murals on government buildings through the Civil Works Administration and later the more extensive Works Progress Administration. New social programs, including old-age pensions, labor standards and minimum wages for some industries, were developed.

With dreams of the good life fading for most workers, unions established strong roots in many industries and gathered political clout with Congress. The Norris-LaGuardia Act changed the rules of the game in labor-management relations by making "yellow-dog" contracts unenforceable and severely restricting the use of federal court injunctions in labor disputes. Union organizations grew in power after passage of the National Labor Relations Act (NLRA) in 1935, also known as the Wagner Act.

The NLRA signaled a change in the federal government's role in labor-management relations, giving employees the right to organize unions and bargain collectively, while prohibiting employers from engaging in certain unfair labor practices. The act also created the National Labor Relations Board (NLRB), which continues to establish procedures for conducting union organizing and election campaigns and has authority to investigate unfair labor practices.

As employers began to understand the need for professionals who could play a middle role between employees and employers, the personnel manager's role emerged. It was during this first movement that employers began to truly understand that employees were more than machines with interchangeable faces. The personnel managers of this period did not have all the answers, but the developing practices and concerns of the era set the stage for continuing study and investment in the role of effective human resource management.

Human relations movement

The field of human relations -- or industrial and personnel relations -- that emerged in the 1920s provided a new focus for the profession. In an effort to increase productivity, personnel programs expanded to include medical aid and sick benefits, vaccinations, holidays, housing allowances and other new benefits. New personnel roles emerged as unions began challenging the fairness and validity of Taylor's scientific management theories.

Although the study began as an effort to quantify the levels of lighting and other physical conditions that would maximize employee productivity, Mayo and his researchers soon found a much greater link between employee productivity and the level of attention managers paid to employees and their behavior. The studies concluded that, in motivating workers, human factors were often more important than physical conditions. For the first time, productivity research put forth the controversial proposition that workers' feelings were important. Mayo's work propelled further developments in HR management.

The concept of employee motivation increased in importance in the 1940s. When World War II ended the nation's economic drought and brought full production and full employment to the industrial giants, labor was again in short supply. As men were called to serve their country, shortages emerged, and women and teens were called on to keep the engines of industry rolling. For the first time, people of color took jobs previously not

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open to them. Expanded job growth also meant expanded roles for the personnel manager -- recruiting, testing, training, mediating, and keeping an eye on employee morale and production efficiency.

As the 1940s moved forward, Mayo's work and real-world business experiences launched a greater understanding of the dynamics of work groups and the social needs of employees. Business leaders began to appreciate the production that resulted when managers acted less like taskmasters and more like good leaders, counselors and facilitators. Non-monetary rewards became an important supplement to monetary rewards for motivating employees. New theories on the benefits of improving the relationships between management and employees abounded.

But many Americans awoke to harsh realities after World War II. Returning war veterans were ill equipped to meet the technological demands of the new workplace. The federal government responded with measures such as the GI Bill of Rights, which granted university-level educational assistance to returning veterans and was instrumental in developing new leaders and a powerful new workforce for the United States.After the war, the country was also rocked by severe inflation and labor unrest. After enduring wage freezes imposed during the war, unions sought to make up for the lost time. Union membership had grown from about 6 percent when the NLRA was passed to about 23 percent in 1947. Strikes became more frequent and union tactics in some cases more militant. strong anti-union sentiment emerged and against this backdrop Congress overrode President Truman's veto of the 1947 Labor-Management Relations Act, better known as the Taft-Hartley Act. The new law banned the use of "closed shops," which required workers to join the union to be hired, and placed government in the role of mediating union and management disagreements. But as the turbulent 1940s came to an end, a new turbulence was brewing in the Far East. Once again, the country mobilized for war production with the outbreak of the Korean War.

Human resource movement

After the Korean War, a new class of college-educated managers emerged with a greater sense of social responsibility than their predecessors. Throughout the second half of the 20th century, social well-being coupled with social upheaval -- best exemplified by the struggle for desegregation -- changed the thinking of employees in the United States.

As the 1960s and 1970s unfolded, a more personable group of managers emerged, and their interests in people and feelings influenced all facets of business, including the growth of market research, communications and public relations. This group of managers emphasized the relationship between employers and employees, rather than scientific management. Programs to increase wages and fringe benefits continued to be developed. New studies linked greater productivity to management philosophies that encouraged worker ideas and initiatives.

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5Rising role of HRM

The role of HRM has gain more important in the year 1980. There was a complete shift from post war collectivism and towards individualism and changes in structure of economy. Some people thought that HRM was evolved to solve union problem as there is a demand to take care of employees of an organization as a whole it performs different function.

During 1990, the success of large Japanese corporation in export market like automobiles and electronic goods took surprise to many western companies but studies say that the success of these Japanese firms is due to effective management of workforce. The studies also show that the workforces of Japanese firms are more productive and efficient than western firm. The key to success of Japanese companies like Toyota, Matsushita are the practice adopted for efficient management of workforce. As these companies started its operations in western countries, these practices of are also implemented by western companies.

Following are the practices:

Job Design – Job Description, Job Evaluation Competency Mapping Psychometric tests Performance Appraisal Assessment Centers Talent Management Leadership Development Culture Building

5 http://www.articlesbase.com/training-articles/evolution-of-human-resource-management-1294285.html

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2.2 Sutras on HRM in Chanakya’s Arthashastra

6Kautilya provides a systematic treatment of management of human resources as early as 4th century B.C. in his treatise titled "Arthashastra". As it has been described in the book, there prevailed logical procedures and principles in respect of labour organizations such as Shreni or guild system and co-operative sector. The wages were paid strictly in terms of quantity and quality of work turned out and punishment was imposed for unnecessarily delay of work or spoiling it. The Government used to take active interest in the operation of both public and private sector enterprises and provided well-enunciated procedures to regulate employer-employee relationship. Kautilya provides an excellent discussion on staffing and personnel management embracing job descriptions, qualifications for jobs, selection procedure, executive development, incentive systems (Sarasasaama- daana- bheda- danda- catura or Carrot and Stick approach) and performance evaluation. We find several indications of prevalence of guild system involving performance of work at the residence of the entrepreneurs themselves. In course of time, the guild system was followed by cooperative sector consisting of craftsmen and traders, and purporting to promote their professional interests. Indeed, numerous professional societies were formed on these lines with their own systematic procedures and policies to nurture their own interests. Again, there are several indications regarding the operation of principles of the division of labour. The concept of "Varnashram" or caste system was originally based on these principles. The individuals who used to earn their livelihood by engaging themselves in activities such as teaching, sacrifice or state management were designated as Brahmins while those specialising in fighting were termed as Kshatriyas. Moreover, individuals engaged in the areas of trade, business and agriculture were called Vaishyas and those devoting themselves in manual work were known as Shudras. Later on, these professions emerged to be hereditary which facilitated the transfer of skills and training from one generation to another Numerous professions based on such specialised transfer of skills became hereditary including goldsmiths, weavers, potters, blacksmiths, carpenters, hunters, charioteers, snake charmers, architects, sculptors, armourers which turned out to be separate communities by themselves.

7Some of the Sutras on HRM in Arthashastra

1) Selection test and Proper placements:

Srutavantam upadh-suddham mantrinam kurvita (Make him a minister who is learned and who has passed integrity tests)

Chanakya has prescribed very clear tests for selecting ministers and also placing them in proper department based on the results of test in Chapter VIII and Chapter XI of Book 1. 2) Results of demotivation

Prakti-kopah sarva-kopebhy gariyan (People’s anger is the greatest of all angers)

6 http://recruitmentlink.in/topics/elaboration-on-the-evolution-of-human-resources-management7 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House

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The anger of employees and also of the society in general is the most to be feared, because it is the worst anger that one can invoke or that happens to get generated when actions are taken without a serious thought to their short and long term consequence.

3) Importance of team work

na ekam cakram bhramayati (One wheel can’t make a cart roll)

sampadya atmanam anvichhet sahayavan (After equipping oneself, seek helpers)

4) Way of communication with employees

agni-dahat api visistam vak-parusyam (Too harsh words are even more significant than the burns from fire)

Scolding employee with very harsh word can be more harmful to the ego of the receiver than monetary or corporal punishment.

5) Employee Standing Orders / Rules

dande praniyate vrttih (Employment is sustained through enforcement of rule)

6) Appraisal pratyaksa-paroksa-anumanaih karyani parikseta (Work should be examined through self observations, others’ observations and logical inferences)

Chanakya is insisting on appraisal by manager, by other related staff and inferences from experience.

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2.3 Uniqueness of Chanakya

Based on own experience

8sukhasya moolan dharmah (Basis of happiness is ethics)

Chanakya, whose father had suffered injustice from the Nanda kings, knew the value of ethical behaviour by the rulers for the happiness of their subjects, from his first hand experience.

Practical and Pragmatic

9dharmasya mulam arthah (Basis of ethics is resources)

Neither following the ethical path nor performing one’s duties to others is a behavioural pattern which is possible until the individual concerned has the money or the means – resources – to fulfill the minimum needs of food, clothing and shelter.

10prakti-kopah sarva-kopebhy gariyan (People’s anger is the greatest of all angers)

The anger of employees and also of the society in general is the most to be feared, because it is the worst anger that one can invoke or that happens to get generated when actions are taken without a serious thought to their short and long term consequence.

11a-vinits-svami-labhat a-svami-labhah sreyan (Not having a chief is preferable to having a chief without humility/morality)

People or the employees would prefer not having a chief to having an arrogant one without scruples.

12gaja-pada-yudhamiva balavad-vigrahah (A clash with stronger is like the fight between elephant-mounted and on-foot warriors)

13rajnyah prati-kalam na acaret (Do not act or behave in opposition to the chief)

14na deva-caritam caret (Do not behave like the gods have behaved)

Practical but still ethical

Chanakya has put a lot of emphasis on ethical behaviour be as a normal human being or king or prince or minister

15dharmena dharyate lokah (The world is supported / looked after through ethics)

8 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House9 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House10 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House11 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House12 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House13 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House14 “Canakya on Management” authored by Ashok Garde published by Jaico Publishing House15 Canakya on Management” authored by Ashok Garde published by Jaico Publishing House

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16dharmena jayati loan (He wins over the people through ethics)

17atma-vinasam sucayati a-dharma-buddhih (wanting to be unethical indicates self-destruction)

Academic and Practitioner

18Kautilya is credited with destroying the Nanda (tyrant) rule and installing Chandragupta Maurya (321-297 B.C.E.) on the throne. He wanted that the kingdom should be secure and that the administration should go on smoothly, bringing happiness to the people. He thought that there were two ways of ensuring the happiness of the people. Firstly, Amatya Rakshasa had to be made Chandragupta’s minister; Secondly, a book must be written, laying down how a king should conduct himself, how he should protect himself and the kingdom from the enemies, how to ensure law and order, and so on.

16 Canakya on Management” authored by Ashok Garde published by Jaico Publishing House17 Canakya on Management” authored by Ashok Garde published by Jaico Publishing House18 http://www.accessmylibrary.com/article-1G1-126387162/kautilya-scope-and-methodology.html

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3. Objective

19Indian (Asian) management in particular, are still focusing in applying western models of management practices due to the wealth of western management literature and concepts available. Besides, many of the new generation of Indian Managers have received their education in management from western countries (Muniapan, 2005a). There is also some fear among the Asian academics that the management philosophy, concepts and ideas from Asia will not be able to get acceptance from the West.

According to Arindam Chaudhari, one of the preachers of Theory ‘I’ Management or Indian Management, although India has some of the best management schools in the world, most Indian organizations have not been able to do well internationally. Among the reasons cited is the failure of Indian management to develop the indigenous management style, which revolves around Indian cultural roots and upbringing. He further asserted that an Indian grows up in a system, where family ties and sense of belongingness gets top priority and with this background, he or she may not be able to adjust or fit into the job environment practicing American philosophies of individualistic, direct, low power distance and contractual style of management (Chaudhari, 2003)

This research will be an in-depth analysis of Chanakya’s Arthashastra and will explore the HR element from the literature. In general, the study of Chanakya’s Arthashastra in the context of modern management practices especially HRD is indeed limited. So this research is aimed to explore HR Element from Chanakya’s Arthashastra and to create awareness to readers of management on the existence of many ancient literatures from India like the Arthashastra which provide many valuable lessons in efficient and effective corporate management specifically HRM.

Further, the differences and similarities in Modern HRM and Chanakya’s Arthashastra will be also analyzed.

4. Scope of the Research

Research will be comparison and review of literature in Management of Ancient times (before and after Chanakya) such as Vidur Niti in Mahabharat, Bhishmacharya’s advice to Dharmaraj, Manusmruti, Panchatantra, Hidopadesh, Prince, Politics, The Art of War etc. with Arthashastra.

Literature available on Arthashastra in book form or paper and research presentations will be also reviewed.

Management practices specifically HRM in today’s scenario will be reviewed.

The relevance of HRM in Arthashastra in today’s HRM will be analyzed.

19 Muniapan (2008) explored Kautilya’s Arthashastra and Perspective on Organizational Management

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5. Limitation of the Research

There are disputes about the period in which Chanakya was born and brought up and developed.

Many myths prevail on Chanakya’s life. There is no clear data available to check validity of these myths and stories. So this will not be the part of research

Since very limited research is done on Management aspect of Chanakya, data will have to be collected and analyzed. This research is limited to HRM aspect of Arthashastra.

6. Hypothesis

How relevant is Arthashastra in today’s competitive business world, where the whole gamut is from managing business to make productive use of the available human resources?

In the growing scenario of Indian industry, looking forward to people enhancement, Arthashastra not only has the strategies of talent management but also the application of organizational motivators, from recruitment to development.

In the perspective of CEO, it is a Constitution guiding him different aspects of strategic management and leadership development; for an HR Head, it will be HR Manual covering selection tests, JDs, Appraisal, Standing orders, culture development, Assessment centers; For CFO, it is a Standards of Accounting Practices and internal audit manual; for individual, it will teach ethics and values.

It’s not just a quick fix solution but provides total value based management guidelines. These value based guidelines provide a total framework of the philosophy of the organization. Based on this philosophy of the organization and the leadership a corporate culture is developed which defines the values that are supposed to guide the behavior of the members of the organization and check instances of unethical behavior.

Arthashastra is an exhaustive bible, the relevance of which cannot be denied in today’s modern management principles. Arthashastra is the evidence of the intellectual capital India possessed in its glorious past. We have the tradition of the past. We need the attitude for resurrecting and recreating the intellectual capital for the future.

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7. Terminology

AAxapTla The records and audit office

AxaSaalaa A workshop for the manufacture of gold and silver articles

Aga` Total number or amount

Aitcaar Transgression [of martial duties], misconduct in general

AityaacHaa Making an exorbitant demand

Aitvaad [1] Excessive praise, [2] Proof, reprimand

A%yaya [1] Penalty, [2]Tribute

AdoiSak Without a guide

AiVkrNa [1] A department, an office [2] Place where the court is situated

AiVYza%aR A supervisor

AiVYzana [1] The basis, [2] A prominent position,

AQyaxa A departmental head, Director, Superintendent

Anaayau<k One not appointed, an unauthorized person

AinasaRYT Unauthorized, without authority or permission

AnvaaiV A person in whose charge someone or something is kept,[2]An object given to one for being handed over to another

Apcar To misbehave

ApcarNa Fraud

Apdana Evil conduct, an offence, a crime

Apnaya Wrong policy

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Avadana Good conduct, pure conduct

Aanauga`aihk BeneficialAayau> An officer

Aayaaoga Appointment, employment,

AavaoSana A factory, a workshop

AavaoSainanaU A workman

AaSaakairk A workman [not working 0n a daily wage basis, but] expecting [a lump sum] remuneration

]<araQyaxa A supervisor

]pQaa A secret test of loyalty and integrity

kmaa-n%a A workshop ,a factory

kariNak A account officer

kamaa-in%ak Manufactured by a smith

kaima-k A works manager

kava-iTk The headquarters of 200 villages

kuuPyaaopjaIivanaU The superintendent of forest produce kulasaMGa A ruling council consisting of al members of the royal family

kR%yakr An administrator [of property]iËyaa TrainingIËyaaivapnna Incapable of being trained

gaaNaina@ya Accounts

gaulma A police station

ga`amaBaRtk A village servant

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ga`amasvaaimanaU The owner of a village

jaanapd Belonging to the country, native

%an~ A member of the[royal]family, a claimant or pretender to the throne, The administration[of the state]

%aaDna Punishment

i%araojanapd A foreigner

%aIqa-kr The head of the religious order

Naagairk The city Superintendent

naIitivad An expert in the political science

inaYËya Compensation

Pa<anaaQyaxa The commissioner of ports

ParaQya- Best

PaaOrvyaavahairk The city-judge or magistrate

Pa`ÌitpuÉYa A principle officer

Pa`iNaVana Employment

Pa`itdoSa Direction, instructions

Pa`itpi<a Understanding, intelligence

Pa`itpat Compensation for loss

Pa`idYT Assigned

Pa`%yaadoSa Communicating

Pa`Vana A prominent person, a leader, A chief

Pa`Baava Power, Might

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Pa`Saas%aR The director of labour corps in the army

Pa`oYaNa Sending a communication

baIjabanV The manufacture of essencemau#ya A principal officer

ivaiYTbanVk A contractor or foreman of labour

Saasak The captain

saMsqaa An establishment,

saM#yaayak An account

saMinaVa%aR The director of stores

samayaanaubaw Bound by an agreement

samaah%a-R The revenue commissioner

ihrNya Money, cash

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8. Chanakya’s identity

20Chanakya is credited with advising Chandragupta during the conquest of the Nanda and the defeat of the Greeks, and on the formation of a strong efficient government, which allowed the Mauryan Empire to rule almost the entire subcontinent (except the area south of present-day Karnataka), as well as substantial parts of present-day Afghanistan. He is best known, however, for his work, Arthashastra, an encyclopedic work on political economy and government, which he refers to as “the science of punishment. Each of its fifteen sections deals with some aspect of government, such as fiscal policies, coinage, commerce, welfare, forests, weights and measures, agriculture, law, international relations, and military strategy. The central purpose of Chanakya's doctrine was to achieve the prosperity of king and country, and to secure victory over rival neighboring states.

Chanakya identified seven factors which affected a government’s ability to accomplish these ends: the qualities of the king, then of his ministers, his provinces, his city, his treasure, his army, and his allies. In describing an ideal government, Chanakya articulated contemporary assumptions of political and economic theory, providing historical information about the political circumstances of the time. Chanakya is admired for his understanding of human nature and his political wisdom, and sometimes condemned for condoning ruthlessness and treachery. He openly advised the development of an elaborate spy system reaching into all levels of society, providing detailed instruction for spies and agents, and encouraged political and secret assassination.

Chanakya was a teacher at Takshasila monastery and was responsible for the creation of Mauryan empire, the first of its kind on the Indian subcontinent.

21He mixes the harsh pragmatism for which he is famed with compassion for the poor, for slaves, and for women. He reveals the imagination of a romancer in imagining all manner of scenarios which can hardly have been commonplace in real life.

22“Arthashastra is a comprehensive work which deals not only with the political theories and the actual organization of administrative machinery but also matters connected with state and society, which could not form the subject matter of law, sociology and economics. At first these subjects were treated in a section in the Dharma sutras and later in Acharangesutras. The Arthashastra is the earliest extent work of this class, but it contains references to a large number of treatises that were regarded as authoritative in.

20 http://www.newworldencyclopedia.org/entry/Chanakya21 http://en.wikisource.org/wiki/Arthashastra22 http://www.indianetzone.com/25/kautilya_s_arthasastra.htm

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9. Collection of material

Chanakya has himself studied in-depth the earlier works by Maharshi Vyas’s Mahabharata, Vedas, and Upnishadas. In Arthashastra, every where he has given reference of work done by Bharadwaja, Visalaksha, Parasar, Pisuna and so on.

Based on the earlier work done by others, he had not only stated his own views but also developed certain principles in such a manner that he has become an identity by himself.

In the last century, a valuable work has been done on Kautilya by various authors like R.P. Kangale and Shamasastri.

The omniscience work done by these two giants has inspired many more scholars who have developed further research on various aspects of Arthashastra.

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10. Analysis

10.1 Today’s HRM

23Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.[1] In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms,[4] although these normally refer to the relationship between management and workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.

Human Resource Management (HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organizations.[5]

Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p. 49).

While Miller (1987) suggests that HRM relates to:".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p. 352).

23 http://en.wikipedia.org/wiki/Human_resource_management

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The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines; therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial engineering, industrial, Legal/Paralegal Studies and organizational psychology, industrial relations, sociology, and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:

Strategic business partner Change management Employee champion Administration

However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen rather as reactive as strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value.

Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside organizations, including, eg, career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, eg, "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone tremendous change over the past 20–30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

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10.2 24HR in Chanakya’s Arthashastra

Training (page 119, Chanakya The Arthashstra – Training of future King)Competencies (page 121, Chanakya The Arthashstra – Competencies of King)Time Management (page 123, Chanakya The Arthashstra – Daily Activities of King)Succession Planning (page 143, Chanakya The Arthashstra – Succession, Princes)Selection Test (page 173, Chanakya The Arthashstra – Testing the integrity of Ministers)Probationary Appraisal (page 176, Chanakya The Arthashstra – Behaviour after Appointment)Job Evaluation (page 179 – 183, Chanakya The Arthashstra – Highest Level Official)Organization Structures and Design (page 182, Chanakya The Arthashstra - The highest level of Chanakya Administration); (page 190, Chanakya The Arthashstra – Administration of Countryside); (page 333, Chanakya The Arthashstra, Organization of Productive Enterprises); (page 464, Chanakya The Arthashstra – Organization of the Secret Services); (page 646, Chanakya The Arthashstra – Military Organization)Incentives (page 204, Chanakya The Arthashstra – Incentives for Textile Industry)Wage Rate System (page 212, Chanakya The Arthashstra – Charges of Goldsmiths and Silversmiths); (page 214, Chanakya The Arthashstra – Charges of Metal workers); (page 215, Chanakya The Arthashstra – Charges of Weavers)Compensation and Benefits (page 257 – 262, Chanakya The Arthashstra, Salaries of Government Servants)Misconducts (page 149, Chanakya The Arthashstra - Abnormality of Kingship); (page 263, Chanakya The Arthashstra – Financial Misbehaviour of Government Servants)Assessment Centers (page 473, Chanakya The Arthashstra – Internal Security)Various Levels of Designation (page 750-752, Chanakya The Arthashstra – Nomenclature of Holders of State Office)Labour System (page 411-417, Chanakya The Arthashstra – Labour, Bonded Labour and Slavery)Demotivation (page 641, Chanakya The Arthashstra – Calamities affecting the efficient functioning of Army)Job Descriptions (page 275- 279, Chanakya The Arthashstra – Heads of Departments); (page 280-283, Chanakya The Arthashstra – Treasure Officials); (page 284-292, Chanakya The Arthashstra – Agriculture, forestry and Livestock Officials): (page 295-304, Chanakya The Arthashstra – Industry Officials); (page 305-316, Chanakya The Arthashstra – Trade and Transport Officials); (page 317-325, Chanakya The Arthashstra – Officials controlling leisure activities); (page 326-330, Chanakya The Arthashstra – Movement Control Officials); (page 331, Chanakya The Arthashstra – Miscellaneous Official); (page 332, Chanakya The Arthashstra – Subordinate Officials); (page 335-336, Chanakya The Arthashstra – Village Headman); (page 539, Chanakya The Arthashstra, On Envoys); (page 647-656, Chanakya The Arthashstra – Duties of Defense Officials)

24 L.N. Rangaraja; CHANAKYA The Arthashastra

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