Can Kautilya‘s Rajarishi be successful in today’s corporate?
“In the happiness of his subjects lies the king’s happiness, in their welfare his welfare. He shall not consider as good only that which pleases him but treat as beneficial to him whatever pleases his subjects. “
Kautilya‘s Rajarishi:
RAJARISHI-A WISE KING
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 & welfare of the people
• Ensures the observance (by the people) of their drama by authority & example
• Improves his own discipline by (continuing his ) learning in all branches of knowledge &
• Endears himself to his people by enriching them & doing good to them
Such a disciplined king should:
• Keep away from another’s wife
• Not covet another’s property
• Practice ahimsa (non violence towards all living things)
• Avoid day dreaming, capriciousness, falsehood & extravagance, and
• Avoid association with harmful persons and indulging in (harmful) activities.
Kautilya says that artha (Sound Economies) is the most important, dharma & karma are both dependent on it. A Rajarishi shall always respect those councillors and purohitas who warn him of the dangers of transgressing the limits of good conduct, reminding him sharply (as with a goad) of the times prescribed for various duties and caution him even when he errs in private.
DUTIES OF KING
IF the king is energetic, his subjects will be equally energetic. If he is slack (and lazy in performing his duties) the subjects will also be lax and thereby eat into his wealth. Besides lazy king will easily fall into the hands of enemies. Hence the king should himself always be energetic. He shall divide the day and the night, each into eight periods of one and half hours and perform his duties as follows:
| Day |
|
| First 1½ hours after sunrise | Receive reports on defence, revenue, expenditure |
| Second 1½ hours after sunrise | Public audiences, to hear petitions of city & country people |
| Third 1½ hours after sunrise | (Personal-bath meals, study) |
| 1½ hours before noon | Receive revenues, tributes, appoint ministers and other high officials & allot takss to them |
| First 1½ hours after noon | Write letters & dispatches, confer with councillors, receive secret information from spies. |
| Second 1½ hours after noon | (Personal-recreation, time for contemplation) |
| Third 1½ hours after noon | Inspect & review forces. |
| 1½ hours before sunset | Consult with Chief of Defence |
NIGHT
| First 1½ hours after sunset | Interview with secret agents |
| Second 1½ hours after sunset | (Personal-bath meals, study) |
| Three hours before & first 1½ hours after midnight | Retire to the bed chamber to the sound of music, sleep) |
| Second 1½ hours after midnight | (after waking to the sound of music, meditate on political matters & on work to be done) |
| Third 1½ hours after midnight | Consult with councilors, send out spies |
| 1½ hours before sunrise | (Religious, household & personal duties, meetings with his teacher, adviser on rituals, purohitas, personal physician, chief cooks & astrologer) |
Hence the king shall be ever active in the management of the economy. The root of wealth is (economic) activity and lack of it (brings) material distress. In the absence of (fruitful economic) activity, both current prosperity & future growth will be destroyed. A king can achieve the desired objectives & abundance of riches by undertaking (productive) economic activity.
Creative assumptions:
The Rajarishi- The CEO
The Senapatis- Head of SBU’s / Directors
The Yodhas or warriors- ranked in order of their position in the organisation
The Praja-The shareholders / lower level employees
Enemies- Competitors
Internal Strife:
Kautilya says –Quarrels among people can be resolved by winning over the leaders or by removing the cause of the quarrel, people fighting among people themselves help the king by their mutual rivalry. Conflicts (for power) within the royal family, on the other hand, bring about harassment and destruction to the people and double the exertion is required to end such conflicts.
Hence internal strife in royal family for power is worse than quarrels among people.
(Royal family-top mgt, people- lower level employees)
Kautilya comments on Vices
Vices are due to ignorance and indiscipline, an unlearned man does not perceive the injurious consequences of his vices. He summarizes: subject to qualification that gambling is most dangerous in cases where there is more than one entity sharing power, the vice with the most serious consequence is addiction to drink, followed by, lusting after women, gambling, and lastly hunting.
The Rise of Ratan Tata
Kautilya Rajarishi qualities versus Ratan Tata
Kautilya -An ideal king is one who has the highest qualities of leadership, intellect, energy & personal attributes.
The qualities of leadership (which attracts followers) are : birth in a noble family, good fortune, intellect & prowess, association with elders, being righteous, truthful, resolute, enthusiastic & disciplined, not breaking his promises, showing gratitude (to those who help him), having lofty aims, not being dilatory, being stronger than neighbouring kings & having ministers of high quality.
Ratan was born in Bombay to Soonoo & Naval Hormusji Tata on December 28,1937. He was their first child, Jimmy following two years later. An old family with old wealth, as a kid, Ratan squirmed when their British driver dropped him off at the all-boys Campion School in the family Rolls Royce.
Ratan’s father Naval was born with a famous surname & not much else. Distantly related to India’s richest & most powerful business family, his parents died at an early age, leaving Naval to be raised at an orphanage. He was thirteen when he was suddenly picked up by childless & widowed Lady Navajbai Tata, whose husband, Sir Ratan Tata, had promoted some of the group’s biggest enterprise.
Ratan’s childhood was troubled as Naval & Soonoo did not get along well with each other. They finally separated in the mid-40 when Ratan was about seven and Jimmy was five. The divorce must have left its mark on young minds. Soonoo moved out, both the kids stayed in Tata Palace, brought up by Lady Navajbai. “My whole life with her was full of endearment. She had a great influence on my life. She taught me the values which I consider very important in myself. “From his grandmother, the young Ratan imbibed the importance of dignity, keeping promises and being dependable.
JRD bequeathed on Ratan 84 companies of which 39 were listed, a corporate empire whose sales topped Rs. 240 bn with pre-tax profit of Rs. 21.2 bn. The group claims to contribute 3% to national GDP & annually pays out Rs. 35 bn in taxes. That is appx. 3.2 % of total government revenues come from Tatas.
Since he became chairman in 1991, Ratan has been trying to push the group into a higher gear. He knows that the group is watershed in its 125 year history. Equally he is intensely aware that the head of an amazingly diversified conglomerate producing just about everything from steel to lipsticks and employing 270,000 people, he cannot afford to take a wrong step.
Kautilya -The qualities of intellect are: desire to learn, listening (to others), grasping, retaining, understanding thoroughly and reflecting on knowledge, rejecting false views and adhering to the true ones.
An energetic king is one who is valorous, determined, quick, and dexterous.
Ratan Tata is tall- six feet at least –broad shouldered. The craggy face is fair & clean shaven with light grey-green eyes above a large Parsi nose. His dark hair is liberally peppered but he looks younger than his age. His light but gravely voice has an American twang, a hangover from his college days.
Tata has never married. In Bombay, he would date on and off, more off than on, an once even got engaged, but broke it off before the cards could be printed. Without a family, children, what motivates him? ‘I have asked myself this quite often. I don’t have a monetary ownership in the company in which I work and I am not given to propagating the position I am in. I ask myself why am I doing this and I think it is perhaps the challenge. If I had an ideological choice, I would probably want to do something more for uplift of the people of India. I have a strong desire not to make money but to see happiness created in place where there isn’t.
Kautilya-Training of a future King
Importance of self discipline:
Discipline is of two kinds –inborn and acquired. (there must be an innate capacity for self discipline for the reasons given below)Instruction & training can promote discipline only in a person capable of benefiting from them, people incapable of (natural) self discipline do not benefit. Learning imparts discipline only to those who have the following mental facilities-obedience to a teacher, desire and ability to learn, capacity to retain what is learnt, understanding what is leant, reflecting on it and (finally) ability to make inferences by deliberating on the knowledge acquired. Those who are devoid of such mental faculties are not benefited (by any amount of training) One who will be a king should acquire discipline and follow it strictly in life by learning the sciences from authoritative teachers.
The training of a Prince:
With improving his self discipline, he should always associate with learned elders, for in them alone has discipline its firm roots. For a (trained) intellect ensues yoga (successful application), from yoga comes self possession. This is what is meant by efficiency in acquiring knowledge. Only a king, who is wise, disciplined, devoted to a just governing of the subjects & conscious of the welfare of all beings will enjoy the earth unopposed.
Ratan was given two sick companies supposedly to train him. First Nelco then ailing Central India Textiles. Central India was turned around, its accumulated losses were wiped out &it paid dividends for several years. Regarding Nelco Ratan Tata says “I learnt a lot. I don’t think I could have leant as much the hard way as I did in Nelco. I’m most grateful to the powers that be that gave me Nelco and that they made me fight for three years, wondering where my next payroll was coming from, and to in a very competitive market place. In fact Telco is the first company in which I could actually do something. In other companies, I was always put in a fire fighting situation.’
Kautilya -As regards personal attributes, an ideal king should be eloquent, bold and endowed with sharp intellect, a strong memory and a keen mind. He should be amenable to guidance. He should be well trained in all the arts and be able to lead the army. He should be just in regarding and punishing. He should have the foresight to avail himself of the opportunities (by choosing) the right time, place and type of action. He should know how to govern in normal times and in times of crisis. He should know when to fight and when to make peace, when to lie in wait, when to observe treaties and when to strike at an enemy’s weakness. He should preserve his dignity at all times and not laugh in an undignified manner. He should be sweet in speech, look straight at people and avoid frowning. He should eschew passion, anger, greed, obstinacy, fickleness and backbiting. He should conduct himself in accordance with advice of elders.
Ratan in the late 70’s thought that the Tatas should be in these areas, we were among the few who would be willing and able to invest in areas like super mini & personal computers, driven by microprocessor advances, artificial intelligence, the convergence of computing & communications into information technology & biotechnology without expecting quick returns, he argued, why shouldn’t Tatas enter those fields of recent technological advancement which have application potential in India?
Russi Mody versus Ratan:
In 1988, JRD had finally made up his mind over the succession issue and his choice fell on Mody. Since Mody was already TISCO chairman, he would take over charge of TELCO from Moolgaokar, ailing chairman. This would make him the head of the two biggest companies in the Tata Group, with combined sales muscle of Rs. 30 Bn- a little more than half of the group’s total sales that time, and would put him in a strong position to stake a claim to the group chairmanship after JRD retired.
In JRD’s game plan, once Mody was Telco’s chairman, Ratan would be his deputy. When JRD played his first move, Mody was overjoyed and prematurely gloat an interview to the Business Standard. Mody’s gung-ho attitude alarmed several Telco executives who began to fear a putsch once he took over. .
On hearing the whispers, an incensed Moolgaokar refused to step down. He would carry on his saddle. He insisted that Ratan should be immediately inducted in Telco as executive deputy chairman giving him the portfolio of Telco’s day to day operation. Palkhivala, then deputy chairman voluntarily resigned but continued as Director. Both Mody & JRD tried to persuade Ratan to resign and publicly state that he would only accept the position under Mody’ chairman, but he refused to do so. Among the values he had learnt from his grandmother was the sanctity of promises. He would not denigrate Moolgaokar, who had built Telco, over the years.
Assault on Ratan’s position came from an unknown trade union leader- Krishnan Pushparanjan Nair better known as Rajan Nair. In 1988 he was suspended for allegedly threatening to murder a security guard & sacked a few months later. He left Telco vowing to bring the management to its knees. Tata did not recognise Nair as Union leader for any negotiation as management views was that a dismissed worker with criminal record could not be acceptable. The unresolved wage agreement became Nair’s rallying point with the management.
On January 31, 1989 – Ratan’s visit to Pune Plant was greeted on shop floor by tool down strike. On same day Nair was taken in preventive custody, on hearing this the second shift workers hijacked buses which were supposed to take them to the plant at Pimpri and diverted them to city where they besieged the district court. Nair was released. Tata said publicly that he was totally unaware and not involved in Nair’s arrest.
On March 15, 1989 Nair’s men selected about 22 managerial personnel & rival unionists & assaulted & stabbed them in various parts of city. This was as much Tata could take. From then on his resolve hardened & he refused to give it any intimidatory tactics of Nair & his men. Meanwhile Ratan launched measures to build bridges between management & workforce.
Telco shed its conservative image for the first time & utilized media to create a public opinion, the mangers initiated a one-to-one contact with workforce to convince them of management intentions & slowly the tide began to turn.
On September 19, Tata ‘s move to eliminate position of Nair by signing a 3 year retrospective agreement with Telco Kamgar Sabha(TKS)rival , the Telco Employees Union (TEC), offering a wage hike of Rs. 585 & a lumpsum arrears of Rs. 7000. Tata wrote to every employee in Pimpri & Chinchwad units warning that ‘the company would have to reconsider its plan for further investments in Pune if the trend of labour unrest continued.’ 2 days later 3000 workers went on indefinite fast at Shaniwarwada, with red bandannas with initials of RNP- Rajan Nair Panel. By third day workers, were fainting from hunger. At the end of week there was a real fear that a fatality could trigger off uncontrollable violence. Pawar, then the Chief Minister stepped in & pressurized both sides to break the deadlock and meet. They agreed. On Wednesday Sept 27, Tata flew from into Bombay from USA & Nair arrived previous night from Pune.
A tripartite meeting between Tata, Nair and Pawar was arranged at CM’s official residence. Before that Dutta Samant led a morcha to Bombay House while Nair held rallies and press conferences. These vitiated that already charged atmosphere. In obvious bid to slight Tata, Nair and his team deliberately arrived late by one and half hour. Meeting proved inconclusive & Nair was unwilling to concede ground.
Powar was becoming increasingly worried about strike’s political repercussions, Pimpri-Chinchwad areas was crucial vote bank, home to over 2000 industrial units with annual turnover of Rs. 35 Bn and nearly a quarter million workers.
Pawar was getting flak from Delhi politicians & Pune Industrialists for state government’s kid glove treatment of Nair. Moreover Telco was the largest company in the region & any prolonged dispute would have tremendous economic fallout. Undercover of darkness at 2.30 am Sept 29, the State Reserve & Pune City Police launched an Operation Crackdown. 80 buses stopped outside Shaniwarwada forts quadrangle. Pouring out of buses, the police cordoned off the fort, stormed inside & rounded up the workers. Evacuation went on in batches until 4 pm. While workers were being taken to police stations in Pune, a separate vehicle took Nair & his lieutenants to nearby Ratanagiri jail where they were charged with attempting to commit suicide & defying prohibitory orders. Nair was released next day, but clear to everyone that strike had been effectively smashed.
Tata believed that it was vindication of principles and values which the group had so zealously protected and propagated all along. The media’s portrayal of Tata as tough manager capable of handling difficult labour situations posed a subtle threat to the Russi Mody. March 31 1991, was red letter day, despite strike, Telco overtook Tisco to become India’s biggest company in private sector by sales. Vehicle production rose up by 26 percent.
Mody desperate attempts to have his men as Chairman of Tisco, could not materialize. His expressive nature through press was disliked by the members of Tata Group. At the introduction of retirement policy which included removal of granting extensions in the tenure of group directors. Mody then seventy five walked out of meeting saying the meeting is closed. The retirement policy was adopted unanimously.
The board answered Mody’s badmouthing in Press by passing a resolution that he would have to go by May 1, when JRD spoke the same to Mody, he requested time till May 21 as an auspicious day to him. Then came his fatal interview in Hindu, doing more badmouthing resulting in his sacking. For the first time in history of Tatas was a top men sacked. Ratan’s perseverance & commitment to principles had managed to bring down Mody from the high pedestal that he had assumed for himself.
In Kautilya’s Arthshastra -An abettor is one who incites or encourages to the act, without sharing in its performance.
Since a revolt can arise either in the interior or in the outer regions, there are four logical possibilities, depending on where it arises & where it is abetted. The four types, their relative seriousness and methods of dealing with them are shown in the table below.
| Type | Instigator | Abettor in | Seriousness | Tackle | Method |
| 1 | Interior | Outer | Least Serious | Abettor | Conciliation Gifts |
| 2 | Outer | Interior | 2nd Least | Abettor | Dissension Force |
| 3 | Outer | Outer | 2nd Most | Instigator | Dissension Force |
| 4 | Interior | Interior | Most | Instigator | All Four |
With all respects to individuals involved, for study purpose let’s compare the Krishnan Nair and Russi Mody as being the Instigator and Abettor for Ratan Tata’s empire.
Kautilya says that for Type 4: in case of conspiracy wholly in the interior, the king should use any of the four means, as appropriate. He may use conciliation if the instigator acts as if contented even if he is not (or acts discontented without really being so). Gifts may be given to him, on happy & sad occasions, on the pretext of appreciating his loyalty or in ostensible consideration of his welfare (thus placating him). A spy, posing as a friend could warn him that the king was about to test his loyalty, and that he should tell the truth. Attempts may be made to carrying tales to the king. Lastly different methods of secret punishment could be used. Three kinds of secret methods can be used-using kinsmen, entrapment & playing one against another.
Some of Ratan Tata ‘s moves : Publicly announcing that he was not aware of Rajan’s arrest on January 31, 1989. Using media to create public opinion, managers initiating one to one contact, offering a 3 year contract to competing union to that of Nair’s, sending letters to every employee warning withdrawal of future projects in that area, using Sharad Pawar as mediator and successfully pressurizing him to clean the strike.
These facts of Ratan Tata method of curbing the revolt by these two men, can be compared with tackling style of Kautilya’s Rajarishi.
In the past, JRD had refused to pay under the table for licenses. Ratan upholds the tradition and to an extent is paying price for his commitment to Tata Group values, watching helplessly other business houses getting licenses. Circumstances & personality gave combined to make Tata a loner. The boardroom battles carved deep scars and he has shed his trustful nature. Reticent to a fault, few know his secrets, hopes and desires. He doesn’t share his confidences with anyone.
Regarding Advisors, Kautilya says a King shall confine his deliberations to three or four advisors. If he consults only one, he may find it difficult to reach a decision on complicated questions, for a single adviser can behave as he pleases without restraint. If there are only two advisers, they may either combine together and overwhelm him or fight and neutralize each other. If there are more than two, they (may either form a clique or split into factions and) become difficult (to control). If ever three or four councillors all combine against the king or become involved in a fight among themselves, it spells great danger (for by then it will be too late to regain control). There should be no more than four advisers, because with more than four, secrecy is rarely maintained. As of Ratan Tata’s advisors very little is known. But assuming his conservative-loner approach, I assume his advisors to be critically selected and few in number.
QUESTIONS UNANSWERED in my mind:
So who today is looking out to make Rajarishi or Wise-Kings for the Indian Corporate?
B Schools? If yes then, does selection process of CAT, XAT, Group Discussion, and Personal Interview of x minutes or hours really efficient? Is this a pool out of which B schools is supposed to be creating Rajarishi? Are values examined during the two year training of a B School? What do B schools teach? Do these subjects make a difference in creation of Industry anchor? Is there a Kautilya today? Is one needed?
Reference:
· Kautilya –The Arthshastra Edited, Rearranged & Translated By L N Rangarajan
· Business Maharajas-By Gita Piramal
Navendu Shirali
Roll No 90
PGP2
Goa Institute of Management
