entrepreneurship and business practices from ancient india

Group Project

CREATIVE EXCELLENCE IN MANAGEMENT – INSIGHTS FROM INDIAN

ETHOS

ENTREPRENEURSHIP AND BUSINESS PRACTICES FROM ANCIENT AND MEDIEVAL INDIA

Group 4

• Hemant Sankhla• Happy Saini

• Harshit Krishna• Himanshu Kumar• Kavish Barapatre

• Kunal Singh• Tejas Padalkar

2

C R E A T I V E E X C E L L E N C E I N M A N A G E M E N T

Historical

Context

• Facts• Interpretat

ions

Vedas and

Arthshastra

• Sayings• Lessons for

Business

Appendix

• A study of India’s contributions to business

AGENDA

3


HISTORICAL PROCESS OF INNOVATION

Innovations

Adaptations and

Intermixing

Practices

Social System

4

• Indus Valley Civilization

• Early Vedic Era

Prehistory

• Later Vedic Era

• Ancient Kingdoms

Ancient History

• Muslim rulers

• British rulers

Medieval

onwards

TIME AND PLACE

The Harappan

sThe

BritishThe

Vedics

The Mauryas

The Guptas

The Mughals

280

0 B

C

150

0 B

C

100

0 B

C

321

BC

240

AD

712

AD

185

7 A

D

• Science in the same tradition as philosophy

• Sophistication in intuition

The learned

• Ever adapting to foreign forces and rulers

• The forefront of innovationsThe

common man

• Patronized all innovations and progress

• Innovation by decree

The ruler

• Influential as a priest, and advisor

• Base of societal knowledgeThe

philosopher

• Overarching background of all thought systems

• Overlaps over the yearsThe

religious authority

• A late entrant to the Indian social system

• Subject to many influencers

The businessman

SOCIETY

6


• Two distinct cultures: a town system and a village based system

• Anthropology: Poto-australoids in north and Homo sapiens in south

• Started with planned cities that traded with Sumeria / Mesopotamia

• Administrative class (planners and policymakers) akin a welfare association

• Potters, laborers and workers continuously relegated to lower strata

• Art and dance forms initially patronized but slowly ousted of nobility

• Inability to absorb advanced culture and systems of foreign society

PRE-HISTORY : I – INDUS VALLEY

Resource exhaustion

and progressive destruction

Intermixing with invasive

civilizations

Division of

labor in

towns

Planned

towns

Agricultural

Settlements

Hunter

Gatherer

• Failure to support human capital development• Inability to manage across cultures

• Management by combining opinions

• Efficient factory shops and sourcing

• Utilitarian self-sufficient society

7


PRE-HISTORY : I – INDUS VALLEY

8


• Ascent of the Aryas (group of warriors and their knowledgeable priests)

• Influenced by and intermingling with the North-Western civilization

• Demigod and war-figure worship as providers of elemental necessities

• Colour based segregation entrenched in occupation• Early vedas written and passed on by shruti (Guru-

Shishya parampara)• Tribal rulership, no big capitals, aboriginal settlers

enslaved (Dasyus)

PRE-HISTORY : II – EARLY VEDIC ERA

• Formalising best practices in an anthology

• Social stratification causing division of labour and specialisation

Conflict for supremacy, epic battles

Creation of several tribes

Creation of RigVeda as a

religious sacrosanct

Travelling horse riding

invaders

• Knowledge an elite object, no dissemination

• People (employee) productivity reduced by downgrading some sections

9


PRE-HISTORY : II – EARLY VEDIC ERA

10


HISTORY : I – LATER VEDIC ERA

• Slow expansion the East and onset of large kingdoms (Mahajanpads)

• Nature revered and sacrificial worship of elements sacrosanct

• New vedas, puranas, upanishads and brahmanas written; the age of epics

• Occupation based segregation entrenched in heredity• Kings patronized hermits, philosophers, scriptures

(Videha’s Raja Janak)• Influential courtiers (Ratnins), consistent policy making

(Manusmriti)• Growing body of scientific knowledge: Vedangas

• Power just for the sake of it leads to overall loss of welfare

• Development of innovations and new knowledge needs top management push

• Precursors to corporate governance and external oversight in organisations

Scientific developments

Ossified caste system

The great epicsMahajanpads

11


HISTORY : I – LATER VEDIC ERA

12


• Division of labour, mercantilism and beaurocracy emerged (Arthashastra)

• Direct integration with Cental Asian empires and clans, hence practices

• Time of Buddha, Mahavira, royal affinity towards asceticism and religion

• Buddhism influenced Mauryas who patronized arts and culture

• Hindu Guptas with large empires travelled from province to province

• Court hearings, moderate taxation, peaceful re-invention of Hinduism

• More learned kings found eras in their names (Vikram, Sakya etc)

HISTORY : II – ANCIENT KINGDOMS

• The Golden age of India! • Top management’s involvement (management by walking around)

• Aligning management’s incentives with that of shreholders Kusanas,

Sakas, Mauryas and

Guptas

Religious ethics,

rational policy

making

Tradition of philosophers

First vast kingdoms

13


HISTORY : II – ANCIENT KINGDOMS

14


HISTORY : III – MEDIEVAL KINGDOMS

• Too much decentralization with insufficient resources leads to conflicts of interest and failure

• Stability at top management leads to success

• Openness of ideas leads to new knowledge, the surest way to innovation

India becomes a multi-cultural

nation

Fusion of Hindus and Muslims

Small unstable ethnically different kingdoms

• Rajputs were small, lacked unity, organization as against invading Turks

• Rise of feudalism in India and re-fragmentation of land• Followed by consolidation and movement from

oppression to amalgamation• Development of Sufism, first Hindu Muslim schools of

thought fusion• Creation of new forms in architecture, music, literature,

and religion• Benevolent rulers soon overshadowed by successors

(Aurangzeb, Acyuta)• Very rapid successions and unstable kingdoms• Increased complexity and rigidity of castes

15


HISTORY : III – MEDIEVAL KINGDOMS

16


VEDAS AND ARTHASHASTRASayings and Interpretations

17


Wealt

h a

ccu

mu

lati

on

• Present wealth

‘vittam’ and future wealth

‘vedyam’: equitable

consumption

• Wealth accumulatio

n by 100s and

distribution to 1000s:

equity

• Prosperity as one of

principal ‘dhyeyas’

and accorded

divine status: hard

work

Cap

ital

Str

uct

ure• All debts to

be cleared and debt

free expansion followed

• Equal partnership

through commonality interpreted as equity shares

Kn

ow

led

ge M

an

ag

em

en

t

• Prameya (objective),

Pramata (seeker) and

Pramana (means) are necessary

• Owner of knowledge

owns power, knower of ‘ayatanam’

(resort) becomes so for others

• Progress from Avidya

to Vidya then Vijnanam for

effective results

Hu

man

Reso

urc

e

• Employees’ prosperity

should follow employer’s prosperity

• Women deserve

equitable treatment

• Personality types:

Annamaya, Pranamaya, Manomaya,

Vijnanamaya,

Anandamaya

THE BUSINESS WISDOM FROM THE VEDAS

18


Bu

sin

ess

an

d S

elf

• Wealth through

propriety and not

miserliness and greed

• Interpreting ashrams

as managerial

posts of similar virtues

• Organisational

behavior as per the advised personal

conduct in Vedas

Soci

al

Resp

on

sib

ilit

y• No

profiteering at others’

expense

• All men to be

protected and served as part of business objective

• Caring for all

dependents, provide benefits

and stable employmen

t

Corp

ora

te G

ove

rnan

ce

• Values to be pursued as an end

in themselves: internal

audits

• Fully transparent and ethical vision and policy, and

thus actions

Pro

du

ctiv

ity

an

d Q

uali

ty

• An enterprise

is all encompassi

ng (jad, chetan, atman),

should be constatly improved

(TQM)

• Only good practices of others to be

emulated (benchmark

ing)

• Competition to be fought

with conviction

and truthfulness

THE BUSINESS WISDOM FROM THE VEDAS

19


Whatever is done with knowledge and faith that becomes more effective. Therefore whatever man contemplates in his mind, that he expresses in words and does in action.

-Rig Veda

At birth all are shudras, but the true birth or second birth has to be achieved through education. A shudra could

qualify to a higher class by remaining clean, polite behaviour and in the company of other three varnas while

a brahmin would be classified as a shudra, even if he consumes liquor once or he is uneducated.

-Yajur Veda

IMPORTANCE OF KNOWLEDGE

20


• Idealized Influence: Loyalty and adoration for Sri Rama, citizens

followed Him and request Sri Rama to return to the Kingdom.

• Intellectual Stimualtion: The intellectual stimulation provided by

Rama to Bharatha.

• Inspirational Motivation: Motivation for Hanuman to cross the

ocean to Lanka and to the vanaras in the bridge construction.

• Individualized Consideration: Rama vows to provide shelter and

protection to any living entity in fear; even to Ravana

“Sakrudeva prapannaya tavasmiti cha yachte;

Abhayam sarva bhutrbhyo dadamyetadh vratam mama”

RAMAYANA ON TRANSFORMATIONAL LEADERSHIP

21


THE BUSINESS WISDOM OF ARTHASHASTRA

Lead

ers

hip

• Control Over the senses, by

giving up lust (Kaam),

anger (Krodh),

greed (Lobha),

pride (Mana),

arrogance (Madh) and

overexcitement (Harsha)

• Leadership by example showing

energy in the work

motivates other to do the

same

Dis

cip

lin

e• Arthshashtra

documents all the roles

and procedures

which should be

followed by everyone in a kingdom

or a company.

• Only through

following practices

and remaining in

discipline one can achieve

excellence

HR

pra

ctic

e

• For employee

motivation

• Sama• Dama• Dand• Bheda

• Kautilya mentions

happy employees benefit the company and the

money spent on

employees is for the

company only

Poli

cies

• In a work that can be achieved with the

help of an associate, he

should resort to a dual policy

• Win win situation for both parties

• Consult everyone

every opinion counts

• Policies should be

well defined and

documented

22


• Gana & Samgha – political and religious entities

• Puga & Vrata – entities whose members had economic motivation, were members of village devoted to a profession

• Pani – group of caravan travelling merchants, for the purpose of trade

• Nigama & Sreni – economic organization of merchants, craftsmen and artisans, includes para-military organizations

DRAWING A PARALLEL: ANCIENT INDIAN CORPORATIONS

23


A legal entity composed of collection of people engaged in similar trade belonging to various castes similar to guilds of medieval Europe but more complex with detailed rules• Separate Legal Entity – similar to the modern concept of

corporation• General Prevalence – 18 to 150 sreni covering both trading

and craft activities• Structure – General Assembly, Headman(Sreshthi) supported

by few executive officers(karya chintakah)• Internal Governance – Rules(sreni dharma) written on a

document(sthitipatra)• Formation – kosha, sreni dharma, madhyastha• Accumulation, Use & Division of funds

SRENI

24


“When all laws are perishing, the king here is the promulgator of laws by virtue of his guarding the right conduct of the world consisting of the four varnas and four

asramas”

Leading in times of recession and austerity: When there is chaos and situation of unrest in the world or in organization, the leaders have to promote law and order which is equal for every one in the organization favoring only the right.

KAUTILYA

25


KAUTILYA

“Time comes but once to a man waiting for an opportunity; that time is difficult for that man to get again when he wants to do his

work”

Swami Vivekananda said: “Awake, arise! Stop not until thy goal is

reached.”

Entrepreneurship: A good entrepreneur should not get disappointed by failures. Favourable times come for everyone but he must use that opportunity because once its lost cannot be regained

26


“Treat your kid like a darling for the first five years. For the next five years, scold

them. By the time they turn sixteen, treat them like a friend. Your grown up children

are your best friends”

Training & Development: In various stages the propensity of an employee to learn changes. Hence, the HR manager or the top managers need to use different tactics at different stages. Develop human capital and organization through ongoing developmental process and incentives.

KAUTILYA

27


“As between a small proximate land and a big land that is distant , the small proximate land

is preferable”

Core competence & Outsourcing: Do whatever you are good at. Many corporate failure happens because companies diversify into other businesses which are profitable for others but unknown to them. Hence, companies are focusing on whatever they are best at and rest they are outsourcing to third parties. i.e. Ford Motors, Nike etc

KAUTILYA

28


“Each king should have councillors because king cannot have expertise in

everything”

Ancient McKinsey’s and BCG’s: Kings had counsellors who were well rewarded for their opinions on critical matters. Similarly, companies now hire consultants to take an opinion. The ancient system has evolved into a whole industry.

KAUTILYA

29


“Wealth and power comes from the country side, which is the source of all activities”

Bottom of pyramid: Current marketing strategies focussed on rural India (by HUL, P&G etc) discussed by Kautilya. Mentioned countryside as source of all material and finally the real customer lies there. Those who want strong market position or economies cannot ignore villages.

KAUTILYA

30


“Time for catching elephants is summers”

Investment decisions: Must wait and yet be aware of the right opportunity, and learn well about a situation before deciding else one may give up just because of bad timing

KAUTILYA

31


“One conversant with the science, but not experienced in practical affairs, would come to

grief in carrying out undertakings”

Internships: To become a successful businessman you must be aware of the practicalities. An engineer may not run an automobile factory successfully unless trained. That’s why we have internships. One of the biggest success factors of MBA as a degree is that it makes you aware of the practical situations in the business world which you would have otherwise learned in years.

KAUTILYA

32


CONCLUSIONInsights in brief

Manage by taking all

opinions but follow the learned

Knowledge management is

knowledge development

Stability and patience at the top required for team’s success

Leaders should push

innovation and incorporate

ideasEmployee Benefits; Benefits

the company

Train employees

and develop human capital

Focus on Core

Competency

Be prepared; Seize the moment

Listen to your

consultants

Equitable laws &

application starts from

top

Leadership starts

with sacrifice &

control

34


APPENDIXMaterial contributions of India to business

35


India started trading with the Romans around 1 CE, during the reign of Augustus and following his conquest of Egypt, which had been India's biggest trade partner in the West. During the time of Augustus, up to 120 ships set sail every year on the Red Sea to India.

Location of Cities

The largest cities and towns were situated along major river systems and coastal areas where people could control the movement of goods and raw materials along the trade routes.

a) Local trade b) Sea trade was probably heaviest with Oman

Trading System: Trade was conducted through a barter system and through the exchange of standardised system of cubical stone weights. The smaller weights were used for taxation.

Period of Trade - and weather considerations i). Overland trade were undertaken after the monsoon rains were over.ii). Maritime trade were determined entirely by the monsoon winds.

INNOVATIVE PRACTICESANCIENT TRADE

36

Maritime Trade RoutesBy the first century C.E., regular maritime traffic connected India to the Malay Peninsula Passage through Southeast Asia became especially important to international traders when the overland routes were disrupted by political turmoil in China. By the late fourth and early fifth centuries the maritime route between India and points east made regular use of the Strait of Malacca and the South China Sea.

Overland Trade Routes

a.) An extensive network of roads connected India with various points on trading routes of Silk Road

b.) Main path of the western Silk Road during the first two centuries C.E. passed through central Asia to the Indus Valley.

Role of Buddhism in Trade Expansion

i) Buddhism, unlike Hinduism, did not view commercial activity negatively, and many Indian merchants became Buddhists.

ii) Trading ships and caravans from India were transporting Buddhist missionaries along with their primary cargos of good

TRADE ROUTES

37


Maintaining Product Quality: Final processing was done in workshops located at the settlements where both quality and style of the manufactured objects could be controlled.

Maintaining Uniformity in craft production: With final processes being done in workshops, certain control measures and trading standards ensured consistent quality and style.

City Planning: Remains found at Harappa and Mohenjo-Daro suggest that the cities were laid out in grids, with straight streets. The houses they lived in were mostly the same in size and shape. Each one had walls surrounding a courtyard, with its own well and bathroom. Pipes led to sewers.

Food Security: Each city had its own storage area for food. The people grew all kinds of different crops, including wheat, peas, and dates; and they stored the food in the town granary, for everyone to eat.

Public Sanitation: Mohenjo-Daro had its own central bath, with several surrounding buildings. This setup resembles the Roman bath, which came much later

INNOVATIVE PRACTICES

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• ‘Hundi’: indigenous bill of exchange

• Employment generation: through manufacture of arts and crafts, perfumes

• Trade practices: Numerous ports, clearing houses

• Laws: Stringent laws passed for market reforms and unfair trade practices

• Mathematics: Numeral and Decimal system

• Business structure: Joint Hindu business family, besides others discussed

• Division of labour through castes

• Fine quality wares, seals and coinage

INNOVATIVE PRACTICES

Thank You

entrepreneurship and business practices from ancient india

Business

management insights

place1000 bcancient

early vedic era ascent

vedic era slow expansion

anthology knowledge

business practices

new loss of welfare

indian social system