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Entrepreneurship and business practices from ancient india


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Entrepreneurship and business practices from ancient india

  1. 1. ENTREPRENEURSHIP AND BUSINESS PRACTICES FROM ANCIENT AND MEDIEVAL INDIA CREATIVE EXCELLENCE IN MANAGEMENT – INSIGHTS FROM INDIAN ETHOS Group Project Group 4 • Hemant Sankhla • Happy Saini • Harshit Krishna • Himanshu Kumar • Kavish Barapatre • Kunal Singh • Tejas Padalkar
  2. 2. AGENDA Historical • Facts Context • Interpretations • Sayings Vedas and • Lessons for Arthshastra Business Appendix 2 CREATIVE EXCELLENCE IN MANAGEMENT • A study of India’s contributions to business
  3. 3. HISTORICAL PROCESS OF INNOVATION Innovations Adaptations and Intermixing Social System 3 CREATIVE EXCELLENCE IN MANAGEMENT Practices
  4. 4. The British TIME AND PLACE 1000 BC Ancient History • Later Vedic Era • Ancient Kingdoms 4 Medieval onwards 240 AD • Indus Valley Civilization • Early Vedic Era 1500 BC 2800 BC Prehistory The Mughals • Muslim rulers • British rulers 1857 AD The Vedics The Guptas 712 AD The Mauryas 321 BC The Harappans
  5. 5. SOCIETY • Science in the same tradition as philosophy • Sophistication in intuition • Ever adapting to foreign forces and rulers • The forefront of innovations • Patronized all innovations and progress • Innovation by decree The learned The common man The ruler • Influential as a priest, and advisor • Base of societal knowledge • Overarching background of all thought systems • Overlaps over the years • A late entrant to the Indian social system • Subject to many influencers The philosopher The religious authority The businessman
  6. 6. PRE-HISTORY : I – INDUS VALLEY • 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 Management by combining opinions • Failure to support human capital development •with Sumeria / Mesopotamia • Inability to manage across cultures • Efficient akin a welfare association • Administrative class (planners and policymakers) factory shops and sourcing • Utilitarian self-sufficient society • 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 Hunter Gatherer Agricultural Settlements Planned towns Division of labor in towns Intermixing with invasive civilizations 6 CREATIVE EXCELLENCE IN MANAGEMENT Resource exhaustion and progressive destruction
  8. 8. PRE-HISTORY : II – EARLY VEDIC ERA • 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 best practices in an anthology • Knowledge an elite object, no dissemination • Formalising • People (employee) written andreduced by by shruti (Guru-Shishya parampara) • Social stratification causing division of • Early vedas productivity passed on downgrading some sections labour and specialisation • Tribal rulership, no big capitals, aboriginal settlers enslaved (Dasyus) Travelling horse riding invaders Creation of RigVeda as a religious sacrosanct Creation of several tribes 8 CREATIVE EXCELLENCE IN MANAGEMENT Conflict for supremacy, epic battles
  10. 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 • Power just for the sake of it leads to overall • Development of innovations Janak) • Kings patronized hermits, philosophers, scriptures (Videha’s Raja and new loss of welfare knowledge needs top management push • Influential courtiers (Ratnins), consistent policy making (Manusmriti) and • Precursors to corporate governance external oversight in organisations • Growing body of scientific knowledge: Vedangas Mahajanpads Ossified caste system The great epics 10 CREATIVE EXCELLENCE IN MANAGEMENT Scientific developments
  12. 12. HISTORY : II – ANCIENT KINGDOMS • 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 • The Hindu Guptas with large empires travelled from province to province • Top management’s involvement • Golden age of India! (management by walking around) • Court hearings, moderate taxation, peaceful re-invention of Hinduism with • Aligning management’s incentives that (Vikram, Sakya • More learned kings found eras in their namesof shreholders etc) First vast kingdoms Religious ethics, rational policy making Tradition of philosophers 12 CREATIVE EXCELLENCE IN MANAGEMENT Kusanas, Sakas, Mauryas and Guptas
  14. 14. HISTORY : III – MEDIEVAL 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 • Too Development of Sufism,insufficient Muslim schools ideas leads to fusion • much decentralization with first Hindu • Openness of of thought new resources leads to conflicts of interest and knowledge, the surest • Creation of new forms in architecture, music, literature, and way to innovation religion failure • Benevolent rulers soon overshadowed by successors (Aurangzeb, Acyuta) • Stability at top management leads to success • Very rapid successions and unstable kingdoms • Increased complexity and rigidity of castes Small unstable ethnically different kingdoms Fusion of Hindus and Muslims India becomes a multicultural nation 14 CREATIVE EXCELLENCE IN MANAGEMENT
  17. 17. THE BUSINESS WISDOM FROM THE VEDAS 17 • 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 CREATIVE EXCELLENCE IN MANAGEMENT • Employees’ prosperity should follow employer’s prosperity Human Resource • Prosperity as one of principal ‘dhyeyas’ and accorded divine status: hard work • Equal partnership through commonality interpreted as equity shares Knowledge Management • Wealth accumulation by 100s and distribution to 1000s: equity • All debts to be cleared and debt free expansion followed Capital Structure Wealth accumulation • Present wealth ‘vittam’ and future wealth ‘vedyam’: equitable consumption • Women deserve equitable treatment • Personality types: Annamaya, Pranamaya, Manomaya, Vijnanamaya, Anandamaya
  18. 18. • Organisational behavior as per the advised personal conduct in Vedas • Values to be pursued as an end in themselves: internal audits • All men to be protected and served as part of business objective • Caring for all dependents, provide benefits and stable employment 18 Corporate Governance • Interpreting ashrams as managerial posts of similar virtues • No profiteering at others’ expense Social Responsibility Business and Self • Wealth through propriety and not miserliness and greed • Fully transparent and ethical vision and policy, and thus actions CREATIVE EXCELLENCE IN MANAGEMENT Productivity and Quality THE BUSINESS WISDOM FROM THE VEDAS • An enterprise is all encompassing (jad, chetan, atman), should be constatly improved (TQM) • Only good practices of others to be emulated (benchmarking) • Competition to be fought with conviction and truthfulness
  19. 19. IMPORTANCE OF KNOWLEDGE 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 19 CREATIVE EXCELLENCE IN MANAGEMENT
  20. 20. RAMAYANA ON TRANSFORMATIONAL LEADERSHIP • 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” 20 CREATIVE EXCELLENCE IN MANAGEMENT
  21. 21. • In a work that can be achieved with the help of an associate, he should resort to a dual policy • For employee motivation • Sama • Dama • Dand • Bheda HR practice • Leadership by example showing energy in the work motivates other to do the same • 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 • Kautilya mentions happy employees benefit the company and the money spent on employees is for the company only 21 CREATIVE EXCELLENCE IN MANAGEMENT • Win win situation for both parties Policies • Control Over the senses, by giving up lust (Kaam), anger (Krodh), greed (Lobha), pride (Mana), arrogance (Madh) and overexcitement (Harsha) Discipline Leadership THE BUSINESS WISDOM OF ARTHASHASTRA • Consult everyone every opinion counts • Policies should be well defined and documented
  22. 22. DRAWING A PARALLEL: ANCIENT INDIAN CORPORATIONS • 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 22 CREATIVE EXCELLENCE IN MANAGEMENT
  23. 23. SRENI 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 23 CREATIVE EXCELLENCE IN MANAGEMENT
  24. 24. KAUTILYA “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. 24 CREATIVE EXCELLENCE IN MANAGEMENT
  25. 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 25 CREATIVE EXCELLENCE IN MANAGEMENT
  26. 26. KAUTILYA “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. 26 CREATIVE EXCELLENCE IN MANAGEMENT
  27. 27. KAUTILYA “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 27 CREATIVE EXCELLENCE IN MANAGEMENT
  28. 28. KAUTILYA “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. 28 CREATIVE EXCELLENCE IN MANAGEMENT
  29. 29. KAUTILYA “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. 29 CREATIVE EXCELLENCE IN MANAGEMENT
  30. 30. KAUTILYA “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 30 CREATIVE EXCELLENCE IN MANAGEMENT
  31. 31. KAUTILYA “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. 31 CREATIVE EXCELLENCE IN MANAGEMENT
  33. 33. Manage by taking all opinions but follow the learned Leadership starts with sacrifice & control Employee Benefits; Benefits the company Equitable laws & application starts from top Train employees and develop human capital Focus on Core Competency Listen to your consultants Stability and patience at the top required for team’s success Leaders should push innovation and incorporate ideas Be prepared; Seize the moment Knowledge management is knowledge development
  34. 34. APPENDIX Material contributions of India to business 34 CREATIVE EXCELLENCE IN MANAGEMENT
  35. 35. INNOVATIVE PRACTICES ANCIENT TRADE 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. 35 CREATIVE EXCELLENCE IN MANAGEMENT
  36. 36. TRADE ROUTES Maritime Trade Routes By 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 36 were transporting Buddhist missionaries along with their primary cargos of good
  37. 37. INNOVATIVE PRACTICES 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 37 CREATIVE EXCELLENCE IN MANAGEMENT
  38. 38. INNOVATIVE PRACTICES • ‘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 38 CREATIVE EXCELLENCE IN MANAGEMENT