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Ability and Capacity decides Rank

This article explores the relevance and application of Principles and Strategies discussed in the 3rd Century BC treatise, Kautilya’s Arthashastra, in Today’s Corporate World.

It is never degrees and certificates that can guarantee the results a manager can produce. Some of the best managers never completed their formal education. Neither Bill Gates nor Henry Ford did an MBA before starting their respective companies.

A CEO has to focus on the results that a person can produce while recruiting his team of managers, not only their qualifications.

Kautilya says,

“From the capacity for doing work is the ability of the person judged. And in accordance with the ability, by suitably distributing rank among ministers and assigning place time and work to them he should appoint all the ministers” (1.8.28-29)

While the job responsibilities are being delegated to team members, Kautilya in the above verse gives five areas for a CEO to focus upon.


Capacity of doing work is the key factor in understanding a person’s ability. Only an able person can bring out the best results. In many organisations, managers are recruited based on influence. However if the person is not capable, the professionalism of the company suffers. One may get the ‘chair’ based on influence but the ‘chair’ will not let you be there for long.


Rank and designation should be given based on one’s ability. In the current corporate world, we find that ranks are distributed freely. Even freshers are given senior positions without examining output. The distribution of designations should be done based on the results produced. This is the key to success, particularly for many family-managed businesses in India.


A person needs to be appointed at the right place. In most industries if a new branch is being opened a preference is given to the local person. He would understand the details in that particular region much more than others. In the tourism industry every traveler prefers a local guide to an outsider as locals explain in more detail.


Timing has to be assigned to the person. First, the time to join the project. Then, the time frame has to be agreed upon. Time-bound targets have to be set in order to bring out the best in a person.


The work expected to be done by that particular manager has to be defined. Management by objectives (MOB) - a concept coined by Peter Drucker or KRA (Key result area) gives a definite focus on the work the manager is doing. This should be followed by a proper and regular feedback system.

When the above areas have been taken into account, it saves a lot of future misunderstanding and complications. Clear communication and an agreement to achieve the defined results not only make a person effective but also the organisation productive.

Contributed by  - Radhakrishnan Pillai

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