Dhirubhai
Dhirubhai
Executive Summary
The MBA program of East West University has been considered a Milestone of business education in Bangladesh. The main objective of this program is to provide graduate with modern theoretical and professional knowledge in business sector. To meet the partial requirement of this program we have taken the MBA 506 Course & was assigned for a term paper after completion of our theoretical course.
This report presents a review of leadership process and management of great icon and solid rock Dhirubhai Ambani and Reliance that was specially made to assist the development of Management and Leadership. The report begins with a review of contribution of great leader in multi sector by own policy and leadership and tracks their evolution over the great man notion of heroic leaders, through trait theories, behaviorist theories, situational leadership, and contingency theory and leadership. The review concludes with an introduction to the notion of dispersed leadership and a distinction between the process of leadership and the socially-constructed role of leader. The next section comparative analysis about Dhairubhai and Reliance and other one is for only Reliance. These define the qualities required of people in leadership positions and help to inform the leadership development process. The last of report is recommendation or implementation of toal Dhirubhai and Reliance process.
.
Background
Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on December 28, 1932, at Chorwad, Gujarat, into a Modh family. His father was a school teacher. Dhirubhai Ambani started his entrepreneurial career by selling "bhajias" to pilgrims in Mount Girnar over the weekends. After doing his matriculation at the age of 16, Dhirubhai moved to Aden, Yemen. He worked there as a gas-station attendant, and as a clerk in an oil company. He returned to India in 1958 with Rs 50,000 and set up a textile trading company. Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built India's largest private sector company, Reliance India Limited, from a scratch. Over time his business has diversified into acore specialization in petrochemicals with additional interests in telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. Dhirubhai Ambani is credited with shaping India's equity culture, attracting millions of retail investors in a market till then dominated by financial institutions. Dhirubhai revolutionised capital markets. From nothing, he generated billions of rupees in wealth for those who put their trust in his companies. His efforts helped create an 'equity cult' in the Indian capital market. With innovative instruments like the convertible debenture, Reliance quickly became a favorite of the stock market in the 1980s. In 1992, Reliance became the first Indian company to raise money in global markets, its high credit-taking in international markets limited only by India's sovereign rating. Reliance also became the first Indian company to feature in Forbes 500 list. Dhirubhai Ambani was named the Indian Entrepreneur of the 20th Century by the Federation of Indian Chambers of Commerce and Industry (FICCI). A poll conducted by The Times of India in 2000 voted him "greatest creator of wealth in the century". Dhirubhai Ambani died on July 6, 2002, at Mumbai.
1.
Reliance Textiles
Diversification
Criticism
Reliance Commercial Corporation: Ten years later, Dhirubai returned to India and started the Reliance Commercial Corporation with a capital of Rs. 15,000.00. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices. Reliance Textiles: Sensing a good opportunity in the textile business, Dhirubhai started his first textile mill at Naroda, near Ahmedabad in the year 1966. Textiles were manufactured using polyester fibre yarn. Dhirubhai started the brand "Vimal", which was named after his elder brother Ramaniklal Ambani's son, Vimal Ambani. Extensive marketing of the brand "Vimal" in the interiors of India made it a household name. Franchise retail outlets were started and they used to sell "only Vimal" brand of textiles. In the year 1975, a technical team from the World Bank visited the Reliance Textiles' Manufacturing unit. This unit has the rare distinction of being certified as "excellent even by developed country standards" during that period. Logo of Reliance Industries Limited: Dhirubhai Ambani is credited with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliance's IPO in 1977. Dhirubhai was able to convince people of rural Gujarat that being shareholders of his company will only bring returns to their investment. Reliance Industries holds the distinction that it is the only Public Limited Company whose several Annual General Meetings were held in stadiums. In 1986, The Annual General Meeting of Reliance Industries was held in Cross Maidan, Mumbai and was attended by more than 35,000 shareholders and the Reliance family. Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial returns on their investments.
Dhirubhai's Control over Stock Exchanges: In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures. It was rumored that company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell the shares of Reliance. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance"
started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange. Diversification: Over time, Dhirubhai diversified his business with the core specialization being in petrochemicals and additional interests in telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. The company as a whole was described by the BBC [18] as "a business empire with an estimated annual turnover of $12bn, and an 85,000-strong workforce". Criticism: Despite his almost Midas touch, Ambani has been known to have flexible values and an unethical streak running through him. His biographer himself has cited some instances of his unethical behavior when he was just an ordinary employee at a petrol pump in Dubai. He has been accused of having manipulated government policies to suit his own needs, and has been known to be a king-maker in government elections. Although most media sources tend to speak out about business-politics nexus, the Ambani house has always enjoyed more protection and shelter from the media storms that sweep across the country. Fight with Nusli Wadia: Nusli Wadia of Bombay Dyeing was, at one point in time, the biggest competitor of Dhirubhai and Reliance Industries. Both Nusli Wadia and Dhirubhai were known for their influence in the political circles and their ability to get the most difficult licenses approved during the times of preliberalized economy. During the Janata Party rule between 1977 -1979, Nusli Wadia obtained the permission to build a 60,000 tonnes per annum Dimethyl terephthalate (DMT) plant. Before the letter of intent was converted into a licence, many hurdles came in the way. Finally, in 1981, Nusli Wadia was granted the license for the plant. This incident acted as a catalyst between the two parties and the competition took an ugly turn. The Indian Express Articles: At one point in time, Ramnath Goenka was a friend of Dhirubhai Ambani. Ramnath Goenka was also considered to be close to Nusli Wadia. On many occasions, Ramnath Goenka tried to intervene between the two warring factions and bring an end to the enmity. To this day, there is no satisfactory explanation as to why Goenka and Ambani became rivals. Later on, Ramnath Goenka chose to support Nusli Wadia. At one point of time, Ramnath Goenka is believed to have said "Nusli is an Englishman. He cannot handle Ambani. I am a bania. I know how to finish him".
Dhirubhai & V.P.Singh: It was widely known that Dhirubhai didn't enjoy a cordial relation with Vishwanath Pratap Singh, who succeeded Rajiv Gandhi as the Prime Minister of India. In May 1985, he suddenly removed the import of Purified Terephthalic Acid from the Open General License category. As a raw material this was very important to manufacture polyester filament yarn. This made it very difficult for Reliance to carry on operations. Reliance was able to secure, from various financial institutions, letters of credit that would allow it to import almost one full years requirement of PTA on the eve of the issuance of the government notification, changing the category under which PTA could be imported.
1.1. On the other hand he also take the opportunity when Indian govt. introduce any scheme for business area like
Provide GOL Export promotion High unit value scheme Refinery capacity Dhirubhai Highly used Highly used Highly used Opportunities & Percentage Export rayon fabric and import nylon fiber 60% export 25% of total India refining capacity Year 1978 1971 1999
Foundation and Chemical Engineering World in recognition of his outstanding contribution to the growth and development of the chemical industry in India.
2000, 1998 and 1996 Featured among 'Power 50 - the most powerful people in
for setting an outstanding example of leadership. Dhirubhai Ambani has the rare distinction of being the first Indian to get Wharton School Dean's Medal.
August 2001 The Economic Times Award for Corporate Excellence for Lifetime
Achievement.
Dhirubhai Ambani was named the Man of 20th Century by the Federation of
A poll conducted by The Times of India in 2000 voted Him "Greatest Creator of
Reliance also focus on the future oriented development strategy that fully integrated world scale operations in multi sector S .No 1 2 3 4 5 6 7 Criteria Oil and gas exploration and production Refining and marketing Petrochemicals Power and textiles Cellular telephony Information technology and communication Reliance general and life insurance
Reliance position according to global fortune ranking S .No 1 2 3 Terms Net profit Net worth Total assets Position and ranks 200 300 425
CEO
Network head
HR head
Marketin g head
Cluster head
Postpaid cc
Out door
3.
When Dhirubhai Ambhani was 17 years old, he left India to yemen. He meet several types of peoples there when he worked there as a worker at petrol pump. Though he doesnt know books theory of business but he acquired this virtue by his instinct. After 8 years later he left to India and started a new business. He knew that what should do to capture the consumer market. Gathering information and scanning the environment: He tried at that time to understand the situation of business future in India. Then he looks for data what should help him to do business. He started as an importer he was imported commodities like, ginger, spices etc. Create customer value: He knew very well how to create customer value. He wanted to produce most efficient product which will help him and his company reliable. Dhirubhai Amnbani always focuses on the mixed pr multi sector business. He is developing his business with huge marketing strategy and those are focusing on a chart. On the other hands Dhirubhai on focus brand name, service and quality.
Marketing Mix:
Market ing mixed Product Product variety Quality Brand name Feature Packaging Service Transport Design Price List price Discount Allowance Credit terms
Target market
Place Channels Coverage Promotion Sales promotion Public relation Sales force Advertising Inventory
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Advertising Sales promotion Event and experience Reliance Company Product service Price Public relation Direct marketing Personal selling Distribution channel Target customer
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Management:
As a management concept Dhirubhai never follow the text book management style but his activities related with management skill. We make a structure on the basis of his excellent job or activities. Skills Self awareness Managing conflict Motivating employee Managing stress Communicating supportive Empowering Problems solving power Leading positive change Building effective team Influencing
Skills of Dhirubhai who uses these skills efficiently for build strongly a higher position in the Indian market. So Indian market can remember him as with respectfully icon and solid rock of nation.
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S kills
Motivating em ployee Managing conflict Self awareness Managing stress Com m unicating supportive Em powering Problemssolving power Leadingpositive change Building effective team Influencing
How these skills are applying Dhirubhai in the field and how to relate all skills as efficiently. He never follows the management style but his work show that is a keep going with management style.
Influencing: In India there is a huge competition among with business to
business and person to person. Dhirubhai competitive with others segment of business like V.P Singh was transferred from finance ministry to the defence ministry. So Dhirubhai has huge power in the market for influencing.
Problems solving power: Dhirubhai has huge skills about problems solving
power because when he faced threat from Calcutta based bear syndicate and he manage it. He also takes opportunities from bear syndicate because bear sold their share. Unfortunately the Reliance group brought the all share with lower rates that skills or strategy build by great man Dhirubhai.
Managing stress: Stress destroy the business as soon so Dhirubhai always
focus on how to managing stress or conflict. When Reliance earns more profit or takes huge opportunities than huge enemies a raised and creates a big conflict between them like Nusli Wadia of Bombay Dyieng. At finally Dhirubhai reach the destination because of managing skills.
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Self awareness: The most important skill is self awareness. Dhirubhai Ambani is an icon of India because of emphasis of self awareness. He knows about himself that what should he do or must be needed. When Indian govt. introduces any scheme in the market he took the beat opportunities and maximizing the profit with innovative thinking.
sector. He started his business with 15000 thousand Rs but for positive thinking about changing he building the multi sector areas like Reliance commercial corporation, oil and gas exploration, stock marketing and textiles industry.
Empowering: Dhirubhai is the ket of empowering because he uses the power at
the time for business profit. He battle with the competitor like Nusli Wadia and also his friend Ramnath Goenka owner of the Indian Express Articles and he was succeed.
5.
Leadership:
Leadership is key skills to achieving the competency of work and creates a revolution for any sector and manager keeps the stability of organization. Similarly Dhirubhai create a revolution in the Indian sector. Dhirubhai build an empire that is rock solid and he always remain as an icon of whole Indian sector and also in the world. We make some category on the basis of Dhirubhai activities.
Based on the belief that leaders are exceptional people, born with innate qualities, destined to lead. This issue done by Dhirubhai Ambani because he is exceptional people and also icon of India and rock solid.
The lists of character or qualities associated with leadership exist in abundance and continue to be produced. Dhirubhai focus on multi sector business with high abundance. These concentrate on what leaders actually do rather than on Behaviorist Theories their qualities. He follow the different patterns of behavior are observed and categorized as styles of leadership. Situational Leadership and managing This approach sees leadership as specific to the situation in which it is being exercised. Sometime Dhirubhai Ambani follow an autocratic style on situations may require others may need a more participative approach.
Characteristic Theories
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Emergency Theory
This is a refinement of the situational viewpoint and focuses on identifying the situational variables which best predict the most appropriate or effective leadership style to fit the particular circumstances. Dhirubhai Ambani always focuses on opportunities in case of emergency or not. This approach emphasizes the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of contract. He tries to listening follower ideas and makes a good relationship with employee. The central concept here is change and the role of leadership in envisioning and implementing the transformation of organizational performance. Dhirubhai Ambani focuses on the vision and strategy implementation.
Transactional Theory
Transformational Theory
Communicating Supportively: It is said that Dhirubhai Ambanie Used his connection with key Politicians and Bureaucrats to obtain licenses and government approvals for projects. He is also said he used other forms of lobbying with prevalent in the US. Buildings team and team work: Dhirubhai belived that business is nothing but way of web relationship and obligation. Keeping this principle Dhirubhai managed to create favorable centers in all the important areas.
Solving problem creatively: When Reliance entered the domestic market, it faced lot of resistance from whole seller older mills. Dhirubhai Decided that time to move from the whole sell trade and open his show room to tap new market. Leading positive change: He had followed small wins strategy to develop from current situation by using of easiest way thats why he took steps to develop an efficient distribution system for VIMAL as he found that the existing marketing channels were inadequate and inefficient.
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Fostering innovation: He always had taken advantages when the high profit earned and also tried to do other things that are why many sector of business is under of Reliance.
Managing Personal stress: For managing his personal stress he appointed several agents. Managing time: Dhirubhais time management system was punctuality. Thats why presently Reliance enjoys global ranking in all major business and its shares lead the domestic market. Maintaining self Awareness: He had a clear concept about different sector of business but he sorted out which is better for doing at first.
Motivating Others: When Dhirubhai adopted the concept of textile business that time he toured the entire country intensively and appointed several agents from textile backgrounds for offering franchises. He provided them a strategic vision. Gaining power and influence: After selecting franchise agent Dhirubhai promised with them that Reliance would provide financial and advertising support for influencing them.
Managing Conflict: Dhirubhai faced the toughest battles with the toughest of politicians and bureaucrats and was eventually successful in gaining a victory over all his political and corporate rivals.
Self-confident Cooperative Significant Dominant (desire to influence others) Energetic (high activity level) Understanding of stress Willing to assume responsibility
Fluent in speaking Knowledgeable about group task Organized (administrative ability) Winning passion Socially skilled
There are important three situations that could define the condition of a managerial task those focus on Dhirubhai activities.
Leader member relations: Task structure:
Position power:
The major three things are focus on Dhirubhai strategy. Sometimes he uses his extra power for keeping position and fight with strong people. He tries to extent to duties and responsibility and telling people what to do, how to do, when to do. He also focus on two types behavior as fact on the situation. Directive Behavior One-Way Communication Followers' Roles Clearly Communicated Close Supervision of Performance Supportive Behavior Two-Way Communication
Listening, providing support and
encouragement
Facilitate interaction Involve follower
in decision-making
On the others hand Dhirubhai follow some other task as a leader like Directing: He provides clear instructions and specific direction for employee to
and motivation on the part of the employee, although the leader still has responsibility and controls. He doing his activities one way with political causes.
17 Supporting: With this view the leader Dhirubhai and followers share decision
Delegating: Its appropriate for Dhirubhai because the followers are ready to accomplish a particular task and are both competent and motivated to take full responsibility.
5.2. Four main management styles can be following by the great rock
solid Dhirubhai Ambani, the icon of India.
Management style
Autocratic Persuasive Consultative Democratic
Extremely
Highly
Fairly/good
An average
5.3. Three main leadership styles can be following by the great leader
Dhirubhai Ambani, the icon of India. Task He define the task that what should to do He make the strategically plan Always allocate work and resources Emphasis control quality and rate of work Team He build effective team spirit Encourage, motivate, give a sense of purpose what to do Influencing to others Individual Focus on company profit Take huge opportunities
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So overall the analysis we can tell him as a great leader and also manager on the basis skills those needed for any leader for highly competition in the market those focusing on Dhirubhai activities that how he is efficient in corporate level and domestic level.
He focus on only future Create huge revolution in Indian Focus on change of nature in Indian market Changing perspectives on task He create innovative visionary for Reliance in Indian business market
6. SWOT Analysis
Strength Strong brand image for winning Attractive plans Unstressed work environment Cheaper services High margin to customers Weakness Less control on sales people Increasing churns Falling revenue in few sections Ignorance of profit margin structure on RCVs Opportunities Enhance the network in rest of the states Provide broadband services to semi urban and rural areas Compound annual growth rate multi business Threats New entrants in the market Present competitors like TATA More lower cost of product
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7. Comparative analysis
Comparative analysis is the most important strategy to measure the company position, competitor, and overall identification of business policy. So we make comparative analysis with some segment and follow the all steps as necessary. Comparative between Dhirubhai Reliance and only Reliance Activities or task Multi sector strategy Comparative analysis for only Reliance Market share Choosing Reliance Satisfaction of customer Efficient product and service with time period As a HRM perspectives
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S trateg y
6 4 2 0 Strategy Strategy
S trateg y
10 8 6 4 2 0 Strategy Strategy
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7.2.1. Market share Competitive company with Reliance 1. Reliance 2. Airtel 3. BSNL 4. TATA 40% 35% 30% 25% 20% 15% 10% 5% 0% Percentag e R eliance Airtel BS NL TATA Percentage 38% 30% 13% 19%
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Item Good service Profit margin Brand name No dead line Prepaid service Connection Others
Reliance Excellent Very High More establish Totally independent Excellent Efficiency Better
BSNL Better Good Good Little bound good Close to good Good
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Percentage
1 8 0 1 6 0 1 4 0 1 2 0 1 0 0 8 0 6 0 4 0 2 0 0
85%
15%
Yes
No
7.2.4. Time taken to provide the services Item Long time Average time Quick time Percentages 17% 25% 58%
Percentag e
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Open Door Policy Career Development Program Managerial Functions Roles and Functions of Executive Personal files Attendance Procedure: Attendance Register Selection and Recruitment Educational Qualifications Job Hierarchy: Training Apprenticeship Training Promotion:
and employee needed More flexibility the managers and the employees share. Excellent like huge opportunities for growth Efficiently like scheduling, meeting, participating Excellent coordinate employee training and giving consultancy Keep all document strongly Excellently Excellently Efficiently for the right person for right place Highly talented and efficient Excellent well decorated More than as much needed (ITI)
Focus on flexibility rather than sharing Lack of scope for development Better but emphasis on few categories Huge problems of consultancy Moderate Moderate Good Sometime got a mistake for selection so conflict is arise Effectives Effectiveness No intuition for training system Good predictable Only work performance For any non vital reason Not specific Transportation is available Line manager but not top management as like reliance Lack of benefit
Excellent predictable consistent work performance, and work behavior Transfers For achieving organizational goal as also employee satisfaction Performance Appraisal: Follow efficiently 360-degree feedback and MBO Facilities for the Employees Very good like locker, Canteen Transportation Disciplinary Actions: supervisors are concerned than manager as needed Benefits given to Workers Excellent like Dearness and staff: Allowance, medical, Gratuity Provident Fund, Personal Loans, rest room and bonus Shifts 3 shift time Sales Structure: Excellent Forecasting Excellent future oriented like Schemes, Promotions Discounts, Market activity Vocational Training Excellent as needed of employee Grievances handling Lower grievances because of more satisfy employee
Lack of shift time Good Not for all element No Try to minimize
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8.
Recommendation
Dhirubhai Ambani started his long journey in Bombay from the Textile Market, where he started as a small-trader. As a mark of respect to this great businessman and at the time Reliance Group had a gross turnover of Rs. 75,000 Core or USD $ 15 Billion. In 1976-77, the Reliance group had an annual turnover of Rs 70 core and Dhirubhai had started the business with Rs.15000. He is such a great leader in the Indian business sector because he creates competition of market and takes more opportunities as an efficient manager or leader. He become Indian rock solid and icon of the nation because his skills
Input
S .No 1 2 3 4 5 6 7 8 9 10 Skills Self awareness Managing conflict Motivating employee Managing stress Communicating supportive Empowering Problems solving power Leading positive change Building effective team Influencing
Output
Establishment Reliance commercial corporation Reliance textiles Efficient use of skill Oil and gas exploration Refining and marketing Petrochemicals Power and textiles
Although Reliance has a hold over a good market share, yet it should be careful with its competitors who are coming up with new offerings. BSNL has already launched its prepaid PCO. It would be using the same network as for other mobile services that it provides. Currently, BSNL is facing a big problem of congestion in its network. So this is the best time for Reliance to capture more market with its new schemes and packages.
9. Implementation
In overall analysis of the Dhirubhai Ambani and Reliance group we reach a destination about his total actives. Actually how he move or run with the situation and make profit. So we show that strategy in the bellow:
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Analysis
Motivated
Managing conflict
Team Work
Creative Idea
Policy Development
Complex Situation
Influencing on Fact
Managing Risk
Create Belonging