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Dhiru Bhai Ambani

In: Business and Management

Submitted By hiteshroy5209
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History of Dhiru Bhai Ambani

Introduction * Dhirubhai Ambani is referred as India's "Businessman of the Century". Founder of Reliance Group India.
* Dhirubhai Ambani (Dhirajlal Hirachand Ambani) was born on 28 December 1932, at Chorwad, Junagadh in the now state of Gujarat (India). * Parents Name: Hirachand Gordhanbhai Ambani and Jamnaben.
* Dhirubhai was the second son of a school teacher and started his entrepreneurial career by selling "pakora" to pilgrims in Mount Girnar. * At the age of 17, Dhirubhai went to Aden (now part of Yemen) and worked for A. Besse & Co. Ltd., the sole selling distributor of Shell products. * Two years later Dhirubhai was promoted to manage the company’s filling station at the port of Aden. * In the year 1958,Dhirubhai Ambani returned to Mumbai and started his first company, Reliance Commercial Corporation, a commodity trading and export house. * The first office was set up at the Narsinathan Street in Masjid Bunder. It was a 350 partnership with Champaklal Damani. * In the year 1965, Dhirubhai Ambani started his own company. * In the year 1966, as a first step in Reliance's highly successful strategy of backward integration, he started the textile mill in Naroda, Ahmedabad. * Textiles were manufactured using polyester fibre yarn. Dhirubhai started the brand "Vimal". * Dhirubhai diversified his business with the core specialisation being in petrochemicals and additional interests in telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. * In the year 1975, a technical team from the World Bank certified that the Reliance textile plant was "excellent by developed country standards". * The company went public in 1997. The group is credited with a number of financial innovations in the Indian capital market. Today the group has the largest family of shareholders in the world. * With an investment of Rs 360 billion in petroleum refining, petrochemicals, power generation, telecommunication services and a port terminal in a three-year time frame, the late Dhirubhai Ambani had steered the Group to its current status as India's leading textiles-petrochemicals-telecommunications player. * Reliance Group is India's largest business house with total revenues of over Rs 600 billion, cash flow of Rs 70 billion, net profit of Rs 45 billion and exports of Rs 93.70 billion. * The company as a whole was described by the BBC as "a business empire with an estimated annual turnover of $12bn, and an 85,000-strong workforce” in the year 2002.

The Dhirubhai Way * Being a Kathiawari, Dhirubhai was endowed with sharp business acumen and a spirit of adventure. But more than this in-born trait, there were three characteristics that set Dhirubhai apart in the conservative world of Indian business. * First, his phenomenal risk-taking ability that was far higher than other contemporary businessmen. He was a born risk-taker and believed in taking on and managing calculated risks.It is this same risk-taking ability that helped him when he ventured into textile manufacturing in 1966 within a year of buying out his original partner in the yarn business, Champaklal Damani. Ditto when he ventured into the backward integration project of setting up a plant to produce fiber intermediate, purified terephthalic acid (PTA) in the mid-80s — he was taking on established businesses and businessmen. In fact, much of his fund-raising for the large capital-intensive projects that his group was involved in the 80s and 90s was underlined by tremendous risk. * Second was his firm belief that business is nothing but a web of relationships and obligations. * He believed in proactive moves rather than reacting to Government policy which is what his contemporaries were doing. This capacity to “manage the environment” would be responsible for the dark spots that any chronicler of the Reliance group’s evolution would encounter.

Benefits to the society * Dhirubhai introduced innovative funding strategies such as the ingeniously designed triple option convertible debentures for the refinery project. The projects generated tremendous number of jobs, by themselves and in downstream sectors. The petrochemicals project made the country almost self-sufficient in plastics and synthetic fiber even as the refinery obviated petroleum product imports. * To Indian middle-class salary-earners, Dhirubhai held out the promise of instant enrichment through the stock market. But he was no fly-by-night operator: Reliance shares offered genuine value, and those fortunate enough to have had faith in the company in the early years eventually became millionaires. Annual general meetings were held in sports stadiums where Dhirubhai would be treated by shareholders with adulation and even reverence. * Dhirubhai was also anxious to encourage the spread of information technology among India’s poor. Through Reliance Industries he arranged computer education and training for thousands of students in schools in Bombay. “You are getting an opportunity. Make the best use of it,” he told children in December during one of his last public speeches. “Be daring. Think big. You can be the best. If you believe in this, you will be the best.

Achievements * Voted India's 'Top Businessman' in the 'Best of India' poll conducted by Zee News, August 2003. * Reliance is the only Indian private company to make the Fortune 500 list of the world’s largest corporations, and Dhirubhai Ambani was listed by Forbes as the 138th richest person in the world in 2002. * Petrotech Society conferred posthumously the 'Lifetime Achievement Award' for his outstanding contribution to Downstream Petroleum Industry in India, January 2003. * Rated as one of 'India's Most Admired CEOs' for the fourth consecutive year in the Business Barons - Taylor Nelson Sofres - Mode Survey, July 2002. * Conferred the 'Lifetime Achievement Award' by India HRD Congress, February 2002. * Conferred 'The Economic Times Award for Corporate Excellence for Lifetime Achievement', August 2001. * Awarded the Companion Membership of the Textile Institute, UK, an award which is limited to 50 living members who have "substantially advanced the general interests of the industries based on fibres", 1994 * Chosen as 'Star of Asia' by Business Week, USA, June 1998. * Awarded the Dean's Medal by The Wharton School, University of Pennsylvania, for setting an outstanding example of leadership, June 1998.

Reasons for Success * Dream big but dream with your eyes opens. His phenomenal achievement showed India that limitations were only in the mind. * One of his phenomenal is risk-taking ability. * Not only did he dream big, he taught all of us to do so too. “Make Vimal’s advertising the benchmark for fashion advertising in the country.” This line was quoted by Dhirubhai Ambani. * Inspiration coupled with hard work and the “can-do” spirit can take one to great heights. One of the main reasons for his success.


* Through sustainable measures, create value for the nation, * enhance quality of life across the entire socio-economic * spectrum and help spearhead India as a global leader in the domains where we operate


* Grow through innovation * Lead in good governance practices * Use sustainability to drive product development and * enhance operational efficiencies * Ensure energy security of the nation * Foster rural prosperity


* values of Care, Citizenship, Fairness, Honesty, * Integrity, Purposefulness, Respect, Responsibility, * Safety and Trust

Dhirubhai as a leader:

Supporting Theories:
The leadership style of Mr.Dhirubhai Ambani has been studied with the help of few different leadership theories. Generally the leadership style is defined as the way in which the leadership skill is executed and also the way the managers respond to their group members. The broad classification of leadership style gives the various possible ways to describe the leadership style such as consultative, doctorial, unitary, bureaucratic, benevolent, charismatic, participative and abdicatorial. Majorly the two common styles of leadership can be observed are authoritarian and democratic styles. These are observes during managerial leadership towards the group members and also on focus of power.
Transformational leadership:
It is the perfect way of supporting leadership style of Mr. Dhirubhai Ambani leadership qualities as this theory focuses on creating the higher levels of commitment and motivation among the followers. Ambani concentrated in generating vision for Reliance industries and higher values and ideals of followers. Mr. Dhirubhai Ambani succeeded in creating a feeling of justice, loyalty and trust among the followers and loyal customers who believed him during the initial years of his successful business journey. He was a perfect example for transformational leader as he always transformed the fortunes of businesses in which he entered and succeeded. The trust and loyalty feelings which he generated in his loyal customers helped him in achieving the desired goals of Reliance industries and also he build the long lasting relationships with the political governing bodies of India. The political aspects play an important role in any business processes of any country. The companies need to have trusted and clean relationships with the political parties for aisle free business operations which Mr. Ambani always had to run Reliance business activities in India.
Many studies have focused on transformational leadership earlier and see that this leadership is similar to the charismatic or inspirational leadership. The charismatic or informational leadership qualities of the leaders transform the people’s goals, values, aspirations, needs and beliefs, which play a significant role, present competitive businesses.
Transactional leadership:
In the present day scenario the increasing business competitiveness have resulted in need of optimised utilisation of available human resources and driving the followers in right path to achieve the goals. Leaders need to revitalise and transform the organisation to make the businesses successful and sustainable in the present competitive global markets. Dhirubhai Ambani’s leadership qualities resemble the transactional leadership qualities which focus on creating self interest in followers. Basically the transactional leadership is based on mutual dependence relationships and it follows the policy of exchange process which says that ‘I will give you this, if you do that’.
The present exchange process of transactional leadership can be related to the working style of Dhirubhai Ambani as he succeeded in offering the genuine value to the investments of his loyal customers. Ambani promised genuine returns before getting Initial public offerings (IPO) from the Indian middle class earners. This scenario proves that Dhirubhai Ambani belongs to the family of Transactional leader. Ambani always emphasised on the clarification of goals and objectives of reliance industries and created interest in his followers which lead him to the peaks of success.
Path-goal Theory:
Path-goal theory has been chosen to analyse the leadership qualities of Mr. Dhirubhai Ambani and the qualities of the leader in path-goal theory supports the qualities of successful business tycoon Dhirubhai Ambani and his leadership skills are better explained with the help of this theory. Path-goal theory establishes the fact that an efficient leader exhibits different types of behaviours at different situations to influence the situation which occurs in business activities and also to influence the perceptions of subordinates.

Leadership Characteristics in Dhirubhai
GRAB AN OPPORTUNITY AND STRIKE ON IT Whenever Mr. Ambani got the opportunity to grow, he had cashed that opportunity. After accumulating certain amt. he shifted to manufacturing from merchandising.

He believed that if a person want to get his work done taken by him, then he must should to have proper knowledge about the task he has taken. Whenever he had approached to govt. for licence or had tried for information about the competitors, market size etc. he used to collect it any cost.

He always tried to create demand for his product by offering it at a lower price. At lower price a large section of population would be able to purchase it. In this way he creates demand for his product. He used to produce in large quantities and with latest technique to reduce per unit cost.

He never focused to only one field. He had focused to almost all yarn, telecom, polyester etc

He even did not mind on copying. Concept of selling through showrooms for his vimal brand to counter the resistance from the traditional markets, he had copied from Bombay Dyeing.
He was a very good innovator. He innovated and reintroduced successful concepts like partial convertible bond, fully convertible bonds etc.

Mr. Dhirubhai Ambani were not having the ego problem. He just wanted to get his work done from people. He was never ashamed of saying “salaam” to anyone.
He always believed in picking up best talent. He used to trained them leadership skill, vision and strategy in order to run his business more effectively by them.

He was an innovator type of person. He always used to aim high target, always used to think fast and ahead of competitors in order to get maximum profit and maximum share of the market.

Mr. Dhirubhai Ambani was always hungry for success. People used to say that he had finaly arrived but he used to say that I have just begin.

Management Style

“His people skills were legendary. A former secretary reveals: “He was very helpful. He followed an ‘open-door’ policy. Employees could walk into his cabin and discuss their problems with him.” The chairman had a special way of dealing with different groups of people, be they employees, shareholders, journalists or government officials. Ambani’s competitors allege that he bought off officials and had legislation re-written to suit him. They recall his earlier days and how he picked up the art of profiteering from the then-Byzantine system of controls of Indian officialdom.
He exported spices, often at a loss, and used replenishment licenses to import rayon. Later, when rayon started to be manufactured in India, he exported rayon, again at a loss, and imported nylon. Ambani was always a step ahead of the competitors. With the imported items being heavily in demand, his profit margins were rarely under 300 percent.”

Though Dhirubhai was not a Management Guru, he gave new management lessons.
He gave nine management lessons.
1. Roll up your sleeves and Help Do it yourself He does not wait for infrastructure to be created to support his operations. He goes out & builds it himself, be it a power plant or a canal.
2. Be a safety net for your team.
Knowledge that he knew and cared for what his team was going through and that he was there for them if needed him, worked wonders for confidence.
3. The Silent benefactor
When helped someone, he never ever breathed a word about it to anyone else. 4. Dream big, but dreams with your eyes open.
Whenever a task seemed too big to be accomplished, he would reply, No, is no answer! ´.
Not only had he dreamed big, he taught all of us to do so.
5. Leave the professional alone!
Let professional do the work´ this technique enforced responsibility among his team.
6. Change your Orbit constantly
When you change orbits, you will create friction. The good news is that your enemies from your previous orbit will never be able to reach you up in your new orbit, you should move to the next level. And so on.
7. The arm-around-the shoulder leader
It was Dhirubhai`s very own signature style.
Arm around the shoulder-with that one simple gesture he managed to achieve many things and draw people towards himself.
8. Theory of Supply creating Demand
When everyone in India would build capacities only after a careful study of market. He went full steam ahead and created giants of manufacturing plants with unbelievable capacities.
9. Money is not a product by itself, it is by product, so don’t chase it.
He did not breathe a word about profits, nor about becoming the richest.
A byproduct is something that you donate out to produce. It is the spins off when you create something larger.

LEARNING FORM HIS LIFE * Risk has to be taken if you want to succeed. * Leadership and Motivational skills. * Faith and Love * Comprehensive approach * Think big, work big and you will some day become big.

Final Journey: Dhirubhai Ambani's funeral saw thousands of people attending. Mukesh Ambani and Anil Ambani can be seen carrying their father's body as per Hindu traditions
Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002 after he suffered a major "brain stroke". This was his second stroke, the first one had occurred in February 1986 and had kept his right hand paralyzed. He was in a state of coma for more than a week. A battery of doctors were unable to save his life. He breathed his last on July 6, 2002, at around 11:50 P.M. (Indian Standard Time).
His funeral procession was not only attended by business people, politicians and celebrities but also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at around 4:30 PM (Indian Standard Time) on July 7, 2002.

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