Business maharajas

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Gita Piramal

A freelance journalist with a Ph.D. in business history, GitaPiramal is

the author of the best-selling Business Legends and the co-author of a

pioneering work on business history, India's Industrialists. She has

also contributed to the seminal volume Business and Politics in India-A

Historical Perspective, edited by Dr. Dwijendra Tripathi and published

by the Indian Institute of Management, Ahmedabad. She has been writing

and commenting on the corporate sector for over eighteen years for

leading Indian and international newspapers such as the UK's Financial

Times and Economic Times.
Piramal has been involved in the making of television programmes on

Indian business for the BBC and for Plus Channel.

She is married to industrialist Dilip G. Piramal and they have two

daughters, Aparna and Radhika. Piramal divides her time between Mumbai

and London.
Penguin Books India (P) Ltd." II Community Centre, Panchsheel Park,

New Delhi 110 017. India Penguin Books Ltd." 27 Wrights Lane,

W8 5TZ, UK
Penguin Putnam Inc." 375 Hudson Street, New York, NY 10014, USA
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First published in Viking by Penguin Books India (P) Ltd. 1996 First

published by Penguin Books India (P) Ltd. 1997

Copyright Gita Pirama11996

All rights reserved

Typeset in Times by Digital Technologies and Printing Solutions, New

This book is sold subject to the condition that it shall not, by way of

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Aparna and Radhika my two little gurus
The maharajas for their time
Dilip for his confidence in me
Khozem Merchant, Nishit Kotecha, Subniv Babuta and Sailesh Kottary for

their suggestions

David Davidar for his encouragement
Krishan Chopra for his constructive criticism Sindhu Sabale for my data

bank my parents for their support

Harsh Goenka for the title
Introduction ix
Dhirubhai Ambani 1
Rahul Kumar Bajaj 85
Aditya Vikram Birla 135
Rama Prasad Goenka 211
Brij Mohan Khaitan 261
Bharat and Vijay Shah 313
Ratan Tata 363
Appendix 408
A Note on Sources 411

Select Bibliography 415

Index 462
Like the territorial rajas of the past, businessmen today rule vast

empires, maintain a watchful eye inside and outside their boundaries,

and protect their turf against invaders. The eight featured here are

among India's most powerful men. Between them, they control sales of

roughly Rs 550bn through over 500 companies and directly employ at

least 650,000 people. Switch on a light, sip a cup of tea, have a

shave, listen to music, drive to work, see a movie, snuggle into a

pillow--and you'll find yourself using their products through the day

and into the night.
They are a study in contrasts. Their businesses are distinct and

varied. Some are highly educated, others are college drop-outs. Some

are inheritors, others self-made. Some topped their chosen field in

their thirties, others didn't approach the starting line until their

fifties. Some dominate a particular business, others control more than

one industry. What they do,. what they think, how they react impacts

the entire economy, not just their customers, shareholders, employees,

and bank managers. So how do they think? How do they conduct their

businesses, arrive at complex investment decisions involving
Sums have mostly been expressed in millkm,lkm. The equivalents in of

lakh/crore arc: ten lakhs: one million; ten million: one crc; 100 cro:

of billion
(1,000 million).
x / Business Maharajas billions of rupees, or hire and fire the

executives who manage their dominions?

For me, the challenge has always been to find out why a company behaves

the way it does, to understand the people and the compulsions behind

business events. Inevitably, therefore, this is a book about business

personalities. Management gurus love to talk about strategy and

strategic decisions, but the. more I learn about business, the more

I'm convinced that management decisions are based on the personal

experiences, aims and vision of one person. Usually it's the head of a

business house or the chairman of a company, but sometimes crucial

decisions can be taken by unexpected people, as I found to my surprise

while researching this book.

I learnt, for example, that the Williamson Magor group's Rs 2.9bn

decision to acquire Union Carbide India was not taken by blue-ribboned

directors in its boardroom at 4 Mangoe Lane but in the tranquil drawing

room of Shanti Khaitan. In 1994, every financial journal covered the

sale, billed as the biggest takeover in Indian corporate history.

Discussing the deal with the Khaitans, I found that their bid was based

not so much on the advice of bean counters but on human factors.

Worried that their son Deepak was spending too much time in their

stable of three hundred horses and not enough in his garage of

engineering companies, Shanti persuaded her husband, Brij Mohan, to

make an offer for the famous battery maker. Deepak needed to settle

down, and she was convinced that a big company like Union Carbide would

be just the right ticket.
At one time, Bhiki Shah was a far more worried mother than Shanti. In

the late '70s,her younger son Vijay had established a tiny office and

:a state-of-the-art factory at Saphadz, outside Tel Aviv. It did so

well that in 1981 it received the Israeli government's highest export

award and the
Business Maharajas / xi next year, sales surged from $2m to $21m. Persuaded that the future for him lay in Israel, Vijay--who speaks fluent Hebrew--wanted to settle there but Bhiki protested. "My mother used to hear about bomb scares an dall those things on television. So we thought we had better settle down in Antwerp," says Vijay. Thereby he altered the course of B. Vijay kumar & Company.

I doubt if there's a more fascinating businessman than Dhirubhai Ambani. As a petrol station attendant, he used to dream of heading a huge company, maybe a global multinational like his first and only employer, Burmah Shelll All teenagers dream but how many have the ability and doggedness to turn fantasy into reality? Ambani founded a brash, upstart company which challenged the established business houses and their way of conducting business. He fought for and seized paper license, converting them into large textile mills and huge petrochemical complexes.

Through the process of building Reliance Industries into a corporate behemoth, he rewrote management theories, fought with India's most fearsome newspaper, made friends with prime ministers, and became the only businessman to be lampooned as often as Rajiv Gandhi. He nailed his nameplate onto an office door in 1966: From next to nothing, within two decades, sales had ballooned to Rs 9 bn, making Reliance one of India's top ten companies, but Ambani wasn't satisfied. Sitting at his desk one day in 1984, he drew up a flow chart. If he built such-and-such factory, added a division here and a unit there, ten years down the road, Reliance could become a Rs 80bn company. Sceptics laughed when he announced his plans, but he proved them wrong. In 1995, sales nudged Rs 78bn. Some say Ambani is an acronym for ambition and money. It's probably true.
In the '80s, Reliance grew at an astonishing 1,100 per cent, with sales moving up from Rs 2bn to Rs 18.4bn, but it wasn't India's fastest growing company. Its expansion trailed behind Bajaj Auto's incredible growth rate of 1,852 per cent. Under Rahul Bajaj, the Pune-based scooter company's sales swelled from Rs 519m to Rs 18.5bn during the same decade. Both Reliance and Bajaj Auto are lean and owner-driven corporations, yet in terms of character, style, background----every parameter that counts is there couldn't be two more dissimilar chairmen than Dhirubhai Ambani and Rahul Bajaj.

Ambani is a first generation entrepreneur, the Bajajs were rich long before Ambani was born. Ambani hustled in Bombay's teeming markets selling yarn and later fabrics. Bajaj didn't have to hustlemthere were long queues of people outside his airconditioned office patiently waiting to be allotted scooters. Ambani Cultivated political contacts, Bajaj was born into a family of patriots. Mahatma Gandhi referred to Rahul's grandfather as his fifth son; Rahul's father was a Congress member of Parliament. Yet the government raided Rahul Bajaj twice, stalled his repeated applications to build new factories and expand production, and wouldn't let him diversify. In 1987 he wanted to buy into Ashok Leyland, a truck maker, but to clinch the deal, he needed dollars. The government wouldn't exchange his rupees and he lost the opportunity. Despite the difficult conditions he worked under, Bajaj established Bajaj Auto as one of India's rare world-class organizations.

The late Aditya Birla came from a family with as rich a political legacy as Rahul Bajaj. Birla had an appetite as voracious or morem if that's possible--for empire-building as Dhirubhai Ambani. To feed it, Birla built 2

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