Case Study- Icomm

8/8/2019 Case Study- Icomm

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Hingrajiya Sameer

(34)

Pankaj

(35)

Mistry Sandip

(60)

Index

TopicPage no.

Introduction: Reliance Industries 1

Objective of present study

2

Reliance Case Death of Shri Dhirubhai 3

Ambani and its effect on the Company.

Case summary

4

Strategies to overcome crisis of death or


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Likewise of top Management Executive 6

Conclusion

Other Strategies to overcome the problems

Arising on death of top management

executive.

Substitute or additional Strategies

INTRODUCTION OF RELIANCE INDUSTRIES

INTRODUCTION OF THE COMPANY

Reliance was not just any other family owned business. It was

Indias largest private sector company with annual sales in theregion of Rs 90,000 crore.

Reliance not only provided livelihood to over 80,000 employees

but also accounted for over 3% of the nation's GDP and 10% of

the revenue collected.

Its empire stretched from well heads to plug points. Reliance

was owned by a clutch of 14 companies which in turn were

owned by a complex web of investment outfits, the control of which extended to over 1,400 entities.

Dhirubhai Ambani had highest number of shareholders with him

in his time. He boosted market capitalization of BSE. He

brought millions of share holders under his umbrella, many of

them were first time in the stock market.


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Dhirubhai Ambani followed these secret techniques of business

through out his lifetime. He was not much interested in

the books or magazines about management. He had an

appetite, a never ending hunger for news.

Starting from a lower level employee of a gas filling station, he became

an industrial giant, a global conglomerate. His name was included in

the list of Fortune 500. He could manage a yearly revenue of $ 78

billions in his life time. No Indian industrialist could achieve that level

at that time. He was dreaming of World No.1, which he could not

achieve because of untimely death. However, it has been achieved

through the Reliance industries which he founded. Dhirubhai Ambani

is world No.1 today, though after his death. The assets of Mukesh and

Anil Ambani (Both sons of Dhirubhai Ambani, between whom his

assets were distributed) together crossed Bill gates, Microsoft.

Objective of the present study

Whether big or small, every organization plans formerly for any

accidental situation that shall take place in the company.

Herein, the main Objective of our study is to have a strategic

approach to be implemented in order to meet with the situation

arising after a sudden death of any top level executive.

Our topic is Death or likewise of Top Management

Executive. Wherein we try to undergo the different situations

that shall result into the unfavorable circumstances on the

sudden death of the top executive and its overall effect on the

goodwill of the company as well internal management.


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Here we represent the live CASE STUDY ON EFFECT OF

DEATH OF DHIRUBHAI AMBANI ON RELIANCE

INDUSTRIES which focuses on the overall problems that

the company faced on sudden death of Shri. Dhirubhai Ambaniand also what different strategies were used in order to

overcome the internal problems as well as how to meet with

such critical situations.

CASE STUDY ON EFFECT OF DEATH OF DHIRUBHAI

AMBANI ON RELIANCE INDUSTRIES.

CASE STUDY ON EFFECT OF DEATH OF DHIRUBHAI AMBANI ON

RELIANCE INDUSTRIES, BY CAUSING The Dispute between

Mukesh and Anil Ambani after Dhirubhai Ambanis death.

Anil was lining up legal luminaries to take his brother to court

over what he believed were questionable share transfers that

had taken place after Dhirubhai's death. Anil had also been

criticizing the corporate governance

practices in Reliance Industries and Reliance Infocomm,

companies that Mukesh controlled.

Anil believed that Mukesh had taken advantage of his position

as the Chairman of Reliance to invest heavily in these

businesses while starving Anil's own businesses of cash. The


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clash between the brothers had started while Dhirubhai was

alive. Since his demise, the relations between the two

brothers had become progressively sour. Uncomfortable with

the idea of playing second fiddle to his brother who had been

appointed chairman after Dhirubhai's death, Anil had

suggested various alternatives but his proposal to be made

co-chairman or alternatively his mother

Kokilaben to be made the non-executive chairperson had not

been accepted by Mukesh. The elder brother contended that

Dhirubhai had already settled the succession issues before his

death.

What triggered off the recent dispute was the sequence of

events after the formal launch of Reliance Infocomm in April

2003. Mukesh had hoped to attract five million subscribers,

each of whom would pay Rs 22,000 upfront to get a free

connection for a three-year period.

This way, he had hoped to raise over Rs 10,000 crore at a goand use it to expand the telecom network. Instead, only one

million users had paid up, and others had opted for the

monthly payment scheme. This led to a huge shortfall in the

resources mobilized. Therefore, Mukesh had used resources

from RIL to finance the telecom project. Between June and

October 2003, nearly Rs 10,000 crore had been provided to

Infocomm on fairly attractive terms. Anil questioned thisoutgo. He was also unhappy that Rs 8,100 crore was invested

by the flagship company, RIL as preference shares against a

dividend commitment of Rs 16 crore a year-or less than 0.2%-

for a period of 10 years. Only after that was the rate to be

hiked to 7% a year. True, RIL could convert the preference


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shares into equity at any later date, but the price was to be

mutually decided by the two companies. Anil was unhappy

that even this had not been decided at the time of issue of the

preference shares...

The Death of an Icon

The 6th of July 2002 was a black day in the Indian corporate

history. The Founder and Chairman of the Reliance group of

Industries (Reliance), Dhirajlal Hirachand Ambani (Dhirubhai)

died after a 13 day battle for survival. A perfect combination

of entrepreneurship and leadership,Dhirubhai transformed Reliance from a company with a

turnover of Rs 640 million in 1976, to one with a turnover of

Rs 620 billion in 2002. Starting with a small textile mill in

Naroda.


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of the entire corporate sector in India. Moreover, one out of every fourinvestors was a shareholder of Reliance. Reliance acquired IPCL10, theIndian petrochemical giant. This acquisition gave Reliance a soundfooting in the global petrochemicals market.

By 2004, it plans to take over more than 35 % of the global market. Thiswould make Reliance the 11th largest polymer producer in the world.

With the amalgamation of RPL with RIL, Reliance became the only

company in the world to have fully integrated world scale operations in

oil and gas exploration and production, refining and marketing,

petrochemicals, power and textiles.

Presently Reliance enjoys global ranking in all major businesses and its

shares lead the domestic market. According to the global Fortune 500rankings, Reliance ranks amongst the top 200 companies in terms of

net profit, amongst the top 300 in terms of net worth, amongst the top

425 in terms of total assets, and amongst the top 500 in terms of

sales.

Reliance Mobile, the new venture of Reliance provides cellular telephony

services in 13 Indian states, and Reliance Basic holds the licence toprovide fixed line telecom services in the state of Gujarat. With the

launch of Reliance Infocomm, Reliance has taken another major step in

its continuous search for growth and excellence. It was Dhirubhai's

dream to provide information technology and communication facilities

to the common man, at affordable prices. The Infocomm revolution will

cover thousands of villages across the country by 2003. Reliance

Power intends to pursue opportunities in the power sector with an

objective to achieve over 10,000 MW in the next decade. With RelianceGeneral Insurance and Reliance Life Insurance, the group has also

entered into the insurance sector. Dhirubhai's entrepreneurial abilities

enabled Reliance to progress on the roads to success both in the

licensing era as well as in the era of liberalisation, privatisation and

globalization.


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Right from the time he suffered his first stroke in 1986, Dhirubhai

groomed his sons Mukesh and Anil Ambani to take care of the day-to-

day operations of Reliance. It was from Dhirubhai that his sons imbibed

the quality to think big. Mukesh's skills were quite evident from his

successful management of the Patalganga and Jamnagar projects andAnil was adept at the finances. Despite their elite education, their most

important training came from Dhirubhai.

He provided them with a strategic vision. His sons always considered

themselves as co builders rather than inheritors of Reliance.

Dhirubhai's words way back in 1993 reflected the immense confidence

he restored in his sons, "Reliance can now run without me." After his

demise, Mukesh was appointed the Chairman and Managing Director of

the Reliance group while Anil became the Vice Chairman. It remains to

be seen whether Reliance will maintain its lead and growth over large

multinationals

Case Study- Icomm

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