TERM PAPER ON

LEADERSHIP OF

“DHIRUBHAI AMBANI”

SUBMITTED BY:

PRIYANKA SINGH (09236)

SRAVANTHI MYADAM (09246)

SYAMLY SATHYAN (09254)

SALEEM PASHA.SK (09010)

MANASA SINGIREESU (09006)

EXECUTIVE SUMMARY

DHIRUBHAI AMBANI

Our team identified Reliance as a representative company for studying the leadership style of its

founder, Dhirubhai Hirachand Ambani, and how it impacted the management practices in his

company in terms of successes as well as failures, if any.

We described the profile of the Reliance Group with all its ramifications along with its

subsidiaries and their broad functioning system.

Thereafter we presented a brief life sketch of Dhirubhai Ambani, the kingpin, the pivot of the

Reliance Group mentioning the highlights of his progress from a small yarn trader to the head of

a premier national conglomerate.

A discussion of his preferences, policies and methods was taken up along with the impact of

each of them on the managerial practices in Reliance Group and related developments.

We tried to fit Dhirubhai Ambani in different leadership models like I 10 model, Situational

Model of Leadership and the leadership grid. In the process, we justified his labeling in each case

based on facts and relevant available data.

Comments were made on his leadership styles, the pros and cons in each case mentioning a few

unavoidable lapses which need to be corrected for attaining 100% excellence.

We have concluded, rightly so, that in spite of a few blemishes not-withstanding, it is solely due

to Dhirubhai Ambani that the Reliance Group is now the largest Indian conglomerate in terms of

market capitalization.

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ContentsINTRODUCTION...........................................................................................................................................4

OBJECTIVES OF THE STUDY..........................................................................................................................5

COMPANY PROFILE......................................................................................................................................5

MAJOR ACHIEVEMENTS OF THE RELIANCE GROUP.....................................................................................8

LEADERSHIP STYLE OF DHIRUBHAI AMBANI................................................................................................9

LEADERSHIP STYLE BASED ON VARIOUS MODELS.....................................................................................14

I 10 MODEL............................................................................................................................................14

SITUATIONAL THEORY OF LEADERSHIP..................................................................................................17

BLAKE & MOUTON’S LEADERSHIP GRID................................................................................................19

COMMENTS ON THE LEADERSHIP STYLE OFDHIRUBHAI AMBANI.............................................................22

CONCLUSION.............................................................................................................................................23

REFERENCES..............................................................................................................................................24

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INTRODUCTION

India is fortunate to have a number of trailblazers who established giant industries in India which

prospered by their special managerial skills acquired through practice or through brain waves or

through hereditary excellence of business background. These include Tatas, Birlas, Khaitans,

Goenkas, Bajajs, Ambanis, Jindals, Mittals, Ruias, Mirchandanis and individuals like Vijay

Mallya and Bhai Mohan Singh of Ranbaxy. Their descendants to day control more than Rs. 800

billion through 600 companies employing about one lakh people. We use their products day in

and day out whether it is consumer durables, electronics, basic necessities and luxuries of life.

One of the greatest businessmen India has produced is Dhirubhai Ambani, a synonym for

Reliance and Vimal. For his vision, leadership qualities, trailblazing characteristics and go

getting approaches, which have all put Reliance and his sons now at the top of the richest people

in the world, out team have selected Dhirubhai Ambani as a quintessential representative of a

specific leadership style which, among other things, will be explained in detail in this term paper.

For a matriculate from a middle class family starting his trading life in Africa with M/s. Besse &

Company, a small sub-division of Shell, rising to the pinnacles of business excellence hardly in

three decades speaks volumes of the qualities of head and heart which guided Dhirubhai Ambani

in his long but eventful journey through the corridors of yarn markets, trading, textiles,

petrochemicals, polyester manufacturing and what not, thus embracing and encompassing all

possible business areas which guaranteed a good profit and best value for money, not only for his

family members, but for the millions of his shareholders. It was a unique spectacle that the

annual general body meetings of Reliance were always held in open auditoria or maidans just

because thousands had to be accommodated is still one of the most unique phenomena in the

Indian business scenario.

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OBJECTIVES OF THE STUDY

1. Study of Reliance Industries Ltd. including all the subdivisions.

2. Study of the leadership style of Dhirubhai Ambani and how it influenced the managerial

practices of the company.

3. Categorization of Dhirubhai Ambani using various leadership models.

4. Study of the impact of this leadership style on the Reliance group.

5. Comments on the Reliance framework and identification of areas for rationalization or

improvement, if any.

COMPANY PROFILE

Reliance Group is India's largest private sector enterprise with revenues in excess of US$ 25

billion. The group has diversified business interests in areas such as petrochemicals, textiles and

retail. Reliance Group's flagship company, Reliance Industries Limited (RIL), is a Fortune

Global 500 company and is the largest private sector company in India.

The Reliance Group was founded by the legendary Dhirubhai H. Ambani. In 1975, the company

expanded into textiles. Dhirubhai Ambani introduced equity cult in India when Reliance went

public with IPO in 1977. Since the launch of its IPO RIL has expanded rapidly and integrated

backwards into other industry sectors, most notably the production of petrochemicals and the

refining of crude oil. Dhirubhai led the evolution as a global leader in the materials and energy

value chain businesses. Today, Reliance Group's activities range from exploration and

production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber

intermediates, plastics and chemicals) to textiles and retail. Reliance enjoys global leadership in

its businesses. It is the largest polyester yarn and fiber producer in the world and among the top

five to ten producers in the world in major petrochemical products. Presently, Reliance Group

has more than 25,000 employees on its rolls and exports products in excess of US$ 15 billion to

more than 100 countries in the world.

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BUSINESS INTERESTS OF RELIANCE:

Petroleum Exploration and Production: Petroleum Exploration and Production is a major growth

area for Reliance and Reliance intends to become a global energy major. RIL is the largest Oil &

Gas acreage holder among the Private sector companies in India with 34 domestic exploration

blocks covering an area of about 331,000 sq. km. It is also India's first private sector company in

the Exploration and Production (E&P) sector to have discovered large gas reserves. RIL also has

interests in one exploration block each in Yemen and Oman.

Petroleum Refining and Marketing: Reliance operates the third largest refinery in the world at

any single location, with a capacity of 30 million tons per year of crude throughput, at Jamnagar,

Gujarat. Reliance is in the process of doubling the petroleum refinery at Jamnagar, which will

make it the largest petroleum refinery in the world. The products rolled out from Reliance

refinery include: LPG, Propylene, Naphtha, Reformate, Gasoline, TAME, Jet / Aviation Turbine

Fuel / Superior Kerosene Oil, High Speed Diesel, Sulphur, and Petroleum Coke.

FUNCTIONING AREAS:

Petrochemicals: Reliance deals in following petrochemical products:

Polymer: Reliance's polymer business is integrated with its cracker facility at Hazira, as

well as its refinery at Jamnagar, ensuring feedstock availability at all times. The company

operates world-scale plants for Polyolefins and PVC with state-of-art technologies from

global licensors like Novacor, Geon and Union Carbide.

Polyester: Reliance is the largest producer of polyester fiber and yarn in the world, with

a capacity of 2,000 KTA.

Polyester Intermediates: Reliance is the world's 3rd largest producer of Paraxylene

(PX), 6th largest producer of Purified Terephthalic Acid (PTA) and 5th largest producer

of Mono Ethylene Glycol (MEG).

Textiles: Reliance textile products are sold under the brand names of Only Vimal, Harmony,

Reance, RueRel and V2. Reliance’s Naroda textile complex, one of India’s largest and most

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modern textile complexes, produces about 25 million meters of fabric both for domestic and

foreign markets.

Retail: Reliance has recently entered the retail market and is aggressively working on

introducing a pan-India network of retail outlets in multiple formats.

SUBSIDIARIES OF RELIANCE GROUP:

Reliance Petroleum - Reliance Petroleum Limited (RPL) is a subsidiary of Reliance

Industries Limited (RIL) and was created to exploit the emerging opportunities, creating

value in the refining sector worldwide.

Reliance Life Sciences- Reliance Life Sciences is a diversified and integrated

biotechnology initiative of the Reliance group companies, India's largest private sector

companies.

Reliance Industrial Infrastructure Limited - Reliance Industrial Infrastructure Limited

(RIIL), a Reliance Group company, is principally engaged in the formation and operation

of industrial infrastructure, involving the leasing and supply with the software of the

computer and data processing.

Reliance Institute of Life Sciences - Reliance Life Sciences Institute (RILS), established

by Dhirubhai Ambani Foundation, is an institution of higher education in various fields

of life sciences and related technologies.

Reliance Solar Limited - Initiative for Solar Energy and Reliance Group aims to bring

solar energy systems and solutions primarily to remote and rural areas and bring about a

transformation in the quality of life.

Reliance Logistics - Reliance Logistics (P) Ltd., a Reliance group company, is a single

window solution provider for all your transportation, distribution, storage, logistics and

supply chain needs.

Reliance Clinical Research Services - Reliance Clinical Research Services (RCRS), a

Reliance group company, is a contract research organization (CRO) and its wholly owned

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subsidiary of Reliance Life Sciences, which aims to provide world-class services for

clinical research, pharmaceuticals, biotechnology companies and medical equipment.

Relicord - Relicord, a Reliance Life Sciences (RLS) initiative, offering services of cord

blood banking is supported by Reliance Group, India's largest business house.

MAJOR ACHIEVEMENTS OF THE RELIANCE GROUP

The world's largest producer of Polyester Fiber and Yarn

4th largest producer of Paraxylene (PX)

5th largest producer of Purified Terephthalic Acid (PTA)

7th largest producer of Polypropylene (PP)

Reliance's refinery at Jamnagar is the third largest refinery at a single location in the

world.

Reliance pioneered the first ever Euro Convertible Bond issue by an Indian company.

Reliance is the first private sector company in India to be rated by international credit

rating agencies.

First corporate in Asia to issue 50 and 100 years bond in US debt market.

First private sector Company in India to record a net profit of US dollar of over 1 billion.

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LEADERSHIP STYLE OF DHIRUBHAI AMBANI

The following is a description of the leadership style of Dhirubhai Ambani, the founder of

Reliance Industries. The managerial practices in Reliance were all affected completely by the

leadership style of its founder. The great success story of Reliance can be completely attributed

to the style of management brought in by Dhirubhai Ambani which was perfected by his sons

and to some extent by experts in business management hired by the Reliance Group. But the fact

remains that the comprehensive and integrated personality of Dhirubhai Ambani permeates and

penetrates through all aspects of working of Reliance Industries and all its subsidiaries.

DHIRUBHAI AMBANI- YARN TRADER TO NATIONAL BUSINESS TYCOON

It is interesting to note the gradual development of Ambani as a leader from his birth, growth and

blooming into a full fledged company head. Born in a traders’ family in Gujarat on December

28th 1932 to Jumna and Hirachand Ambani, he was the third of five children and his father was a

school master. Having barely completed his matriculation exam at 17 years of age, Dhirubhai

reached Aden and joined M/s. Besse & Co. which was dealing with Shell products and was paid

a first salary of 300 rupees per month. He studied all the nuances of the marketing of petroleum

and as an ambitious young man; he shifted from service to business. He was helped by Jamnadas

in dealing with commodities like rice and sugar and returned to India in 1958.

He started Reliance Commercial Corporation with a capital of Rs 15000 as a trading firm. It is

very educative to note that as for an Arab Sheik’s request even a consignment of Indian soil was

sent to Aden to grow roses in the desert showing that Ambani had the knack to identify an

opportunity and strike the iron when it is hot.

Branching out to yarn trading, he started the first spanking new mill at Naroda as he foresaw

synthetics as the fabric of the future which shows the visionary nature of the man in general.

Dhirubhai registered Reliance Textile Industries with a paid up capital of 150000 as a power

loom unit. This is where the backward integration concept first took roots and later became the

central theme for all strategic planning in Reliance.

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As a risk taker, Ambani raised Rs. 280000 to get into manufacturing in a project which was

predicted to fail by great business stalwarts like Viren Shah. But, because of his advance

anticipation of things to come, he made a profit of 1.3 million in the first year. By 1977,

Dhirubhai went public and his profit reached Rs 43.3 million from the revenues of 700 million.

To manage his exploding business, he took out talent from wherever available and jobs were

offered more on showing initiative rather than on paper qualifications which became a classic

Reliance management strategy. The best technological talent was poached from all his

competitors to form the brains trust of Reliance.

When Ambani bought machinery, he was always ahead of tomorrows and had commitment to

quality by taking the finest technology the world could offer. The best example is that of

acquiring DuPont technology for synthetic yarn from Delaware, US, the polyester process being

first bought by him outside of United States.

Dhirubhai entered domestic markets with an advertising blitz on par with Hindustan Lever when

Reliance introduced ONLY VIMAL since he was very confident that the brand image was the

most important in order to win the consumer’s confidence. Dhirubhai felt that marketing success

was a function of three factors, namely, choosing the right product mix, identifying the market

and establishing a viable distribution structure. When faced with resistance from traditional cloth

marketers, Dhirubhai opened his own showrooms and appointed agents and offered franchises to

his own shareholders. He also opened up non metro urban segments in smaller towns as a result

of which by 1980, Reliance fabrics were available to twenty company owned retail outlets, 1000

franchised outlets and more than twenty thousand regular retails stores. This was comparable in

speed and numbers only to Italian Benetton and American Mc Donald’s. Dhirubhai established a

good rapport with his dealers by making his business with them risk free because he used to say

“if you lose, come back to us, but if you make profits, they are all yours!” Dhirubhai’s future

gazing skill could be inferred from the fact that though India is a poor country, people will not

mind paying a little more for synthetics provided they have a good quality and had a longer wear

and tear.

The Naroda mill transformed Dhirubhai from a simple yarn trader to a great mill owner on par

with Mafatlals, Sarabhais etc. Dhirubhai spread out countries abroad through his Reliance

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synthetic textiles. His dynamism and confidence in the future made him reach a sales turnover of

Rs 1 billion in just twelve years whereas Bombay Dyeing needed hundred years. Dhirubhai was

accused of black marketing and corruption to improve his sales and get things done.

After 1977, when Reliance went public, Dhirubhai’s holdings were 16% but he had thousands of

share holders from the public to support him in all his endeavors. By converting debt into equity

through successful debenture issues through 1979 to 1982, he was able to raise up to Rs 500

millions. A very important philosophy of Dhirubhai was always to ensure that Reliance share

were in the ascendant to draw maximum benefit for the shareholders for whom he was prepared

to bend the Govt. rules, use his political influence and any legal Hera pheri required for the

purpose.

Dhirubhai made sure that whenever Reliance had to impress the Govt. to modify the existing

rules and regulations, they used to have all the information in India and abroad on the fingertips

of the group which met and influenced the Govt.

Reliance always managed to maintain its zero-tax status by changing its accounting practice by

capitalizing interest for the long term debt for the purchase of fixed assets. Many people felt that

Reliance was avoiding taxes by cheating the Govt. However, all the profits were ploughed into

the company by Dhirubhai and his family so that business prospered. Dhirubhai had the knack of

taking on people like VP Singh in which he had the inherent support from Ms. Indira Gandhi,

Pranab Mukherjee and Rajeev Gandhi. One best example is when he contracted the purchase of a

whole year’s supply of PTA of 60000 tons by having letters of credit from many banks when the

Govt. was about to decide to shift imports of PTA from open license to permissible limited list.

Dhirubhai was able to show his one-upmanship against Nusli Wadia and Goenka of Indian

Express which were bent upon destroying Reliance. Though this led to his paralysis and later

failing health, he was able to broker peace with his enemies through the success of Reliance’s G

series along with the meeting of Dhirubhai with Rajeev Gandhi through the good offices of

Amitabh Bachhan when VP Singh was shifted from Finance to Defence.

However, there was never formal delegation of authority in Reliance as there was flexibility as

well as ambiguity. Only the top managers could call the shots in addition to Dhirubhai and his

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sons. In spite of this, Dhirubhai was very considerate to his employees like when Mr. Sanghvi

incurred a heavy loss in a deal with a view to increase the profit for Reliance. After 1995,

Dhirubhai handed over the reins of his empire to his sons though he did not lose his craving for

money and power since he was always available for expert advice.

According to Anil Ambani, his father’s only fault was he thought too big and clearly ahead of his

time.

DHIRUBHAI AMBANI’S IMPACT ON RELIANCE’S MANAGERIAL

PRACTICES AND THEIR POSITIVE IMPACT ON BUSINESS

The great success of the Reliance Group is in no small measure to epoch making changes in

management practices and philosophies brought about by Dhirubhai Ambani based on his

convictions that reflect his unique management style. The following illustrate and prove

Dhirubhai Ambani’s influence on Reliance’s management practices.

Dhirubhai Ambani was a transformational leader. His innovative idea of converting the

debentures of the company into equity shares resulted in far reaching changes in the

management practices. Reliance was able to convert its liabilities into assets by this

masterstroke and the share prices of the company went up and all the investors could

make through this process. Though, the Government of the day was against this equity

cult starter by Dhirubhai per say, but, over a period of time based on precedence in

foreign companies, the statute book itself was modified to be in line with this innovative

idea. Consequently, the volumes of business in Reliance increased very fast along with

quick multiplication of its share capital.

Dhirubhai was a visionary who foresaw that mere financing through banks and public

limited companies will not suffice to increase the wealth base of Reliance. So, he was

able to convince the people of rural Gujarat and elsewhere that shareholders of the

company will have handsome returns on their investments. This approach resulted in

having more than 3 million shareholders investing in Reliance, which is the highest

number in the world for any company. As a result, Reliance Industries was the only

public limited company whose annual general meetings had to be held in open air

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stadiums. So much so, with almost 20% of the shareholders in India belonging to

Reliance, it became a dictating factor in Indian economy, courtesy the Indian stock

markets.

Dhirubhai Ambani believed that his people were his most important assets. The most

talented professionals were drawn from all and sundry, were nurtured and continuously

provided initiative to aim for still higher goals and targets. These highly motivated people

comprised the core of what is known as the Reliance “family”. This practice improved

the working of not only Reliance, but other prospering companies who followed this

practice also prospered in the long run. He also empowered his managers by giving

authority to them to work independently to work independently he had belief in the

capabilities of his people. This has grown to become the core of the Reliance group’s HR

policy of staff recruitment and maintenance.

Dhirubhai was a risk taker, but was only prepared to take calculated risk based on the

expected future trends. He invested his entire earnings to purchase a huge stock of

polyester yarn which was felt as a wrong decision by others because cotton was the king

in India at the time. But he proved right and this made him a billionaire as polyester

caught the fancy of the people for better value and longer wear and tear period of the

clothing. This influenced Reliance to such an extent that it went on with the purchase of

polyester technology from DuPont as the first non- American company to do so. This

move gave the Reliance Group monumental financial resources that helped build a robust

growth engine and also developed a core competence to grow business, expand and

diversify into a potato-to-petrochemicals conglomerate at a break neck speed.

When Dhirubhai felt that was a lot of opposition for the introduction of polyester cloth

for retail outlets, he started his own chain of distribution centers and gave retail agencies

to many of his shareholders on franchise basis. This made it possible for only Vimal to

penetrate through A and B class cities and semi-urban neighborhoods which made the

market blossom to absorb additional supplies and increase the demand for the same all

over the country. In the long term perspective, this also helped develop the much needed

knowledge of supply chain management strategies in the Reliance Group, which now

boasts of one of the best supply chains in the country in the category of departmental

stores, food chains, pharmacy drug stores etc.

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Dhirubhai Ambani was the one of the first Indian businessmen to realize that high quality

actually costs less. Dhirubhai always insisted that Reliance use the best and finest state-

of-the-art machinery, equipment and manufacturing facilities. Under his stewardship, the

Reliance Industries operated the best manufacturing plants in the country, a comment by

the World Bank team affirming the same being a testimony to its technological

advancement. In the long run this emphasis on constant up gradation of facilities

improved the capacity utilization, economies of scale and reduced the production costs

per unit in various factories of the company. Also, this philosophy helped the company to

vastly cut down its production/manufacturing costs, provide higher quality products and

product pricing flexibility in many of their high volume- low margin businesses.

LEADERSHIP STYLE BASED ON VARIOUS MODELS

We are aware of different frameworks and models for leadership styles. Based on the facts and

data available to us regarding Dhirubhai Ambani, we will now proceed to categorizing him

accordingly and appropriately using relevant leadership models.

I 10 MODEL Information

Dhirubhai Ambani mastered the secret of gathering information. He had an uncanny knack of

knowing exactly how the market is going to behave and stayed ahead of times. He used to gather

information, whatever it may be and at whatever cost. He used to gather information about

Governments whether they were local, state, central or international. Whenever he went for

approval of license from government he used to have all the information about the market

capacity, market share, competitors etc. he used to gather information about products,

companies, consumers, markets, people, services, politics and practically anything and

everything that mattered for that matter. He used to keep up to date information of competitors.

He used to gather information, analyzed and process the same. He was also able to identify

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opportunities out of those news and information. He was also quick to disburse that information

to the relevant people.

Intelligence

Jamnadas, a friend of Dhirubhai helped him by giving some money to invest in share market

when both of them left the job in Aden. Dhirubhai came to India after some years and established

his own business. When Jamnadas came to India Dhirubhai gave him job in his company. Even

though Jamnadas stopped working after sometime, Dhirubhai insisted that he be paid his salary

till his demise. It shows his social intelligence. He was able to understand others’ emotions and

feelings. He never forgot people who helped him.

Dhirubhai was very shrewd in his business transactions as well. He had a knack of getting the

right information appropriate to the situation and used it to his advantage whenever necessary.

He had the ability to solve any problem or deal with any kind of situation at the right time and in

the right perspective.

Imagination

He always was ahead of the times and was able to predict or forecast future developments

correctly. For example, he made the plant capacity of polyester production mill higher than the

current market demand at that point of time because he knew that in near future, the demand for

polyester would increase. Once he also reserved some stock of yarn in view of expected increase

in the market price and this happened, resulting in huge profits.

Inspiration

He was a very inspirational leader. He inspired a good deal of young entrepreneurs in India. To

his employees, he was their messiah whom they could fall back to in any hour of need. For

example, when the action of one of his employees resulted in a huge loss, he was magnanimous

in condoning the same, for he was very sure that the employee worked for the benefit of his

company in the said situation.

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Insight

He had an uncanny insight to the future of his business. His choice of moving on to polyester,

especially, at a time when cotton was the more popular fabric was based on his perception that

the demand for polyester would pick up very soon and his prophecy was proved right.

Converting debt into equity using debentures only highlights his deep insight about his business

because by this move, he could clear the company’s debts and achieve profits for all the

shareholders.

Dhirubhai gave importance to the small investor and his contributions, and by doing so, he

involved millions of middle class investors

Intensity

Dhirubhai was intensely attached to his company, its people and its business. All his moves were

directed ultimately for the good of his company. His intensity was that infectious that it spread to

all his employees. He was so intensely attached to his company that was prepared to forego his

integrity for the sake of getting things done by hook or by crook for the sake of his company.

Integrity

Dhirubhai seems to stand low in terms of integrity. Dhirubhai manipulated the laws and customs

rules to his company’s advantage. He exploited the Indian government, their rules and tax system

to the best of his ability which is very clear from the fact that Reliance is the only company

which never paid taxes even after three decades of listing and went on giving bonuses and

dividends to shareholders. It was government and the system which was at loss. Billions of

rupees which should have gone to the coffers of government allegedly went into building

Reliance Empire and also went for paying bribes to the government babus. Critics accused him

of using "more than the usual" ways of obtaining licenses, getting quick approvals for public

issues and capital goods imports, and of getting policies formulated in favor of Reliance

Industries.

However, Dhirubhai used to say that these were baseless allegations made against him by his

jealous competitors.

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Influence

Dhirubhai Ambani was known for his influence in political circles and had the ability to acquire

most difficult licenses during the license raj. Ambani’s influence on New Delhi was so strong

that everything worked the way he wanted it to be, whether it was getting a license or taking

action against his competitors.

Interdependence

Dhirubhai depended on the “Reliance family” consisting of professionals and technocrats drawn

by him from all possible quarters who were able to convert his expectations to fruitful results. By

depending on them and looking after them simultaneously, he was able to achieve superlative

results. This shows that Dhirubhai believed in team work though, of course, he was always the

team leader.

Impact

Dhirubhai had a great impact on stock exchanges and on government. He had such an impact

that when Govt. and stock exchange experts opposed his idea of converting debentures to shares,

he threatened them that if they take any legal action he will withdraw all shares from the stock

exchange. Fearing this SEBI never took any action against him, and he forced the government to

change the law.

SITUATIONAL THEORY OF LEADERSHIP

Situational leadership stresses that leadership is composed of both a directive and a supportive

dimension, each of which is to be applied appropriately in a given situation. According to this

theory, leaders must change the degree to which they are directive or supportive to meet the

changing needs of the subordinates. In other words, situational leadership demands that a leader

should match his style to the competence and commitment of his subordinates. Effective leaders

are those who can recognize the needs of the employees and adopt their own style to meet those

needs.

S3: high supportive/low directive behavior S2: high directive/high supportive behavior

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SUPPORTIVE STYLE COACHING STYLE

(DHIRUBHAI AMBANI)

S4:low supportive/low directive behavior

DELEGATING STYLE

S1:high directive/low supportive behavior

DIRECTING BEHAVIOR

Note: Horizontal axis represents directive behavior. Vertical axis represents supportive

behavior

Based on the data available, we can categorize Dhirubhai under S2 leadership style which

involves high directive and high supportive behavior as per the Blanchard-Blanchard situational

leadership-II model. As Dhirubhai was showing spectacular results right from the beginning of

his company’s functioning in India and also because he picked and chose the technical and

professional core group for his Reliance family, the followers were highly motivated, optimistic

and goal directed. The followers therefore were at D2 to D3 development levels and required a

guided coaching approach. Because of their commitment and competence, Dhirubhai followed

the coaching approach in a high directive and high supportive style. As for this, he focused

communication on both achieving goals and meeting the socio-emotional needs of his

subordinates. He involved himself with the subordinates by giving encouragement and soliciting

subordinate input. However, it is an extension of S1 leadership style that is high directive and

low supportive behavior because as a leader, he was always making the final decision based on

what and how the goal can be accomplished.

BLAKE & MOUTON’S LEADERSHIP GRID

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The leadership grid proposed by Blake & Mouton, in its most reformed form of 1985, is

designed to explain how leaders help organizations to reach their purposes through two factors,

namely, concern for results on a 9 point scale and concern for people also on a 9 point scale.

(1,1) represents impoverished management, (9,1) represents authority compliance, (5,5)

represents middle-of-the-road management, (1,9) represents country club management and (9,9)

represents team management.

The (9, 9) style places a strong emphasis on both tasks and inter-personal relationships. It

promotes a high degree of participation and team work in the organization and involves the

employees fully committed to their work.

Based on the data available, Dhirubhai Ambani can be categorized as a 9,9 leader, that is, in the

team management block of leadership grid. Dhirubhai used to stimulate participation of the

employees, always made his priorities clear and followed them to the successful completion. He

behaved open mindedly and enjoyed working with his employees. However, he was not perhaps

getting all the issues into the open which is perhaps a lapse. Because the employees were hand-

picked based on professional and technical competence and drawn from diverse sources, their

involvement and commitment to work was of the highest order. In addition, Dhirubhai acted as a

member of the so called Reliance family though sitting at the top of the table and thus could

establish very good inter-personal relationships as he was strongly goal directed, he was able to

always emphasize and motivate his employees towards task achievement as an important goal to

be kept in mind at all times. He always had a very clear perception of his priorities in terms of

immediate and final goals, a concept that percolated down to all his employees. Because of the

common stake for his company, very good relationships of trust and respect ensued between him

and his team members. The following points corroborate this view as additional confirmations:

TASK ORIENTED BEHAVIOR

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DHIRUBHAI AMBANI

Dhirubhai was ready to risk his personal integrity, bend the rules, influence the

politicians and the Government Officers concerned for the sole purpose of achieving his

goals or targets.

As a risk taker, he expanded the capacity of his mills or went for polyester at such times

when the atmosphere did not appear right for the same because he had a form conviction

that the goals he had set for his company are justified and are bound to be met.

PEOPLE ORIENTED BEHAVIOR

He had a very jovial manner while handling his employees by treating them as part of his

extended family, condoning their honest mistakes, if only, when they were for the benefit

of the organization.

He was a very good pay-master and was very kind and considerate to all his employees

who were hand-picked him for their administrative/technical expertise.

He never advertized his munificence because felt obliged to help out not only the needy

employees, but others remotely connected with the Reliance family.

(HIGH)

9

8

(1,9)

COUNTRY CLUB

(9,9)

TEAM MANAGEMENT

(DHIRUBHAI AMBANI)

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DHIRUBHAI AMBANI

MANAGEMENT

6

5

4

(5,5)

MIDDLE-OF-THE-ROAD

MANAGEMENT

3 1,1

IMPOVERISHED

MANAGEMENT

2

(LOW)

1 2 3 4 5 6

9,1

AUTHORITY

COMPLIANCE

MANAGEMENT

7 8 9

LOW HIGH

Note: horizontal axis represents concern for results. Vertical axis represents concern for

people.

COMMENTS ON THE LEADERSHIP STYLE OF DHIRUBHAI AMBANI

Ambani’s style of functioning produced all-round success for his organization in terms of the

following:

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DHIRUBHAI AMBANI

His coaching style of high directive and high supportive behavior as well as the team

management style under the leadership grid are very apt and relevant for Reliance Group as they

always produced the best possible results with all-round benefits to all the stakeholders including

employees, customers, shareholders and the investors. His high directive and high supportive

behavior is found to be very suitable for his dedicated and motivated employees who were all

hand-picked by him for their ability and expertise. His style of functioning made all concerned to

believe that Reliance was indeed a big extended family of Ambanis.

But his go-getter status by hook or by crook and by bending the rules and regulations of the

Govt. concerned and his single minded devotion to improve Reliance at the cost of other parallel

establishments made him many enemies like Nusli Wadia or P Goenka and a few others with

whom he had to continue an ever-going war of words and deeds.

There is no evidence to show that career development schemes were in operation in Reliance at

that point of time, which is a prime necessity to retain talent and to stay competitive in the

changing environment. It also appears that a well set hierarchy in the bureaucracy seems to be

absent and most of the decisions were taken by the senior most managers in addition to

Dhirubhai showing that delegation of responsibility was under a low key. Though Reliance

followed all the rules of corporate governance seemingly, they always took advantage of the

loop-holes in the laws, systems and procedures. For good accountability, established companies

must not only follow the rule of the law but also its spirit through ethical practices.

In spite of the few of the above lapses in Reliance, we must add that due to Dhirubhai Ambani’s

passion, intensity, passion, charisma, leadership capabilities and his favorable impact on all the

stakeholders, Reliance has now become the number one company in terms of market

capitalization in Indian stock exchanges.

CONCLUSION

Dhirubhai Ambani was not just an exceptional human but also an outstanding leader. A man far

ahead of his times, he epitomized the dauntless entrepreneurial spirit. He dared to dream on a

scale unimaginable before in Indian industry. His life and achievements prove that backed by

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DHIRUBHAI AMBANI

confidence, courage and conviction, man can achieve the impossible. From a humble beginning,

he went on to create an enviable business empire within a span of just 25 years.

The Rs.60, 000 crore Reliance Group is a living testimony to his indomitable will, single-minded

dedication and an unrelenting commitment to his goals. Under Shri Dhirubhai Ambani's

visionary leadership, the Reliance Group emerged as the largest business conglomerate in India,

and carved out a distinct place for itself in the global pantheon of corporate giants. The Group's

track record of consistent growth is unparalleled in Indian industry and perhaps internationally

too. Today, the Group's turnover represents nearly 3 percent of India's GDP. Shri Dhirubhai

Ambani was not just firmly rooted in traditional Indian values, but was also the quintessentially

modern man, the man of the new millennium. This was clearly reflected in his passion for mega-

sized projects, the most advanced technology and the highest level of productivity.

The corporate philosophy he followed was short, simple and succinct - "Think big. Think

differently. Think fast. Think ahead. Aim for the best”. He inspired the Reliance team to do

better than the best - not only in India but in the world. Prestigious awards and titles were

conferred on him by national and international organizations. He was acclaimed as the top

businessman of the twentieth century and lauded for his dynamic, pioneering and innovative

genius. His success story fired the imagination of the younger generation of Indian

entrepreneurs, business leaders and progressive companies. He was an icon for them, a role

model to be emulated. The number of revolutionary precedents set by Shri Dhirubhai Ambani is

a legion. His unique vision redefined the potential of the Indian corporate sector as he challenged

conventional wisdom in several areas. He was probably the first Indian businessman to recognize

the strategic significance of investors and discover the vast untapped potential of the capital

markets and channelize it for the growth and development of not only Reliance but also other

publicly listed companies.

It is worth noting the famous quotation of Dhirubhai Ambani in connection with conformity with

rules and regulations. He said "You should not do anything illegal. First of all, the law should be

changed!"

It is not for nothing that to date, Reliance is the largest Indian conglomerate in terms of market

capitalization.

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DHIRUBHAI AMBANI

REFERENCES

1. Business Maharajas – Gita Piramal

2. The Polyester Prince – A biography of Dhirubhai Ambani

3. Leadership Theory & Practice – Peter G. Northhouse

4. Principles & Practices Of Management – Daft & Daft

5. Reliance Industries Limited Website – www.ril.com

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