Ms Word of Leadership

7/28/2019 Ms Word of Leadership

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ACKNOWLEDGEMENT

I would like to express our special thanks of gratitude to our faculty prof. Amresh Chandra

Nayak who gave us the golden opportunity to do this wonderful topic on Dhirubhai Ambani,

who is one of the great leader of the world, which also helped us in doing a lot of Research and

we came to know about so many new things.

We are making this topic not only for marks but to also increase our knowledge. So we

are really thank full to him.


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INTRODUCTION

Dhirajlal Hirachand Ambani, who known as Dhirubhai Ambani was an Indian business tycoon

who founded Reliance Industries in Mumbai with his cousin. Dhirubhai has been among the

select few to be figured in the Sunday Times list of top 50 businessmen in Asia. Ambani took his

company public in 1977, and by 2007 the combined fortune of the family was $60 billion,

making the Ambani's the second richest family in the world. Ambani died on July 6, 2002.

Dhirubhai Ambani had the various types of leadership style, leadership quality and leadership

skill.


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Content:-1. Acknowledgement2. Introduction3. Content4. Early life history of Dhirubhai Ambani5. Life in Aden6. Leadership Concepts Used By Dhirubhai Ambani7. Being a successful leader within an organization8. Nine management lessons from Dhirubhai Ambani9. Leadership quality of Dhiubhai Ambani10. Awards and Recognition11. Famous Quotes12. Conclusion


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Early life history of Dhirubhai Ambani:-Dhirajlal Harichand Ambani was born on 28th December 1932 to a local schoolteacher in

a village called Chorwad, in Junagadh district, Gujarat India into a Modh family very moderate

means. He was the 3rd son of his father. When he was in 16 yrs. old, he moved to Aden, Yemen.

Initially dhirubhai worked as a dispatch clerk with A. Besse & Co. Two yrs. later A Besse &

Co. became distributer for shell products and Dhirubhai was promoted to manage the companies

oil-filling station at the port of Aden. He was married to kokilaben and had 2 sons and 2

daughters.

Life In Aden:-

In the 1950s the Yemini administration realized that their main unit of currency Rail was

in Disappearing. After investing the matter it was realized that all rails were rotated to the port

city to the Aden.

There a Youngman in twenties was blessing unlimited by orders of Yemini Rails. During

those days the Yemini Rails was a few pure silver coins and was much in demand at the London

Bullion Exchange. Young Dhirubhai would buy Rail, melt it in pure silver and sell it to Bullion

traders in London. In the later part of his life while talking to reporters it is believed that he said

The margins were small but it was money for jam. After 3 months it was stopped. But I made a

few lakh of rupees. I dont believe in not taking opportunities.


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Leadership Concepts Used By Dhirubhai

Ambani:-

In the present report the importance of effective and efficient leadership in the present

competitive business scenarios is discussed and also the role of todays leaders and their timely

execution of leadership skills during the crucial situations which often takes place in business

activities are analyzed. The successful Indian business tycoon of his times in India Mr. Dhirubhai

Ambani and his outstanding decision making and managing skills are discussed in the present

report. It also focuses on the life history and his evolution as true leader and unbeatable business

personality in Indian history. The report successfully establishes the leadership skills and

capabilities of the chosen personality with the support of different leadership theories.

Transformational and transactional leadership styles are defined as compared to the leadership

qualities of Mr. Dhirubhai Ambani and also the path-goal theory is used to support the leadership

skills of Mr. Ambani.

Back ground of the leader:- Dhirubhai Ambani a well-known

legendary Business tycoon from India was born on 28 December 1932 at Junagadh, Gujarat state

in India. He built the Indias largest private sector business empire which changed the entire

business scenario of India. Reliance being Indian premier private sectors company was the first

Indian company to get listed in Forbes 500 companies. Dhirubhai Ambani was the most capable

enterprising entrepreneur of India; he successfully revised the Indian corporate history giving

new meaning to the Global corporate sector. He started his entrepreneurship by selling bhajias to

the pilgrims in mount Girnar, and at the age of 16 he moved Aden Yemen after doing his

matriculation and started his career as gas station attendant and later he worked as a clerk in an

Oil company. Dhirubhai Ambani returned to India and started a business with the initial amount

of 15000 Rupees and since then he evolved as dynamic and most popular business tycoon in

India. He is an efficient business leader who always motivated people throughout his journey

towards success.


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Dhirubhai Ambani started textile trading company after returning to India in 1958 with initial

investment of Rs 15000. Mr. Ambani succeeded in building Indias largest private sector

Reliance India limited with the valuable assistance of his two sons Mukesh Ambani and Anil

Ambani who are leading the Reliance companies in successful path after he passed away. Both

the sons of Dhirubhai Ambani played a vital role in making the Reliance India limited successful

and created everlasting Brand image in Indian corporate sector. Reliance India limited evolved as

a market leader with diversified product range. Its wide range of product made the Reliance a

unique corporate sector in Indian market under the leadership of Dhirubhai Ambani. Reliance

has become part of daily life to its customers by providing services in various fields such as

capital markets, telecommunications, energy, power, information technology, retail, textiles,

infrastructure services, and logistics. He made revolution by making millions of Indian

customers in to part of Retail sector who were in the hand of financial institutions previously. He

rewrote the Indian corporate history by generating billions of rupees in wealth by making the

people trusted his companies. The trust he gained in Indian market made the Reliance an

unbeatable corporate in various fields. He played a significant role in creating an equity cult in

Indian capital market. Reliance became favorite in Indian stock market with the implementation

of innovative concepts like convertible debenture during 1980s. The convertible debenture

instrument worked really well and brought innumerable value to the reliance in Indian stock

market. Reliance became a first Indian company which raised money in global markets in 1992,

which lead the company towards success and it was placed in Forbes 500 list for which the

companies across the world strives.

Federation of Indian chambers of commerce and Industry (FICCI) honored by

naming Mr. Dhirubhai Ambani as Indian entrepreneur of the 20th century which he deserved for

his business excellence over the decades. People voted him "greatest creator of wealth in the

century when Times of India conducted a poll in year 2000. Dhirubhai Ambani evolved as one

of the most dynamic and flamboyant entrepreneurs and lead a multibillion-dollar Reliance group

of Industries which are known for wide range of products and services in Indian market. His

keen business sense and dynamic though process made him the unbeatable leader in Indian

business history; he succeeded in building a strong business empire within the span of 3 decades


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which outgrew the corporate houses of Tatas and Birlas which were ruling the Indian Business

sectors over a century. The sharp thinking and clear business ideas of negotiation made the

Indian politics favorable in various aspects which led the reliance companies on successful track

over the decades.

Key capabilities:-

Dhirubhai predicted the future of textile business in India and started importing polyester

yarn by exporting spices under Reliance Commercial Corporation. The businessmen ruled the

export and import businesses with the support of politicians and Reliance Commercial

Corporation successfully utilized the support extended by the political connections. Ambani

sensed the requirement of Indian textile market and stepped towards getting necessary clearances

from the governing bodies to set up first textile mill in Naroda, near Ahmedabad in 1966. After

satisfying the required eligibility criteria Ambani started concentrating on building the business

gradually. Vimal the brand name which is well known to the Indian household was the outcome

of the reliance textile industry. Dhirubhai Ambani after having succeeded in the field of Textile

business concentrated further expansion particularly related businesses. When the matter

investment came in to the consideration Dhirubhai concentrated on generating capital by Initial

public offerings (IPO) instead of consulting other financial sources such as loans from Banks. He

decided to tap the Bombay stock exchange in an attempt to create equity cult on the way to make

transformation of Indian financing system. Dhirubhai made the right step at the right time which

resulted in 58000 investors associated with Reliance in the 1977 and involved in Initial public

offerings (IPO) by buying the shares. Reliance succeeded in gaining the confidence of the Indian

customers and very soon the number of shareholders in Reliance climbed to three million which

brought the considerable change to the Reliance business scenario.


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Dhirubhai Ambani promised the Indian middle class salary earners and succeeded in

giving instant enrichment to the invested value with the support of stock market. Though he was

fly by night operator Dhirubhai offered genuine value to his loyal customers. The early investors

of the Reliance Industries were fortunate to gain such great value to their investments and

became millionaires in the less span of time. Reliance was the first Indian organization which

held the annual general meetings in sports stadiums and the loyal investors of Reliance industries

treated Dhirubhai with adulation and as an efficient leader who lead the organization in

successful path. Dhirubhai Ambanis timely decisions according to the Indian customers

requirement made him the true leader and successful entrepreneur in Indian Business history.

In 1982 Reliance group started manufacturing polyester filament yarn by setting up

local manufacturing plant as a part of backward integration process. Later Dhirubhai entered in

to various diversified businesses such as chemicals, petrochemicals, gas, power, plastics, and

telecom services which made the Reliance group well established and one of the most trusted

companies in India. Reliance group evolved as most influential and profitable business

organizations by late 1980s and the credit of rapid growth of the Reliance industries and its

success in various fields goes to Ambanis acumen and intelligence of sensing the future of

Indian business scenarios. Dhirubhai Ambani was well known for his everlasting and healthy

relationships with the local and central governing bodies of India.

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. (Laurie J

Mullins, Management and organizational Behavior, seventh edition, 2005).


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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 achievingthe 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 peoples goals, values, aspirations,

needs and beliefs, which play a significant role, present competitive businesses.


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Transactional leadership:-

In the present day scenario the increasing business competitiveness have resulted in need of

optimized utilization of available human resources and driving the followers in right path to

achieve the goals. Leaders need to revitalize and transform the organization to make the

businesses successful and sustainable in the present competitive global markets. Dhirubhai

Ambanis 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 (Laurie J Mullins, Management and organizational Behavior,seventh edition, 2005).

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 emphasized 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 analyses 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

behaviors at different situations to influence the situation which occurs in business activities and

also to influence the perceptions of subordinates (Laurie J Mullins, Management and

organizational Behavior, seventh edition, 2005).


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Directive Leadership:-

Directive leadership involves guiding the followers in right path and also making supporters

part of the policies and objectives of the organization. Mr. Dhirubhai Ambani successfully

directed the Reliance Industries and played an important role in making the Reliance group one

of the finest and capable industries in India. Reliance gained the confidence in customers by its

policies and goals which lead to the tremendous success which reliance is enjoying till date. The

initiation structure followed by Dhirubhai Ambani made the company successful in the market

and initiation structure is also considered to be one of the major requirements of starting business

operations.

Supportive leadership:-

Supportive leadership involves supporting the followers in various aspects of the business

processes Mr. Dhirubhai Ambani is well known for his support extended to the loyal customers

of Reliance Industries. He supported the loyal investors who invested during the initial public

offerings with the genuine value and played a vital role in transforming them in to millionaires.

Participative leadership:-

Participative leadership involves consulting the followers and consideration the views and

opinions of them while making crucial decisions. Mr. Dhirubhai Ambani conducted annual

general meetings in sports stadiums for sharing the views, ideas and success of Reliance

industries. These activities of Mr. Ambani made him the participative leader and resulted in

closer to the Indian customers.


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Achievement-oriented leadership:-

Achievement-oriented leaders are more concentrated on the achievement of goals and

objectives. Mr. Dhirubhai Ambani always dreamt of seeing Reliance industries as most

successful groups in India. Achievement oriented leadership involves continuous working on

goals and objectives by making the optimized utilization of available resources.

Being a successful leader within an

organization:-

At 17 Ambani set out to Aden, Yemen to work for A. Besse & Co. to supplement his familys

income. Although he would have liked to continue his studies, he was very aware of his

responsibilities. He was determined to overcome all obstacles that stood before him, and learned

English through leftover reading materials in the office and overcame his lack of formal

education in trading by learning the intricate regulations that governed the industry and spending

his lunch observing the constant negotiations. His ability to identify the obstacles in his path and

find ways around them continued to be a theme throughout his life and was crucial to his

success. Soon he was promoted to managing the companys filling station at the Aden port,

started a family, and enrolled in night school as well. In 1957, shortly after Yemen acquired

independence, Ambani took his family back to India due to concerns facing non-Yemens in the

newly independent nation. In Bombay, Ambani set up a one man company, Reliance

Commercial Corporation and began spice trading. His office was set up close to the yarn market

in Mumbai and Ambani soon saw the opportunities in yarn. Unfortunately he had two seriousobstacles to overcome before entering the yarn industry, but obstacles were nothing new to

Ambani. First, he had no experience with the industry, so he utilized the same techniques that led

him to success in Yemen. He would go down to the yarn market and watched and persistently

read up on global trends. Second, the yarn industry required startup funds for inventory

investment.


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Ambani resorted to borrowing from other small traders at exorbitant rates but was attacked by

the more established traders. When rumors that he was selling at a loss and his creditors would

soon come calling, he took a risk and preemptively offered to pay back his debts, which

convinced the lenders that the rumors were false. His leadership and decision making saved his

new business. He soon cornered the polyester market and in the 90s started a strategy of vertical

integration which started first with a textile mill in Naroda. Throughout his other business

ventures he was always quick to find unique solutions and take risks. He was opportunistic

almost to a fault which would later bring criticism upon him but also was key to the remarkable

change he brought about to the Indian business world. Even after his death in 2002, his mark can

still be seen on the Indian world especially in the equity culture now found there.

Attributes:- A large part of being a successful leader within an organization is the

ability to work with others. When interacting with employees, clients, or competitors, it is

important to understand each individual relationship and act accordingly. Dhirubai Ambani had

approached every situation differently, altering his actions to his surroundings. This allowed him

to have a unique impact on those with whom he interacted. Ambani once said, Between my

past, the present and the future, there is one common factor: Relationship and Trust. This is the

foundation of our growth.

Trust:-

The study of Organizational Behavior focuses on the people within an organization and

relationship based management. According to Wilsons managerial skills, dealing effectively

with people is what management is all about (Kinicki & Kreitner.).


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Often people mistake managing employees with controlling them. The negative

connotation of the word control is well deserved. Some degree of control is necessary while

working to manage an office, but you must be able to allow for freedom as well . A lack of

control may cause inefficiency or disorganizationboth of which Ambani was able to prevent

while still avoiding becoming overbearing. A great manager/leader can generate results and

motivate while still decreasing his involvement. To accomplish this, Ambani hired the most

qualified employees and compensated well for their talent (McDonald). According to him, the

most valuable resource is people and this example shows how dedicated he was to having the

best employees. While paying high wages may have cost him more to run his business, the

innovation and efficiency allowed his business to grow.

He created an environment in which employees were relied on for their integrity, strength and

sureness; this environment helped boost employees morale and maximize their performance. A

good working environment facilitates beneficial two-way communication between employers

and employees. When employees do not feel trusted, it is hard to inspire or motivate them.

Moreover, employees may be limited while working in a strict, professional environment.

Dhirubhai Ambani trusted his employees skills and dedication and gave his people confidence

to express any idea and use whatever skills they felt appropriate, giving his employees a sense of

competence and choice (Kinicki & Kreitner.) (intrinsic motivation section) . His hiring strategy,

choosing the best employees and paying them exceptionally well, is often referred to as offering

an efficiency wage, a premium above expected salaries to attract the most qualified candidates

and encourage them to work hard in order to keep their job (Mankiw). Although money may not

be the best motivator, it can be used to as a tool to attract, and more importantly keep highly

skilled employees.


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Approachability:-

Accessibility is one thing, approachability is another. The importance of being available to

your employees is recognized by most managers recognize, but actually becoming available and

generating enough good will so that employees feel comfortable approaching their superior is

something few have mastered. Its this type of communicative environment that fosters job

satisfaction. Two major models of job satisfaction are centered on value attainment and equity

(Kinicki & Kreitner). These are the two primary vehicles through which Ambani generated job

satisfaction in his organization.

Ambani, contrary to what many would expect from a high-level business owner, enacted

an open-door policy. Not only did he deal directly with employees, but he would also allow

them to come in at any time to discuss their problems (Bist). He would discuss work-related and

personal problems; he felt resolving personal issues was important for efficient operation of the

organization also. This type of approachability and atten tiveness helped to recognize employees

values and recognition leads to fulfillment of those values.

As Ambanis business grew, so did the diversity of his employees. Within this broad range of

workers, from highly educated, upper class managers to lower class laborers, the upper

management often overlooked the lower wage earners. Ambani eschewed these equity issues and

unlike other businessmen of his stature, developed relationships with everyone he interacted with

(McDonald). The care, interest, and respect he demonstrated when conversing with people of all

backgrounds and social statuses created a sense of fairness amongst his employees. This equity

in conjunction with employees value attainment creates motivation, job involvement, and

organizational commitment (Kinicki & Kreitner).


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Motivation, job involvement, and organizational commitment all boil down to the same

thing: efficiency and loyalty. Satisfied employees want to keep their jobs; people who want to

keep their jobs work harder. Time spent with employees discussing seemingly non-work related

issues is often misconstrued as inefficient or even a waste of time, but can generate real results.

The benefits of job satisfaction pervade an organization and improving job satisfaction is

worthwhile at nearly any cost. Ambani believed that people are the most valuable resource, and

recognized the necessity to cultivate and maintain this resource. Dhirubhai Ambani said: Give

the youth a proper environment. Motivate them. Extend them the support they need. Each one of

them has infinite source of energy.

Ambanis leadership style combines characteristics of both transactional and transformational

leaders. He recognized that employees can be motivated by a reward and punishment system,

and in that way he was a transactional leader. However, he knew that there was more to

motivation than just money. Ambani created an environment in which employees felt free to

exchange ideas and identified with the company - generating loyal employees who want to see

the company itself succeed. In this way he was a transformational leader - and it is these skills

that made the most significant impact on his success.

Courage:-

One characteristic that can contribute the success of a leader is his willingness to take risks.

Leaders are inevitably faced with difficult decisions and it is their personal courage that

influences the choices they make when faced with fear. The desire for safety prevents progress

and initiative; however, courage opens doors of opportunity. The courage of a leader will inspire

commitment from their followers. Billy Graham said, "Courage is contagious. When a brave

man takes a stand, the spines of others are stiffened". During Ambanis business life, he created

many ambitious projects that required large capital investments. Despite Ambanis previous

success, bankers and financiers were continuously reluctant to fund his projects. Investors

typically percieved these as too big or too risky. With limited options, Ambani realized that his

shareholders were his best untapped resource.


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In order to fund his projects he turned to current shareholders, investors who already had an

interest in the company and would be happy to take risk for high return. By combining traits such

as trust with his courageousness to take bold actions, Ambani as well as Reliance and its

shareholders all shared in the reward. Ambani showed his proactive personality, which is action-

oriented person, identifying the opportunities, and taking action and persevere until meaningful

change occurs.Ambanis ability to think outside of the box and deviate from the norm further

demonstrated his courageousness as a leader. Ambani realized that the shareholders, contrary to

popular belief at the time, would not be satisfied with only dividends. He knew the value of

capital appreciation and the value of his shareholders. In order to reward his investors he

converted a non-convertible debenture into shares and produced enormous profits for Reliances

shareholders. In doing so he violated Indian law, however, he took a risk that grew his company,

his followers and eventually changed the law.

Dhirubhai Ambani once said, Dont give up, courage is my conviction (The Man). He always

played an active role as a leader. During the class, team 7 discussed Stogdills and Manns

Findings, Stodgily concluded that five traits which is tended to differentiate leaders from

average followers: (1) intelligence, (2) dominance, (3) self-confidence, (4) level of energy and

activity, and (5) task-relevant knowledge (Kreitner / Kinicki, 467). Ambani continuously

showed his courage and always demonstrated his true spirit for risk-taking and tenacity

throughout his life. He exhibited his great level of energy and activity, embraced a new version

of thinking, kept trying new things and never took no for an answer.

Perseverance:-Among the many unique and remarkable traits Dhirubhai Ambani

possessed, perseverance is one trait has been a crucial part of his entire life. For many young

men like Ambani, growing up in poverty, dropping out of school in order to earn money for his

family wasnt really an option. However, Ambani dropped out for other reasons as well. Ambani

grew tired of the labor some and repetitive grind of the school classroom. Instead he found his

time better utilized through work and soon began setting up pakora (fried treats) stands at village

fairs to earn money for his family. This was essentially the start of Ambanis long and

prosperous entrepreneurial career.


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Earlier in his career, while Ambani was working as a desk clerk in Aden, Ambani continued to

improve himself in any way possible. He used his spare time wisely, teaching himself English

with materials around his office, as well as developing his understanding of the industry. (similar

to my part, how can it be more OB focused?) Ambani refused to let his lack of formal education

hold him back from anything, he made sure that he would instead use his time to get what we

call a leg up on the competition. According to Sociologist Gecas, self-concept can be

defined as the concept the individual has of himself as a physical, social, and spiritual or moral

being. Ambani exercised his self-esteem by actively and fully commiting to what he did and

with whom he interacted.

After 10 years, Ambani returned to Mumbai to start Reliance Commercial Corporation with his

partner and second cousin, Champaklal Damani. The chief business was to import polyester yarn

and export spices, it was a small business ran out a 350 square foot office. Though living with his

wife and two kids in a small one bedroom apartment, Ambani pressed through and made sure to

continuously expand the business. His drive to succeed even came at the cost of breaking from

his partner Damani because of different leadership styles. Though he was only making modest

profits, Ambani continued to build inventories and stay ahead of the price rise. After cornering

the market in imported polyester, he moved into textiles where he saw enormous potential.After

years of expanding and diversifying Reliance Industries Ambani saw another obstacle to push

through. With his leadership and guidance Reliance was able to overcome large competitors that

threatened its success and existence. He pushed competitors such as Swan Mills and Kapal

Mehra of Orkay out of business and irrelevant among Indias powerhouse companies.

There was also Nusli Wadia of Bombay Dyeing, who was for some time the largest competitor

of Reliance Industries. Competing in the same market with similar political influence Nusli

Wadia and Reliance battled for years. In addition to everything Dhirubhai Ambani haspersevered through in a business sense, Ambani also had to survive and fight through numerous

and near constant criticism.


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Often criticized for his ethical and legal actions in his business decisions, Ambani overcame

years of media attacks, accusations and investigations on both Reliance Industries and himself.

Despite everything Ambani went through, he built a business empire from the ground up. If one

thing is clear, it is that perseverance is one trait that few possess comparable to Ambani

Opportunistic/Imaginative:-

Ambani also laid claim to traits such as opportunistic or imaginative. These traits are greatly

correlated to his strong perseverance trait; however, cover a much deeper look into his business

life and ventures. The earliest example of Ambani seizing opportunity came early in his life

while working in Aden. It all started when the Yemini administration launched an investigation

to discover why their main unit of currency, the Rail was disappearing. Still in his twenties itturned out that Ambani was placing unlimited buy orders on the Rials. At the time, Rials were

made of pure silver. Ambani was melting them down into silver and re-selling them on the

London Bullion Exchange. Talking to a reporter later in life he was quoted.

The margins were small but it was money for jam. After three months, it was stopped. But I

made a few lakhs. In short, I was a manipulator. A very good manipulator. But I dont believe in

not taking opportunities. Ambani made it very clear that seizing every opportunity was an

integral part to building his success. (Good example, maybe start section with saying why

opportunistic is important/good for leaders and then go into story).

Ambani believed in always finding opportunity, he found opportunity in information. He used

any information he could gather and turned it into a opportunity, a profit making opportunity. He

once said that, there is no invitation for making profits, you have to find it (Kothari). (This

quote and next two paragraphs are in Tings section, needs to be combined) That being said,

Ambani was always on the search for any new news or information that could earn him a profit

or give him the competitive advantage.

After Reliances initial switch from polyester to textiles, the company remained as a textile

company for years. Ambani then began to seize alternative opportunities that the growing Indian

economy was beginning to offer. By instilling a policy of backward integration, or a policy thatinvolves purchasing suppliers of products to decreases risk and dependency. Ambani began by

buying and setting up plants to manufacture polyester filament yarn as well as textile

intermediates. After some time continually expanding the backward integration of the textile

company, Ambani began to diversify Reliance industries as well.


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In the early to mid 80s along with the economic opportunities, India also had openings in the

regulation-driven sectors of its economy. Ambani began by diversifying the company into

chemicals, petrochemicals, plastics as well as power. His goal was to seize any opportunity for

profits and turn Reliance Industries into a well-versed global business. After expanding thecompany into different sectors, Ambani continued to instill the backward integration policy.

Reliance set up world-scale facilities for plastics and polymer intermediates, detergent

intermediates and chemical plants.

Dhirubhai Ambani was the a pioneer of global thinking. While his competition was still

thinking local, he was thinking global and pushed to make Reliance a world competitor. While

others could not meet global standards, Ambani created world-class products and factories the

competition couldnt compete with. It was once said that nobody in India could even think

about that in his time.

In the midst of expansion, Ambani also took every chance he got to bend government laws

and find loopholes that would benefit the company. Though he suffered extreme criticism for

this, Ambani felt he was only doing what any other industrialist would do given the opportunity.

In regards to these actions a leading management consultant, S.K. Bhattacharya was quoted, the

distinction between Reliance and others is that it creates the future for itself rather than waste

time sobbing over government controls and insensitivity of government policies (SCRIBD).

Ambani made it clear that he would take any opportunity present in order to grow his business.

Dhirubhai Ambani was a true visionary; he would locate an opportunity and find a way to use

it to his advantage. Opportunistic and imaginative together created enormous success, as traitsthey made Ambani who he was and made Reliance what was described as, a business empire

with an estimated annual turnover of $12bn, and an 85,000-strong workforce.

Law and Business Ethics:-

Business Ethics is concerned with the ethical and moral problems that exist in the business

environment. Business Ethics considers the conduct of individual and business organization as a

whole. It is hard to understand the scope of business ethics as it covers a vast area from corporate

governance, reputation management and fair labor practices to the total responsibilities the

company has to its shareholders, employees, creditors etc.


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Milton Friedman believed that the primary motive of the corporations is to make a profit

within the framework of the legal system. This is where it is important to draw a distinction

between law and ethics. Legal system deals with technical and bureaucratic rules between right

and wrong where as ethics deals with voluntary and conscientious choice between right andwrong. This leads to a false implication that all illegal actions are unethical by nature whereas all

unethical actions are not illegal.

Dhirubhai Ambani took advantage of the loop holes of the legal system [5]. He was alleged

to be influential in the government elections. He was known to use these political connections to

suit his companies business policies. Another such instance is depicted when cabinet note was

found in the office by a police raid.[can you elaborate on this? or at least clarify what you

mean?] Thus, violating the Official Secrets Act. Reliance Industries, owned by Ambani, was

critisized for not paying taxes properly.

Financial Ethics and Business Ethics:-

Fair trading practices, transparent accounting, proper tax payments, healthy sales practices,

appropriate internal and external audit by the organization contribute to adding value to the

society. However, some of the following practices taken by the firm go against Carolls model of

Corporate Social Responsibility (CSR). As the text describes the ethical behavior is complex

combination of both internal and external factors.

Though the objective of such practices may have been attempts to please the interests of the

shareholders, practices such as these contribute to unhealthy competition and monopolisticbusiness tactics. Such business tactics also foster negative energy within the organization, where

each individual gets engrossed in his own success and give employees within the organization a

moral ground to justify false actions.

Insider Trading: After the sale of Grasim, Reliance Industries was accused of increasing its stake

in L& T. The Security and Exchange Board of India inquired in to the matter and levied charges

for committing insider trading and price manipulation.

Bribery and Facilitation payment: The Reliance Yarn Industry was allowed more than twice its

legal capacity of production. The company was also alleged to have evaded 1 billion rupees (24billion dollars) in taxes on imported machinery.

Earnings Management: Raashid Alvi, a member of Parliament, distributed photocopied

documents of the company requesting to settle charges by the income tax department. Alvi also

accused the company for manipulating the balance sheet and account statements. Though the

Department of Company (DCA) affairs rejected the allegations, DCA later agreed that the

company transferred incomes between one another in a controversial manner.


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Control of Stock Exchange: Dhirubhai Ambani was notoriously known for his control over the

stock exchange. The company was rumored to have taken actions such that the stock prices of

the company do not slide..

Ethical Decision Making Style:-

Stanley Krolick describes four types of ethical decision making styles.

i. Individualist: An individualist is driven by his own reasons, motives and desires. He

does not consider the shareholders, colleagues in his decision process.

ii. Altruist: An altruist is primarily concerned about others. He sacrifices his needs for

others. His objective is to satisfy the needs of the population.

iii. Pragmatist: A pragmatist is concerned with the current problems and solution to those

problems. He is not influenced by his needs or by the needs of others.

iv. Idealist: An idealist is driven principles and regulations. He places utmost importance

to moral values and is very rigid in his decision making style.

Dhirubhai Ambanis ethical decision making style can be described as a mix of an individualist

and a pragmatist. This is evident from his business tactics used. The business strategy employed

by Reliance Industries is monopolistic in nature by controlling the resources, networkexternalities, regulating political activity, non- complying with the import- export laws etc.

Corporate Social Responsibility (CSR):-

Reliance Industries must incorporate CSR as an integral part of its business strategy. This can be

achieved by preparing corporate philosophy and the code of conduct that depict the corporate

standard the company is trying to achieve. This clearly draws a line between the legal, ethical

activities and illegal, unethical activities. This method is bound to work in this case study

because clear statements effectively communicate the appropriate action to be taken in case of a

conflict of interest . Thus it eliminates the unacceptable behavior and course of action. The figurebelow demonstrates the approach that could be taken by Reliance Industries.


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The conclusion that can be derived from the analysis of his life is based on the relative role of

companies, government and individuals in ethical decisions. The company is not entirely

accountable for the unethical things done. The government regulation constraining the

production, return expectations from the stakeholders etc are responsible in driving the unethicalfactors. It is important for the government to realize that regulations must only try to curb

unethical practices but to never pressurize the companies to take up alternative loophole

methods.

It is essentially important for the company and its shareholders to realize that performance on

social, ethical and moral grounds is as important as the performance on the financial grounds. All

of us must realize that the company can truly create value for everyone only when it turns profit

by acting responsibly and staying out of unethical practices.

Nine management lessons from DhirubhaiAmbani:-

No 1: Roll up your sleeves and help:-

Reliance, during Vimal's heady days had organized a fashion show at the Convention Hall,

at Ashoka Hotel in New Delhi.

As usual, every seat in the hall was taken, and there were an equal number of impatient

guests outside, waiting to be seated. I was of course completely besieged, trying to handle the

ensuing confusion, chaos and protests, when to my amazement and relief, I saw Dhirubhai at the

door trying to pacify the guests.

Dhirubhai at that time was already a name to reckon with and a VIP himself, but that did not stop

him from rolling up his sleeves and diving in to rescue a situation that had gone out of control.

Most bosses in his place would have driven up in their swank cars at the last moment and given

the manager a piece of their minds. Not Dhirubhai.

When things went wrong, he was the first person to sense that the circumstances would have

been beyond his team's control, rather than it being a slip on their part, as he trusted theircapabilities implicitly. His first instinct was always to join his men in putting out the fire and not

crucifying them for it. Sounds too good a boss to be true, doesn't he? But then, that was

Dhirubhai.


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No 2: Be a safety net for your team:-

There used to be a time when our agency Mudra was the target of some extremely vicious

propaganda by our peers, when on an almost daily basis my business ethics were put on trial. I,

on my part, putting on a brave front, never raised this subject during any of my meetings with

Dhirubhai.

But one day, during a particularly nasty spell, he gently asked me if I needed any help in

combating it. That did it. That was all the help that I needed. Overwhelmed by his concern and

compassion, I told him I could cope, but the knowledge that he knew and cared for what I was

going through, and that he was there for me if I ever needed him, worked wonders for my

confidence.

I went back a much taller man fully armed to face whatever came my way. By letting us knowthat he was always aware of the trials we underwent and that he was by our side through it all, he

gave us the courage we never knew we had.

No 3: The silent benefactor:-

This was another of his remarkable traits. When he helped someone, he never ever breathed a

word about it to anyone else. There have been none among us who haven't known his kindness,

yet he never went around broadcasting it.

He never used charity as a platform to gain publicity. Sometimes, he would even go to the extent

of not letting the recipient know who the donor was. Such was the extent of his generosity.

"Expect the unexpected" just might have been coined for him.

No 4: Dream big, but dream with your eyes open:-

His phenomenal achievement showed India that limitations were only in the mind. And that

nothing was truly unattainable for those who dreamed big.

Whenever I tried to point out to him that a task seemed too big to be accomplished, he would

reply: " No is no answer!" Not only did he dream big, he taught all of us to do so too. His one-

line brief to me when we began Mudra was: "Make Vimal's advertising the benchmark forfashion advertising in the country."

At that time, we were just a tiny, fledgling agency, tucked away in Ahmedabad, struggling to put

a team in place. When we presented the seemingly insurmountable to him, his favourite response

was always: "It's difficult but not impossible!" And he was right. We did go on to achieve the

impossible.


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Both in its size and scope Vimal's fashion shows were unprecedented in the country. Grand

showroom openings, stunning experiments in print and poster work all combined to give the

brand a truly benchmark image. But way back in 1980, no one would have believed it could have

ever been possible. Except Dhirubhai.

But though he dreamed big, he was able to clearly distinguish between perception and reality and

his favourite phrase "dream with your eyes open" underlined this.

He never let preset norms govern his vision, yet he worked night and day familiarizing himself

with every little nitty-gritty that constituted his dreams constantly sifting the wheat from the

chaff. This is how, as he put it, even though he dreamed, none of his dreams turned into

nightmares. And this is what gave him the courage to move from one orbit to the next despite

tremendous odds.

Dhirubhai was indeed a man of many parts, as is evident. I am sure there are many people who

display some of the traits mentioned above, in their working styles as well, but Dhirubhai was

one of those rare people who demonstrated all of them, all the time.

No5: Leave the professional alone!

Much as people would like to believe, most owners (even managers and clients), though eager

to hire the best professionals in the field, do so and then use them as extensions of their own

personality. Every time I come across this, which is much too often, I am reminded of how

Dhirubhai's management techniques used to be (and still remain) so refreshingly different.

For instance, way back in the late 1970s when we decided to open an agency of our own, he

asked me to name it. I carried a short list of three names, two Westernised and one Indian. It was

a very different world back then. Everything Anglicised was considered "upmarket."

There were hardly any agencies with Indian names barring my own ex-agency Shilpi and a few

others like Ulka and Sistas. He looked at the list and asked me what my choice was. I said

"Mudra": it was the only name that suited my personality. And the spirit of the agency that I was

to head.

I was very Indian and an Anglicised name on my visiting card would seem pretentious and

contrived. No further questions were asked. No suggestions offered, just a plain and simple "Go

ahead and do it." That was just the beginning.

He continued to give me total freedom -- no supervision, no policing -- in all my decisions

thereafter. In fact, the only direction that he gave me, just once, was this: "Produce your best."


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His utter trust in me was what pushed me to never, ever let him down. I guess the simplest

strategies are often the hardest to adopt. That was the secret of the Dhirubhai legend. It was not

out of a book. It was a skillful blend of head and heart.

No6: Change your orbit, constantly!

To understand this statement, let me explain Dhirubhai's "orbit theory."

He would often explain that we are all born into an orbit. It is up to us to progress to the next. We

could choose to live and die in the orbit that we are born in. But that would be a criminal waste

of potential. When we push ourselves into the next orbit, we benefit not only ourselves but

everyone connected with us.

Take India's push for development. There was once a time our country's growth rate was just 4

per cent, sarcastically referred to as the "Hindu growth rate." Look at us today, galloping along at

a healthy 7-8 per cent.

This is no miracle. It is the product of a handful of determined orbit changers like Dhirubhai, all

of whose efforts have benefited a larger sphere in their respective fields.

In a small way, I too have experienced the thrill of changing orbits with Mudra. In the 1980s, we

leapt from the orbit of a small Ahmedabad ad agency to become the country's third largest ad

agency -- in just under a decade.

However, 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 in your new one. By the time resentment

builds up in your new orbit, you should move to the next level. And so on. Changing orbits is the

key to our progress as a nation.

7. The arm-around-the-shoulder leader:-

I have never seen any other empire builder nor the CEO of any big organisation do this (why, I

never adopted this myself!).

It was Dhirubhai's very own signature style. Whenever I went to meet him and if on that day, all

the time that he could spare me was a short walk up to his car, he would instantly put his armaround me and proceed to discuss the issues at hand as we walked.

With that one simple gesture, he managed to achieve many things. I was put at ease

instantaneously. I was made to feel like an equal who was loved and important enough to be

considered close to him. And I would walk away from that meeting feeling so good about myself

and the work I was doing!


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This tendency that he had, to draw people towards him, manifested itself in countless ways. This

was just one of them. He would never, ever exude an air of aloofness and exclusivity. He was

always inviting people into sharing their thoughts and ideas, rather than shutting them out.

On hindsight I think, it must have required phenomenal generosity of spirit to be that inclusive.

Yes, this was one of the things that was uniquely Dhirubhai -- that warm arm around my

shoulder that did much more than words in letting me know that I belonged, that I had his trust,

and that I had him on my side!

8. The Dhirubhai theory of Supply creating Demand:-

He was not an MBA. Nor an economist. But yet he took traditional market theory and stood it

on its head. And succeeded.

Yes, at a time when everyone in India would build capacities only after a careful study of market

expectations, he went full steam ahead and created giants of manufacturing plants with

unbelievable capacites. (Initial cap of Reliance Patalganga was 10,000 tonnes of PFY way back

in 1980, while the market in India for it was approx. 6000 tonnes).

No doubt his instinct was backed by years and years of reading, studying market trends, careful

listening and his own honed capacity to forecast, but yet despite all this preparation, it required

undeniable guts to pioneer such a revolutionary move.

The consequence was that the market blossomed to absorb supply, the consumer benefited with

prices crashing down, the players increased and our economic landscape changed for the better.The Patalganga plant was in no time humming at maximum capacity and as a result of the plant's

economies of scale, Dhirubhai's conversion cost of the yarn in 1994 came down to 18 cents per

pound, as compared to Western Europe's 34 cents, North America's 29 cents and the Far East's

23 cents and Reliance was exporting the yarn back to the US!

A more recent example was that of Mukesh Ambani taking this vision forward with Reliance

Infocomm (which is now handled by Anil Ambani). In India's mobile telephony timeline there

will always be a very clear 'before Infocomm and after Infocomm' segmentation. The numbers

say it all. In Jan 2003, the mobile subscriber base was 13 million, about 16 months later, shortly

after the launch, it had reached 30 million.

In March 2006, it has touched 90 million ! Yes, this was yet another unusual skill of Dhirubhai's

-- his uncanny knack of knowing exactly how the market is going to behave.


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9. Money is not a product by itself, it is a by-product, so don't chase

it:-

This was a belief by which Dhirubhai lived all his life. For instance when he briefed me about

setting up Mudra, his instruction was clear: 'Produce the best textile advertising in the country,'

he said.

He did not breathe a word about profits, nor about becoming the richest ad agency in the country.

Great advertising was the goal that he set for me. A by-product is something that you don't set

out to produce. It is the spin off when you create something larger.

When you turn logs into lumber, sawdust is your by-product and a pretty lucrative one it can be

too! It is a very simple analogy but extremely effective in driving the point home. Work toward a

goal beyond your bank balance.

Success in attaining that goal will eventually ring in the cash. For instance, if you work towards

creating a name for yourself and earning a good reputation, then money is a logical outcome.

People will pay for your product or service if it is good. But if you get your priorities slightly

mixed up, not only will the money you make remain just a quick buck it would in all likelihood

blacklist you for good. Sounds too simplistic for belief? Well, look around you and you will

know exactly how true it is.

Leadership Quality Of Dhirubhai Ambani:-

When we talk about Indian leaders one name, which we cannot miss out, is Dhirubhai

Ambani. He believed that if a person wants to succeed in something then he should have

complete access to information on that topic. Whenever he wanted to approach the government

to get licenses, information about the competitors, market size etc. he would collect all these

information, no matter at what cost it came. He also believes in destiny and gives all the credit to

his luck. This shows how down to earth he is. Even today he has a simple ritual of Puja when a

new machine is installed. He isnt proud of what he is and he still believes in Simple thinking,

Modern thinking.


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He always followed the rule to be the pioneer/first to do anything. He would just grab an

opportunity that would come up because of some government policy changes and would

implement it successfully. He believed not in meeting demand but in creating demand. He

always produced in large quantities. He was of the opinion that customer should be providedwith best quality goods at the lowest price. Moreover Dhirubhai as opposed to most other leaders

wasnt expert in only one field. He was a manufacturing as well a marketing whiz. He knew how

to offer the right product mix, identify markets and establish viable distribution structure, which

holds true for one of his famous brand Vimal. He is also referred to as Manchester of India.

He didnt mind copying someone elses idea, which he could implement better than his

competitors. As in the case of copying the concept of selling through showrooms for his brand

Vimal to counter the resistance from the traditional markets which he copied from Bombay

Dyeing. He always had the dynamism and confidence in future and was always ready to go

against all odds. He always believed in himself.

He has always believed that his first responsibility is towards his companys shareholders and

he was also concerned in protecting their interests. He also known as the stock market messiah.

This is because when some Marwari clan were trying to bring down the price of his shares by

short selling, he couHe has been successful in manufacturing world-class products. He always

believed in Think big, think fast and think ahead. He has never had an ego problem and he

knew how to get his work done from people. He was never ashamed to salaam anyone enter

attacked them and in turn earned a hefty sum from them.

He has been successful in manufacturing world-class products. He always believed in Thinkbig, think fast and think ahead. He has never had an ego problem and he knew how to get his

work done from people. He was never ashamed to salaam anyone.

Another incident that shows his vision as a leader is that when Reliances Patalganga Complex

was damaged due to floods. Technical experts from Du Pont estimated hundred days to make the

complex operational but Reliance had the complete complex operational in twenty-one days.

This was possible because of Dhirubhais vision, his confidence, his dedication proper logistical

planning and making available all resources.


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Awards and Recognition:-

November 2000- Conferred Man of the Century award by Chemtech Foundation.

Chemical Engineering World in recognition of his outstanding contribution to the growth anddevelopment of the chemical industry in India.

2000,1998 and- Featured among Power 50- the most powerful people in Asia by Asia WeekMagazine an outstanding example of leadership.

June 1998- First India to get Deans Medal by The Wharton School , University ofPennsylvania, for setting an outstanding example of leadership.

August 2001- The Economic Times Award for Corporate Excellence for Lifetimeachievement.

Dhirubhai Ambani was named the Man of 20th Century by the Federation of IndiaChambers of Commerce and Industry(FICCA).

A poll conducted by The Times of India in 2000 voted Greatest Creator of Wealth in TheCenturies.


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Famous Quotes:-

Growth has no limit at Reliance. I keep revising my Vision. Only when you dream it youcan do it.

Think big, think ahead. Ideas are no ones monopoly. Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our

efforts greater. This is my dream for Reliance and for India.

You dont require an invitation to make profits. Pursue your goals even in the face of difficulties , and convert advertises into

opportunities.

Give the youth a proper environment. Motivate them. The extend them the support theyneed. Each one of them has infinite source of energy. They will deliver.

Between my past , the present and the future, there is one common factor: Relationshipand trust. This is the foundation of our growth.

We bet on people. Meeting the deadlines is not good enough, beating the deadlines is my expectation. Dont give up, courage is my conviction.


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Conclusion:-

The importance of capable leadership in present day business scenarios has been clearlyanalysed and also the leadership skills of chosen leader have been compared with the various

leadership supporting theories for better understanding. The major qualities of Mr. Dhirubhai

Ambani have been highlighted and the role of those qualities in making the Reliance group

tremendous successful in the Indian market is discussed. The present report successfully

established the fact that Mr. Dhirubhai Ambani evolved as true leader with his efficient and

effective leadership qualities. The timely decision making capability of him made the Reliance

industries prime group in India. The resemblance of Dhirubhai Ambani leadership style and

transactional are explained for better understanding of leadership qualities. The transformational

leadership qualities are also compared to Mr. Ambanis qualities in order to make clear

understanding of the leadership capabilities. Dhirubhai Ambani can better called as leaderinstead entrepreneur as the initial steps he made in the business proves to be an efficient leader

and his policies which he followed gives enough strength to represent him to be a true leader of

his times.

Documents

Ms Word of Leadership