Succession Planning at Ranbaxy - Family Drama, Corporate Style

            
 
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Case Details:

Case Code : HROB057
Case Length : 18 Pages
Period : 2000-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Ranbaxy
Industry : Pharmaceuticals
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

What Happened Behind the Boardroom Doors?

When Brar took over as Ranbaxy's MD & CEO, the company did not have any family representation on the board. It was truly a company managed by professionals. However, by the beginning of the 2000s, the Singh family reportedly decided to take control of the firm. According to the media, Bhai Mohan Singh had been pressing the company board to elevate Malvinder Singh to the board of directors. The disagreements over Ranbaxy's international expansion strategy between Brar and the family were common knowledge by now. Sources within the company denied that there were any disputes, stating that Brar's decision to leave was an independent one.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Reportedly, he had revealed his retirement plans in 1997 itself. Brar had said that he would retire in 2002, after completing 25 years with Ranbaxy. However, analysts felt that he could have easily renewed his term (due to expire in July 2004), as he had seven more years to go before he would have to officially retire from the company. That he chose not to do so, was seen as an indication of something being amiss.

However, Brar maintained that he wished to leave the company as he had fulfilled his responsibilities successfully. He added that he now wanted to look at other opportunities. He said, "Having fulfilled my role in the company, I would like to devote my time to other pursuits in the next 10-15 years of my working life. I would therefore not like to renew my appointment as the CEO and Managing Director upon expiry of my current term. In the meanwhile, I would do my best to ensure a smooth transition in favor of a successor in the best interest of the company."...

Leadership Challenges for the Future

Company watchers believed that the real effect of the top management changes at Ranbaxy would be felt only when Tempest's tenure came into effect from July 5 2004. An analyst commented, "Brar is expected to continue for the next six months. I think he would do his best to ensure a smooth transition in favor of his successor. The changes will be seen only when Tempest takes over.

Tempest is expected to continue till Malvinder Singh is groomed to done the mantle. Brar has already put in place a robust team and set the vision of making Ranbaxy a $2 billion company by 2007."

Under the leadership of Tempest, Ranbaxy planned to focus on HR planning and put in place improved motivation, hiring and training programs. Speaking about the immediate steps he would take during his tenure, Tempest said, "We, and I in particular, am going to spend a lot of time in the HR activities and that is the area we want to get better and better and we need good products with good people."...

Exhibits

Exhibit I: Succession Planning - As Practiced at a Few Leading Companies
Exhibit II: Ranbaxy - Major Milestones
Exhibit III: Brar's Career Growth at Ranbaxy
Exhibit IV: Ranbaxy - Ten Year Financial Highlights (1993-2002)
Exhibit V: Dr Brian Tempest - A Brief Profile
Exhibit VI: Malvinder Mohan Singh - A Brief Profile

 

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