Dhirubhai Ambani and Reliance

Corporate Battles of Dhirubhai Ambani Contd...

He was considered to be a symbol of all that was wrong with the Indian economy. It is said that Ambani used his connections with key politicians and bureaucrats to obtain licenses and approvals for projects. He is also said to have induced government intervention by offering bribes and using other forms of lobbying prevalent in the US. Reliance was known to engage politicians, journalists, and others to increase its sphere of influence. Some businessmen described Reliance as "an out of control monster, a bubble that would burst any moment."⁷ However, not all analysts would agree to that. They felt that Dhirubhai was quick to recognize and exploit opportunities. Dhirubhai believed that "business is nothing but a web of relationships and obligations."

Keeping this principle in mind, Dhirubhai managed to create favourable centers in all the important areas – among the bureaucrats, the ruling politicians, as well as the media. These were the areas where power vested.

Dhirubhai was of the opinion that business was not all about ethics and morality; it was about expansion and success. His amazing ability to use the state and its policies to his advantage was responsible for the expansion of Reliance.

Be it licenses, foreign exchanges or quotas, he always succeeded in making the best out of most difficult situations. However, his immense success earned him a number of enemies.

The fight between Nusli Wadia, the Bombay Dyeing chief and Dhirubhai is well known in the Indian business circles. Both of them were adept in using their business and political connections to suit their ends. During the Janata Party rule (1977- 1979), Nusli Wadia obtained the permission to build a 60000 tpa di-methyl terephtalate (DMT) plant. However, before his letter of intent could be converted into a license, the government changed and when the Congress government came to power, his license was being delayed (until 1981) with one pretext or the other. This was the same time when Dhirubhai obtained license to build a PTA plant. Dhirubhai was also contemplating on building a Paraxylene facility.

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7] Gita Piramal, Business Maharajas, Penguin Books, 1996.

Case Details

Case Code : LDEN011
Themes: Corporate Social Responsibility, Great Leaders
Case Length : 17 Pages
Period : 1958-2002
Organization : Reliance India
Pub Date : 2001
Teaching Note : Not Available
Countries : India
Industry : Varied

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