Dhirubhai Ambani and Reliance
 <<Previous
CORPORATE BATTLES OF DHIRUBHAI AMBANI contd...
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. All this infuriated Nusli Wadia and
marked the beginning of one of the major battles in the history of
Indian business which lasted for several years. |
|
In the 80s, Ramnath Goenka, (Goenka) the proprietor of the
Indian Express Group[8] which was into news publication, had often tried to act
as a mediator and solve the conflict between the two corporate giants; but
in vain. Goenka backed Nusli Wadia. He considered the latter his son and at
times, urged Dhirubhai to bring the rivalry to an end. Even though Dhirubhai
promised to do so, he continued his fight with Wadia and Goenka felt
betrayed. Soon, Goenka turned against Dhirubhai and launched a series of
press campaigns against Reliance.
Goenka always promised Dhirubhai that he would put an end to the campaigns
being held against him in the press. But the very next moment, he would
scheme another plot against him. The assaults did not stop even when
Dhirubhai was hospitalised after his first stroke in 1986. Newspapers,
magazines and weekend tabloids continually attacked Dhirubhai. To counter
these attacks, a few weeks later, Reliance issued 15 advertisements in
leading newspapers of the country including the Indian Express. The
advertisements contained key statements like "concern for truth",
"allegiance to ethics", and "commitment to growth".
Goenka formulated a fresh assault issuing a statement that Reliance had
smuggled extra machines into the country, and therefore had excess built
capacity. This resulted in a show cause notice from the customs, and a duty
and penalty claim of Rs. 1.19 billion on Reliance. In spite of all these
attacks, Dhirubhai never failed to retain public confidence. Slowly, tables
started turning against Goenka. In September 1987, there was a nationwide
raid on the Express group, and a number of cases were filed against it.
Dhirubhai was victorious for once. After Goenka's death in 1991, his son,
Vivek Goenka took over. But he did not see much sense in lobbying against
Dhirubhai and this brought to an end the big battle.
QUESTIONS FOR DISCUSSION
EXHIBIT I RELIANCE GROUP OF COMPANIES
EXHIBIT II THE AMBANI FAMILY TREE
EXHIBIT III CHRONOLOGY OF EVENTS
EXHIBIT IV THE BOMBAY DYEING AND MANUFACTURING CO. Ltd
EXHIBIT V BACKWARD INTEGRATION
EXHIBIT VI MANAGEMENT MANTRAS OF DHIRUBHAI AMBANI
EXHIBIT VII ACHIEVEMENTS OF DHIRUBHAI AMBANI
ADDITIONAL READING & REFERENCES
[8] The Indian Express Group is a
major publication house in India. It brings out the prestigious newspaper,
The New Indian Express from 14 centres covering the states of Tamil Nadu,
Karnataka, Andhra Pradesh, Kerala, and Orissa. Express Publications (Madurai) Ltd is also the
publisher of two vernacular newspapers. These are ‘Dinamani'in Tamil and
‘Kannada Prabha'in Kannada. The group also publishes the following
magazines: Cinema Express (Tamil), Malayalam Vaarika (Malayalam) and Tamilan Express (Tamil).
2010, ICMR (IBS Center for Management Research).All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted
in any form or by any means - electronic or mechanical, without permission.
To order copies, call +91- 8417- 236667 or write to ICMR,
Survey No. 156/157, Dontanapalli Village, Shankerpalli Mandal,
Ranga Reddy District,
Hyderabad-501504.
Andhra Pradesh, INDIA.
Mob: +91- 9640901313, Ph: +91- 8417- 236667,
Fax: +91- 8417- 236668
E-mail: info@icmrindia.org
Website: www.icmrindia.org
|
More Classifications...