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 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
³family´. 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 centres 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
neighbourhoods 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.

 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.

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 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.