Dhirubhai was a well known personality of India.He always believed in Karma and his and his work spoke louder than announcement .He has delivered some of the marvels to Indian industries . He changed the stream of Indian industries ,the investment scenario and surely the shape of Indian stock market . He was undoubtedly the most talented busineesman of his time. He amazed the world with his success stories .He became a celebrity in India and overseas .
Reliance India Ltd.(RIL) has implemented several world class projects during last few years are as follows:
1.Jamnagar Project:RIL in the past four years has set up a world class refinery in record time with investment of $6 billion , one of the most cost competitive refineries in the world . The second unit of Jamnagar refinery is the sixth largest single location refinery in the world with commencement of 29 million tones per annum .The second unit of Jamnagar Refinery has special features like World's Largest FCCU, World's Largest Coker, World's Largest Aromatics Complex, and India's largest Sulfur Recovery Complex. The refinery also has a large sized captive power plant of 450 MW.
2.K G D-6 Project: It is one of the world's fastest developed projets ,2.5years less than world average of 9 years for similar projects . Field development cost of KG D-6 is about $5 billion oil equivalent (boe), much less than the world average of $10 - $12 boe.On the other hand ,it has developed world class oil & gas exploration project off the coast of Andra Pradesh in record time with Investment of Rs.34000 crore.
ACHIVEMENTS:
1.During all his while ,RIL forayed into retailing and opened its first store in November,2006 within 30months time of opening up its first store ,RIL has set up a retail network of more than 900 stores of 17 formats ,across 77 cities of the country,with more than 4.2 million sq feet.
2. RIL also launched India's largest hypermarket in Ahmedabad in 2007.All these projects have become reality not only dreams.
3.RIL shareholders and stakeholders trust its intent as it has always delivered what it said before time and in most economical manner thus, keeping trust built by Dhirubhai both in short term and long term.
4. RIL has not only made money for its shareholders but will also save $9 billion each year of Government which goes out in importing the oil. Gas from RIL operated KG D-6 block will increase India's GDP by $103 billion at peak production and will improve country's current account deficit by 0.60% by 2014.
"Success is a journey ,not a destination."If we look for examples to prove this quote then we can find many but there is none like that of Reliance Money .The company which is today known as the largest financial service provider of India.
Reliance Money is a part of the reliance Anil Dhirubhai Ambani Group and is promoted by Reliance Capital ,the fastest growing private sector financial services company in India ,ranked amongst the top 3 private sector financial companies in terms of net worth.
The success story of the company is driven by 8 success adopted by it namely
TRUST
SUCCESSINTEGRITY
DEDICATION
COMMITMENT
ENTERPRICE
HARDWORK & TEAMPLAY
LEARNING & INNOVATION
EMPATHY& HUMILITY
To achieve & sustain market leadership Reliance Money shall aim for complete customer satisfaction ,by combining its human and technological resources ,to provide world class quality services .In this process Reliance Money shall strive to meet and exceed customer's satisfaction and set industry standards.
REASONS FOR SUCCESS:
1.Gather information about Government be local ,state, central or international . Gather information about products ,companies ,consumers,market,people,services ,politics and anything, just anything and everything. Don't forget to get information of his competitors.
2.Find an opportunity , he always endeavor to analyze whatever information are gathered . He used to do that to convert information into an opportunity , a profit making opportunity .According to him,"There is no invitation for making profit."
3.Jump from an orbit to the next . No matter where hindrances are occurred . Accumulate some energy and jump into another orbit ,a higher one , stay there sometime control that orbit .
4.Complete projects on time , thrive to do it before scheduled time. He and his sons completed all their projects on time ,mostly before time. However big the projects were they completed those timely. No matter how much disturbances or hurdles came in their way . Dhirubhai Ambani derived some techniques to do so. They kept close eyes on their projects to monitor those secrets.
5.Organization is the main point of success of reliance industries .Due to organization ,Dhirubhai achieved his goal.So, an organization is a deliberate arrangement of people to accomplish some specific purpose.Characteristics:
Distinct purpose
People
Deliberate structure
6.The below diagram shows the concepts clear:
EMPLOYEES
SUPPLIARS
MEDIA
GOVERNMENTS
TRADE AND INDUSTRY ASSOCIATION
COMPETITORS
SOCIAL GROUPS
CUSTOMERS
ORGANIZATION
The above table depicts the factors that are covered to become an organization . So, the Reliance Company used above methods relatively and got success. In case of employees : Hire the best people.Pay them well .He was able employ the best people ,top ranking masters of their respective fields .He was the best pay master of his time .Human Resource is the best resource, according to him.
In case of shareholders : Pay shareholders well .He paid his shareholders the best.He required huge amount of money at that time to make his dreams true.
SWOT Analysis
Strengths
One of India leading and fastest group growing private sector financial services companies ,and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
Strong position in the financial services category.
It is India's first insurance company to be awarded the ISO Certification across all funtions , processes ,products and locations in India.
Company issued 36.57Lac policies during the year as compared to 14.60Lac in the previous year
Weaknesses
Dependence on fellow subsidiaries for various supplies .
Sudden expantion in year 2007-08 by establishing more than 125 branches has increased operation and administration expences due to which looses interest.
Opportunities
General Insurance industry inIndia has grown at 15% CAGR in terms of gross premium collection.
The company has moved to 3rd position amongst private sector Insurers in Financial year 2008 & is ranked 7th amongst the Industry with 14 General Insurance players.
Threats
New Entrants:- Future General India Life Insurance company Ltd.
New Joint Ventures :- Shriram Group is to enter General Insurance Market.
LEHMAN BROTHERS
FAILURE COMPANY
INTRODUCTION:
Lehman Brothers Holdings Inc. was a global financial services firm which , until declaring bankruptcy in 2008 , participated in business in investment banking , equity and fixed - income sales,research and trading ,investment management, private equity and private banking .It was a primary dealer in the U.S . treasury securities market .Its primary subsidiaries are
The firms worldwide headquarters were in New York city ,with regional headquarters in London and Tokyo as well as offices located throughout the world . Lehman Brothers 's investment management business , including Neuberger Berman.
CAUSES OF COLLAPSE OF LEHMAN BROTHERS:
Subprime Mortgage Crisis:
In August 2007, the firm closed its subprime lender ,BNC Mortgage ,eliminating 1200 position in 23 location, and took an after -tax charge of $25 million and a$ 27 million reduction in goodwill.
In 2008,Lehman faced an unprecedented loss to the continuing subprime mortgage crisis. Lehman's loss was a result of having held on to large positions in subprime and other lower-rated mortgage tranches.In any event ,huge losses accrued in lower- rated Mortgage-backed securities throughout 2008.
In second fiscal quarter ,Lehman reported losses of $2.8 billion and was forced to sell off $6 billion in assets.In the first half of 2008 alone, Lehman stock lost 73% of its value as the credit market continued to tighten .
On August22, 2008 shares in Lehman closed up 5% on reports that the state - Controlled Korea Development Bank was considering buying the bank .Most of those gains were quickly eroded as news came in that Korea Development Bank was facing difficulties pleasing regulation and attracting partners for the deal.
On Sep.17,2008 Swiss Re-estimates its overall net exposure to Lehman Brothers as 50 million investor confidence continued to erode as Lehman's stock lost roughly half its value .
SHORT- SELLING ALLEGATION:
Here Allegation means "without proof".During hearings on the bankruptcy filing by Lehman Brothers and bailout of AIG before the House Committee on Oversight and Government Reform,former Lehman Brothers CEO Richard Fuld said a host of factors including a crisis of confidence and naked short-selling attacks followed by false rumors contributed to both the collapse of Bear Stearns and Lehman Brothers.
BANKRUPTCY:
On Saturday, September 13, 2008, Timothy F. Geithner, the president of the Federal Reserve Bank of New York called a meeting on the future of Lehman, which included the possibility of an emergency liquidation of its assets. Lehman reported that it had been in talks with Bank of America and Barclays for the company's possible sale. However, both Barclays and Bank of America ultimately declined to purchase the entire company.
LIQUIDATION:
On Tuesday, September 16, 2008, Barclays announced that they would acquire a "stripped clean" portion of Lehman for $1.75 billion, including most of Lehman's North America operation.On September 20, 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays to acquire the core business of Lehman was approved. Here "stripped clean" means clearly shown all records.
SALE OF NEUBERGER BERMAN: On September 29, 2008, Lehman agreed to sell Neuberger Berman to a pair of private-equity firms, Bain Capital Partners and Hellman & Friedman, for $2.15 billion. The transaction was expected to close in early 2009, subject to approval by the U.S. Bankruptcy Court; however, a competing bid was entered by the firm's management, who ultimately prevailed in a bankruptcy auction, held on December 3, which scuttled the deal with Bain and Hellman.
FINANCIAL FALLOUT:
Lehman's bankruptcy was the largest failure of an investment bank since Drexel Burnham Lambert collapsed amid fraud allegations 18 years prior.Immediately following the bankruptcy filing, an already distressed financial market began a period of extreme volatility, during which the Dow experienced its largest one day point loss, largest intra-day range (more than 1,000 points) and largest daily point gain. What followed was what many have called the "perfect storm" of economic distress.
The fall of Lehman also had a strong effect on small private investors such as bond holders and holders of so-called Minibonds. In Germany structured products, often based on an index, were sold mostly to private investors, elderly, retired persons, students and families. Most of those now worthless derivatives were sold by the German arm of Citigroup, the German Citibank now owned by Credit mutually.
OTHERS CAUSES:
Boom and burst in the housing market
Speculation
High risk mortgage loans & lending / borrowing practices
Securitizing
Inaccurate credit ratings
Government policies
Policies of central bank
Financial Institution debts levels and incentives
Boom and collapse of shadow banking
IMPACT OF LEHMAN BROTHER'S ON INDIAN:
This will shake the confidence of the industry which was banking too much on foreign institutional investors .
Lehman has investment in Indian companies like spice communication ,spice Mobile,Development Credit Bank & Goldon.
So,due to all the above points of causes prove the failure of Lehman Brothers.
RECOMMENDATION:
Under the opinion of comparison between the failure and successful company, I Recommend that successful company become failure when it involve in some unfair means & practices to gain profit.So, in the case of successful company i.e Reliance Industries ,Dhirubhai Ambani uses the Taylors approach which is Scientific management theory .
Due, to this approach he found that "how tasks improved ,study the way workers perform their tasks.Codify the new methods of performing tasks with written rules & standard operating procedures.Carefullly select the new workers who posses skill & abilities.Providing reward for performance of the workers.On the other hand,In the failure company i.e Lehman Brothers has used unfair means of speculation in the company .This company has bankrupt and assist with financial crisis.
