TERM PAPER

ON
LEADERSHIP
OF
“DHIRUBHAI AMBANI”

SUBMITTED BY:

PRIYANKA SINGH (09236)

SRAVANTHI MYADAM (09246)

SYAMLY SATHYAN (09254)

SALEEM PASHA.SK (09010)

MANASA SINGIREESU (09006)

EXECUTIVE SUMMARY
 DHIRUBHAI AMBANI

Our team identified Reliance as a representative company for studying the leadership style of its
founder, Dhirubhai Hirachand Ambani, and how it impacted the management practices in his
company in terms of successes as well as failures, if any.

We described the profile of the Reliance Group with all its ramifications along with its
subsidiaries and their broad functioning system.

Thereafter we presented a brief life sketch of Dhirubhai Ambani, the kingpin, the pivot of the
Reliance Group mentioning the highlights of his progress from a small yarn trader to the head of
a premier national conglomerate.

A discussion of his preferences, policies and methods was taken up along with the impact of
each of them on the managerial practices in Reliance Group and related developments.

We tried to fit Dhirubhai Ambani in different leadership models like I 10 model, Situational
Model of Leadership and the leadership grid. In the process, we justified his labeling in each case
based on facts and relevant available data.

Comments were made on his leadership styles, the pros and cons in each case mentioning a few
unavoidable lapses which need to be corrected for attaining 100% excellence.

We have concluded, rightly so, that in spite of a few blemishes not-withstanding, it is solely due
to Dhirubhai Ambani that the Reliance Group is now the largest Indian conglomerate in terms of
market capitalization.

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Contents
INTRODUCTION...........................................................................................................................................4
OBJECTIVES OF THE STUDY..........................................................................................................................5
COMPANY PROFILE......................................................................................................................................5
MAJOR ACHIEVEMENTS OF THE RELIANCE GROUP.....................................................................................8
LEADERSHIP STYLE OF DHIRUBHAI AMBANI................................................................................................9
LEADERSHIP STYLE BASED ON VARIOUS MODELS.....................................................................................14
I 10 MODEL............................................................................................................................................14
SITUATIONAL THEORY OF LEADERSHIP..................................................................................................17
BLAKE & MOUTON’S LEADERSHIP GRID................................................................................................19
COMMENTS ON THE LEADERSHIP STYLE OFDHIRUBHAI AMBANI.............................................................22
CONCLUSION.............................................................................................................................................23
REFERENCES..............................................................................................................................................24

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INTRODUCTION

India is fortunate to have a number of trailblazers who established giant industries in India which
prospered by their special managerial skills acquired through practice or through brain waves or
through hereditary excellence of business background. These include Tatas, Birlas, Khaitans,
Goenkas, Bajajs, Ambanis, Jindals, Mittals, Ruias, Mirchandanis and individuals like Vijay
Mallya and Bhai Mohan Singh of Ranbaxy. Their descendants to day control more than Rs. 800
billion through 600 companies employing about one lakh people. We use their products day in
and day out whether it is consumer durables, electronics, basic necessities and luxuries of life.

One of the greatest businessmen India has produced is Dhirubhai Ambani, a synonym for
Reliance and Vimal. For his vision, leadership qualities, trailblazing characteristics and go
getting approaches, which have all put Reliance and his sons now at the top of the richest people
in the world, out team have selected Dhirubhai Ambani as a quintessential representative of a
specific leadership style which, among other things, will be explained in detail in this term paper.

For a matriculate from a middle class family starting his trading life in Africa with M/s. Besse &
Company, a small sub-division of Shell, rising to the pinnacles of business excellence hardly in
three decades speaks volumes of the qualities of head and heart which guided Dhirubhai Ambani
in his long but eventful journey through the corridors of yarn markets, trading, textiles,
petrochemicals, polyester manufacturing and what not, thus embracing and encompassing all
possible business areas which guaranteed a good profit and best value for money, not only for his
family members, but for the millions of his shareholders. It was a unique spectacle that the
annual general body meetings of Reliance were always held in open auditoria or maidans just
because thousands had to be accommodated is still one of the most unique phenomena in the
Indian business scenario.

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OBJECTIVES OF THE STUDY

1. Study of Reliance Industries Ltd. including all the subdivisions.

2. Study of the leadership style of Dhirubhai Ambani and how it influenced the managerial
practices of the company.
3. Categorization of Dhirubhai Ambani using various leadership models.
4. Study of the impact of this leadership style on the Reliance group.
5. Comments on the Reliance framework and identification of areas for rationalization or
improvement, if any.

COMPANY PROFILE

Reliance Group is India's largest private sector enterprise with revenues in excess of US$ 25
billion. The group has diversified business interests in areas such as petrochemicals, textiles and
retail. Reliance Group's flagship company, Reliance Industries Limited (RIL), is a Fortune
Global 500 company and is the largest private sector company in India.

The Reliance Group was founded by the legendary Dhirubhai H. Ambani. In 1975, the company
expanded into textiles. Dhirubhai Ambani introduced equity cult in India when Reliance went
public with IPO in 1977. Since the launch of its IPO RIL has expanded rapidly and integrated
backwards into other industry sectors, most notably the production of petrochemicals and the
refining of crude oil. Dhirubhai led the evolution as a global leader in the materials and energy
value chain businesses. Today, Reliance Group's activities range from exploration and
production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber
intermediates, plastics and chemicals) to textiles and retail. Reliance enjoys global leadership in
its businesses. It is the largest polyester yarn and fiber producer in the world and among the top
five to ten producers in the world in major petrochemical products. Presently, Reliance Group
has more than 25,000 employees on its rolls and exports products in excess of US$ 15 billion to
more than 100 countries in the world.

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BUSINESS INTERESTS OF RELIANCE:

Petroleum Exploration and Production: Petroleum Exploration and Production is a major growth
area for Reliance and Reliance intends to become a global energy major. RIL is the largest Oil &
Gas acreage holder among the Private sector companies in India with 34 domestic exploration
blocks covering an area of about 331,000 sq. km. It is also India's first private sector company in
the Exploration and Production (E&P) sector to have discovered large gas reserves. RIL also has
interests in one exploration block each in Yemen and Oman.
Petroleum Refining and Marketing: Reliance operates the third largest refinery in the world at
any single location, with a capacity of 30 million tons per year of crude throughput, at Jamnagar,
Gujarat. Reliance is in the process of doubling the petroleum refinery at Jamnagar, which will
make it the largest petroleum refinery in the world. The products rolled out from Reliance
refinery include: LPG, Propylene, Naphtha, Reformate, Gasoline, TAME, Jet / Aviation Turbine
Fuel / Superior Kerosene Oil, High Speed Diesel, Sulphur, and Petroleum Coke.

FUNCTIONING AREAS:

Petrochemicals: Reliance deals in following petrochemical products:

 Polymer: Reliance's polymer business is integrated with its cracker facility at Hazira, as
well as its refinery at Jamnagar, ensuring feedstock availability at all times. The company
operates world-scale plants for Polyolefins and PVC with state-of-art technologies from
global licensors like Novacor, Geon and Union Carbide.

 Polyester: Reliance is the largest producer of polyester fiber and yarn in the world, with
a capacity of 2,000 KTA.

 Polyester Intermediates: Reliance is the world's 3rd largest producer of Paraxylene

(PX), 6th largest producer of Purified Terephthalic Acid (PTA) and 5th largest producer
of Mono Ethylene Glycol (MEG).

Textiles: Reliance textile products are sold under the brand names of Only Vimal, Harmony,
Reance, RueRel and V2. Reliance’s Naroda textile complex, one of India’s largest and most

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modern textile complexes, produces about 25 million meters of fabric both for domestic and
foreign markets.

Retail: Reliance has recently entered the retail market and is aggressively working on
introducing a pan-India network of retail outlets in multiple formats.

SUBSIDIARIES OF RELIANCE GROUP:

 Reliance Petroleum - Reliance Petroleum Limited (RPL) is a subsidiary of Reliance

Industries Limited (RIL) and was created to exploit the emerging opportunities, creating
value in the refining sector worldwide.

 Reliance Life Sciences- Reliance Life Sciences is a diversified and integrated

biotechnology initiative of the Reliance group companies, India's largest private sector
companies.

 Reliance Industrial Infrastructure Limited - Reliance Industrial Infrastructure Limited

(RIIL), a Reliance Group company, is principally engaged in the formation and operation
of industrial infrastructure, involving the leasing and supply with the software of the
computer and data processing.

 Reliance Institute of Life Sciences - Reliance Life Sciences Institute (RILS), established
by Dhirubhai Ambani Foundation, is an institution of higher education in various fields
of life sciences and related technologies.

 Reliance Solar Limited - Initiative for Solar Energy and Reliance Group aims to bring
solar energy systems and solutions primarily to remote and rural areas and bring about a
transformation in the quality of life.

 Reliance Logistics - Reliance Logistics (P) Ltd., a Reliance group company, is a single
window solution provider for all your transportation, distribution, storage, logistics and
supply chain needs.

 Reliance Clinical Research Services - Reliance Clinical Research Services (RCRS), a

Reliance group company, is a contract research organization (CRO) and its wholly owned

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subsidiary of Reliance Life Sciences, which aims to provide world-class services for
clinical research, pharmaceuticals, biotechnology companies and medical equipment.

 Relicord - Relicord, a Reliance Life Sciences (RLS) initiative, offering services of cord
blood banking is supported by Reliance Group, India's largest business house.

MAJOR ACHIEVEMENTS OF THE RELIANCE GROUP

 The world's largest producer of Polyester Fiber and Yarn

 4th largest producer of Paraxylene (PX)

 5th largest producer of Purified Terephthalic Acid (PTA)

 7th largest producer of Polypropylene (PP)

 Reliance's refinery at Jamnagar is the third largest refinery at a single location in the
world.

 Reliance pioneered the first ever Euro Convertible Bond issue by an Indian company.

 Reliance is the first private sector company in India to be rated by international credit
rating agencies.

 First corporate in Asia to issue 50 and 100 years bond in US debt market.

 First private sector Company in India to record a net profit of US dollar of over 1 billion.

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LEADERSHIP STYLE OF DHIRUBHAI AMBANI

The following is a description of the leadership style of Dhirubhai Ambani, the founder of
Reliance Industries. The managerial practices in Reliance were all affected completely by the
leadership style of its founder. The great success story of Reliance can be completely attributed
to the style of management brought in by Dhirubhai Ambani which was perfected by his sons
and to some extent by experts in business management hired by the Reliance Group. But the fact
remains that the comprehensive and integrated personality of Dhirubhai Ambani permeates and
penetrates through all aspects of working of Reliance Industries and all its subsidiaries.

DHIRUBHAI AMBANI- YARN TRADER TO NATIONAL BUSINESS TYCOON

It is interesting to note the gradual development of Ambani as a leader from his birth, growth and
blooming into a full fledged company head. Born in a traders’ family in Gujarat on December
28th 1932 to Jumna and Hirachand Ambani, he was the third of five children and his father was a
school master. Having barely completed his matriculation exam at 17 years of age, Dhirubhai
reached Aden and joined M/s. Besse & Co. which was dealing with Shell products and was paid
a first salary of 300 rupees per month. He studied all the nuances of the marketing of petroleum
and as an ambitious young man; he shifted from service to business. He was helped by Jamnadas
in dealing with commodities like rice and sugar and returned to India in 1958.

He started Reliance Commercial Corporation with a capital of Rs 15000 as a trading firm. It is

very educative to note that as for an Arab Sheik’s request even a consignment of Indian soil was
sent to Aden to grow roses in the desert showing that Ambani had the knack to identify an
opportunity and strike the iron when it is hot.

Branching out to yarn trading, he started the first spanking new mill at Naroda as he foresaw
synthetics as the fabric of the future which shows the visionary nature of the man in general.
Dhirubhai registered Reliance Textile Industries with a paid up capital of 150000 as a power
loom unit. This is where the backward integration concept first took roots and later became the
central theme for all strategic planning in Reliance.

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As a risk taker, Ambani raised Rs. 280000 to get into manufacturing in a project which was
predicted to fail by great business stalwarts like Viren Shah. But, because of his advance
anticipation of things to come, he made a profit of 1.3 million in the first year. By 1977,
Dhirubhai went public and his profit reached Rs 43.3 million from the revenues of 700 million.
To manage his exploding business, he took out talent from wherever available and jobs were
offered more on showing initiative rather than on paper qualifications which became a classic
Reliance management strategy. The best technological talent was poached from all his
competitors to form the brains trust of Reliance.

When Ambani bought machinery, he was always ahead of tomorrows and had commitment to
quality by taking the finest technology the world could offer. The best example is that of
acquiring DuPont technology for synthetic yarn from Delaware, US, the polyester process being
first bought by him outside of United States.

Dhirubhai entered domestic markets with an advertising blitz on par with Hindustan Lever when
Reliance introduced ONLY VIMAL since he was very confident that the brand image was the
most important in order to win the consumer’s confidence. Dhirubhai felt that marketing success
was a function of three factors, namely, choosing the right product mix, identifying the market
and establishing a viable distribution structure. When faced with resistance from traditional cloth
marketers, Dhirubhai opened his own showrooms and appointed agents and offered franchises to
his own shareholders. He also opened up non metro urban segments in smaller towns as a result
of which by 1980, Reliance fabrics were available to twenty company owned retail outlets, 1000
franchised outlets and more than twenty thousand regular retails stores. This was comparable in
speed and numbers only to Italian Benetton and American Mc Donald’s. Dhirubhai established a
good rapport with his dealers by making his business with them risk free because he used to say
“if you lose, come back to us, but if you make profits, they are all yours!” Dhirubhai’s future
gazing skill could be inferred from the fact that though India is a poor country, people will not
mind paying a little more for synthetics provided they have a good quality and had a longer wear
and tear.

The Naroda mill transformed Dhirubhai from a simple yarn trader to a great mill owner on par
with Mafatlals, Sarabhais etc. Dhirubhai spread out countries abroad through his Reliance

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synthetic textiles. His dynamism and confidence in the future made him reach a sales turnover of
Rs 1 billion in just twelve years whereas Bombay Dyeing needed hundred years. Dhirubhai was
accused of black marketing and corruption to improve his sales and get things done.

After 1977, when Reliance went public, Dhirubhai’s holdings were 16% but he had thousands of
share holders from the public to support him in all his endeavors. By converting debt into equity
through successful debenture issues through 1979 to 1982, he was able to raise up to Rs 500
millions. A very important philosophy of Dhirubhai was always to ensure that Reliance share
were in the ascendant to draw maximum benefit for the shareholders for whom he was prepared
to bend the Govt. rules, use his political influence and any legal Hera pheri required for the
purpose.

Dhirubhai made sure that whenever Reliance had to impress the Govt. to modify the existing
rules and regulations, they used to have all the information in India and abroad on the fingertips
of the group which met and influenced the Govt.

Reliance always managed to maintain its zero-tax status by changing its accounting practice by
capitalizing interest for the long term debt for the purchase of fixed assets. Many people felt that
Reliance was avoiding taxes by cheating the Govt. However, all the profits were ploughed into
the company by Dhirubhai and his family so that business prospered. Dhirubhai had the knack of
taking on people like VP Singh in which he had the inherent support from Ms. Indira Gandhi,
Pranab Mukherjee and Rajeev Gandhi. One best example is when he contracted the purchase of a
whole year’s supply of PTA of 60000 tons by having letters of credit from many banks when the
Govt. was about to decide to shift imports of PTA from open license to permissible limited list.

Dhirubhai was able to show his one-upmanship against Nusli Wadia and Goenka of Indian
Express which were bent upon destroying Reliance. Though this led to his paralysis and later
failing health, he was able to broker peace with his enemies through the success of Reliance’s G
series along with the meeting of Dhirubhai with Rajeev Gandhi through the good offices of
Amitabh Bachhan when VP Singh was shifted from Finance to Defence.

However, there was never formal delegation of authority in Reliance as there was flexibility as
well as ambiguity. Only the top managers could call the shots in addition to Dhirubhai and his

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sons. In spite of this, Dhirubhai was very considerate to his employees like when Mr. Sanghvi
incurred a heavy loss in a deal with a view to increase the profit for Reliance. After 1995,
Dhirubhai handed over the reins of his empire to his sons though he did not lose his craving for
money and power since he was always available for expert advice.

According to Anil Ambani, his father’s only fault was he thought too big and clearly ahead of his
time.

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

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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 “family”. 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 centers 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 neighborhoods 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

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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.

LEADERSHIP STYLE BASED ON VARIOUS MODELS

We are aware of different frameworks and models for leadership styles. Based on the facts and
data available to us regarding Dhirubhai Ambani, we will now proceed to categorizing him
accordingly and appropriately using relevant leadership models.

I 10 MODEL
Information

Dhirubhai Ambani mastered the secret of gathering information. He had an uncanny knack of
knowing exactly how the market is going to behave and stayed ahead of times. He used to gather
information, whatever it may be and at whatever cost. He used to gather information about
Governments whether they were local, state, central or international. Whenever he went for
approval of license from government he used to have all the information about the market
capacity, market share, competitors etc. he used to gather information about products,
companies, consumers, markets, people, services, politics and practically anything and

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everything that mattered for that matter. He used to keep up to date information of competitors.
He used to gather information, analyzed and process the same. He was also able to identify
opportunities out of those news and information. He was also quick to disburse that information
to the relevant people.

Intelligence

Jamnadas, a friend of Dhirubhai helped him by giving some money to invest in share market
when both of them left the job in Aden. Dhirubhai came to India after some years and established
his own business. When Jamnadas came to India Dhirubhai gave him job in his company. Even
though Jamnadas stopped working after sometime, Dhirubhai insisted that he be paid his salary
till his demise. It shows his social intelligence. He was able to understand others’ emotions and
feelings. He never forgot people who helped him.

Dhirubhai was very shrewd in his business transactions as well. He had a knack of getting the
right information appropriate to the situation and used it to his advantage whenever necessary.
He had the ability to solve any problem or deal with any kind of situation at the right time and in
the right perspective.

Imagination

He always was ahead of the times and was able to predict or forecast future developments
correctly. For example, he made the plant capacity of polyester production mill higher than the
current market demand at that point of time because he knew that in near future, the demand for
polyester would increase. Once he also reserved some stock of yarn in view of expected increase
in the market price and this happened, resulting in huge profits.

Inspiration

He was a very inspirational leader. He inspired a good deal of young entrepreneurs in India. To
his employees, he was their messiah whom they could fall back to in any hour of need. For
example, when the action of one of his employees resulted in a huge loss, he was magnanimous

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in condoning the same, for he was very sure that the employee worked for the benefit of his
company in the said situation.

Insight

He had an uncanny insight to the future of his business. His choice of moving on to polyester,
especially, at a time when cotton was the more popular fabric was based on his perception that
the demand for polyester would pick up very soon and his prophecy was proved right.
Converting debt into equity using debentures only highlights his deep insight about his business
because by this move, he could clear the company’s debts and achieve profits for all the
shareholders.

Dhirubhai gave importance to the small investor and his contributions, and by doing so, he
involved millions of middle class investors

Intensity

Dhirubhai was intensely attached to his company, its people and its business. All his moves were
directed ultimately for the good of his company. His intensity was that infectious that it spread to
all his employees. He was so intensely attached to his company that was prepared to forego his
integrity for the sake of getting things done by hook or by crook for the sake of his company.

Integrity

Dhirubhai seems to stand low in terms of integrity. Dhirubhai manipulated the laws and customs
rules to his company’s advantage. He exploited the Indian government, their rules and tax system
to the best of his ability which is very clear from the fact that Reliance is the only company
which never paid taxes even after three decades of listing and went on giving bonuses and
dividends to shareholders. It was government and the system which was at loss. Billions of
rupees which should have gone to the coffers of government allegedly went into building
Reliance Empire and also went for paying bribes to the government babus. Critics accused him
of using "more than the usual" ways of obtaining licenses, getting quick approvals for public

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issues and capital goods imports, and of getting policies formulated in favor of Reliance
Industries.

However, Dhirubhai used to say that these were baseless allegations made against him by his
jealous competitors.

Influence

Dhirubhai Ambani was known for his influence in political circles and had the ability to acquire
most difficult licenses during the license raj. Ambani’s influence on New Delhi was so strong
that everything worked the way he wanted it to be, whether it was getting a license or taking
action against his competitors.

Interdependence

Dhirubhai depended on the “Reliance family” consisting of professionals and technocrats drawn
by him from all possible quarters who were able to convert his expectations to fruitful results. By
depending on them and looking after them simultaneously, he was able to achieve superlative
results. This shows that Dhirubhai believed in team work though, of course, he was always the
team leader.

Impact

Dhirubhai had a great impact on stock exchanges and on government. He had such an impact
that when Govt. and stock exchange experts opposed his idea of converting debentures to shares,
he threatened them that if they take any legal action he will withdraw all shares from the stock
exchange. Fearing this SEBI never took any action against him, and he forced the government to
change the law.

SITUATIONAL THEORY OF LEADERSHIP

Situational leadership stresses that leadership is composed of both a directive and a supportive
dimension, each of which is to be applied appropriately in a given situation. According to this
theory, leaders must change the degree to which they are directive or supportive to meet the

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changing needs of the subordinates. In other words, situational leadership demands that a leader
should match his style to the competence and commitment of his subordinates. Effective leaders
are those who can recognize the needs of the employees and adopt their own style to meet those
needs.

S3: high supportive/low directive behavior S2: high directive/high supportive behavior
SUPPORTIVE STYLE COACHING STYLE
(DHIRUBHAI AMBANI)
S4:low supportive/low directive behavior S1:high directive/low supportive behavior
DELEGATING STYLE DIRECTING BEHAVIOR

Note: Horizontal axis represents directive behavior. Vertical axis represents supportive
behavior

Based on the data available, we can categorize Dhirubhai under S2 leadership style which
involves high directive and high supportive behavior as per the Blanchard-Blanchard situational
leadership-II model. As Dhirubhai was showing spectacular results right from the beginning of
his company’s functioning in India and also because he picked and chose the technical and
professional core group for his Reliance family, the followers were highly motivated, optimistic
and goal directed. The followers therefore were at D2 to D3 development levels and required a
guided coaching approach. Because of their commitment and competence, Dhirubhai followed
the coaching approach in a high directive and high supportive style. As for this, he focused
communication on both achieving goals and meeting the socio-emotional needs of his
subordinates. He involved himself with the subordinates by giving encouragement and soliciting
subordinate input. However, it is an extension of S1 leadership style that is high directive and
low supportive behavior because as a leader, he was always making the final decision based on
what and how the goal can be accomplished.

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BLAKE & MOUTON’S LEADERSHIP GRID

The leadership grid proposed by Blake & Mouton, in its most reformed form of 1985, is
designed to explain how leaders help organizations to reach their purposes through two factors,
namely, concern for results on a 9 point scale and concern for people also on a 9 point scale.
(1,1) represents impoverished management, (9,1) represents authority compliance, (5,5)
represents middle-of-the-road management, (1,9) represents country club management and (9,9)
represents team management.

The (9, 9) style places a strong emphasis on both tasks and inter-personal relationships. It
promotes a high degree of participation and team work in the organization and involves the
employees fully committed to their work.

Based on the data available, Dhirubhai Ambani can be categorized as a 9,9 leader, that is, in the
team management block of leadership grid. Dhirubhai used to stimulate participation of the
employees, always made his priorities clear and followed them to the successful completion. He
behaved open mindedly and enjoyed working with his employees. However, he was not perhaps
getting all the issues into the open which is perhaps a lapse. Because the employees were hand-
picked based on professional and technical competence and drawn from diverse sources, their
involvement and commitment to work was of the highest order. In addition, Dhirubhai acted as a
member of the so called Reliance family though sitting at the top of the table and thus could
establish very good inter-personal relationships as he was strongly goal directed, he was able to
always emphasize and motivate his employees towards task achievement as an important goal to
be kept in mind at all times. He always had a very clear perception of his priorities in terms of
immediate and final goals, a concept that percolated down to all his employees. Because of the
common stake for his company, very good relationships of trust and respect ensued between him
and his team members. The following points corroborate this view as additional confirmations:

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TASK ORIENTED BEHAVIOR

 Dhirubhai was ready to risk his personal integrity, bend the rules, influence the
politicians and the Government Officers concerned for the sole purpose of achieving his
goals or targets.
 As a risk taker, he expanded the capacity of his mills or went for polyester at such times
when the atmosphere did not appear right for the same because he had a form conviction
that the goals he had set for his company are justified and are bound to be met.

PEOPLE ORIENTED BEHAVIOR

 He had a very jovial manner while handling his employees by treating them as part of his
extended family, condoning their honest mistakes, if only, when they were for the benefit
of the organization.
 He was a very good pay-master and was very kind and considerate to all his employees
who were hand-picked him for their administrative/technical expertise.
 He never advertized his munificence because felt obliged to help out not only the needy
employees, but others remotely connected with the Reliance family.

(HIGH) (9,9)
9 TEAM MANAGEMENT

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8 (DHIRUBHAI AMBANI)
(1,9)
COUNTRY CLUB
MANAGEMENT
6 (5,5)
MIDDLE-OF-THE-ROAD
5 MANAGEMENT

3 1,1 9,1
IMPOVERISHED AUTHORITY
MANAGEMENT COMPLIANCE
2 MANAGEMENT
(LOW)
1 2 3 4 5 6 7 8 9
LOW HIGH

Note: horizontal axis represents concern for results. Vertical axis represents concern for
people.

COMMENTS ON THE LEADERSHIP STYLE OF

DHIRUBHAI AMBANI

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Ambani’s style of functioning produced all-round success for his organization in terms of the
following:

His coaching style of high directive and high supportive behavior as well as the team
management style under the leadership grid are very apt and relevant for Reliance Group as they
always produced the best possible results with all-round benefits to all the stakeholders including
employees, customers, shareholders and the investors. His high directive and high supportive
behavior is found to be very suitable for his dedicated and motivated employees who were all
hand-picked by him for their ability and expertise. His style of functioning made all concerned to
believe that Reliance was indeed a big extended family of Ambanis.

But his go-getter status by hook or by crook and by bending the rules and regulations of the
Govt. concerned and his single minded devotion to improve Reliance at the cost of other parallel
establishments made him many enemies like Nusli Wadia or P Goenka and a few others with
whom he had to continue an ever-going war of words and deeds.

There is no evidence to show that career development schemes were in operation in Reliance at
that point of time, which is a prime necessity to retain talent and to stay competitive in the
changing environment. It also appears that a well set hierarchy in the bureaucracy seems to be
absent and most of the decisions were taken by the senior most managers in addition to
Dhirubhai showing that delegation of responsibility was under a low key. Though Reliance
followed all the rules of corporate governance seemingly, they always took advantage of the
loop-holes in the laws, systems and procedures. For good accountability, established companies
must not only follow the rule of the law but also its spirit through ethical practices.

In spite of the few of the above lapses in Reliance, we must add that due to Dhirubhai Ambani’s
passion, intensity, passion, charisma, leadership capabilities and his favorable impact on all the
stakeholders, Reliance has now become the number one company in terms of market
capitalization in Indian stock exchanges.

CONCLUSION

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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.

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It is worth noting the famous quotation of Dhirubhai Ambani in connection with conformity with
rules and regulations. He said "You should not do anything illegal. First of all, the law should be
changed!"

It is not for nothing that to date, Reliance is the largest Indian conglomerate in terms of market
capitalization.

REFERENCES

1. Business Maharajas – Gita Piramal

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2. The Polyester Prince – A biography of Dhirubhai Ambani

3. Leadership Theory & Practice – Peter G. Northhouse
4. Principles & Practices Of Management – Daft & Daft
5. Reliance Industries Limited Website – www.ril.com

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