306-0 43-1

Aditya Birla Group under

Kumar Mangalam Birla:
Can he Manage the Mandate?
,At
38, f,wpr Mavatan Bfula has ateady done rnon than what mosl otiers gel lo do in a ffiefrnr.. He's
transfonpd a h;/iebou7t' anghnenb inb a npdem onnpdities giant thafs g6ally anpetitive. Ihw
did tE & iI? By rprl efiry hE age.4
,tt
nny appet as ll the whee! has orne full cirde. But tturnr Birla would puhaps teel that in a nNU
gtobalisury envfuonmed, his
ioumey
has only
iud
begun-z
Kgmar Mangalam Birla (KM Birla), Chairman of Aditya Birla Group, India's tttird largest conglomerate, became the
youngestleaderof treOroupin 1995,affertredeatr of h'sfutrerand fonnerchairmanAdityaVikam Bjrla.Attrattimghe
ROity" ain" Croup recorded rarenues worh INR 15,000 crqes.3 Since then, KM Birla has canied out major managerial
and financial reslucturing in he Grouo, which has resulted in the Group recording revenues of INR 33,000 crores in
2005.a KM Birfa revolulionized ihe Grciup by disconlinuing tre ageold tadilions such as Babucultres ,Wornbl*btr'b
NW ,
Paha s4elf and poliry of in{rouse recruitnent He implernented varbus naiv prognms lke '}Ve-lti7l-W and
',Hqpi:ness
AWoilindex-dgttrebasicchatlengeforKM
Birh fiesin mainbinlng fre leadenhip psilions in treGroup's
mre'business andbregain ib pmilion as oneoftrebptrrcconglomerabs in hecounty. KM Birla's nextbigfoo.ts's benbr
into tre listof Fortune 500 companies. KM Birh said,lVly call'rng is b build an organisalion thatcan createvalue;anyhing
ebeb asubsetof tratThereban elementof legaryhere,butldontseemyselfasacatalystof
changeassuch, onlychange
as a subsetof organbalion building.{
The Birla Legacy
The lineage of ttre Aditya Birla Group dates back b 1857, when Seth shiv Narayan Birla sbrted cotton-tsading
operations in
-tre
small toun of Pilani in Rajastran, lndia. ln the early 20t century the founding bther of the Group,
dhyanshyamdas Birla (GD Birla), entered into the manufaclrdng sector by sefting up the first
jute
mill in Calcuth, lndia
ltSiS;
toitoweA byvarious otherfactories for manuhcfuring cotton, sugar and chemicals. ln 19?2.,he set up Kesoram
dott*.tg"6rtta GD Birla acquired lfnotrsfan Imes in 1927 andesbblished treUppaGanges Sugafactory in 1931-
ln 1945, he builtSaunastrtra Chemicals at Saurashba, GujaraL ln 1947, Grasim Industries (Gnsim)was sdt up and
incorporated as Gunlior Rayon Silk Manufacfuring Co., which commenced with nyon weaving operalions in Gwalior,
r
Suendar T.
.l(|m'r
llig Bcb'. *whlinsruldndadlr Scdsr$6 2F 2004
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lbirt
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'
T* orgrizdimMa'. !9.41
306-043.1
Aditya Bida Group under Kumar Mangalarh Birla: Can he Manage'rhe Mandate?
MadhyaPm&sh. Hindalco, Group's aluminum di,,ision, was incorporated in 1958,which shrted production in 1962at-b
aluminum complex atRenukmt Uthr Pradesh (UP).
The Grandson of GD Birla, Aditya Vikram Birla (AV Birla) entered into the business in i964. Hesbrted he Eastern
SpinnhgMibard Industies in 1965 in Calcutta. AVBiila acquired a smallspinningmill,lndian RayonCorpn$on Ltd-ir
1966 with an aim to expand the Group's business. However, many of his prcjecb were eiher rejecbd or blocked by fie
gwemmentundervarbus prarbions of he'lbense Rf . During he perbd of Lirnse Rry'ln he 1960s and 1 970s, here
wae priceresbictions in majorindusties includingfertilizen, sugar, steelandcoal.Alsomany golemment clearances
relatedbfoe'gn technology collaboration andimportofcapitalgoods and rawmabdalswererequiredtosbrt any project-
Having reahd tratitwould be diffiorltbexpand ib business within frecannby due bredhpism andbureaucncy,AVBirla
sbrbdlookhg atothercounbiesforgrowtr opportunites. He tumed h'rs atbniion bwards Souh-EastAsian counbies lke
Thailand,Indonesia l/alaysia, and hePhilipplnes.Thefrstglobalexpansion bytreGroupwasin 1969,whenAV Birlaset
up Indo-Thd Synthetics Company Limited. The Group furtrer expanded ib intemational presence by establishing P-T.
ElegantTex$e in Indonesia (1973) and Pan Century Edible Oils in Malaysia (1977).
Duringfie1980s, he Groupfurherdversiled
I
adding cementandcafton blackb ib prfolio.ln 1980, Birla Coppa,
$e copperdvision of Hindalco, was esbblished at Dahej in he Bharuch distictof Gujan[ which b the largest copper
smelling plaf ln lndiaro In he same year, the Group set up a carbon bladi plant h Thaihnd. AV Birla also eshblished P.T.
IndoBharatRayoninl9S2bbecomefrefrstvbcoseshplefiber(VSF)it poducerinlndonesia.Thrceyearslater,lndia's
firstgs$asedferlilizaplantin pimtesecbr; lndoGulf Ferdlisers Limited (lndoGulf)uns eshblshedatJagdishpur, UP.In
1984, Grasimentered hecementbusinessforhelirstlime bysefiing up a plantatJawad,liladhyaPradestr.Afierthe Indbn
govanmentfibenlized the petroleum indusfy in 1988, heAditya Birla Group enbred into a
jointvenhrre
witr H'ndusbn
Petoleum Company Limited
12
(HPCL) to set up Mangalore Refineries and Pebociemicah Ltd. (MRPL) at Mangalore,
Framabka. In 1988, fte Group esbblished a carbon black plant in Uthr Pndesh followed by anothercarbon black phnt in
Alexandria (Egypt) in 1990.
TheGnup conlinuedib oveseas o<pansion and in tre early 1990s, Birlaheaded a INR 12 billion overseas empire
ofl2companiesinThailand,lndonesia,lvlalaysia,PhilippinesandEgypt,makingittheonlyh:elndianmultinalional.rs The
Groupalsoconlinueditsdorneslicexpansion,andin1994VlkramlspatraassetupbyGrasimtoproduceSpongelron. That
same year fte Group made ib foray into Russia when it bought a pulp plant UnderAV Bida's leadership the Group's
compan'ns became tre vnrld's largest refner of palm oil, lire largest producer ofVSF, tre third largestproducer of insulaton
and besixft largestproducerof carbon black in trewodd.la
Afurhedeah dAVBida in 1995, hisson Kumarfi,bngalam Birla, aCharteredAccarnhntandan MBAfomLoncion
BusinessSdtool,atheageof28 bokorerfrereignof theGro.rp tratwas hadngbblrcvenuesof INR 15,000croreswith
asseb of INR 16,000 crores. lt had a strength of75,000 employees and 600,000 shareholders"
KumarMangalam Birla: The Catalystof Change
After hking up the charge, Kumar Mangalam Birla (KM Birla) decided to consolidate the entire Group's companies
underoneumbrellaof teAditya BirlaGratp.Wtr aviewtofurtrerdivenif theGrurp's business,hedecided toenbrthe
telecommunicationssectorthroughajointvenfurewithAmericanTelephoneandTelegnphCorporalion(AT&T)in 1995.
However, rnany critics were of tre opinion tratKM Birlawould be unable to manage theGroup successfully.
When KM$rta succeeded his fttrerin 1995, his crilics dismissed him as a softand shyperson,who lackedhe business
expertbe and asserliveness of hls taher. He was accused of inconsistent behaviu, an unapproachable nnnagement style
and misplaced pdotities. The result was'hat tre invesion shrted selling off theirshares. ln 1996, the marketvalue of the
LlcruR- nbtli0E lcsrcr r.grLtm-dtfr
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lld.daPctrbnrCoAa$mlidtdi0tosEadbgrdifrdlddfdrft!rd,D*dirgocprnlh lr&rnr.iffio($n616.89Hrm[.lS5l1J(EMloro)ro{
2005.
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306-043-1
Aditya Birla Group under Kumar Mangalam Birla: Can he Manage he Mandate?
Group's fourlargestcompanies-Grasim,lndian Rayon, Hindalco and lndo Gulf Ferlilizer, plunged by$1 billion of37%'r!
KM Birla took setrenl initialives to prove his oitics wrong.
KM Birla discontinued various ancient pnclices and porryer cenbrs witrin tre Gro:p. He hhoduced a relirernent pollry
in 1995, on tre basis of l.rhich around325 senioremployees,whowerein the{rearly60s, had to quitthe uganizalion in t}re
next five yean. Subsequently about 400 young executives replaced them. With this, Bida reduced $e average o{ the
employees in tre Group from 54 years in 1996 to less than 40 years in 2000. Meanwhile, answering tre crilics he said,
'Peoplein the Groupwere aboutfuvice myagewhen lbokoveraschairman.lhad
greatrespectforhem personally, but
I also felt he need for change"rT
In 1996, helaunchedfortrefntlime acorporate identityttratrmrldserveas acorprablogo. TheGroupselectedthe
'Rrsingsur/ as the logo, v*rich signifiedoplimism andswedas aunifralion symbolfortreGroup. KM Birh said,"During
trat psio4 wlren tre organisaton
r,rns gc.,ing trrur gh trnnoil due b he deah of AV Birla, tre new cuporate logo helped in
bringing trevariouscompanies of theGroupbgeher.This helpedtreorganisalion toreanergizeandgetshrted bthe pah
ofchange."lr
KM Birla also changed ttre Group's poficy of in*rouse recruitnent- In 1996, he also made changes in tre Group's
Human Resource
ftlR)systenr.
He hired professionalsfiomobercornpanies intohis managementteam
[Erhibit
1]. This
removed he earlier nolion trat people, who dd not find
jobs
elsaartrere,
joined he B:irla companies. KM Birla said, lne of
the trings I got to know early ttrat helped me know myself betteruas rny ovtn stengths and weaknesses. lt was very
imporhntfor me to get people who are much brighter tlran me, ndjust peopie who have more experience. Thafs what
keeps me challenged.'re He canied outvarbus bdrer changes as well-
The Parfia System of daily fnancial reporling which foctsed mainly on production was replaced
'sith
an Economb
VdueAddedmodep. In September 1998, while implementing fre'WeWillMn'grogramfaemployees, KM Birla sai4 "l
.
do believe trat our sustainable advanbge will come from consbnfr r+invenling he Group and putting more and more
people on the board who can think outof-h+box.'21 KM Birla also established Aditya Birla Management Corporafon
Limitdd
(ABIrc1) modeled after GE Capibl, tre sfategic decisionmaking bodyfor ensuring the best praclices acrms the
Gro.rp companies.
In 1998, hecanied outa numberof restuctudng likeconsolidatim of its cement manufachrring dMsion of Ind'tian Rayon
andGrasiminba single division cf Gnsim.This mergerwasftebiggstrestucturing caniedoutby any corpoi-ateentity
in Inda.a ln 1998, he Grorp also made ib enty into Canada by setting up a 5050 pulp milljoini venture company with
Ternbec lnc.a of Canada. This was underhken in order to supply pulp for he Group's VSF opentons. lt also decided to
tie up with Sunlife Financ'Blof Canada, a financial services compatry, wih a vie,rr to expand ib financial seruices business
in 1999. Another landmark restructudng by KM Birla vras tlre decision to consolidate IndoGulfs copper business witlt
Hindalco. This was underbken with an objeclfue of unifiing the Group's non-fenous mebls businesses, and bansforming
Hindalcointoa ghballymrnpelilive non-fens;s mebb porerho:saHedecided bfocuson tre aspecb of marketleadership
and size. With an aim to remain among ttre top three playens in ib business, KM Bida decided to reduce the Goup's
dependence on fiber-based business where ib market share::esbw. lnstead he decided to concenbate on non-fenous
metals as hererrras less compelition and Hi'rdalm already had atrig presence in the aluminumsecbr.
KM Birfa also brotght in oher key chaoges. In order to do away with the customary'babu+ulfurd, he inhoduced a
360-degree feedback program in 1999 trat permitted managers to raise questions over his leadership style, managedal
ability and also personal baib. According to tris feedback, the verdbt of he managas v,as trat he delegated tre uork well
and also had a vision. But he could notcleafy de{ine what he expected fom his employees. He, soon afier the feedback,
issued each senior manager a sixjage letta mentioning the areas of imprwementand his expecbtions.?a In 1999, KM
tan he son fll p?a's *rocs at 8|ida 7, w,iv.asiabuinssveek con
rbi4
8ih' r|m
lbngdm'Tradorndic
w dchai* lom edrry pqy'c" whcsztrEgs'trt DeEmbB 200+'bdrtt 2005
1r fftrg': Gambt'. tt r Esqi Tw. wa$dirb.cq, lrat 27r 2005
Tlitnodd bq!6m-t alt}t !?cd. of
FenabilV..sdtddnlt
ad goilfr
'Ata n lrcia'titg {zt t: bcm r ddr b hc hg'. s*cmridnahdafncroq Sdctt&slF 2|)03
rilr,.dt bih.m
Tcnrbcciirla*r9i{car&dffi prodEbw?ry d6trtEdhlbhAncdn.d Frncah2004r'th sle olepminaclf 9lblinrd3m ll,000oCstcc{lQrrdEd
m 50 mld pu$, prpc nd mod pdwf rnftduitrgd3
frmg.|rst hl$t Iltr End of lhr$loTort?', fttattrircsdoernaC' Odobc f 20O
{ffi
'
Aditya Birla Group under Kumar Mangaiam Birla: Can ,.
""r*:;:;lr:rJ
Birla launched 0pAdityaBirlaScholanhips to promote s<ebnceamongheshrdentconrmunity b culliyate tre leaders of
tornrcnow. Hesaid, tullivatng a nalgeneralion of managersandfostahga participaliveculbre are krybtreincreasingf
energetic,peopbcenbred,andperfornanc+focusedq.iliretratvleaspirefor.% HealsolaunchedAdtyaBLhAunrdsl
in 1999 whereteam achiaremenb are recognized everyyear. Birla had also implemented tre Organizational Health
Survey by the hte 1990s, which measured fre 'Happrness atWort( index. This
rras
canied out in order to back tlre
employees' safishclicn.
In the yea2000, be Group entered into ebusiness iirough an alliance of ib softv'rare division, Birla Softurare and
Ccrsulbncy Savices (BCSSI
y/itr
La son Sofiraet (USA) The Group's aluminum dMsion Hindalco acqrired ahrminum
maker lndal in 2000 to stenghen its psition as tre ma*etleader. The Gioup's telecom dvision SirlaAT&T
irined
hands
wih TabGrory'n 2000wihan ideaof making telemnrmunizdon onedhecorebusinesses dheGroup.ln tre sameyear,
theGrup's nmtdvesifiedmngbmeratq Indian Rayon,acquired MadunGannenb orerseas brand righbforinbmalbnal
brands like Louis Phillipe, \hn Heusen and Allen Soliy. Ail trese acquisitions made Indian Rayon ihe market leader in
branded apparels in lndia-2r
The Goup also acqrired PSI Dah Systems, a softran nnjor, fom Groupe Bullt of Fnnce in 2001. In 2002, lndan
Rayon,hehsrdabrdlvbbnoflndianRayon,entercdintoa50:S0jcintvenfurewitrNGKil dJapanbgainaccessbnanr
productand manuhctdng bchnology and fur[rerstrengfrened Group's leadership posilion. KM Birlaalso divesbd tre
Grorp'sshkeinlr/angloreRefineriesandPehochemic*Ltd.(MRPL)bOilandNatunlGasCorponlion(ONGC)stto
ralionalizeibbus'nnessporffCio.According toanalysb, frbsfategyindicated fratKM Birlawanted b gdoutof businesses
where he Groupuas snnllplayen and sFengthen he businesses where $e Group had core competencies and had to
consofidatefurfier.il ln 208, tre Group inco'pcrabd Liaafng tsir,la Carbon in China, expanding ib inbmalional business
furha. The Grup pusued backward inbgratlon as part ofib consdidalion sfabgy. lt acquired both Nifly mines and Mount
Gordon oppamlnes ofAustal'a b source rarmatsriialfu'lts mppersneltaatDahej, Gujaratand become acompetlive
copper playerin he global arena. In 2004, the Group acquired contolling shke in the cement business of Larsen and
Toubro3 b brm a nar conrpany Ult'a Tech CemenL
In2005,theGrotpbecamelndia'slargestexprterofcementandclinker-x Cementsectorof fieGroupconiributed
around 16.'lo,6of he Group's totaitrmwerin 20O5
lExhibit2l.
KM Birla also merged IndoGulf and Birla GlobalFinance
Ltd.5 with Indian Rayon to createAdi$a Birla Nuvo. This was done to reduce he cross-holdings across the different
companies dfteGroup.TheGrorpalso decided tosetupawodd+lass aluminum projectin Orissa ln aderbconsolidate
ib position asoneof thelargestaluminum producers inAsia
[Exhibit3J.
Gaining ma*et leadership, productivity gains,
economies ofscaleand operalionaleffciencies were tTemerjorfacton behindtheconsolidalion process.Aditya BidaGroup
also became Indn's fiini hrgestconglomerate behind ReFance andTab Grarp, wifr rwenues ofoyer[,,1R 33,000 crores
in 20O5.$
KMBirla alsobratghtinsomemanagerialchangesin treGroup. Before KM Birla boktrechairnnmhip, trehienrctry
in the Grotp was detarnined by senioity instead of mait fle changed trb by abotbh ngheGratp's\tunb$4ornb polbl
and instifuteda performance appnisalsysiem. He decidedto implementperfornnnce managernentslnbms, rwiewed
compensatiom and accenfuabd on taining to bring in maitocncy. He also shrbd a prognm to dwelop high-potenlial
managers hatcompbedof dwelqping skills trrough inter+nithansferandoverseas assignmenb. Hepenonallyled tre
recruibrent pngram ftom business schools. He also brought abofichanges in hereporting system being followed at tre
Grotp.
lfan-gcm"rf in Asic Thc Erd of ltbmb{oTomb?', op.
:(
Th's ale& idtdcd avrards llc llc lmc adricvcnr ql
atai ,:'..np pofust ::ai. odCa;ong leaders awards
rmgd dtrF
ts
Lmo Sdnarc is a irf.ndind
F{ilc
of sfaFire e.t frrirg ii:3) shr: bacd h USA h ftsd
ta AO{ I rc?ct.d totat rru d 596.3 ,rllo
'
tr emgmql hAi.Th: Erd dlbrbbTobT. opcl.
,
G6t'P. &I (C$ tnorn r &f Oqdr 6 rirylt 8r{ L | *rdt aflfit3 srgrq b.*d h tmddFl Eamq orlridc
p.ir,
'
tlGK b | &p- brcd conpny**ni: ilo h: mlbdui; C irJ&n
tr
oil@ ie r
PUbft
sdr p&dm onprry h Indr ll ir t fr"':n aoo mrry. t! nod
y*.d.
eogcrt b be
0y
rntd dCbaim) ufrihip n* of lrda! m,& dl
podrtm ad 8l *of l'de's nnd p podrcdot ll h !* ligfrd pd?clirg s+rjo h hdt
,
wdVCih,m
5
Lrs t Td$F tirtd is lr'&l l'gcC ltlirqhg ad ottrtJdim dElotrrb fri rddirml rlccds in lT drd dcdid tuiE
!
lrw.dlyetilr.m
I
lwrdrNrBihGtofthtUt"E.h19S6btlEfeyr a-Sqpbst:itohetr..rddsoiccbu*r*lhe CongarrywmdrBih0ddFset-tlFGn)h
i93l-
x
wadtyatih.m
.ffi
306-043-1
Aditya Birla Group un
jerKumar
Mangalam Birla. Can he Manage fre Mandate?
The top 20 executives of the Group, who had greater responsibilities in the Group, could report direciiy to KM Bida,
trerebygMng tremcompletefreedom b run trelrbusinesses, andatthesame time holding them more accounbbleforheir
ierformance.
KM Birla said, 'Delegation for me is given. lf the person feels that he can't hke responsibility hen I am he
wrongpersonbworkfor." BasantKumarBirh,fatherofAVBirl4said,KumarMangalam'swo*ingrnrdelismmpletety
difierentfrom his fatrer's. Kumar Mangalam believes in delegalicn of ponrer. His style is more.Group oriented.sr Santupt
Misra, oneof the mostimportantHR execulives of theGrorp, sairf"Mr. Birlashrtsftom a position oftustandconlinuesio
doSo unless prwen othen*ise, butitis in noway abdicalion. Hehas his ovm antennae and picks rare moments to assess
people.lfyorpassmusterattrosepoinb,trenyorhareh'shuslbrever.4 SaneralanalystsalsopnisedKMBirla'sstyle
offunclioning.
Analysbwereof freviewtlrathemreof KM Birla's managenentstylewere trequalifes of endunnceandpersuasion.
The negoliaiion forhe Group's acquisilion of Larsen & Toubro's (L&T) cement division was a suihble example of iL The
negotialions lasted orertwoyears and KM Birla keptpursuing itpersistentV tillhe clinched tre deal.A.M. Naik, Chairman
and Managlng Director, L&L said, tlis style, very slmply pu( b to win over tre person across the hble witr a lotoi patience.
He
justwon'tgiveup. Heis verychanning andfriendty wen in trethickof negoliations. He geb o<ac0ywhatheuanb by
actually winning you over.{
KM Birla, dudng histenure, alsoemployeda numberofwomenmanagers unlike hispredecesson.When hehadhken
oreraschairman, herewereveryfewwomen managers, butasdmrly20O5women canstifubd morethan 6%dGrottp's
employeeslt Shailendra Jain, President of Grasim, said, lVhat changed under he young Birla, however were the
expectalionsfrombeemplryees. Botr G.D. Birla andAV. Birlawere morefocused on relatively shorttermgoals, but$e
cunent chairman hkes a longterm viary and while he
's
less dernanding in tlre short term he is far more demanding in the
long run. lnilially; he''ras tying b undershnd; now he b in complete command. Earlier he would ask, now he gives us he
direction.'42
Analysb beliwed tratKM Birla has began to think big in recenttimes. ln he beginning, he usually used tofocus more
on exhacting value raherfran betting big on growfr. Unlike his early days as the chairman of theGroup, he expanded his
business empire through various acquisitions. In 2000, he Group acquired tre INR 1,750 crore Indal b become he largest
playain aluminum business inAsia6 and in 2005 he Group acquired L&T making il $e largest cement company in lndrla.
According to an arlicle published inThe Economic Imes, The Group's acquisitions bear bstimony b Kumar Nlangalam s
aggression in trema*etry Asof 2005, Kumar Mangalam Birla 38, chairman of one of the oldestfamily business houses
in India, has succeeded not only in sustaining the growth of Aditya Birla Group, but has also made it one of the most
diversified conglomerates inAsia. But analysts beliared trat therewere sareral challenges ahead.
Challenges Ahead
Despite remaining profitsbie, the compan/s growtr has beensloweras compared to ib peer:s in tre recentpast lthas
been reflecled in tre stock nnrkel where'tts marketcapibtzation of INR 30,000 crores is less tran ib tobl tumover.
. Although tre Group has become ttre king of commodilies in India by becoming the largest producers of cement,
aluminum and insulators and also leading manufucfurers of viscose shple fiber, carbon black, viscose filament yam,5
analysts befiwed thatheGrorp's biggestchallengerestedin making ib commcdity businessof aluminum,viscceshple
fber and fertilizer more compefilive and also valuable on ttre stock market According to an article in Eusiness loday, 'After
all, theGranp's marketcap todayis much less han ib orremllrevenues.lts noordinarychallenge. But,henhehas prwed
that he is no ordinary young man."
e
The Ogrrhation [bt', op.tit
t
1s he Biila rumba me?F, op.cil-
r
lbid.
.
Thc Organizdion Man. op.cit
't Trarsbrmatlon ncil atchcmisb tom ordrary peoplc', op.cL
a
Thc lfirgs Ga'rntit', g.d.
ilAftcr
ar trcir-nisirg sbrl il'r bccn a dadr to ha top, op.ot
r
lbid.
t'
Ja1*2, Ro*ri 'Thc Eg B of lndn &rsirpsC. rt*v.h.rsirpss{oda7.oom. Deccmbcr 2lr 200:l
t
Thc Orgnirdion l*an'. opciL
ffi
306-043-1
Aditya Bida Group under Kumar Mangalam Birla: Can he Manage the Mandate?
Though fteGroup hasforayed into Telecom and InfoTech consulting in 1995 and 2000 respecfvely, itis stilla smafi
player ln tre ma*et Aditya Birla Grrup has excelled in he commodi6es business and is one of tre larest cost producea
of nmtoffremnunodiEes itmanuhcfures. Butibfu[rre bstlies in afraining leadership posilion ln cusbnBrodenteJ Uusl.'ess-
Thechallengaalsolies in consolidating ibold businessesandathesamelimeexpanding
fre newemnonry businesses-
In the days ofAV Birla, ttre Group had to dealwih the exiernalenvironment like obhining ficenses, permib and
cleanances from tre govanment
But ln present day scenario KM Birla's main challenge lies in combdng tre very compbx
nafureof hemarketlike hriffbaniens which has gone do,rn considerably.The shndardsforqualityandcos[ competence
hatealso become a crucialfactorforsurvival. Commenling on KM Birla, R. Gopalakrishnan, o<eculfuedirecbr,TaLSons,
said lle (KMBit'h) has assembledan impressive bunchofprofessionals andhelistenstotrem,wirbhe himself scans tre
envionnentbanlic'4latectrarges.v
KM$rlabelisrestratfiefourmstlmporhntfactmihatrarurlddetermineheallifude
of heGroupbsuccessin trefuturearescale,effcienry,managementof
cashflortrs and dwelopmentofskillsof his people.
Analysb fed trat setting bigger challenges and offering incenlives to achieve trem would 6e tre key in preparing tre
organizationforgrowth. KM Birlasaid The task is in differentiatingbetween a good performeranda performer.'iThe
biggest challenge trat lies ahead for KM Birla, named Young Global Leader' by World Economic Fonrm (Daos) in 2004
[Annexure
1], istoenter0re listof Fortune500companies by treendof CI10, which is oneof his tiggerdreams.
The Group has been consistenty planning to expand its globai presence. But ttre challenge fes ln sushining ib
leadership posilions in ib cue businesses. Also KM Birla has to play a malx role in mairnhlnirng a hannony among tre-op
larel management in cultrnliy divercffied working Group. lt is also imporhnt to create a itong hurnan resourie base.
Another big bstfor KM Birla is changing this patiarchal Grorp into a maitrcracy based Grorp. According to an article
published in Er.rsiness Sfandard,'Attretop sib KunnrMangalam Birl4 and despite fre delegation cfauhority, people stilt
preferbunitfortsabu
s'orderdirecs.Ghanging this mindsetisclearly Birla's biggestchallengenow.'o
'
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306-0 43-1
Aditya Birla Group underKumar Mangalam Birta: Can he Manage tre Mandate?
Exhibit I
Kumar Mangalam's Management Team
Santrupt Misra: Joined in 1996. Creditedwitr helplngprofessionalizetheGroup.
Sanjiv Aga: Joined tre Group in 1998 and presently b the managing dir-ector of Indian Rayon
S.K. Mitra: DirectorofGroup's FinancialSewbes
Shailendra Jain: WorkingwittheGrroupsincel965andistreheadofpulpandsbplefbrebusiness.
Debu Bhattacharya JoinedtheGroupinl99SandisheManagingDirec{orofHindalcolndustries.
Bharat Singh: Heads Group wide mrporate stsategr and developmeni.
Saurabh Misra: GroupDirecbrofhecementbusins.HejoinedtlreGror:pin2000
Deepak Mittal: Group Directo-Acrylic Fibre and Tedles, Bangkok
S*r*t St
Exhibit 2
Contribution of
g*ctors
in fndia to Group tsrnover
?to of tatal turnovar
others
; insubtsrs
vFv
mining
cerbon blrch
gatuEirts
inlgtencp
fertilirers
<h+nricalr
sponge iron
textiLcs
vsF
(erie6t
copPer
alurni.niurn
O,:O 5,O
Sou rce: www.adityabirla. com
306-0 43-1
Aditya Birla Group under Kumar Mangalarn Ejirla: Can he Manage tl-te Mandate?
Exhibit 3
Aditya Birla Group Fac$ile
'
The Group is tre world leader in Viscose Staple Fiber.
.
OneotheAsia'slargestproducers'ofAluminurn
.
The Group is also the fastesigrowing copper company in Asia
.
lfs tre Bh largest producer of cernent in the world.
.
Worfds fourth largest produca of carbon bfack
.
The Group also has the world's largest singlelocation palm oil refinery.
.
Third largest producer of insulatcrs glcbally.
.
India s secondJargest producer of viscose filamentyam.
.
The numbertwo private sector insurance company in India.
.
Fourh-largestassetmanagementcornpanyinlndia
Compiled byEFA| Business SchoolCase Development0enhefom -wtru.adityabirla.corn andunmrllogspotmm
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306-0 43-1
Aditya Birla Group under Kurnar Mangalam Birla: Can he Manage tre Mandate?
Annexure 1
Various Awards Won by Kurnar Mangalam Birla
Chosen as heYoung GiobalLeaden bytheWorld Economic Forum (Davos)in 2004.
The EconomicTimesAwards named him as TheBusinessLeaderof heYea/forCorporate Excellence2002
2003.
.
&rsiness /nda selected him m he "Business Man of tr\eYear-2003 .
.
In 2003, he also won The Natonal Inslitrte of lndustrial Engineering's (NlTlE)'s The Lakshya - Business
VisionaryAward
.
He was also ranked among tre top fweAsian business baders forfie ?sian Business LeaderA'anrd 2002
sponsored by CNBCfl nsead.
.
Hewon the prestigious Inslitubof D'recbns Golden Pemc* NationalAvrrard forBusiness Leadership'in 2001.
.
Won The Gianb lntemationalAraard for tsusiness Exceilence and his Contibulion to he Industf in 2001.
.
Won The ffindtr/ran 77meC'tsusinessman of heYea/ award in 2001
.
Was honoured as The ManagementMan of heYear 1999-200f by he Bombay ManagementAssocialion.
.
ln 1998, he became trefirstand onlyindustiaiistbhave been appeinbd as a public nomineeon tre goveming
board of tre Securities and Exchange Board of India (SEBI) by tre Finance Ministy.
Compiled by ICFAI Business SchoolCase DevelopmentCentefrom -wvwv.adityabirlacom
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