1. Which internal and external factors have helped Reliance group to grow into its current position? Reliance group is an example of a well-managed company that has been able to take advantage of interior competitive advantage possibilities as well as exterior ones. On one hand, Reliance started out with Dhirubai Ambani by borrowing money from the Indian government, shifting towards textiles made out of synthetic plastic fibers and receiving benefits from government incentives and political connections at its origin and middle life cycle.
Reliance responded perfectly to the world leading industries at the time and acted as a pioneer in introducing them in the Indian market. As the world’s leading industry shifted from a high demand for plastics and textiles derived from plastics to petrochemicals and fuel production, the Reliance group did likewise by building petrochemical plants in India and tried to make the maximum profit out of what India had to offer to the world and itself at the time and had not been developed to its maximum potential yet.
On the other hand, government played a key role in Reliance success as it enabled the company to export worldwide and grow in domestically by reducing quotas and tariffs as well as taxes on the raw materials needed for manufacturing.
2. In which aspects has the management of Reliance group been typical for Indian management? In which aspects has it been atypical? Most of the aspects of the management of the Reliance group can be easily related to the way companies are managed in India. Reliance group is a family run company that depends gravely on the relationship between the siblings that own the company, all siblings had the father and founder as the center of the company and once he passed away the company was divided amongst the brothers and sisters.
Another typical Indian attribute is the diversification of the operations of the company, Ranging from petrochemical to eatable products or telecommunications. Each brother took care of a different sector and the gender role with a tendency towards masculinity and seniority was also seen when the company was divided giving the oldest of the brothers 70% of the market share of the company, 20% to the younger brother and only 5% to each one of the sisters. What was very atypical was the monochromic way the company has been run, however it can easily be explained due to the fact that they need to replicate the way the international monochromic market works that emulates the way US firms work.
3. Do you think Reliance Group has to transform its fundamentally to remain successful in the future? Yes, I do believe that Reliance group should find of way of not having to depend on the fluctuations of the global market as much as it does, Thus preventing the company from ever being as impacted as it was by the recent global crisis. I believe they should expand domestically as a way of having a “safe space” in case there is another crisis in the future and perhaps try to grow deeper ties with other Asian countries like Japan or China that did not suffer from the crisis at the scale that western economies did and that are geographically closer from India than many other western countries.
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