So are we missing the obvious. That the Ambani brothers fight was just another episode of the great gala show which is - the Indian Family managed business.
If you have anything to do with India - you would know what I am talking about. A brilliant entrepreneurial mind (and no one would contest that Dhiru Bhai was) would create a business from nowhere. The mind would have married in the meantime in true Indian tradition. The business would grow big and successful. The family would also grow in the meantime. The mind finally retires (or dies) - the sons (now also daughters) would inherit the successful business. They will then fight with each other and the booty will eventually be distributed amongst them - sometimes after a bitter fight which might drag in courts for years. What happens next is legendary in Indian tradition :
A bitter competition among siblings erupt because most probably they are in the same business (their father's) and probably in the same region too. Also their relatives, friends, business associates everyone is similar, and hence come what may, they will be compared for every step they take, for every failure they face or every success they achieve. An ego tussle follows. Sometimes, scheming against each other happens. One of them could turn out to be a winner. Most often however - the two (or more) survive but each of them smaller, weaker and more tired. The business in the meantime suffers. (sounds familiar - ahhm. In fact, you have seen this being played out in the media in the present case).
The division of business leaves the business weaker. Resources shrink, debts grow, synergies dilute. The team (father's) is dismayed, confused due to divided loyalties. Some leave - others go into a shell. New core team arrives - often with those who wish to cash in on opportunity making it all worse.
These brothers reach retirement and the next generation is ready - history repeats - businesses gets further divided - fights intensify. Gradually, it reaches a stage where the all important question - so gruellingly discussed in B-Schools - is forgotten. What business are we in? I have cut the juicy - soap stuff where the wives, the vamps and the uncles/aunts/jijas and Bahus play their role in the mess.
All across India in every village, from farmers to merchants, from mill owners to Business groups - this drama has been played out year after year, generation after generation. Ambanis just happen to be the most rich family out there.
Now !! if Ambanis is the typical Indian Gujarati family - and I think they are, every bit of them - this drama is far from over. Among friends and public - Mukesh and Nita have played the archtypical avancular big brother claiming that - "The bitterness should now be put to rest". What the other camp will most probably read this as (no matter what the true intentions of Mukesh are) - "See they are saying - accept that you have beend defeated".
Anil might not have the system to digest what can only be called a clear slap in the face. He went to great extent coming up with front page ads claiming loss of shareholder value & national treason in the brother's companies. Now his compnies lost 10000 crores in market cap in just one day. It is tough to believe that he will keep quiet. He is only waiting for the negotiations on the Gas deal to pan out.
Mukesh has managed his image quite well till now. So he will keep playing the smart backdoor manouverer. Anil should now learn that too much exposure is a risky game and so most of this story will now be played out more quietly.
Sadly, the shareholders remain at the mercy of these brothers, their moods and tantrums. Despite being the largest shareholder business - the Reliance group is managed in the purely Indian family managed business style. Not many think of questioning the competence of the two brothers to manage these businesses. Not one would bother to question the competence of the next generation.
So do you think I am wrong if - I plan my retirement as shareholder of Tatas, Infosys, ITC or/and Wipros rather then of Reliance?
"If you have anything to do with India - you would know what I am talking about. A brilliant entrepreneurial mind (and no one would contest that Dhiru Bhai was) would create a business from nowhere. The mind would have married in the meantime in true Indian tradition. The business would grow big and successful. The family would also grow in the meantime"
ReplyDeleteExcellent Lines, I'll like to quote them some where, some time, sir. :)
The mind finally retires (or dies) - the sons (now also daughters) would inherit the successful business.
And thanks for mentioning daughters in this one. :)
But why so much pain for the mere gas-sy "Ambanis"?
And certainly, you won' be completely wrong, ending up share-holding anything other than Reliance, but won't that make it a dull game to be played then?
Why would a young blood like yours, retire old, following conventions?
No doubts, one would like to keep his/her sweat-earned moolah in secure hands at that stage of life, secured enough to be bequest-ed by their future generations of course. But what if, the next that happens, is all a mere "legendary in Indian tradition"??
And is that all, you'll leave them with, to be learnt? I think a smart investor always makes his way out, how-so-ever "Smart" these "Reliance Smarts" be!
[I certainly agree though, that these Reliance guys are loosing their "Goodwill" like anything, the process has already crossed its initial stages, that too in their own territorial grounds: exemplifying my own experience with Reliance Capital here :)]
P.S. And now that I am in a role of your VA+PD faculty, I observe a lot of Grammatical / Spelling errors here ;-)
[To be read as: See, how loyal I am, even on Sundays! ;-)]
[I understand you must be busy enough to proof-read it and they were mere typos].
On behalf of all your readers: Can we demand some posts from you on some demanding topics in future?
Hi !! Ahyta
ReplyDeleteThanks for this earlier then expected response. I generally post what I write and proof read them later. Guess, I will have to change that habit soon enough.
I don't know about demanding topics - I just type when something clicks (to me that is). You might like to comment on what you call demanding topics.
Cheers and thanks for following my blog.
-Akash
Arey Sir, Thanks kis baat ka, it is always an honor for us to listen to you.
ReplyDeleteSorry for a late response, was busy with work. ;-)
And.. ahhh! are you trying to embarrass me, by "mis-spelling" my name? ;-)
Well, the demanding topics, I don't know if it'll be right to put them on this public domain, but, since I have done a case study on CH-E merger, I wanted to hear more of it, directly from you. So, I wished to read some of your thoughts on the same, if possible, here on your blog.
You say: I just type when something clicks (to me that is).
I say: Who presses your button?? :P
Click! Click! Say cheese! and write frequently please. :)
Mukesh Ambani had always been the 'strategist', the shy, right hand man of Dhirubhai Ambani, while Anil had always projected himself as the 'outgoing', attention-loving richie. It was only after Mr. Dhirubhai Ambani's death that the 'Strategist' showed that how good any industrialist could be at arm twisting :).
ReplyDeleteIncidently, Mukesh is a Stanford Graduate and Anil is a Wharton alumni. Be it expansion plans or acquisitions, Anil was always a meek shadow of Mukesh with the latter exercising his tactics and rich experience of being the closest aid of Dhirubhai, something that Anil missed out on.
BTW, Anil also holds the distinction of topping Business Sheet's "world's biggest loser" list of business leaders who lost money in 2008's recession, which brought him out of the top ten list to number 34 in 2009. Guess that Wharton wouldn't be too pleased with a Stanfordian edging out one of its pupil.
Hello !! Ram. cool obserations. Worth another post.
ReplyDeleteHi Akash,
ReplyDeleteSorry for the late response, but, I guess it wouldn't have come at the right time, with Anil's ADAG kneeling before Mukesh (the Strategist :) ... ) last week. Guess that everyone knew that this one was on the cards since day one of the 'Ambani-bros' war. Definitely worth another post from you. And BTW, I'm waiting for a review of my book from your end :) . TC...