Description
Presentation on Leadership with example of Rahul Bajaj.
Hamara Bajaj
Values at Bajaj
Our Philosophy
• We approach our responsibilities with ambition and resourcefulness • We organise ourselves for a transparent and harmonious flow of work. • We respect sound theory and encourage creative experimentation. • And we make our workplace a source of pride.
We believe in
•
Transparency: In a commitment that the Fairness: To all stakeholders in the Company, Disclosure: Of all relevant financial and non-
business is managed along transparent lines
•
but especially to minority shareholders.
•
financial information in an easily understood manner
1
Hamara Bajaj •
Supervision: Of the Companys activities by a
professionally competent and independent board of directors. ''In every venture of yours, try to reach the top. If you do not succeed, it does not matter. It is the efforts which count.'' These words have guided Rahul Bajaj through his life……
2
Hamara Bajaj
Rahul Bajaj
Rahul Bajaj, one of the most respected businessmen today, has a multifaceted personality. From being just another student in Cathedral school to one of India’s most vociferous business magnates, Rahul’s journey has been long, fraught with excitement, criticism and accolade. He has accumulated wealth beyond anyone’s imagination. How did he reach this pinnacle of success? What is the secret behind this man’s success? We take you through his journey spanning six decades of peaks and troughs, applause and abase and joys and sorrows. Let the journey begin……
Childhood
On June 10,1938 Savitri Bajaj gave birth to a son who would eventually take over the reins of the Bajaj empire from his father, Kamalnayan.Rahul was raised in an intensely nationalistic family. Kamalnayan, Rahul’s father became a Congress member of the Parliament. Kamalnayan’s first priority was the nation and after Independence in 1947 he applied himself heart and soul to the business. This upbringing has imbibed nationalistic values and pride in Rahul. Rahul was brought up in a spartan atmosphere unusual for business family. Even though Rahul’s father grew up in Gandhi’s ascetic ashram at Wardha, Rahul, Suman and Shishir grew up in relatively more luxurious surroundings
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Hamara Bajaj
at Carmichael road. Rahul’s values are more middle class than aristocrat. He spent his holidays playing with workers children in the family’s factory. As an adolescent Rahul enjoyed boxing as a hobby. He schooled at Bombays elite Cathedral and John Connon School and graduated from Delhi’s St. Stephen College with a B.A. (Hons) in economics in 1958. Back in Bombay Bajaj did a two-year stint at Bajaj Electricals, clocking after morning lectures at the government law college. He spent most of 1961-62 as a junior purchase officer at Mukand and gained some work experience. He left for Harvard after his stint at Mukand. In December 1961 he married Rupa Golap. They have 3 children, Rajeev, Sanjeev and Sunaina Rahul Bajaj graduated from Harvard in 1964 at the age of 26 with an MBA degree. When he returned from Harvard in 1965, his father Kamalnayan Bajaj put him through a rigorous three-year training program as a shop-floor apprentice. In 1968, at the age of 30, Rahul was given a free hand to run the company.
At Bajaj Auto
Rahul Bajaj has faced some tough times at Bajaj Auto but he has triumphed and emerged unscathed from them. Here are some of the biggest challenges that he has faced as CEO.
Rift between Firodias and Bajaj
Rahul’s first job was as a deputy general manager. At that time his boss was Naval.K.Firodia, the then CEO of Bajaj Auto and MD of Bajaj Tempo. Soon after Rahul joined the business, the Firodias began buying shares in the market, possibly from mid-1967 onwards, trying to quietly strengthen their position in Bajaj Auto. Ironically, Rahul was looking after the commercial side of the business at that time and so the shares that the Firodias had bought came to him for transfer, which he refused to do. This was the genesis for the fight. The battle for Bajaj Auto was first fought in the boardroom, then on the stock market and finally in courtrooms. Rahul Bajaj refused to give up easily and more than matched the Firodias when they upped the price to Rs.262.5, quoting a whopping Rs.411 for a share that was priced at Rs.260.
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Hamara Bajaj
The Firodia’s walked out disdainfully saying they “did not have that kind of money to throw”. The rift between the two families continues even today. Rahul holds 26% in Bajaj Tempo (a Firodia Company), which enables him to block special resolutions. This just shows that Rahul does not forgive and forget easily.
Piaggio
Piaggio and the Bajaj Group tied up in early 1960, to assemble scooters in India. The collaboration was highly successful in India. It came to an end in 1971, when the Indira Gandhi government refused permission to extend its term. On the day the collaboration officially ended, Piaggio wrote to Bajaj, thanking him for years of “really friendly co-operation” and wishing Bajaj Auto “the most successful future”. Then a decade later, Piaggio sued Bajaj in Californian courts for pilfering Piaggio designs. Bajaj is reported to have said that this was a knee-jerk reaction to Bajaj’s export thrust even though there was no real competition to Piaggio from Bajaj. But that was not all. Rahul hired Baker- McKenzie one of the largest international law firms in the world, pouring 1 million dollars into his defence, which was a huge figure for any Indian company at that time. In USA Piaggio offered an out of court settlement in which they scaled down the demand for millions of dollars of compensation to only $50,000. However Bajaj refused to budge and in the final settlement only gave a promise that he would not sell Bajaj scooters of Piaggio design in the US and by then there was no demand for the scooters in the US anyway. In Germany even though he lost in the lower courts, Bajaj won in the Supreme Court. During the 4-5 years while he was battling out Piaggio in the courtrooms, Bajaj’s exports suffered. But Bajaj went on with the legal duel only because he refused to take the accusation lying down and wanted to come out clean. The following quote reveals the sportsman spirit of Rahul Bajaj, “journalist like to dramatise, but quite frankly there was no hate. It was a serious business fight. In their position, I might have also done the same bloody thing.”
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Hamara Bajaj
Through all the three incidents Rahul’s spirit and determination are apparent. He never gave up on something he believed strongly in, stuck by his principles, was undeterred even if things were against him and when he ventured into something, he saw it through the end. Criticising or ridiculing his opponents was just not his style.
Characteristics of Rahul Bajaj
Compared to his peers Bajaj appears colourless rather than dynamic. Squeaky clean, he has never been involved in shady takeovers. He doesn’t engage in street fights with other industrial magnates; nor has he ever hijacked someone else’s project. He hasn’t burnt tyres during a hard drive for meteoric growth. On the contrary, he is something of a plodder, routinely burning the midnight oil, and devoted to the virtues of hard work. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the Company today, are often traced back to its birth during those long days of relentless devotion to a common cause and to its owners own values. Since childhood, Rahul has been used to being in the driver’s seat. In school he normally stood first in the class. He was a prefect, house captain and captain of the boxing team. His leadership qualities can be clearly seen from the time he was in school. Rahul is a simple man and the Mercedes he owns is the only status symbol he allows himself. He lives inside the industrial complex in a simple house. Rahul believes that actions speak louder than words. He does not believe in absentee landlordism, which is why he stays on the company grounds. He says, what he has to, with conviction and passion. He speaks to the point and the point is driven home strongly
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Hamara Bajaj
Bajaj’s appetite for media coverage is insatiable. He loves reading about his company and himself. He is the public face of Bajaj Auto whereas his sons work behind the scenes. Rahul Bajaj is very much is own man. Not one to suffer fools, he can be amazingly cruel to those not in his mental league. “People like me don't like to be told what is right, and to be told to follow what anyone says. I don't mind bearing that as long as you also listen to me, and by me, I mean my country,” he says. His attention span is short but his judgement is incisive. He is classified as an ‘A’ type hyperactive who is always fidgeting. Rahul is analytical and moves very cautiously. Being neither proactive nor a risk-taker, he always waited for situations to arise, never thinking of them in advance. He waited for the Indian market to be opened to foreign competition before he undertook technological innovations.
Visions
Rahul Bajaj dreamt big and he put in every effort to realise his dreams. In 1994, Bajaj realized his dream of producing 1 million motor scooters a year after numerous problems. The firm cornered 46% of the market in motorcycles and two- and three-wheel scooters, aided by a highly successful joint venture with Japan's Kawasaki to produce a popular four-stroke, 100-cc bike. Bajaj's exports also zoomed. In addition to Bangladesh and West Asia, Bajaj products were now available in Iran and parts of Africa and Latin America. Almost from the day he joined Bajaj Auto, he dreamt of making the Indian company the world’s leading manufacturer of 2 wheelers. This was when Bajaj Auto had only 1 product, that too a Piaggio look-alike, and there was a 10 year waiting list. Yet in every interview he gave, Bajaj would talk about internationalisation, about the need to become world class, and so on. Asked once to spell what he meant by world class, he said, “the day 20% of my production is exported, I will say I am world class.” The company and Rahul are clearly working towards fulfilling that dream.
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Hamara Bajaj
Decision Making
Decision-making by consensus is not Rahul’s style and he continues to be the last word at Bajaj Auto. “I ask for other people's opinion in key matters and give them a fair hearing. But I don't take a vote. I make the decisions," he once said.
The Customer
He is a customer driven and an ethical person. When the Bajaj Chetak became famous, dealers charged customers huge premiums – unofficially to jump the queue. But Bajaj refused to exploit the situation. Holding the price line became the ethical issue, a modern twist to Gandhian trusteeship concepts imbibed during childhood. “Ensuring that the customer obtains the best possible product at the lowest cost and the employee gets a fair wage for a day’s work is the criterion of ethics of business”. He feels that the emerging global and electronic economy has placed the customer in the pilot's Seat and that Customer Relation Management has taken a new dimension. He says, “There should be no gap between promise and performance. Only then people- your customers, retailers will have faith in your capabilities to deliver what you promise.”
Acceptance
Not being one to shirk away from reality, Rahul Bajaj faces it head on and without fear. For eg. No one had expected the motorcycle market to be such a lucrative market. Admitting in an interview that they were a distant second to Hero Honda in that segment, he stated that that they should have seen this trend coming to India.
Employees
Rahul Bajaj considers people to be the most important assets of his company. According to him, People Management is a hands on job and not one that works by remote control. He treats his employees with respect and compassion.
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Hamara Bajaj
He says, “You have to give people a lot of independence. Allow them to make mistakes and then correct them on their own. People can make value addition to the organization and their growth is should not be restricted. They should be able to grow with the organization.” This philosophy is reflected in the fact that for thousands of its workers the factory was, for many years, the only hope of a secure future. One such a case is that of Pravin Chavan, who has been working at the factory since dropping out of school 23 years ago. “I have now built my own house. I have a provident fund, insurance scheme and can do whatever I want with that money," he told the BBC. "My job is secure, I feel confident and can provide good education for my children. Even in these expensive times my salary helps me to lead a contented, satisfactory life," he added.
Determination
Rahul Bajaj has tremendous determination and resilience. He would not accept defeat and despite the many pitfalls that he has faced, he has still emerged successful. But by the mid-1980s, Bajaj slipped as undisputed king of the road. His company began facing intense competition from a string of motorcycle jointventure companies that sprang up. Bajaj was simultaneously hit with a lawsuit by Piaggio of Italy, with whom his grandfather Jamnalal, the company founder, had signed a technical-collaboration deal in 1960. Piaggio claimed that Bajaj was violating an agreement forbidding the export of products made with Piaggio technology. Bajaj contested the suit and a court ruled in his company's favor in 1991. His troubles were far from over. A recession in the early 1990s caused an unexpected downturn in Bajaj Auto's profits. The CEO reacted by launching a major restructuring drive, converting Bajaj Auto from a purely productiondriven outfit to one with a marketing wing and a revamped R&D department. The strategy paid off.
Social Concern
Rahul Bajaj said the concept of corporate volunteering and corporate social responsibility had gained tremendous currency with the realisation that the shareholder was not the only stakeholder in a corporate initiative. Looking
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Hamara Bajaj
after the interests of the employees, vendors, customers and society in which the corporate operates were equally important. He said while creating wealth and making profits was necessary, there was growing recognition among companies of their responsibility in complementing the efforts of the Government in the field of social infrastructure, notable education and health as well as in sustainable human development
Criticisms
Bajaj is a clear leader in the world’s second largest scooter and two-wheeler market. Yet he is unable to take the next step, which is to become a global player. He has the world’s lowest costs; he has successfully withstood the challenge of Japanese competitors on his home ground; he is cash rich – making more profit than all his competitors put together. But he exports only 3 per cent of his output. Despite his awesome advantages, Bajaj does not have the confidence to take on the Hondas and Yamahas in the world market.
Rahul’s Belief
Bajaj believes that if Bajaj Auto cannot be a world player in its field, he does not deserve to diversify. He says, “you should diversify from a position of strength and not from a position of weakness.” As far as bajaj auto was concerned, he says that “I don't want to diversify. As far as Bajaj Auto is concerned, I want to stick to my core competence and I want to become truly multinational.”
Rahul Bajaj Today
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Hamara Bajaj
After decades of leading India's largest motor scooter company with an iron hand, industrialist Rahul Bajaj is finally mellowing. Until just a few years ago,the chairman and managing director of Bajaj Auto insisted on making every corporate decision himself. For that, he was often described as autocratic, inflexible and arrogant. Bajaj is a radically different man today. The "King of the Road," as he is known in local industry circles, has gradually distanced himself from the day-to-day running of his $1.4-billion company. In the last few years, he has delegated substantial control to his cousin, Madhur Bajaj, 43, and to his 29year-old son Rajiv. Younger son Sanjiv, 26, will soon join the company after completing his MBA at Harvard University. Rajiv has been trying to make Bajaj Auto synonymous with style and speed. Rahul Bajaj too agrees with his son and says, “His role is to give the company a new life and make it truly global in styling and product range.”
Rahul on retirement and succession
“I became 60 last June. Normally you should retire at 60. So I have stopped looking after the day-to-day work of Bajaj Auto but as I still remain chairman and MD, I am still responsible for the progress of the company. My cousin Madhur Bajaj is president of BAL and my two sons Rajiv and Sanjiv, who joined BAL in August 97 are vice-president, products, and general manager, corporate finance, respectively. As of now, it is very difficult to be very specific about succession. In India one has to be aware of the fact that this is a public limited company with 30,000 shareholders and if one has to be internationally competitive, one has to manage on merits. On the other hand, our family has a controlling interest and the Indian family goes by age and generation. According to me, the best guy to succeed me as the CEO, five years from now, is Rajiv. He is the one who is doing very well [with] new product development, production, quality and marketing.”
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Hamara Bajaj
Achievements of Rahul Bajaj
Despite his various shortcomings , Rahul Bajaj has had various achievements The posts that he holds are: Chairman of : Bajaj Auto Ltd, Bajaj Auto Finance Ltd, Maharashtra Scooters Ltd and Mukand Ltd. He has also been the past president of the Confederation of Indian Industry (CII) and the Society of Indian Automobile Manufacturers (SIAM). He is also the former Chairman of the World Economic Forum Council Rahul Bajaj was presented the Lokmanya Tilak Award in Pune for keeping the Indian industry flag flying in difficult times.
Some facts about his success story
It’s a general acceptance that the success of Bajaj auto is credited to Rahul Bajaj. He became the managing director on his father’s death in 1972. He made the Bajaj scooter so popular that a flourishing black market developed. A customer fortunate to be allotted a Chetak or super would sell it at double the price in the black market When Rahul joined Bajaj Auto, the company had a turnover of merely Rs 20 million making negligible profits. But, today, the same company has registered a turnover of Rs 35 billion and making a profit of Rs 4.40 billion. In the 1980’s for all his reputation as India’s hottest company, Reliance was not the India's fastest growing company. In the 80’s, Bajaj auto was the fastest growing company in India. During the decade, sales grew from 519m
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Hamara Bajaj
to 18.5bn, making for a 1,852 percent growth rate. In contrast, Dhirubhai Ambani’s reliance industries grew 1100 percent with sales moving from 2bn to 18.4 bn. By maintaining an iron-fisted control on cost and by continuously improving productivity to lower the cost per vehicle, Rahul Bajaj funded this growth almost entirely out of internal earnings. In 1987 Rahul Bajaj was offered the chairmanship of Indian airlines. He was the first person to be appointed to a public sector unit from the private sector. When he joined, the airline was facing a hell lot of problems. Some of them included airlines flight rarely taking off on time, morale was low, customer satisfaction even lower and aircraft maintenance dangerously poor because of a perennial shortage of planes. Incidents ran from bizarre and tragic to the ridiculous.By appointing Bajaj, Rajiv Gandhi had hoped to introduce greater efficiency and professionalism into the national carriers. Bajaj and the board set three objectives at the beginning, “ to increase aircraft availability, to streamline marketing practices and to intensify training inputs. By the end of his tenure, IA was reporting better profitability, had induced over a dozen new aircraft into its fleet, and was planning to increase its sales agents, which had remained frozen at 400 for 5 years.
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Hamara Bajaj
Rahul Bajajs advice to the youth of today
“In addition to hard work, team efforts, commitment and dedication, integrity and courage and honesty, in order to succeed in life, you also must have the guts to say ''no'' when necessary”
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doc_427803673.doc
Presentation on Leadership with example of Rahul Bajaj.
Hamara Bajaj
Values at Bajaj
Our Philosophy
• We approach our responsibilities with ambition and resourcefulness • We organise ourselves for a transparent and harmonious flow of work. • We respect sound theory and encourage creative experimentation. • And we make our workplace a source of pride.
We believe in
•
Transparency: In a commitment that the Fairness: To all stakeholders in the Company, Disclosure: Of all relevant financial and non-
business is managed along transparent lines
•
but especially to minority shareholders.
•
financial information in an easily understood manner
1
Hamara Bajaj •
Supervision: Of the Companys activities by a
professionally competent and independent board of directors. ''In every venture of yours, try to reach the top. If you do not succeed, it does not matter. It is the efforts which count.'' These words have guided Rahul Bajaj through his life……
2
Hamara Bajaj
Rahul Bajaj
Rahul Bajaj, one of the most respected businessmen today, has a multifaceted personality. From being just another student in Cathedral school to one of India’s most vociferous business magnates, Rahul’s journey has been long, fraught with excitement, criticism and accolade. He has accumulated wealth beyond anyone’s imagination. How did he reach this pinnacle of success? What is the secret behind this man’s success? We take you through his journey spanning six decades of peaks and troughs, applause and abase and joys and sorrows. Let the journey begin……
Childhood
On June 10,1938 Savitri Bajaj gave birth to a son who would eventually take over the reins of the Bajaj empire from his father, Kamalnayan.Rahul was raised in an intensely nationalistic family. Kamalnayan, Rahul’s father became a Congress member of the Parliament. Kamalnayan’s first priority was the nation and after Independence in 1947 he applied himself heart and soul to the business. This upbringing has imbibed nationalistic values and pride in Rahul. Rahul was brought up in a spartan atmosphere unusual for business family. Even though Rahul’s father grew up in Gandhi’s ascetic ashram at Wardha, Rahul, Suman and Shishir grew up in relatively more luxurious surroundings
3
Hamara Bajaj
at Carmichael road. Rahul’s values are more middle class than aristocrat. He spent his holidays playing with workers children in the family’s factory. As an adolescent Rahul enjoyed boxing as a hobby. He schooled at Bombays elite Cathedral and John Connon School and graduated from Delhi’s St. Stephen College with a B.A. (Hons) in economics in 1958. Back in Bombay Bajaj did a two-year stint at Bajaj Electricals, clocking after morning lectures at the government law college. He spent most of 1961-62 as a junior purchase officer at Mukand and gained some work experience. He left for Harvard after his stint at Mukand. In December 1961 he married Rupa Golap. They have 3 children, Rajeev, Sanjeev and Sunaina Rahul Bajaj graduated from Harvard in 1964 at the age of 26 with an MBA degree. When he returned from Harvard in 1965, his father Kamalnayan Bajaj put him through a rigorous three-year training program as a shop-floor apprentice. In 1968, at the age of 30, Rahul was given a free hand to run the company.
At Bajaj Auto
Rahul Bajaj has faced some tough times at Bajaj Auto but he has triumphed and emerged unscathed from them. Here are some of the biggest challenges that he has faced as CEO.
Rift between Firodias and Bajaj
Rahul’s first job was as a deputy general manager. At that time his boss was Naval.K.Firodia, the then CEO of Bajaj Auto and MD of Bajaj Tempo. Soon after Rahul joined the business, the Firodias began buying shares in the market, possibly from mid-1967 onwards, trying to quietly strengthen their position in Bajaj Auto. Ironically, Rahul was looking after the commercial side of the business at that time and so the shares that the Firodias had bought came to him for transfer, which he refused to do. This was the genesis for the fight. The battle for Bajaj Auto was first fought in the boardroom, then on the stock market and finally in courtrooms. Rahul Bajaj refused to give up easily and more than matched the Firodias when they upped the price to Rs.262.5, quoting a whopping Rs.411 for a share that was priced at Rs.260.
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Hamara Bajaj
The Firodia’s walked out disdainfully saying they “did not have that kind of money to throw”. The rift between the two families continues even today. Rahul holds 26% in Bajaj Tempo (a Firodia Company), which enables him to block special resolutions. This just shows that Rahul does not forgive and forget easily.
Piaggio
Piaggio and the Bajaj Group tied up in early 1960, to assemble scooters in India. The collaboration was highly successful in India. It came to an end in 1971, when the Indira Gandhi government refused permission to extend its term. On the day the collaboration officially ended, Piaggio wrote to Bajaj, thanking him for years of “really friendly co-operation” and wishing Bajaj Auto “the most successful future”. Then a decade later, Piaggio sued Bajaj in Californian courts for pilfering Piaggio designs. Bajaj is reported to have said that this was a knee-jerk reaction to Bajaj’s export thrust even though there was no real competition to Piaggio from Bajaj. But that was not all. Rahul hired Baker- McKenzie one of the largest international law firms in the world, pouring 1 million dollars into his defence, which was a huge figure for any Indian company at that time. In USA Piaggio offered an out of court settlement in which they scaled down the demand for millions of dollars of compensation to only $50,000. However Bajaj refused to budge and in the final settlement only gave a promise that he would not sell Bajaj scooters of Piaggio design in the US and by then there was no demand for the scooters in the US anyway. In Germany even though he lost in the lower courts, Bajaj won in the Supreme Court. During the 4-5 years while he was battling out Piaggio in the courtrooms, Bajaj’s exports suffered. But Bajaj went on with the legal duel only because he refused to take the accusation lying down and wanted to come out clean. The following quote reveals the sportsman spirit of Rahul Bajaj, “journalist like to dramatise, but quite frankly there was no hate. It was a serious business fight. In their position, I might have also done the same bloody thing.”
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Hamara Bajaj
Through all the three incidents Rahul’s spirit and determination are apparent. He never gave up on something he believed strongly in, stuck by his principles, was undeterred even if things were against him and when he ventured into something, he saw it through the end. Criticising or ridiculing his opponents was just not his style.
Characteristics of Rahul Bajaj
Compared to his peers Bajaj appears colourless rather than dynamic. Squeaky clean, he has never been involved in shady takeovers. He doesn’t engage in street fights with other industrial magnates; nor has he ever hijacked someone else’s project. He hasn’t burnt tyres during a hard drive for meteoric growth. On the contrary, he is something of a plodder, routinely burning the midnight oil, and devoted to the virtues of hard work. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the Company today, are often traced back to its birth during those long days of relentless devotion to a common cause and to its owners own values. Since childhood, Rahul has been used to being in the driver’s seat. In school he normally stood first in the class. He was a prefect, house captain and captain of the boxing team. His leadership qualities can be clearly seen from the time he was in school. Rahul is a simple man and the Mercedes he owns is the only status symbol he allows himself. He lives inside the industrial complex in a simple house. Rahul believes that actions speak louder than words. He does not believe in absentee landlordism, which is why he stays on the company grounds. He says, what he has to, with conviction and passion. He speaks to the point and the point is driven home strongly
6
Hamara Bajaj
Bajaj’s appetite for media coverage is insatiable. He loves reading about his company and himself. He is the public face of Bajaj Auto whereas his sons work behind the scenes. Rahul Bajaj is very much is own man. Not one to suffer fools, he can be amazingly cruel to those not in his mental league. “People like me don't like to be told what is right, and to be told to follow what anyone says. I don't mind bearing that as long as you also listen to me, and by me, I mean my country,” he says. His attention span is short but his judgement is incisive. He is classified as an ‘A’ type hyperactive who is always fidgeting. Rahul is analytical and moves very cautiously. Being neither proactive nor a risk-taker, he always waited for situations to arise, never thinking of them in advance. He waited for the Indian market to be opened to foreign competition before he undertook technological innovations.
Visions
Rahul Bajaj dreamt big and he put in every effort to realise his dreams. In 1994, Bajaj realized his dream of producing 1 million motor scooters a year after numerous problems. The firm cornered 46% of the market in motorcycles and two- and three-wheel scooters, aided by a highly successful joint venture with Japan's Kawasaki to produce a popular four-stroke, 100-cc bike. Bajaj's exports also zoomed. In addition to Bangladesh and West Asia, Bajaj products were now available in Iran and parts of Africa and Latin America. Almost from the day he joined Bajaj Auto, he dreamt of making the Indian company the world’s leading manufacturer of 2 wheelers. This was when Bajaj Auto had only 1 product, that too a Piaggio look-alike, and there was a 10 year waiting list. Yet in every interview he gave, Bajaj would talk about internationalisation, about the need to become world class, and so on. Asked once to spell what he meant by world class, he said, “the day 20% of my production is exported, I will say I am world class.” The company and Rahul are clearly working towards fulfilling that dream.
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Hamara Bajaj
Decision Making
Decision-making by consensus is not Rahul’s style and he continues to be the last word at Bajaj Auto. “I ask for other people's opinion in key matters and give them a fair hearing. But I don't take a vote. I make the decisions," he once said.
The Customer
He is a customer driven and an ethical person. When the Bajaj Chetak became famous, dealers charged customers huge premiums – unofficially to jump the queue. But Bajaj refused to exploit the situation. Holding the price line became the ethical issue, a modern twist to Gandhian trusteeship concepts imbibed during childhood. “Ensuring that the customer obtains the best possible product at the lowest cost and the employee gets a fair wage for a day’s work is the criterion of ethics of business”. He feels that the emerging global and electronic economy has placed the customer in the pilot's Seat and that Customer Relation Management has taken a new dimension. He says, “There should be no gap between promise and performance. Only then people- your customers, retailers will have faith in your capabilities to deliver what you promise.”
Acceptance
Not being one to shirk away from reality, Rahul Bajaj faces it head on and without fear. For eg. No one had expected the motorcycle market to be such a lucrative market. Admitting in an interview that they were a distant second to Hero Honda in that segment, he stated that that they should have seen this trend coming to India.
Employees
Rahul Bajaj considers people to be the most important assets of his company. According to him, People Management is a hands on job and not one that works by remote control. He treats his employees with respect and compassion.
8
Hamara Bajaj
He says, “You have to give people a lot of independence. Allow them to make mistakes and then correct them on their own. People can make value addition to the organization and their growth is should not be restricted. They should be able to grow with the organization.” This philosophy is reflected in the fact that for thousands of its workers the factory was, for many years, the only hope of a secure future. One such a case is that of Pravin Chavan, who has been working at the factory since dropping out of school 23 years ago. “I have now built my own house. I have a provident fund, insurance scheme and can do whatever I want with that money," he told the BBC. "My job is secure, I feel confident and can provide good education for my children. Even in these expensive times my salary helps me to lead a contented, satisfactory life," he added.
Determination
Rahul Bajaj has tremendous determination and resilience. He would not accept defeat and despite the many pitfalls that he has faced, he has still emerged successful. But by the mid-1980s, Bajaj slipped as undisputed king of the road. His company began facing intense competition from a string of motorcycle jointventure companies that sprang up. Bajaj was simultaneously hit with a lawsuit by Piaggio of Italy, with whom his grandfather Jamnalal, the company founder, had signed a technical-collaboration deal in 1960. Piaggio claimed that Bajaj was violating an agreement forbidding the export of products made with Piaggio technology. Bajaj contested the suit and a court ruled in his company's favor in 1991. His troubles were far from over. A recession in the early 1990s caused an unexpected downturn in Bajaj Auto's profits. The CEO reacted by launching a major restructuring drive, converting Bajaj Auto from a purely productiondriven outfit to one with a marketing wing and a revamped R&D department. The strategy paid off.
Social Concern
Rahul Bajaj said the concept of corporate volunteering and corporate social responsibility had gained tremendous currency with the realisation that the shareholder was not the only stakeholder in a corporate initiative. Looking
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after the interests of the employees, vendors, customers and society in which the corporate operates were equally important. He said while creating wealth and making profits was necessary, there was growing recognition among companies of their responsibility in complementing the efforts of the Government in the field of social infrastructure, notable education and health as well as in sustainable human development
Criticisms
Bajaj is a clear leader in the world’s second largest scooter and two-wheeler market. Yet he is unable to take the next step, which is to become a global player. He has the world’s lowest costs; he has successfully withstood the challenge of Japanese competitors on his home ground; he is cash rich – making more profit than all his competitors put together. But he exports only 3 per cent of his output. Despite his awesome advantages, Bajaj does not have the confidence to take on the Hondas and Yamahas in the world market.
Rahul’s Belief
Bajaj believes that if Bajaj Auto cannot be a world player in its field, he does not deserve to diversify. He says, “you should diversify from a position of strength and not from a position of weakness.” As far as bajaj auto was concerned, he says that “I don't want to diversify. As far as Bajaj Auto is concerned, I want to stick to my core competence and I want to become truly multinational.”
Rahul Bajaj Today
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After decades of leading India's largest motor scooter company with an iron hand, industrialist Rahul Bajaj is finally mellowing. Until just a few years ago,the chairman and managing director of Bajaj Auto insisted on making every corporate decision himself. For that, he was often described as autocratic, inflexible and arrogant. Bajaj is a radically different man today. The "King of the Road," as he is known in local industry circles, has gradually distanced himself from the day-to-day running of his $1.4-billion company. In the last few years, he has delegated substantial control to his cousin, Madhur Bajaj, 43, and to his 29year-old son Rajiv. Younger son Sanjiv, 26, will soon join the company after completing his MBA at Harvard University. Rajiv has been trying to make Bajaj Auto synonymous with style and speed. Rahul Bajaj too agrees with his son and says, “His role is to give the company a new life and make it truly global in styling and product range.”
Rahul on retirement and succession
“I became 60 last June. Normally you should retire at 60. So I have stopped looking after the day-to-day work of Bajaj Auto but as I still remain chairman and MD, I am still responsible for the progress of the company. My cousin Madhur Bajaj is president of BAL and my two sons Rajiv and Sanjiv, who joined BAL in August 97 are vice-president, products, and general manager, corporate finance, respectively. As of now, it is very difficult to be very specific about succession. In India one has to be aware of the fact that this is a public limited company with 30,000 shareholders and if one has to be internationally competitive, one has to manage on merits. On the other hand, our family has a controlling interest and the Indian family goes by age and generation. According to me, the best guy to succeed me as the CEO, five years from now, is Rajiv. He is the one who is doing very well [with] new product development, production, quality and marketing.”
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Achievements of Rahul Bajaj
Despite his various shortcomings , Rahul Bajaj has had various achievements The posts that he holds are: Chairman of : Bajaj Auto Ltd, Bajaj Auto Finance Ltd, Maharashtra Scooters Ltd and Mukand Ltd. He has also been the past president of the Confederation of Indian Industry (CII) and the Society of Indian Automobile Manufacturers (SIAM). He is also the former Chairman of the World Economic Forum Council Rahul Bajaj was presented the Lokmanya Tilak Award in Pune for keeping the Indian industry flag flying in difficult times.
Some facts about his success story
It’s a general acceptance that the success of Bajaj auto is credited to Rahul Bajaj. He became the managing director on his father’s death in 1972. He made the Bajaj scooter so popular that a flourishing black market developed. A customer fortunate to be allotted a Chetak or super would sell it at double the price in the black market When Rahul joined Bajaj Auto, the company had a turnover of merely Rs 20 million making negligible profits. But, today, the same company has registered a turnover of Rs 35 billion and making a profit of Rs 4.40 billion. In the 1980’s for all his reputation as India’s hottest company, Reliance was not the India's fastest growing company. In the 80’s, Bajaj auto was the fastest growing company in India. During the decade, sales grew from 519m
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to 18.5bn, making for a 1,852 percent growth rate. In contrast, Dhirubhai Ambani’s reliance industries grew 1100 percent with sales moving from 2bn to 18.4 bn. By maintaining an iron-fisted control on cost and by continuously improving productivity to lower the cost per vehicle, Rahul Bajaj funded this growth almost entirely out of internal earnings. In 1987 Rahul Bajaj was offered the chairmanship of Indian airlines. He was the first person to be appointed to a public sector unit from the private sector. When he joined, the airline was facing a hell lot of problems. Some of them included airlines flight rarely taking off on time, morale was low, customer satisfaction even lower and aircraft maintenance dangerously poor because of a perennial shortage of planes. Incidents ran from bizarre and tragic to the ridiculous.By appointing Bajaj, Rajiv Gandhi had hoped to introduce greater efficiency and professionalism into the national carriers. Bajaj and the board set three objectives at the beginning, “ to increase aircraft availability, to streamline marketing practices and to intensify training inputs. By the end of his tenure, IA was reporting better profitability, had induced over a dozen new aircraft into its fleet, and was planning to increase its sales agents, which had remained frozen at 400 for 5 years.
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Rahul Bajajs advice to the youth of today
“In addition to hard work, team efforts, commitment and dedication, integrity and courage and honesty, in order to succeed in life, you also must have the guts to say ''no'' when necessary”
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