Family Business of Dhirubhai Ambani Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

India has been supported by a number of trailblazers, who established a number of giant industries in the country and contributed a lot to its today’s progress and growth. These people had excellent managerial skills acquired through brain waves, experience in the business or through practice or hereditary excellent business backgrounds. Dhirubhai Ambani was one of them, who was one of the greatest businessmen in India and considered as a synonym for Vimal and Reliance. He was born to Hirachand Gordhanbhai Ambani and Jamnaben at Chorwad, Junagadh on December 28, 1932. He belonged to a middle class family and was the second son of a school teacher. He used to go at Mount Girnar on weekends and started his entrepreneurial career there by selling Pakoras to the pilgrims. At the age of sixteen he moved to Aden, Yemen to work there and support his family, there he joined A. Besse & Co. as a dispatch clerk and was later on promoted to the post of manager operations to manage the company’s oil filling stations at the port of Aden. He worked for ten years at Aden and then came back to his native land India in 1958 and started the business of import of polyester yarn and export of spices with a capital of Rs.15, 000 under the brand of Reliance Commercial Corporation. He set his first office in Masjid Bunder at Narsinathan Street in a partnership with Champklal Damani, which comprised upon a 350 sq. feet area. Later on. in 1965 he had started his own company and achieved his first milestone by starting a textile mill in Naroda, Ahmedabad through his successful strategy of backward integration. He had diversified his business while retaining the core interest in the petrochemical industry and additional interests in information technology, textiles, power generation, telecommunication, retail, logistics, infrastructure services and capital markets. The company went public in the year 1997 and got certified with a number of financial institutions in the capital market of India and today it represents the largest shareholder's family in the world.

He was married to Kokilaben in 1955 and had two sons and two daughters from her, Anil Ambani and Mukesh Ambani, Deepti Solhavankar and Nina Kothari respectively. In June 2002, Dhirubhai Ambani got seriously ill and suffered a major brain stroke and was admitted to the Breach Candy Hospital in Mumbai. Dhirubhai Ambani was struck for the second time of such an intense brain stroke, the first one happened to him in February 1986 and badly affected his right hand i.e. kept his right hand paralyzed. This time when he was admitted to the hospital he was in a state of comma for a period of more than one week; he was monitored by a number of electronic machines but the batteries of doctors were unable to save his life and he died on 6^th July, 2002.

The Business Split

After the death of Dhirubhai Ambani, his son Mukesh Ambahi had admitted to have differences with his younger brother Anil Ambani regarding certain ownership issues. After one year of this dispute, on June 2005, Kokliaben Ambani with the help of Kundapur Vaman Kamath, who was the managing director of ICIC bank and a close friend of the Ambani’s family settled the issue and announced it to the public through a press release. As a result of this settlement, the business was divided between the two brothers such as Reliance Industries Limited and Indian Petrochemical Corporation Limited (IPCL), headed by the elder son Mukesh Ambani and Reliance ADA Group, which included the business of Reliance Capital, Reliance Infocomm and Reliance Energy, headed by the younger son Anil Ambani. (See Appendices)

Family Structure

The family of Dhirubhai Ambani consisted of four children. He had two daughters and two sons; Mukesh was the eldest son of the family. He gave special attention towards the education and early life development of his children, therefore today both of his sons are known as the most successful industrial giants of India. He had distributed the business responsibilities between his children and all the other family members. (See Appendices)

Mukesh Ambani

Mukesh Ambani is the eldest son of the great Dhirubhai Ambani, born in the city of Aden, Yemen, on 19, April, 1957. He has one brother and two sisters i.e. Anil Ambani, Neena Kothari and Dipti Salgaoncar respectively. He is known as a magnet in the Indian Business world because of his competent and keen observations regarding the viability of a business opportunity. He is the managing director and chairman of the largest Indian conglomerate, Reliance Industries, which has been listed in the Fortune 500 magazine as a largest private sector enterprise. According to a report in 2011, he has been reported as the ninth richest man of the world and the second in Asia with an earning worth of $3,019,935 and a personal net wealth worth of $22.6 billion.

Early Life

Mukesh Ambani had spent the initial days of his life on the Altamount road in the Usha Kiran Skyscraper and later on moved to the newly purchased house oh his father, Sea Wind, which was a 14 floor apartment block, located in Colaba. Mukesh Ambani earned his early education from the Abaay Morischa School and then completed his graduation with a bachelor degree in chemical engineering from the Mumbai University. He studied for one out of two years of MBA course in the Stanford University USA in 1980. In 1980s, Mukesh was interested to get enrolled in the most famous YPP (Youth Professional Program) of the World Bank but his father wanted.................

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