INTRODUCTIONMr. Bajaj ( June 10, 38) is recognized as one of the most successfulbusiness leaders of India. He heads the Bajaj Group of Companieswhich is a leader in a variety of manufactured products and financialservices in India and abroad including motorized 2 and 3-wheelers,home appliances, electric lamps, wind energy, special alloy andstainless steel, cranes, forgings, infrastructure development, materialhandling equipment, travel, general and life insurance andinvestment, consumer finance & asset management.
AWARDS AND ACHIEVEMENTS In 1975, he received the "Man of the Year" award from National Institute of Quality Assurance Business India honoured him as “Businessman of the year 1985”. Bombay Management Association rewarded him for his service in the field of Management, in 1990. On behalf of the French President Nicolas Sarkozy, the French Ambassador Mr.Jerome Bonn font presented the honour of “Knight in the Order of the Legion of Honour” to the CEO of Bajaj Auto, Rahul Bajaj. The French have numerous divisions in the Order and the title awarded to Rahul Bajaj is of the highest distinction. Rahul Bajaj Chairman, of Bajaj Auto Limited was conferred the Alumni Achievement Award by the Harvard Business School (HBS) from where he did his MBA in 1964, He was listed twentieth on the Forbes "Indias richest 40" list of people with a net worth of US$1.1 Billion For his contribution to Indian industry, he was awarded the nations third-highest civilian honour, the Padma Bhushan, in 2001. He was elected to the Upper House of Parliament (Rajya Sabha)(2006-10) Economic Times and Ernst & Young bestowed their "lifetime achievement" awards on him in November 2004. Rani Durgavati University conferred the degree of Doctor of Letters (Honoris Causa) in March 2005.
HERIDITY "Given my family background, I knew I wanted to be a businessman by the time I was about 12," says Bajaj. His grandfather had bought a steel mill and started a sugar mill, and in 1945 his father founded Bajaj Auto, now the crown jewel in the Bajaj Group, which numbers almost thirty companies in a variety of industries. Due to such environment prevailing around, his mind was into business since the childhood days. He grew up in an environment when the Indian freedom struggle was at its fiery heights. The Bajaj family was truly nationalistic. Rahuls father and uncle were involved in the freedom struggle, and had also been jailed briefly by the British Colonials for their patriotic fervour. Rahuls father served as a three time Member of Parliament under the Congress government. This is the reason he is not afraid of taking the risks. He is outspoken, confident and a man of his words Jamnalal Bajaj was the firm believer in M.K Gandhi and so is Rahul Bajaj. He is high on ethics as it is evident from fact that he has never bribed any official or has stolen any of the other company’s project.
SITUATION In the 1970s, India was a socialist state barred by rules and regulations. As a result, there was no entrepreneurship and nothing could be done without government approval. At this difficult time Bajaj became the CEO of Bajaj Auto Ltd in 1968. In this environment, the company was limited to produce just 20,000 units a year. Supply and demand didnt match. Hence, after placing their order, customers had to wait for roughly ten years to receive it. To lower costs while improving the price and quality of the products, he increased production to avail “Economies of Scale”. He ignored a government regulation and increased volume by more than the permitted 25 prevent of his licensed capacity. He was appointed Chairman of Indian Airlines in 1984. This was the first instance when someone from the private sector had been given this responsibility. The initiation of Liberalization in India by the then PM Rajiv Gandhi posed great challenges for Bajaj Auto. It brought the threat of cheap imports and FDI from top companies like Hero Honda. Rahul Bajaj became famous as the head of the “Bombay Club”, which opposed this liberalization. Rahul Bajaj’s company was rock-solid and he didn’t feel threatened to join hands with a rag-tag band of men with completely different corporate cultures and ethics but for Bajaj, the issues were simple. He felt that the government had not allowed Indian industry to function freely for decades. When opening up the economy and laying out the red carpet to foreigners, it owed Indian industry the chance to put its house in order before forcing it to compete against global giants.
SITUATION The slump in the sale of scooters and the downfall of the stock market of 2001 hit the company hard. It was forecast by some business analysts that Bajaj industries would have to shut down soon. But without losing hope Rahul Bajaj with his business expertise re- established the battered company. He established another factory in Chakan, invested in R&D and came up with Bajaj Pulsar Motorcycle. Bajaj Pulsar is presently a leader in its sector. Rahul Bajaj took over the charge of Bajaj Group in 1965, under his leadership Bajaj Auto has grown to new heights year after year. The turnover of Bajaj Auto has risen from a mere Rs.72 million to Rs.46.16 billion. He created one of Indias best companies in the difficult days of the license-permit raj. Rahul’s pet project - The Bajaj “Chetak” scooter was a huge success story. In 1980 with some relaxation in LCV’s company’s started entering Indian markets through joint ventures. Rahul had foreseen this, and had gone in for a massive appointment of new dealers throughout the country. He also initiated advertising campaigns to improve the brand recall in the minds of the customer.. His efforts paid off, and Rahul had ensured that Bajaj retained its top spot in the scooter industry in India. He had his share of low points in his life. His parting with the Firodias and the Italian automobile major Piaggio left a bad taste. Rahuls spat with the Indira Gandhi Government made the company suffered as they were not allowed to expand their facilities to keep up with the growing demand. The Union related problem at his factory, which turned violent, raised a few eyebrows on the Bajaj Management. In the 80s; analysts criticized him for sticking to his knitting rather than diversifying, and for preferring to pay hefty taxes rather than taking advantage of dubious tax loopholes.
ENVIRONMENT Rahul Bajaj went to The Cathedral and John Conon School. He graduated from St. Stephens College in Delhi in 1958 with an honour’s degree in economics. Back in Bombay, Bajaj did a two-year stint at Bajaj Electricals, clocking in after morning lectures at the Government Law College. He spent most of 1961-62 as a junior purchase officer at Mukand and with some work experience under his belt, he left for Harvard Business School in USA. He joined Bajaj Auto as Deputy General Manager, in charge of the Commercial function of the company. Rahul was made to involve himself in almost all departments in the company including key departments in the company like Marketing, Accounts, Purchase, and Audit etc. except manufacturing. The company was gaining prominence as the two-wheeler market had begun to expand exponentially. Under the guidance of Naval K Firodia, the Chief Executive of Bajaj Auto, Rahul began to learn the nuances of the business.
16 CATTELL FACTOR TEST
SOCIAL ASSERTIVENESS High Score- Uninhibited, Bold Low Score- Shy, Withdrawn Rahul Bajaj Is high on this factorBecause as seen in the incident of breaking the rule of the limited production of scooters he increased the production without any one’s permission. Therefore we can say that his nature is very bold and inhibited as he is very resilient and gutsy. His statements about the kingfisher airlines, and Rajat Gupta shows his high social assertiveness.
WARMTH High Score- Supportive, Comforting Low Score- Cold, Selfish Rahul Bajaj has been high on this factor as his speeches he clearly mentions his views about the Indian economy and his concern towards the citizens of his country and he also came into politics to serve the people of the nation. And he also makes his employees feel very comfortable while he talks to them. At the time when Bajaj scooters were selling at a waiting period of ten years and were being sold at double the price in the black market he thought for the citizens of the country and did not increased the price of vehicle even the ball was in his court. Rather he decided to increase the production to double and he was even ready to go to jail for doubling the production.
INTELLECT• High Score- Analytical, Cerebral• Low Score- Instinctive, Unstable• According to his interview all his decisions are thoroughly analysed and are properly pertained to his brain due to which Bajaj Auto the 4th largest two wheeler manufacturer of the world. And when asked about getting into the four wheeler market he just said that for getting into such competitive market you have to attain at least the 2nd position in the two wheeler market.• According to Bajaj "If Bajaj Auto cannot be a world player in its field, I do not deserve the right to diversify. You should diversify from a position of strength, not from a position of weakness.”
EMOTIONAL STABILITY High Score- Calm, Level Headed Low Score- Irritable, Moody Rahul Bajaj is moderate on this factor as seen in his interview with Karan Thappar he was easily irritated when the conversation got too personal and direct; but in other interviews he was found very calm and quiet when answering the questions. Rahul Bajaj is very short Tempered when it comes to his own ethics but he is also very patient at times when it comes to taking serious decisions.
INTROVERSION High Score- Private, Quiet Low Score- Open, Friendly Rahul Bajaj is low on this factor as seen in his many interviews and speeches he is found to be very open and friendly and has portrayed himself as what he is from inside is from outside. The editor of Business Standard T.N. Ninan has mentioned that "He uses a hundred words when ten would do."
BIG FIVE PERSONALITY TEST
ABOUT THE BIG 5 PERSONALITY TEST In psychology, the Big Five personality traits are five broad domains or dimensions of personality that are used to describe human personality. The theory based on the Big Five factors is called the Five Factor Model (FFM) The Big Five framework of personality traits from Costa & McCrae, 1992 emerged as a robust model for understanding the relationship between personality and various academic behaviors. The Big Five factors are: Openness (inventive/curious vs. consistent/cautious) Conscientiousness (efficient/organized vs. easy-going/careless) Extraversion (outgoing/energetic vs. solitary/reserved) Agreeableness (friendly/compassionate vs. cold/unkind) Neuroticism (sensitive/nervous vs. secure/confident)
EXTRAVERSION• High- Open and friendly• Low- Quiet and private• Rahul Bajaj is high on extraversion as he is outgoing, talkative and sociable.• We can see this as Rahul Bajaj openly speaks about what is on his mind. For example, when Vijay Malaya asked for government support when Kingfisher was going down, Rahul Bajaj openly spoke against it.• Also, Rahul Bajaj openly voiced his opinion about being happy about Rajat Gupta getting a lenient jail sentence.• He was also openly against liberalization in India.
AGREEABLENESS• High- Empathetic friendly and helpful• low-- Manipulative and self-centred• Rahul Bajaj is moderate on agreeableness. He is very helpful as can be seen in the numerous corporate social responsibly initiatives that Bajaj auto has taken and also,• Rahul Bajaj is always very concerned about his employees.• But, even though he listens to his subordinates, the final decision is always his.
CONSCIENTIOUSNESS High: Hardworking and reliable Low: less goal oriented and laid-back Rahul Bajaj is high on conscientiousness as it can be seen by the success of the company. From just a scooter manufacturing company Rahul Bajaj has diversified the company into automobiles, electrical, insurance ,travel and finance. Rahul Bajaj took over the charge of Bajaj Group in 1965, under his leadership Bajaj Auto has grown to new heights year after year. The turnover of Bajaj Auto has risen from a mere Rs.72 million to Rs.46.16 billion
EMOTIONAL STABILITY• High- Level Headed and Calm• Low- Moody and Irritable• He has moderate emotional stability.• Sometimes he gets very emotional looking at peoples problems but other times, he does not move an inch.• He lost control of his emotions as shown in Karan Thapars interview in his show devil’s advocate.
OPENNESS TO EXPERIENCE High- Imaginative, sensitive, intellectual Low- Incomprehensible Rahul Bajaj is high on this factor as can be seen that when foreign companies came in and the stock market collapsed in 2001, But without losing hope Rahul Bajaj with his business expertise re- established the battered company. He established another factory in Chakan, invested in R&D and came up with Bajaj Pulsar Motorcycle. Bajaj Pulsar is presently a leader in its sector.
MAJOR PERSONALITY ATTRIBUTES AFFECTING OB Locus of Control Machiavellianism Self-Esteem Self-Monitoring Risk Taking Type A and Type B Personalities
LOCUS OF CONTROL• The degree to which people believe they are in control of their own fate. – Internals:Individuals who believe that they control what happens to them – Externals:Individuals who believe that what happens to them is controlled by outside forces such as luck or chance.• I am a believer. I firmly believe that God exists — but I do not make a show of this belief. I do not pray at temples, I do not follow rituals. But I do pray a lot although I do not have a fixed time or place to pray.-RAHUL BAJAJ• I belong to a deeply religious family, so I have no reason not to believe in God. I also believe in karma and the doctrine that man makes his own destiny. My karma will determine my future.• Also in his interview at CNBC , he blamed Government and entry of other companies for his company’s downfall in late 1990’s• Thus Rahul Bajaj is an external person.
MACHIAVELLANISMDegree to which an individual is pragmatic, maintains emotionaldistance, and believes that ends can justify means. .People high on this factor tend to be rash decision makers and wouldnot give a thought on how their decisions would affect others.Such individuals may some times not take decisions within theframework of the organization.• Rahul Bajaj is high on this factor. He made a rash decision to increase the production in 1967 when the government didn’t allow him to increase it. Without giving a second thought that he could be jailed. But he too takes his own decisions on his own with feedback from employees.• Also he didn’t diverse in other fields in 1980s due to which he was criticized.
SELF-ESTEEMIndividuals’ degree of liking or disliking of themselves.People with lower self esteem generally lack self confidence.High on self esteem tends to make a person goal oriented andachievement oriented. Rahul Bajaj is high on this factor as he is a goal oriented person and high on confidence. He is a person who has the ability to call a spade a spade. He is outspoken. He turned the Profits of the company from Rs.72 million to Rs.46.16 billion today.He is extremely goal oriented and achievement oriented. He made an excellent company during license raj.
SELF MONITORING A personality trait that measures an individual’s ability to adjust behaviour to external situational factors. People high on this personality trait would adjust themselves quickly to external environment. These people can control their emotions quickly. Rahul Bajaj was moderate on this factor. He strongly opposed FDI in 1991 because he knew that it would bring in cheaper imports of raw materials and there might be chances that his company wouldn’t survive. When he saw scooters coming into the market in 80s he became aggressive on his marketing strategies. Handed over the company to his Son when he felt that he won’t be able to compete in motorcycle market.
RISK TAKING Refers to a person’s willingness to take chances or risks Also refers to some levels of decision making. Whether he / she is decisive or need external help for their decision making. He was high on this factor as he took the risk of increasing the production even though the government didn’t permit it. He was decisive in nature as he took the decisions on his own. After the heart attack he started delegating his work to the senior officials of the company.
TYPE A PERSONALITY• The theory describes a Type A individual as ambitious, rigidly organized, highly status conscious, can be sensitive, care for other people, are truthful, impatient, always try to help others, take on more than they can handle, want other people to get to the point, proactive, and obsessed with time management. People with Type A personalities are often high-achieving "workaholics" who multi-task, push themselves with deadlines, and hate both delays and ambivalence.• Rahul Bajaj is a Type A personality as it is seen in his interviews that he measured his success in terms of numbers.• Unlike others he spend his leisure time with the employees children in his factory premises.• He is a workaholic as he took the break of merely 4 days between 1964-1984
Myers-Briggs Personality Type Indicator
Extraversion V/S Introversion He is an extrovert. Entrepreneurs are not known for their sharp tongues. But Rahul Bajaj is. When wielded, sharp tongues may cut down profits and invite victimization from the government. He is very brazen and outspoken about his views. He is bold and aggressive when it comes to express them. Bajaj likes to do things his own way. He has no inhibitions, when it comes to speaking his mind, and he does that remarkably loudly and defiantly. This characteristic made Rahul Bajaj famous as the head of the Bombay Club that vehemently opposed liberalization in the Nineties. Bajaj was never shy of announcing his friendship or special relationship with Sharad Pawar, though the latter has lot many political foes in Delhi’s political circles. He chose to strike rapport with his 20,000-odd employees, basically with his personal equation and talking to them. At the factory, he is not a tight-lipped, inscrutable boss, but more an intimate friend, who talks directly. This style of openness and cordiality, he believes, enhances productivity, quality and smoother functioning.
Sensing V/S Intuitive• Sensing :• The past few generations of successful Indian businessmen did not have formal education. They were more known for native wisdom and robust common sense. They sensed the changing directions of the blowing wind and adjusted accordingly to make the best of the change for their businesses and personal fortunes.• Rahul Bajaj had formal education in business administration at the world renowned Harvard University. Though he inherited the common sense of the business family, his was a more scientific approach towards management. He relied on gathering data, making surveys and studying the projections of the economy.• When economic liberalization became a reality in India and rival Hero Honda made him bite the dust, Rahul Bajaj thought of recovering from the paralyzing blow by setting up altogether a new world-class factory in Chakan, near Pune, invested heavily in the R&D and came back to the market with Bajaj Pulsar Motorcycle. Bajaj Pulsar is a big hit and currently a leader in the two-wheeler segment.• A scientific management approach made this possible, not intuition.
Thinking V/S Feeling• Rahul Bajaj cannot exactly be described as a person, who was always right or who was not sentimental. He was sentimentally attached to the License & Permit Raj. He had acquired an expertise on how to function in that system. Rather he had become a bit inert in the protected atmosphere. When the liberalization came in the Ninties, he opposed it and spoke on behalf of the regressive elements in the industry. Also, he escaped logic. He thought liberalization was reversible. He was rather sentimental.• But soon reasoning prevailed over him. He fell in line. He toed the line of healthy competition and innovation. He went to create a market leader Bajaj Pulsar two-wheeler, braving a break-neck competition.• When he took over the reins of Bajaj Group in 1965, the turn over was just Rs.72 million. Now it has crossed Rs.46 billion.• Now the Bajaj Group has diversified interests ranging from automobiles, home appliances, lighting, iron and steel, insurance, travel and finance.
Judging V/S Perceiving• Rahul Bajaj changed his style of decision making, when he took over his family business, the Bajaj group, in mid-Sixties.• It was Rahul’s grandfather Jamnalal Bajaj, who had launched the Bajaj Group. Jamanalalji was a close associate of Mahatma Gandhi and had an unwavering loyalty to the Gandhian principles. Rahul’s father, Kamalnayan Bajaj, served as a Congress MP for three-times. The whole family was honed in the Gandhian ambience.• Rahul had to survive and grow in the ruthlessly negative ambience of the License & Permit Raj that was marked by red-tapism, favoritism and corruption. It was urgent and must for him to remould his style. He did it.• Rahul Bajaj created one of Indias best companies in those difficult days, when ‘entrepreneurship’ and ‘profits’ were considered to be ‘dirty words’.
ESTJESTJs are hardworking traditionalists, eager to take charge in organizingprojects and people. Orderly and rule-abiding, ESTJs like to get thingsdone, and tend to go about projects in a systematic, methodical way. Theyvalue factual evidence over conjecture, and trust their personalexperience. ESTJs are the consummate organizers, and want to bringstructure to their surroundings. They value predictability and prefer thingsto proceed in a logical order. If chaos is present, the ESTJ often takes theinitiative to establish processes and guidelines, so that everyone knowswhats expected. The ESTJ wants to achieve efficient productivity andtypically believes this is best accomplished when people and systems arewell organized. ESTJs are usually outgoing and enjoy upholding family andcultural traditions. They concern themselves with maintaining the socialorder and keeping others in line. ESTJs often take on a project managerrole at home as well as at work, and excel at setting goals, makingdecisions, and organizing resources to accomplish a task.
BLAKE & MOUTON’S MANAGERIAL GRID The Blake and Mouton managerial grid uses two axis. Concern for people is plotted against the y axis Concern for work/production is plotted against the x axis. Each axis ranges from 1(low) to 9(high).
LEADERSHIP STYLES• The impoverished style (1,1)- In this style, managers have low concern for both people and production. Managers use this style to preserve job and job seniority, protecting themselves by avoiding getting into trouble.• The country club style (1,9)- This style has a high concern for people and a low concern for production. Managers using this style pay much attention to the security and comfort of the employees, in hopes that this will increase performance.• The produce or perish style (9,1)-With a high concern for production, and a low concern for people. Managers using this style pressure their employees through rules and punishments to achieve the company goal. This style is often used in cases of crisis management.• The team style (9,9)- In this style, high concern is paid both to people and production. As suggested by the propositions of Theory Y, managers choosing to use this style encourage teamwork and commitment among employees. This method relies heavily on making employees feel themselves to be constructive parts of the company.• Middle of the road style (5,5)- Managers using this style try to balance between company goals and workers needs. By giving some concern to both people and production, managers who use this style hope to achieve suitable performance but doing so gives away a bit of each concern so that neither production nor people needs are met.
We analyzed Rahul Bajaj and he lies at (9,7) in the managerial grid
CONCERN FOR PEOPLE On personal front, he is more a human than a businessman. He is very liberal to his employees and gives them lot of independence and room to learn, create and innovate while at work. This makes his employees involved and interested in working in an open and friendly environment, which is not possible by coercion. This shows his empathy towards employees and his relationship with them. As a great strategist and business analyst, Rahul Bajaj visualized the necessity of safe and hazel free transport availability, for the average Indian household. He played key role in the design and development of Bajaj Chetak scooters in India. This shows his concern towards common- man. On the contrary, to the new leadership practices, Bajaj never believed in delegating authority to all. He always keeps himself at the helm of things. He gave a patient hearing to all others ideas. However, the final decision was made at his discretion.
CONCERN FOR WORK Rahul Bajaj has established Bajaj Group as top player in India with his tremendous efforts and seamless hard work. He is exhaustively workaholic and never likes to take a break. In twenty years of long stretch from 1965-1984, he took a leave of just 4 days. This would probably be the reason why Bajaj Group emerged as a company of excellence with smooth and friction free operations. Between 1978 and 1981, Bajaj Autos export sales jumped from Rs63.5m to Rs133.2m. A euphoric Bajaj even ran a campaign in Time magazine, perhaps the first Indian advertiser to do so. Under the helm of Rahul, Bajaj Group has diversified into various business verticals ranging from automobiles, home appliances, lighting, iron and steel, insurance, travel and finance; serving needs of all categories of consumers. Rahul Bajaj applied his cross-pollinated ideas on the growth of the company and turned it around from a company of Rs.72 million to Rs.46.16 billion. This was possible by striking decisiveness and assertiveness of Rahul Bajaj even at turbulent times and his great business acumen. In 2001, recession and collapse of stock markets hardly hit the sales of scooters. Some business analysts even forecasted that there was every possibility that Bajaj Autos would shut down. However, Rahul Bajaj with high determination and great perseverance; reinvented the company.
CONCLUSION Rahul Bajaj Is a leader who led from the front, with his actions proving so. His thinking and taking decisions based on honesty has always paid off. For e.g., after the workers strike in 1979, there has been no other strike at the pune plant because they reached a consensus which was a win for both Bajaj and the workers. Rahul Bajaj has always stayed true to his words. When he says something, he sticks by it. He is not fickle minded. We can learn to be honest and truthful. Bajaj has never bribed anyone in his life. He did not give any bureaucrat a single penny to secure licenses. Rahul Bajaj was also very hardworking and knows every part of the company as at the beginning of his career, he worked in almost all departments of the Bajaj business. Bajaj knows how to handle difficult situations in a good manner. When liberalization happened and competitors like Honda came in, Rahul Bajaj increased his advertising and his R&D expenditure to ensure that his products are not inferior to his competition. Also, He made it through the parting with firodias and piaggio and is still a very big name today. Bajaj also knew what was the right thing to do when. When he was not getting licenses to produce more vehicles, even though there was a lot of demand, he did not exploit the situation and charge a higher price. Instead, he found ways to produce more. Lastly, it is the passion of Rahul Bajaj for his company that inspires us. He led a scooter manufacturing company to where it is today and the fact that he lives in his factory grounds even though he could afford a sprawling mansion, proves how much he loves his work.