Emerging HR Practices
Study Group A9(IMIS)
Sritam Kumar Dash
Kumar Mangalam Birla is the chairman of Aditya
Birla who is son of A.V.Birla.
K.M.Birla took responsibility of the business having
total revenue of INR 15,000 crores with assets of
INR 16,000 crores. It had a strength of
75,000employees and 600,000 shareholders.
The longitudinal case study provides a snapshot of the
dynamic and turbulent nature of the new liberalized Indian
economic environment and how an organization such as
Aditya Birla Group needed to brace itself from competition
through innovative HR practices.
This article analyzes a longitudinal case of organizational
redesign and the emerging role of HRM during this redesign
of Aditya Birla Group, the third largest diversified business
group in India, that grew from US$1.5 billion in 1995 to
US$7.59 billion in 2006.
Having taken over the business K.M.Birla decided to consolidate
entire group’s companies under one umbrella of the “Aditya birla
Many critics came out as “K.M.Birla would be unable to manage the
When K.M.Birla was criticized as a soft and shy person. who lacked
the business expertise and assertiveness of his father A.V.Birla.
An unapproachable management style and misplaced priorities
resulted into investors started selling off their shares .In 1996 the
market value of group’s four largest companies Grasim ,Indian
rayon ,hindalco & indo gulf fertilizer suddenly decreased by $1billion
So K.M.Birla took several initiatives to prove his critics wrong.
He introduced a retirement policy , on the
basis of which around 325 senior were there
early 60s,had quit the organization in the next
five years .subsequently about 400 young
employees replaced them.
Meanwhile ,answering the critics he said,
"people in the group about twice my age when
I took over as chairman. I had great respect for
them personally, but I also feel the need for
He launched for the first time a corporate identity
that would serve a corporate logo. The group
selected the rising sun as the logo, which signified
optimism and served as a unification symbol for the
K.M.Birla said, “The new corporate logo helped in
bringing various companies of the group together.
This helped the organization to reenergize and get
started to the path of change”.
K.M.Birla also changed the group’s policy in house
recruitment. He also made changes in group’s HR
system. He hired professionals from other companies
into his management team.
The partha system of daily financial reporting which focused
mainly on production was replaced with an “Economic value
added model”. This model focuses on the aspects of
profitability, asset productivity and growth.
K.M.Birla also established aditya birla management
corporation limited, the strategic decision making for
ensuring the best practices across the group companies.
K.M.Birla decided to reduce the group’s dependence on fiber
based business where its market share was low. Instead he
decided to concentrate on non-ferrous metals as there was
less competition and hindalco already had a big presence in
the aluminum sector
K.M.Birla introduced a 360 degree feedback
program in 1999 that permitted managers to raise
questions over his leadership style, managerial
ability and also personal traits but he could not
define what he expected from his employees.
After the feedback, he issued each senior manager a
six page letter mentioning the areas of improvement
and his expectations.
In 1999 K.M.Birla launched the Aditya Birla
scholarship to promote excellence among students
community to cultivate the leaders of tomorrow.
He said, "cultivating a new generation of managers
and cultivating a participative culture are keys to the
increasingly energetic, people centered, and
performance focused culture we aspire for”.
He also launched Aditya Birla awards in 1999 where
team achievements recognized every year .
Birla had also implemented the organizational health
survey, which measured the “Happiness at work”
index. This was carried out to track the employees
K.M.Birla also brought in some managerial changes
in the group. Before K.M.Birla took the
chairmanship, the hierarchy in the group was
determined by seniority instead of merit. He
instituted a performance appraisal system. He
decided to implement performance management
systems, reviwed compensations and accentuated on
training to bring meritocracy.
He personally led the recruitment program from
He also brought about changes in reporting system
being followed at the group. The top 20 executives
of the group, who had greater responsibilities in the
group, could report directly to K.M.Birla, thereby
giving them complete freedom to run their
businesses and same holding the more accountable
for their performance.
This case study explained how an emerging Indian MNC
redesigned itself within a span of 10 years through its HR
function to keep up with the accelerating pace of change in
the external and internal environments.
Within a hypercompetitive and turbulent environment, HR
itself demanded that the organization develop new
capabilities aligned to the organization’s business strategy.
This article elaborated on some of the peculiarities and
defining characteristics of HR practices unique to India and
some of the main external and internal factors that have
shaped the attitudes, work systems, and strategic and HR
skills of Indian organisation in the context of liberalised
Everlast aluminium roofing
Freshwrapp aluminium foil
Freshpakk semi-rigid containers
Aura alloy wheels
UltraTech Cement (formerly
Birla Ready Mix
COMPANY: ADITYA BIRLA NUVO
COMPANY: INDO GULF
Birla Shaktiman Urea
COMPANY: ADITYA BIRLA NUVO
COMPANY: THAI ACRYLIC FIBRE
COMPANY: ADITYA BIRLA NUVO
COMPANY: ADITYA BIRLA CHEMICALS
COMPANY: THAI PEROXIDE CO. LTD.
COMPANY: BIRLA NGK INSULATORS
Aditya Birla Insulators
key products and brands capaci coun
PSI Data Systems Ltd. (subsidiary of
Aditya Birla Nuvo Ltd.)
IT solutions (banking,
finance and insurance)
key products and
Aditya Birla Minacs Worldwide Limited
(subsidiary of Aditya Birla Nuvo Ltd.)
BPO / ITES
COMPANY: IDEA CELLULAR
COMPANY: ADITYA BIRLA