KUMAR

MANGALAM BIRLA

HOW HE PROVED HIS CRITICS WRONG.

Mr. Kumar Mangalam Birla is the Chairman of the
Aditya Birla Group, which is among India's largest
business houses.

Kumar Mangalam Birla (June 14, 1967), is among

the richest persons in India and the eighth youngest
billionaire according to the Fortune magazine.
KM Birla became the youngest leader of the group in 1995,
after the death of his father and former chairman Aditya
Vikram Birla.

At that time, the Aditya Birla Group recorded revenues worth

INR 15,000 crores.

Since then, KM Birla has carried out major managerial and

financial restructuring in the Group, which has resulted in the
Group recording revenues of INR 33,000 crores in 2005.
MAJOR COMPANIES OF THE GROUP

Idea Grasi
Cellular m

Ultratech
Cements

Hindal
co
 JOINT VENTURES

JOINT
VENTUR
ES

BIRLA
NGK

BIRLA
SUN LIFE
 THE BIRLA LEGACY

 Dates back to 1857, when Seth Shiv Narayan Birla started

cotton trading operations(Pilani, Rajasthan).

 Early 20th Century, the founding father of the group,

Ghyanshyamdas Birla(GD Birla), set up first jute mill in
Kolkata.

 In 1947, Grasim Industries was set up and incorporated as

Gwalior Rayon Silk Manufacturing Co.

 Hindalco, Group’s aluminum division, was incorporated in

1958.
 THE BIRLA LEGACY

 The Grandson of GD Birla, Aditya Vikram Birla(AV Birla)

entered into business in 1964.

 AV Birla had to work in a restricted economic

environment.

 AV Birla started looking at other countries for growth

opportunities.(Indo – Thai Synthetics Company
Limited,1969)
 KM BIRLA ENTERING INTO THE
BUSINESS

 After the death of AV Birla in 1995, his son Kumar

Mangalam Birla, a Chartered Accountant and an MBA
from London Business School, at the age of 28 took over
the reign of the Group.

 KM Birla decided to consolidate the entire Group’s

companies under one umbrella of the Aditya Birla Group.
 CRITICISMS AGAINST KM BIRLA

 Lacks ability to manage the Group successfully.

 Soft and shy person
 Lacks expertise and assertiveness of his father.
 Inconsistent behavior
 An unapproachable management style
 Misplaced priorities
 CONSEQUENCES

 The investors started selling off their shares.

 In 1996, the market value of the Group’s four largest

companies – Grasim, Indian Rayon, Hindalco and Indo Gulf
Fertilizer, plunged by $ 1 Billion or 37 %.
 KM BIRLA TOOK
SEVERAL
MEASURES TO
PROVE HIS CRITICS
WRONG.
 DISCONTINUING VARIOUS
ANCIENT PRACTICES

 KM Birla changed Group’s policy of in-house recruitment.

 He introduced a 360-degree feedback program to do

away with the customary ‘babu-culture’.

 ‘Partha System’ of daily financial reporting which focused

on production was replaced with an Economic Value
Added model.
 DISMANTLING THE POWER
CENTRES WITHIN THE GROUP

 He introduced a retirement policy in 1995

 400 young executives entered.

 LAUNCHING FOR THE FIRST TIME
A CORPORATE IDENTITY

 In 1996, he launched for the first time a corporate identity

that would serve as a corporate logo. The Group selected
‘RISING SUN’ as the logo, which signified optimism and
served as a unification symbol for the group.

 “ During that period, when the organization was going

through turmoil due to death of AV Birla, the new
corporate logo helped in bringing the various companies
of the Group together.”
KM BIRLA
 CONSOLIDATION

 Consolidated its cement manufacturing division of Indian

Rayon and Grasim into a single division of Grasim.

 Decided to consolidate Indo-Gulf’s copper business with

Hindalco.
 DIVERSIFICATION AND
INTERNATIONAL EXPAMSION

 A joint venture with (AT & T) in 1995 (Telecom).

 50:50 joint venture company with Tembec Inc of Canada.

(Pulp Mill)

 Tie up with Sunlife Financial of Canada in 1999.

 OTHER INITIATIVES

 THE ADITYA BIRLA SCHOLARSHIPS to cultivate the leaders

of tomorrow.

 ADITYA BIRLA AWARDS since 1999 where team

achievements are recognized every year.

 Organizational Health Survey measuring happiness at

Work’ index was undertaken to track the employees’
satisfaction.
 OTHER INITIATIVES

 Establishment of Aditya Birla Management Corporation

Limited (strategic decision making body).

 Entry into e-business through an alliance) with Lawson

Software.
 Changes in the reporting system , the top 20 executives of
the Group, reporting directly to KM Birla.
 OTHER INITIATIVES

 During his tenures, KM Birla employed a number of

women managers unlike his predecessors.

 More focused on long term goals.

 RESULT OF THESE MEASURES
AND INITIATIVES

 Aditya Birla Group has become India’s third largest

conglomerate behind Reliance and Tata Group, with revenues
of over INR 33,000 Crore.

 Gained market leadership, achieved economies of scale and

operational efficiency.

 In 2005, the Group became India’s largest exporter of Cement.

 ADITYA BIRLA GROUP FACTFILE

 The Group is the world leader in Viscose Staple Fiber.

 One of the Asia’s largest producers of Aluminum.

 The Group is also the fastest growing copper company in

Asia.

 It’s the 8th largest producer of Cement in the world.

 World’s fourth largest producer of carbon black.

 VARIOUS AWARDS WON BY KM
BIRLA

 Chosen as the ‘Young Global Leader’ by the World

Economic Forum in 2004.

 The Economic Times awards named him as the ‘Business

Leader Of the Year’ for Corporate Excellence 2002-2003.

 Business India selected him as the ‘Business Man of the

Year- 2003’.
Kumar Mangalam Birla proved his
critics wrong by performing well
as an Entrepreneur and taking
Aditya Birla Group To The
Heights.
THANK YOU