To actively contribute to the social and economic development of the communities in which we operate. In so doing build a better, sustainable way of life for the weaker sections of society and raise the country's human development index.
Integrity, Commitment, Passion, Seamlessness and Speed
Strategic Business Units:
Life insurance and Asset management services are being handled under a JV with Sun Life Financial, Canada.
Life insurance - ABNL holds 74% stake in Birla Sun Life Insurance.
Asset management - ABNL holds 50% stake in Birla Sun Life Asset Management.
Telecom business - ABNL holds 25.38% stake in Idea Cellular, in which Group holds 46.99% stake.
IT-ITeS business - ABNL holds 88.28% stake in Aditya Birla Minacs.
ABNL's total revenue grew at 36% CAGR, from Rs. 18 Bn in '02-'02 to Rs. 155 Bn in '09-'10. The breakup shows that of '09-'10 year.
Key Growth Milestones:
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India's second largest producer of viscose filament yarn (VFY).
The country's largest premium branded apparel company.
The second largest producer of carbon black in India.
Largest manufacturer of linen fabric in India.
Among the most energy efficient fertilizer plants.
India's largest and the world's fourth largest producer of insulators.
Idea Cellular Limited, among topÂ five cellular operators in India.
Birla Sun Life Insurance, among topÂ five private life insurance companies in India.
Birla Sun Life Asset Management, among topÂ five asset management companies in India.
Aditya Birla Minacs Worldwide Limited, among the topÂ ten BPO players in IndiaÂ by revenue size.
ABNL has a typical management structure where we can see mixed characteristics of business unit structure as well as matrix structure. It's evident from the management structure that every vertical operates its business independently, as per the goals set by the management board, and is supervised by the Managing Director. Every business unit has its own financial, marketing, operations and human resource division and they function as per the guidelines and goals set by the business directors or board of the respective units. The units do not share their resources directly with each other, since they are focused and diversified from one another. At the same time all financial aspects are consolidated by group CFO. Group CFO is a link between the management board and the boards or management team of respective verticals, as far as financial planning and goal setting are concerned.
Board has 50% independent directors. Company adheres to the norms of corporate governance as specified by SEBI. In fact, Kumar Mangalam Birla chaired a committee set up by government to advice upon the corporate governance in India and recommendations for proper governance.
Management style and Culture
The Management Style
The way the managers operate in an organization is closely related to the organizational culture and Culture and Managerial style mutually influence each other.
Managerial styles may be summarized on a continuum between highly directive or autocratic styles and highly participative style. At ABNL the management style is very much participative from top level decision to a project level decision. All decisions are made through discussions in a meeting. At 52nd annual general meeting addressing the shareholders, Chairman Mr. Kumar Mangalam Birla said," At your Company, employees continue to be the key driving force of the organization and remain a strong source of our competitive edge. We believe in aligning business priorities with the aspirations of employees. This leads to the development of an empowered and responsive human capital. We strive to create a work environment which encourages innovation and creativity. Appropriate measures are continuously taken to ensure talent retention and employee engagement."
Essentially they nurture leadership and reward the performance. Earlier referred management structure is an evident of the way authorities are delegated by the top management to the business heads. However, company holds all financial control under a single umbrella. We can see that as such they have no group CEO, who looks after the everyday business operations, nor they have group COO who looks after the everyday operations related issues; instead Managing Director is the overall in-charge of guiding and monitoring the divisions - in order to achieve the business goals set up by the board. All financial decisions are taken by the CFO who is ultimately reporting to MD directly. Thus, CFO charts the financial planning as per the board guidelines and subsequently all the verticals are allocated financial resources as well as assign goals to be achieved in the respective financial year.
Always on Time
Marked to Standard
This management style has given company a very strong financial control and optimum distribution of the financial resources, which fueled growth.
Culture at ABNL
The work culture at ABNL is based on the belief that employees are the most valuable assets. Respect and genuine concern regarding all employees are the basic principles on which the organization functions. It believes that development of potential of the employees is necessary for both the people and the company to prosper. ABNL believes that by encouraging mutual respect, recognition, trust, open communication, transparency, opportunities for growth, employees perform to their fullest potential and are sincere, dedicated and committed to the job.
To it, employee's needs for personal growth are fostered by:
Continuous development of knowledge and skills
Objective based performance review
Rewards and recognition
To take this forward, the company has launched employee value proposition. It entails reinforcement of four pronged approach.
Firstly, offering exciting career prospects that give employees a leeway to chart their own growth trajectory.
Secondly, intensifying learning processes that hone existing skills. Transcending it, the company has taken the learning to a higher stage where talented employees are able to convert knowledge into action through exposure to the best global minds. For example, this year at Gyanodaya, company's benchmarkable Institute of Management Learning, more than 500 colleagues at senior levels participated in specially designed, intellectually stimulating, innovative focused programmes. These all are related to globalization, leadership & innovation and getting far beyond the mind of the customer. These were conducted in collaboration with the best in class faculty from International Business Schools and consulting organizations. Among these feature, The Ross School of Business, The Duke University, UCLA (all from USA), ISB (Hyderabad), The Hay Group and Mercer Consulting. This year over a 1,000 executives enlisted for different learning sessions. Gyanodaya's virtual campuses reached out to more than 13,500 learners through its e-learning courses and webinars.
Thirdly, as part of concerted efforts towards a sharp organizational focus and alignment in the talent management processes, across the businesses, they have put critical differentiators in place. Besides linking rewards to performance, special performance incentives, international assignments, and Group-wide recognition programmes have been set in motion.
Fourthly, promoting enriched living by encouraging talent to look beyond just professional enhancement and to work toward building a wholesome - balanced life. Not only for the employees, but also for the upliftment of the society and community in which it operates, the culture is participative in nature.
All projects are made in participative manner, in consultation with the community, literally sitting with them, gauging their basic needs. They recourse to "participatory rural appraisal", which is a mapping process. Subsequently based on a consensus with the employees and the village Panchayat, the decision is taken and milestones are prioritized. Village meetings are held at regular interval and all the employees involved in the project have to consult with each other and also with the project head so that in the long run, the villagers become self- reliant.
The Company has adequate internal control systems for business processes across various profit and cost centres, with regard to efficiency of operations, financial reporting, compliance with applicable laws and regulations, etc. The Internal control system is supplemented by extensive audits conducted by the Corporate Audit Cell. Clearly defined roles and responsibilities for all managerial positions have been institutionalized by the ABNL over a period.
Regular internal audits and checks ensure that responsibilities are executed effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements. The Management Information System is the backbone of the Company's control mechanism. All operating parameters are monitored and controlled regularly. Any material change in the business outlook is reported to the Board of Directors. Material deviations from the annual planning and budgeting, if any, are reported on a quarterly basis to the Board of Directors. An effective budgetary control on all capital expenditure ensures that actual spending is in line with the capital budget.
The Company has an Audit Committee at the Board level with powers and role that are in accordance with Clause 49 of the Listing Agreement. The Committee acts as a link between the management, the statutory and internal auditors and the Board of Directors, and oversees the financial, reporting process. All the members of the Company's Audit Committee are Independent Directors.
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The scope of the functioning of the Audit Committee is to review, from time to time, the internal control procedures, the accounting policies of the Company, oversight of the Company's financial reporting process. To ensure that the financial statement is correct, sufficient and credible, and such other functions as may be recommended from time to time by SEBI, Stock Exchanges and/or under the Companies Act, 1956.
Cybernetics for CFO
Rewards & Recognition
It is essential for the executive to induce individuals to participate if there is to be a formal organization. The effectiveness of a given incentive is a function of the broader environment and the tailoring of the incentive to individual needs. The organization cannot payout in inducements more than what it receives from its value-creating activity, so it must match incentives to the value contributions of individuals in the organization. Incentives take the form of both materialistic and non materialistic inducements and include all forms of monetary compensation, together With nonmonetary forms, such as organizational purpose, desirable associations, acceptance, status, increased autonomy, pride of workmanship, and desirable physical conditions.
At ABNL they have a two-way formal performance review process which normally takes place between each manager and employee at the start of each new business year. It offers an opportunity to take a more considered view of performance and development, and agree actions on the basis of a wider exploration of the challenges and opportunities that exist within your role.
At the start of every year employee receives his target, which when achieved in a stipulated time yield to a performance linked bonus. These targets are both individual, team and sector specific and hence results in linking an employee's bonus not only to his but also to teams as well as sectors performance. Apart from this, there is also a mid year review to show employees there current performance.
Apart from these employees are given many other incentives like subsidized cab service, lunch and discounts on various branded outlets. There are also many non monetary rewards and recognitions given such as every employee is rewarded for their good work at the company's annual function. Awards are given to best employees, best new idea, and best team at the department level. Awards are also given at sector and company level.
Co-ordination and Communication
Specific management communication vehicles within the organization are necessary for-coordination, for resource allocation decision making Or conflict resolution, for building identification with organization purpose, and for developing Communication or and trust within the organization.
At ABNL, communication is of at most importance. Many committees are formed during the year to check if any grievance exists. Apart from these there are formal conferences in which sector head and CEO come and addresses employees informing them about recent developments and future strategies of the company.
ABNL has also a very good intranet facility through which they can communicate with anyone directly. The ERP System adopted by the company a decade back, acts as a great source of communication and information transfer within the company. This ensures faster flow of information there by enabling faster and informed decision making.
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