Vijay Mallya Is An Industrialist Commerce Essay

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Vijay Mallya is an industrialist he is the chairman of the UB Group - an Indian conglomerate, with diverse interests in brewing, distilling, aviation, pharmaceuticals, real estate, engineering, fertilizers, biotechnology and information technology.Kingfisher Airlines Limited is an airline group based in India. Its head office is in Andheri (East), Mumbai and Registered Office in UB City, Bangalore. Kingfisher Airlines, is under its parent company United Breweries Group. Kingfisher Airlines was established in 2003. The airline started commercial operations in 9 May 2005 with a fleet of four new Airbus A320-200s operating a flight from Mumbai to Delhi. It started its international operations on 3 September 2008 by connecting Bangalore with London.

Leadership style:

The liquor tycoon is flamboyant and outspoken. Mallya's entrepreneurial styleand his trade acquisitions, etc., reveals sharp business acumen. By studying his profile and various instances in his life, competencies have been identified for a leader and entrepreneur. They are initiative, persistence, knowledge, systematic planning and leadership. These competencies are defined. Initiative is acting out of choice rather than compulsion, taking the lead rather than waiting for others to start, sees and acts on opportunities. Knowledge of the leader can be defined as when he has functional expertise, knowing who knows, consulting experts, reading relevant material and an overall openness to ideas and information. Persistence is a never say die attitude, information seeking till success and after that too, and concern for optimum utilization of resources. Systematic Planning is the breaking down of the complex whole into parts, close examination of the parts and inferring about the whole. Leadership can be defined as being self confident, assertive, leads people and motivate them.

Current company performance:

The kingfisher airline was never showing any accountable profit since it was active from may 2005, it has been reporting losses. After acquiring Air Deccan, Kingfisher suffered a loss of over INR1,000 crore (US$182 million) for three consecutive years. By early 2012, the airline accumulated losses of over INR7,000 crore (US$1.27 billion) with half of its fleet grounded and several members of its staff going on strike. Kingfisher's position in top Indian airlines on the basis of market share had slipped to 5 from 2 because of the airline's chronic inability to make a profit.

Critics if leadership can help its performance:

Include your points 200-300 words

Leadership error:

It may be a trifle uncharitable to hit a man when his business is down, but Vijay Mallya has served as such a wonderful example of how not to run a business, that one has to set scruples aside. There are larger lessons to be learnt from his impending failure with Kingfisher Airlines. Lets consider the important lessons that brought to the company's debacle .

Of the five reasons, the first two relate to the causes of failure (management hubris, leading to over-reach and expansion beyond the core) and the other three to how managements respond to crisis when things start going wrong (denial of risk, grasping at straws for salvation and capitulation to irrelevance).

In Mallya's case, he has not only managed to qualify on all five counts, but has added several bits of foolishness of his own. Jim Collins will have to add a few chapters when he learns about the Mallya mishaps.

Let's begin with Collins' five reasons.

Hubris: Mallya's Kingfisher foray had all the wrong reasons for entry and staying the course to disaster. He entered the business for the glamour it brought to his portfolio (which is why, in any Kingfisher flight, Mallya talks to you directly on the video), rather from any special understanding of competitive advantage. He wanted to be India's Richard Branson, forgetting the success is not easily copied.

In India, given high fuel prices and related costs, success in aviation depends on reducing costs all the time. In contrast, Mallya ratcheted up his costs wherever he could - from handing out earphones to all passengers to serving high-cost gourmet meals in business class.

When he bought Air Deccan, he failed to see that running a low-cost carrier is different from a full service airline. He made the mistake of calling it Kingfisher Red - another pointer to hubris ("my brandname") - and reduced his full-service brand to the level of a cut-price carrier despite much higher costs.

In this morning's Business Standard, Mallya has gone on record to say that "I am a businessman and my businesses are for sale at the right price."

He said that in the context of his flagship United Spirits, not Kingfisher. In the case of Kingfisher, which has Rs 7,000 crore in accumulated debt and a further Rs 7,000 crore in losses, he missed the bus for getting the right price years ago. He will get no price for Kingfisher at all.

Overreach: Mallya's prime folly, which again flowed from hubris, was overreach. The overreach happened at several levels.

First, he failed to understand the difference between running a business with 25-35 percent margins (booze) and one with 1-2 percent margins, or even losses for long periods of time (aviation). He failed to see his managerial limitations in this new business where he didn't have a clue on how to run it.

As we noted before, in the US, the last 30 years have seen nothing less than 50 airline bankruptcies. In India, we have seen at least 10 failures since  aviation was opened up to the private sector in the 1990s. But Mallya does not seem to have noticed any of this. He assumed that since he was so successful in liquor, the airline business should be a breeze.

Trying to run an airline like the liquor business was his first mistake. It was also a case of unrelated diversification.

The second overreach related to his expansion with the acquisition of Air Deccan. Despite the odds, the fact is Mallya did create the best airline brand in Kingfisher. Business passengers were shifting from Air India and Jet in droves to Kingfisher, thanks to Mallya's no-expenses-spared approach to Kingfisher First Class. But when he suddenly decided that he wanted size and scale, he bought Air Deccan at a huge premium (Capt GR Gopinath's airline was roughly where Kingfisher is today-on stretchers-but Mallya didn't see that). Worse, he named it Kingfisher, too. Do you name a loser the same as a potential winner?

Mallya can be excused for running a lavish Kingfisher, but trying to run a cut-rate carrier like Kingfisher was folly dipped in red ink from day one.

This double overreach-from profitable liquor to an unprofitable airline and even further into a discounting airline-set the stage up beautifully for Mallya's ultimate failure.

Denial of risk: It is one thing to blunder into an unprofitable business, quite another to bet the farm on it. But this is precisely what Mallya has done. He has staked almost his entire liquor business to save a sinking airline.

In business you can succeed by doing one of two things: avoid putting all your eggs in one basket (and so spread the risk), or you can put all in one basket (that is, focus on one business and stick to your core competence) and watch the basket like a hawk.

Mallya did neither. He put all his eggs one one flight to disaster - including his shareholdings and personal assets - and failed to focus on what makes an airline succeed.

Today, if Mallya is talking to Diageo to sell a stake in United Spirits, it is largely because he has pledged too much of his liquor business and his personal assets to keep Kingfisher afloat. He threw away his good business to rescue the bad.

Did Mallya not understand, at least as late as 2010-11, when everyone knew how the aviation business was going down hill?

Did he not understand the risks involved? Like a gambler who thinks the next throw of the dice will get him his jackpot, Mallya bet the farm after his Titanic had already hit an iceberg.

Grasping for Salvation: Nothing exemplifies a bankrupt rescue effort more than Vijay Mallya's constant refrain that he is talking to investors on Kingfisher. He has been talking about this for  nearly a year now, even while banks have moved in on his properties and aircraft lessors have been willing to pay Mallya's dues to the Airports Authority of India (AAI) just to repossess their aircraft.

This may be factually true, but why would any airline want to buy a stake in a company with Rs 7,000 crore in losses and an equal amount in debt? They will buy only if Mallya keeps his debts and sells the airline for Re 1. They will buy his assets (the remaining brand value of Kingfisher and its airport slots) and let him keep his liabilities (debts, etc).

Capitulation to irrelevance: Vijay Mallya is clearly going through the motions in talking about saving his airline when it does not have a snowball's chance in hell of being saved.

What he should be doing is abandoning the airline as a mistake, and save his shareholdings in the liquor companies, to the extent possible, from his creditors.

He is still making vague and irrelevant statements on FDI in aviation, and how fuel costs are so high - as though a reduction is fuel costs will help him in anyway.

If fuel costs fall, they will fall for everybody, and the resultant fare war will damage Mallya more than his rivals. A fare war has already broken out, but Mallya seems to think salvation lies just after the next mirage.

Write about company structure organizational business process

Company profile:

Virgin Group Ltd. is a British multinational conglomerate company founded by business tycoon Richard Branson. Its core business areas are travel, entertainment and lifestyle and it consists of more than 400 companies worldwide.The net worth of Virgin Group as of September 2008 was £5.01 billion.

.Ricard Brason started his early years with the magazine called Student at the age of 16. In 1970, he set up an audio-record mail-order business. In 1972, he opened a chain of record stores and named it Virgin Records.Branson's Virgin brand grew rapidly during the 1980s, as he set up Virgin Atlantic Airways and expanded the Virgin Records music label

It was on june of 1984 the first virgin flight took off. In March 2000 Virgin Group sold 49% of the airline's holding company to Singapore Airlines for £600.25 million. Virgin Group still owns the remaining 51%.

In June 2002, Virgin Atlantic became the first airline to use the Airbus A340-600.

Leadership style:

Sir Richard Branson is also known for his unique character and leadership styles with the amalgamation of adventure in it.,he is a person who willingly takes risk and strongly believes that people are the foundation to his company's success.

  He is definitely a democratic leader. He always pays attention to input from other people and gives utmost importance to it.He always carries a notebook in his pocket all the time just in case he hears something interesting from people that he interacts with on any level. Whether it be an employee, friend, business partner or complete stranger, for according to him he always believes that good ideas can come from anywhere and anytime. He has said in an interview that,   "Virgin Group is an organization driven on informality and information, one that is bottom heavy rather then strangled by top level management".Making it clearly evident that he is open for ideas.

    Branson will still ultimately make the top decision and never hesitate to take risks . He also stresses on the importance of being a simple guy and making your employees feel important. He feels that praise goes much farther than criticism and he likes to make sure his people that work with him are taken care of.

    Branson is a very natural born leader and shows all the characteristics of the leadership trait.As mentioned above se is a ardent adventurer and has few records to his name.

In 1987 smashed the world record for the fastest crossing of the Atlantic ocean. In 1987-91 Brason crossed the atlanctic ocean in the "VIRGIN ATLANTIC FLYER". Which was the first hot air ballon crossing the Atlantic ocean, so there are many such accolades added to his reputation.

Who is a better leader:

The two have quite a bit in common in terms of their loud personalities. Richard Branson has had no problems being in the limelight, neither does Vijay Mallya. Both seem to have a posse of beauties living the larger than life image. Branson and Mallya- their lifestyles defy the lifestyle of the ordinary rich and famous with both owning islands and home around the world.But the question here is though Brason has been in the airline industry for more than 30 years he is able to balance and create profits unlike Vijay mallaya.

Ironically both had started with different business before entering into aviation industry. Both made their fortunes outside the aviation business - Branson through his music company Virgin Records, and Mallya through his liquor business, United Spirits. Both men began their careers early in life - Branson founded Virgin Records when he was 20; Mallya took over as UB Group chairman at 28 after his father's death.

In aviation too, similarities abound. Branson entered a market dominated by British Airways; the Indian skies were lorded over by Jet Airways in Kingfisher's infant years.

Today, everything about Branson and Mallya is as different as chalk and cheese.The reason according to me is Mallya's flamboyance and extravagance, especially his association glamorous events like the Formula One race and his Kingfisher calenders when his airlines was taking a plunge in terms of profit and was heading towards severe bankruptcy and payment dues for employees, have drawn a lot of criticism. At any point of time in this society we live entrepreneurs and successful people have to get to get their balance right in their lifestyle.People are always evaluated by how they use their money in a more constructive manner, in making people's lives better.

Flamboyance is always dangerous. If you show your wealth too much, that's never a good thing mainly for a business person. You've got to get the balance right, especially in a country like India where there are poor people.

That's were Brason scores more than mallaya and proves he is a better leader.He always Flamboyance is always dangerous. If you show your wealth too much, that's never a good thing mainly for a business person. You've got to get the balance right, especially in a country like India where there are poor people.

That's were Brason scores more than mallaya and proves he is a better leader.He always

follows simplicity and focuses on issues that can make a difference ,keeping aside the factor that he even owns a island like mallaya does.But that's not of any discussion at this moment.

Current business process Virgin:

When talking about Process, the company's main motto of involving every employee in the customer satisfaction process, both directly and indirectly.Virgin Atlantic's process has always related to both internal communications through employees and external communication through strategic alliances to further capabilities. The Virgin Atlantic management structure allows all head officers to report directly to Richard Branson. Sir Richard Branson is himself active in communicating with employees. He says in his book, Richard Branson:Losing My Virginity, "I also insist that we continually ask our staff for their suggestions,and I try my hand at their jobs". The company at present is also engaged in code share and strategic alliance with various airlines acrpss the globe , thus permitting greater external communication.

Current market situation: