“Business ethics was paramount for Rahul Bajaj”
By Vishnu Makhijani
New Delhi, March 26 (IANS): Despite the myriad obstacles he faced during a career spanning more than five decades at the helm of the diverse Bajaj Group, veteran industrialist Rahul Bajaj, the original promoter of Make in India, lived by the saying according to which “integrity and character matter. Without them, no amount of ability can get you anywhere. In addition, you need courage – courage to make tough decisions and courage to stand up to something. thing if your conscience tells you that you are right.”
Business ethics were therefore paramount to Rahul Bajaj, the grandson of Jamanlal Bajaj, a close associate of Mahatma Gandhi and who founded the Bajaj Group in 1926. He took over as the group’s head in 1965.
“Ensuring that the consumer gets the best possible product at the lowest possible price, and that the employee receives a fair wage for a day’s work, is the test of business ethics,” he often said. , writes business historian Gita Piramal in ‘Rahul Bajaj – An Extraordinary Life’ (Penguin), the first authorized biography that chronicles the transformation of India through the life story of one of the legends of India’s most successful and visionary businessman, who died on February 12 after a long illness at the age of 83.
Bajaj cut his teeth at a time when Indian industry was going through one of its most difficult phases – the licence-permit-raj era – during which politicians and bureaucracy dictated every step, from creation of a factory to the decision of its production and in some cases even the price. For example, the waiting list for Bajaj scooters, whose company eventually became not only one of the most valuable two-wheeler manufacturers in the world, but also the largest two-wheeler manufacturer in the world and the largest manufacturer of three-wheelers.
Restrictions began to ease somewhat in 1985, but were not removed until the era of liberation which began in 1991 when Manmohan Singh (later Prime Minister) presented his first budget as Minister of Finances.
“We faced the competition head-on and I focused on three things: I need to have volume, the lowest cost and the best quality. It’s very simple… There’s nothing clever about it. You don’t have to go to Harvard to learn. If you don’t have these three things, you’re in trouble. Others didn’t, and they couldn’t compete with us in quality or price. The best quality would include the latest cutting edge technology. And that is what I have constantly done. I needed scale for both, so I kept going to Delhi to get approvals for extensions,” Bajaj said in the book.
This saw the Bajaj Group drop from 40th in the hierarchy in 1964 to seventh in 1990 and third in 2020.
Bajaj’s journey should be seen through three key lenses, writes Piramal.
“First, the leadership lens.” Bajaj exemplified leadership “as it is taught in business schools, but is often so elusive in the corporate world itself.” He was “visionary and clear on strategy”, was “decisive, action-oriented and execution-oriented, and excellent with people and at building teams”. What made him distinctive was “his beliefs and his ability to speak out and stand up for his beliefs” – ultimately, “the true hallmark of leadership”.
“Secondly, his journey captures the complex and inseparable relationship between business, government and society…It symbolizes the evolution of this relationship in India…Given that we live in a world where environmental, social and governance concerns are increasingly important to investors and other stakeholders. , I hope these lessons will resonate with readers from diverse backgrounds.
“Finally, the lens of sustainability and the value of leaving a lasting legacy. Many young entrepreneurs today are driven by billion-dollar valuations and relatively quick exits. It’s certainly a tempting path. Yet Rahul’s journey testifies to a life of perseverance and purpose, towards creating value with a horizon that spans generations,” writes Piramal.
Based on unrestricted interviews, remarkable anecdotes and business teachings, this book is a comprehensive account of the life and times of the business icon. From his mother’s incarceration during India’s freedom struggle to his own personal life, his journey to becoming one of the world’s most beloved business personalities, this book opens a window into the turbulent life from Bajaj.
It’s a book peppered with incomparable lessons about family, business and public life, and how to leave an indelible mark on the fabric of society.
For example, Bajaj has been very clear about its “no bribe” rule – whatever the consequences.
“I learned how hard it can be to chase someone in Delhi for a license and then some fool delays the whole project procrastinating because he wants something for himself…but thank God I I have never been penalized. Even though the money could have bought a license, I can say categorically that we did not give any minister or bureaucrat a single rupee to get a license,” Piramal quoted Bajaj as saying.
Then there’s Manohar Joshi’s comment after Osamu Suzuki of Suzuki Motors outbid Bajaj for the government’s 50% stake in Maruti Udyog Ltd. during the divestment process.
“An incident is still fresh in my mind. As Minister of Heavy Industry (in 1992), we were instructed to divest from Maruti Udyog Ltd. You approached me to buy the shares. let it be known that you want to buy the shares, but the whole deal must be transparent, and you will not bribe anyone, at any time.During my long political career, you were the only industrialist, who was so honest and frank. Rahul ji, I am proud of you,” the book quotes Joshi as saying.
Bajaj was also very clear on the question of probity on two aspects of the opening of banking to the private sector in 1993.
“The RBI must ensure that new banking licenses are not granted to firms or large houses whose track record does not suggest probity in public life and ethical behavior,” Piramal quoted him as saying.
“The second call was to erect Chinese walls within a conglomerate in order to avoid the lending of funds between the companies of the group and its bank”, writes Piramal.
Bajaj was also outspoken about the Bombay Club, which was initially made up of 16 industrial majors, then reduced to six and finally single-handedly.
“The whole idea has been completely ultafified (turned on its head),” Piramal quotes Bajaj as Indian-American economist Srikant Datar, now dean of Harvard Business School, put it in a 2008 interview.
“I cried out in the 1980s for liberalisation, but in 1993 I became infamous. When I called for a level playing field everyone thought it was a euphemism for protection. All we saying is that the government should allow us to face foreign competition. Nobody listened to me, neither the media nor anyone else,” he said.
Bajaj was also pleased that the line of succession, as of 2008, which he drew after stepping down as Bajaj Group Managing Director in 2005 retained male descendants from both branches of the family – his own and that of his late uncle, Ramakrishna Bajaj – uni.
He decided that eldest son Rajiv “should continue to run the automobile manufacturing business as managing director and chief executive. (Younger son) Sanjiv would hand over the international market to Rajiv…Sanjiv would oversee financial and news activities strategic activities”.
“The two sons would serve on all boards and Sanjiv would continue as the executive director of Bajaj Auto. Rajiv would join Sanjiv’s boards as they are formed. The board structure of Bajaj Auto should remain unchanged and (Rahul) Bajaj would be chairman of the two new A few cousins on the side of the Ramakrishna family would be fine,” writes Piramal.
Simultaneously, Bajaj Auto was split into three units in 2008 – Bajaj Auto, Bajaj Finserv and a holding company. He resigned as Chairman and Non-Executive Director of Bajaj Finserv to become its Chairman Emeritus in 2019. He resigned as Non-Executive Chairman of Bajaj Auto in April 2021, handing over the position to his cousin Niraj and is remained with the company as Chairman Emeritus. .
After his studies at the Cathedral of Mumbai and the John Connon School, Bajaj graduated in Economics from St. Stephen’s College, Delhi, obtained a law degree from the Government Law College, Mumbai and completed it with an MBA from Harvard.
Honored with the Padma Bhushan, India’s third highest civilian honour, he was also a member of the Rajya Sabha and twice president of the CII.