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TABLE
OF CONTENTS

 

 

Sr. No.

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Title

Page No.

1

Objectives of the Study

 

2

Qualitative Research

 

2.1

Business,
Government & Society

 

2.2

The Reliance
Industries Limited

 

3

Hypothesis Construction

 

4

Research Methodology

 

4.1

Selecting a BGS Model

 

4.2

The Dominance
Model

 

4.3

H1:
Relationship between Reliance Industries Limited and Government

 

4.4

H2:
Relationship between Reliance Industries Limited and Government

 

4.5

H3:
Relationship between Reliance Industries Limited and Government

 

5

Conclusion

 

6

References

 

 

 

OBJECTIVES OF THE STUDY

In the universe of human endeavour, we can distinguish
sub-divisions of economic, political and social activity – that is, Business,
Government and Society – in every civilization throughout time. Interplay among
these activities creates an environment in which businesses operate. The
environments of business, and the historical forces that shape them, have
profound implications. Simultaneously, the actions of companies and industries
shape not only their external environments but also the deeper course of history.

Business is not simply a passive entity that reacts to
historical and environmental forces. On the contrary, although strongly
constrained by its environment, businesses have a powerful capacity to shape
society and change history in ways large and small. Business seeks and
exercises political power in a government that is extraordinarily open to
influence. Business power, like any form of social power, is intangible, its
exercise not subject to direct or exact calibrations. Having no physical state
to be observed, it is known to be great or small solely by its effects on the
world.

The objective of the project is to:

·        
Describe
and analyse the Business relations of the Reliance Industries Limited

·        
Describe
and analyse the Government relations of the Reliance Industries Limited

·        
Describe
and analyse the Society relations of the Reliance Industries Limited

 

 

 

QUALITATIVE RESEARCH

Business,
Government & Society:

Humans are
social beings and from ages, we have survived by relying on each other by means
of multiple organized forces. Each of these organized forces has its mix of
regulations and process to culminate the optimum functioning of the organized
body.  Therefore, to learn and understand
the interaction and interplay between these bodies, we have classified and
distinguished them into three broad subdivisions, which are Business,
Government and Society.

Business encompasses a range of
organized bodies, which covers activities and actions pertaining to management,
manufacturing, finance, trade, service etc. These are usually through a
collective allocation and use of resources to achieve specific declared goals,
which are mostly involved in the provision of goods and services to customers
and fundamentally make a monetary profit of it.

Government is (are) the group of people
and institutions, which make and apply rules and policies. It also exercises
and exerts Sovereign authority over a state and nation or any other body of
people. Usually tasked with protection of the populace of both external and internal
threats, managing currency and economy with the policies and regulations they
make.

Society is a cooperative network of
human relations, which are organized by flows of power and relatively distinct
in its boundaries from other analogous networks. Composed of three element
which are: 1) Ideas, 2) Institutions and 3) Material things.

The study of
this is important as any organization whether in the Business, Government or
Society field interact with other organizations in the subdivisions. No
organization can function alone and therefore all co-exist, dependent and the
action of one complement and affect the functioning of the other.

If we look at
from a company’s point of view, we need to recognize that a company operates
not only within the market but also within the society. It is because if the
company’s actions are not accepted by the society, the firm will not be able to
go through with their objectives and make profits.  In addition, companies are important to a
nation as they are the core contributors of development for a country which is
in line with the objectives if the government. The Government also needs to
keep in touch with the needs of the society as the leaders elected by the
people run the institutions of the government. Thus, the government has to
balance development and socialistic views for the country. This is reflected in
the regulations made for the companies, so as the companies do not fall in the
bad books of the government as the government as the power to penalize the
companies heavily and revoke their business options. Which is why a complete
and through understanding of the interactions between these entities are
needed.

The
Reliance Industries Limited:

Reliance
Industries Limited is an Indian holding company in the Business sub-division
(from the three major sub-divisions). With an annual sale of USD 20 billion and
total assets of USD 21billion it has its presence in the fields of Energy,
petrochemicals, textiles, natural resources, retail and telecommunications with
its products and services reaching across the globe to around 100 countries. It
is also the most profitable and the largest publicly traded company in India.

The company was
founded by the Ambani brothers Dhirubhai and Ramnikbhai in the 1960s as a
partnership and in 1965 the partnership ended and Dhirubhai Ambani got hold
over the reins which he used to continue the Polyester business which led to
the culmination of the Reliance Textile Industries Pvt. Ltd. in 1966.

In 1985, the
name changed from Reliance textile Industries Pvt. Ltd. to Reliance Industries
Limited, the name that we are so familiar with. To further their foray into
other markets, the Hazira petrochemical plant was commissioned in 1991-92 and
in 1993, Reliance looked into the Overseas Capital Market through the issue of
Reliance Petroleum.

From 1995
onwards, the company delved into the Telecom Industry and in 1998 RIL oved in
packaged gas (LPG) under the brand name reliance Gas. The company moved into
the retailing sector with the introduction of Reliance Fresh in 2006 and the
broadband services in 2010 with the acquisition of Infotel broadband services.
In 2016, Reliance set up a disruption in the Telecom market with the introduction
of Reliance Jio.

Reliance has
been a pioneer in the various in India and continues to do so. With franchises
such as IPL, Reliance TV etc. under its belt it has never stopped diversifying
and moving into new segments and influencing these markets.

 

Reliance has
also been a key investor in development plans of India. Unlike many major
Multi-National, RIL heavily invests in India and these can be reflected on the
projects like for example Jio.  Reliance
Jio is RIL’s 4G (LTE) services, which has caused a major disruption in the
telecom market in 2016. It has had a huge impact in all the three divisions
i.e. Government, Business and Society. In the Business aspect, it has caused a
revolution in the market and brought about innovation. It has also forced competitors
to up their game and change their playstyle of customer service. In the domain
of the society, it has brought to the masses ease of use of data at a cheaper
price, which can be seen by its popularity and subscription in such a short
notice. The Society in fact lauds Jio for its achievements and encourages such
an approach. On the other hand, the government has kept a check on Jio so that
the telecom industry does not become monopolistic as it was driving many of its
competitors to losses. The government therefore regulated it by asking Jio to
withdraw its Summer Surprise offer. In addition, the government also supported
Jio’s innovation by supporting its expansion and ruling in favour of Jio when
its competitors deliberately refused to connect Jio calls with their services.

From this
example, we can therefore see a small glimpse of interaction of Reliance
Industries Limited with Business, Government and the Society about which we
will go in depth later.

 

HYPOTHESIS CONSTRUCTION:

H1: There exists a significant
relationship between the Reliance Industries Limited and the Government

H2: There exists a significant
relationship between the Reliance Industries Limited and the Society

H3: There exists a significant
relationship between the Reliance Industries Limited and other Businesses and
Corporations

 

 

 

RESEARCH METHODOLOGY

Selecting a
BGS Model:

Forces in Business, government
and society have been fundamental in shaping the world as it is today. They work together to create better solutions in all the three
elements.

·        
Business
– It encompasses a range of actions and institutions and satisfies human needs
by providing them products and services in exchange for profit.

·        
Government
– A structure
and process in society that has the authority to make and apply policies and
rules. The economic and regulatory powers of the government are the primary
facets that affect a business.

·        
Society – A cooperative network of human relations
composed of ideas, institutions, and material things that interact with each other.
It is organised by flows of power.

 

Four different
models describe the relationship among business, government and society:

·        
The Market
Capitalism Model – It believes that

Ø  Government regulation should be limited

Ø  Market will discipline private economic activity to
promote social welfare

Ø  The proper measure of corporate performance is profit

Ø  The ethical duty of managers is to promote the
interests of owners and investors

·        
The Dominance
Model – It believes that

Ø  Corporations are insulated from pressures holding them
responsible

Ø  Regulation by a government in thrall to big business
is feeble

Ø  Market forces are inadequate to ensure ethical
management

·        
The Countervailing
Forces Model – It believes that

Ø  Business is deeply integrated into an open society and
must respond to both economic and non-economic forces

Ø  It is not isolated from any part of the society nor is
it always dominant

·        
The Stakeholder
Model – It believes that

Ø  A corporation that embraces stakeholders prospers
& sustain its wealth creating function better with the support of a network
of parties beyond shareholders

Ø  It is the ethical way to manage because stakeholders
have moral rights that grow from the way powerful corporations affect them

Considering the
power that the Reliance Industries Limited wields on the common masses and the
ruling government, we believe that the Dominance model would best describe
RIL’s relationship with the Government, Society and other corporations. However,
this assumption will be verified in the following sections using secondary data
such as industry reports and news articles.

The
Dominance Model:

The dominance model represents the perspective of
business critics. Society is in a pyramid, but only a small group of privileged
(corporations, government and business leaders) control society. Power and
wealth are mostly concentrated in a selected group. In this model, the society does
not have any control but has a probability of experiencing difficulties. The
corporations and the government take advantage of the society. Businesses have
very high power and changes in the systems become crucial.

 

 

Ralph Nader, an American political activist, author,
lecturer, and attorney who is noted for his involvement in consumer protection,
environmentalism, and government reform causes, said: “The Corporations… have become
our Government… and both parties are moving deeper into the grip of global
corporatism. Corporate power over our political economy and its control over
people’s lives knows few boundaries”

H1: Relationship between Reliance Industries Limited
& Government:

The Hypothesis H1 states that there is a significant
relationship between the Reliance Industries Limited and the Government. In
this section, we attempt to prove this hypothesis using historical instances
from industry reports and news articles.

Instance 1: Mukesh Ambani’s speech
at the Reliance’s “intelligent” phone launch told us a lot about the
corporate cultures and private–public sector relationship in India.

Mukesh Ambani’s live speech on the launch of Jio was widely
compared to Steve Jobs’ speech on the launch of the i-Phone. However, the
difference between the two speeches speaks volumes about the societal make-up,
the corporate culture as well as the relationship between the private and
public sector in their respective nations, India and the United States. Sample
of some of Ambani’s statements are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Referring
to the Prime Minister on several occasions, Ambani piggybacked on India’s most
influential political figure, just as many Indian politicians do. Ambani puts
on the veil of patriotism and socialism for two reasons: One, to please his
target audience. Two, to please the government.

Despite
great progress, India continues to be a tightly controlled economy, especially
in sectors such as telecom and power, where currying favour with the
government, still India’s biggest business entity, can ensure big and lasting
profits. In order to survive and succeed, the government must be pleased by all
and sundry. The Reliance Industries Limited has been a major beneficiary of
this system.

The
speech’s stress on social upliftment, tinged with patriotism, sends out a
message to the government that Ambani is aligning Reliance’s goals with its
own, which therefore makes his company the only deserving private partner for
mega government schemes such as Digital India. Similarly, Jio Phone is not
intended to be a revolutionary product, but only a hodgepodge that helps fulfil
the government’s cherished dream of universal internet connectivity.

American
and Western European companies who are focussed on their respective nations do
not pitch their products/services as national services to please their
governments. Further, Ambani’s praise for the government has hardly anything to
do with the current one, as even in previous AGM addresses, he has expressed
similar sentiments. Other big Indian corporates such as HUL and ITC, too, make
sure to pay due obeisance to the government through their annual reports and
otherwise.

The
dependence of corporates on the government is characteristic not just of India,
but of most developing economies. A 2010 McKinsey survey of senior company
executives confirms this. On almost all criteria, the respondents from India,
China and Middle East/Africa were far more concerned about the government than
those in U.S. and Europe.

‘The
government has no business being in business’ is a cherished ideal. Corporate speeches will be a
leading indicator of India’s move towards that ideal.

 

Source: http://www.thehindu.com/thread/politics-and-policy/jio-phone-where-business-meets-socio-capitalism-meets-government/article19379656.ece

Instance 2:  Gas Price Raise to
solely benefit RIL?

 

The ruling Government of India had been
accused of raising the gas prices primarily to benefit the Reliance Industries
Limited with a whopping 1.2 lakh crore rupees despite incurring an additional
cost of about 54,000 crore rupees every year. The Chief Minister of Delhi, Mr.
Arvind Kejriwal brought the issue to light.

Instance 3:  India’s Reliance Jio
got $530 million undue benefit: government auditor

 

The Government Auditor has said that the
Reliance Industries Limited’s telecoms unit got an undue benefit of about $530
million after the Indian government allowed it to offer voice services over
wireless broadband spectrum it had won in 2010.

 

Reliance Jio It is the only firm in the country to
have a license for pan-India broadband wireless airwaves, though it has yet to
start commercial services. However, the auditor said the telecommunications
department had allowed the company to migrate from being just an internet
service provider to a full services provider at a cost far lower than
prevailing market prices. The migration had been allowed at price levels seen
in 2001.

The government’s lapses resulted “in an undue
advantage of 33.67 billion rupees ($528.56 million)” for the unit, Reliance
Jio, “due to non-accounting of time value of migration fees,” the comptroller
and auditor general of India said in a report. The report also noted that roll
out obligations had not been met by the winners of the airwaves, even four
years after the auction.

The above-mentioned historical instances clearly
portray the Reliance Industries Limited to have an amicable, if not favoured,
relationship with the Government of India. Hence, we can conclude that there
exists a significant relationship between the Reliance Industries Limited and
the Government.

H1: Relationship between Reliance Industries Limited
& Society:

 

H1: Relationship between Reliance Industries Limited
& Other Businesses (or) Corporations:

 

 

CONCLUSION

 

From the
analysis and findings, we can conclude that Reliance Industries Limited has a
very high position with remarkable difference with their competitors in the
segments they are present in. We also find that it possesses a dominance over
the Indian market and it is a very difficult to overcome the position Reliance
has built over time. They were not only able to establish a name for them in
Indian market but also with the international market.

            The dominance that Reliance
possesses also show its influence in the policies of the government and vice
versa. Reliance has also been influenced by the society in its decision-making,
which is evident in not only their products, and services but in the CSR
activities carried out by the company. Reliance has invested heavily in
transforming Rural India by bringing the developmental gap between rural and
urban India and in initiatives towards enhancing ecological balance and
biodiversity. Not to forget the affordable solutions to healthcare, education
and Sports development. The IPL can be seen as a way for finding talent in
youngsters in cricket who are given a chance to prove themselves in the midst
of international players.

 

REFERENCES

 

1)     
http://www.ril.com/ar2015-16/csr.html

2)     
https://www.economist.com/news/business/21610238-mukesh-ambani-indias-most-powerful-tycoon-could-make-his-country-better-place-he-would

3)     
http://www.thehindu.com/thread/politics-and-policy/jio-phone-where-business-meets-socio-capitalism-meets-government/article19379656.ece

4)     
http://www.rediff.com/news/interview/government-of-the-people-or-for-reliance/20140224.htm

5)     
https://en.wikipedia.org/wiki/Reliance_Industries

6)     
https://innovation.govspace.gov.au/interaction-between-business-and-government-where-might-design-help-dramatically-improve-things

7)     
http://www.thehindu.com/thread/politics-and-policy/jio-phone-where-business-meets-socio-capitalism-meets-government/article19379656.ece

8)     
https://www.bartleby.com/essay/The-4-Basic-Models-of-the-BGS-F3JTEAE3TJ

9)     
https://www.reuters.com/article/us-reliance-spectrum-auditor/indias-reliance-jio-got-530-million-undue-benefit-government-auditor-idUSKBN0NU09B20150509

 

 

 

 

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