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The Adi Godrej Chat

'Joint ventures and strategic aliances are not necessarily forever'

Adi Godrej was more than forthcoming on why the alliance between Godrej Soaps and Procter & Gamble disintegrated some weeks back.

The Godrej Soaps chairman inaugurated our first midday Chat on Friday afternoon with an hour-long discussion on MNCs and the outlook for Indian business before he rushed off for a board meeting.

Check out the transcript. It is refreshingly candid.

Nikhil Lakshman, (Fri Sep 13 14:49:54 1996 IST):

Good afternoon, Mr Godrej. Welcome to the Rediff Chat. I do hope you enjoy this experience.

Hi everyone

hello mr. godrej. remember me??

Nikhil Lakshman: thank you I'm looking forward to the session.

Hello Mr Godrej. Is it correct to say that the MNCs are largely responsible for the introduction of "Mc Donald" culture to India with the result that the tradional Indian trustworthiness, honesty, brand name loyalty are fast disappearing so as to generate a culture of "It is profit that matters"

Good afternoon Mr. Godrej. This really is a rare opportunity, to be able to speak to you.

Is Mr Godrej in? I'd like to ask him whether the Godrej-P&G break-up signals the death of joint ventures in India.

Mr Godrej: after the break of the strategic allaince with P&G what are your plans to revive the declining image and market share of your flagship soap brand Cinthol?

Mr Godrej,unlike many other Indian industrialists, you are much more open and forth-coming, do you think Godrej has suffered more because of the P&GG break-up or restructuring?

Nathan: I don't agree with your assesment. I think many multinational bring in lot of technlogy, investments and specialised knowhow that India could usefully absorb. Our consumers also need the variety of products that MNCs bring with them. I'm in favour of India encouraging MNCs in our country.

Hi Adi. Fancy meeting you in cyberspace.

Apart from Cinthol, Godrej just has 4 per cent of the soap market, how can you revive this. In addition to this are also rumours of Godrej soaps selling out to Kao. How much of this is true?

Melanie: I think Godrej soaps will benefit from the restructuring of our allianfce with P&G. We will continue to manufacture soap for P & G. We will now manage our own brands and control our own distribution. This, we feel, will help accelearate the growth of our market share. We also recieved a lare sum of money for sale of our shares in PGG which will strenghten our financial position. All in all Godrej Soaps is a gainer in this restructuring.

Adi. Is it true that the real reason behind the PGG break-up has been the forced coming together of the diverse corporate cultures of P&G and Godrej. Word is that the people from these two organisations did not see eye-to-eye on anything. Is it true??

Hi, Mr Adi. My Question Is This. What Do U Plan To Project Godrej As After The Break Away Between U & P&G ??

Good evening, Sir. I was just wondering whether a cultural clash would make it impossible for joint ventures to exist in India.

Ramchandran: We have major plans for Cinthol promotion which you will see unravel in the next couple of months. We will also relaunch our Ganga brand very soon.

Hi Parmeshwar! good to see you here. Remember me from old JJ? want to get in touch with the old gang...tell me where & how .

Balamurali: I don't expect any problems from cultural clashes. Indian managers are fast adjusting to the changing conditions and are becoming global in their approach and competitve in their operating style.

Mr Godrej: Apparently the Godrej brands suffered during the P&G Godrej dispensation in terms of market share. Do you agree with this.

What is your opinion of the takeover code that has just been launched in your country? Does that mean hostile takoevers will become the norm in India?

Mr Godrej, in the times of core competence, is not Godrej with interests in areas as wierdly diverse as soaps, white goods, locks, is like being a dinosaur? Are your planning to focus on a particular area?

Hi Buddy. So when am I featuring in the next Cinthol ad eh??

Mr Godrej, it is also believed that the other Godrej soap brands were given a step-motherly treatment, compared to Camay?

Deepak: We plan to strongly project our brands. Have a major presence on TV sponsored programmes, as we had prior to our P& G alliance.

Hi Parmeshwar good to see you too made it to the chat today.

Sir Do U Think The Breakaway Between P&g - Godrej Will Be A Call To Lots More Companies To Do The Same ? How Long Do U Think This Piggy-Back Ride ( Called a Merger) Last ??

Mr Godrej: What is your view on non-voting shares which has been permitted in the latest budget. Do you think it will take -off in India?

coomi?? what's a coomi??

Parmeshwar, Forgotten Applied Art days have you?

Akash: We have separte strategic business units for each of our diverse businesses. These business units are professionaly managed and cater to their businesses by stressing on their respective core competency.

Ramchandran: Non-voting shares is a good concept. It could be usefully employed by some corporates. I don't think they will be succesful unless there is a considerable dividend premium over voting shares.

Mr Godrej, According to you, what makes your soaps so different from other brands

Wshy are Indian businessmen so insecure about foreign companies? Are you not a member of the Bombay Club that wanted a level playing field? Are Indian businessmen frightened of competition?

Mr Godrej, thanks. But you miss the point. What synergy is there in such diversity. That may have made sense during the socialist years, but does it hold today? Why not hive off some areas and concentrate on a few, and thus become an MNC?

Mr Godrej what are the lessons you've learned with the P&G break-up. What lessons does it have for the other Indian joint MNC ventures?

Dear Mr. Godrej. Namashkar. It feels good to talk to a person who had the guts to kick some white ass. It is time we showed these guys that they can't take us for granted. I personally feel that Godrej is a great company and has brands which are world class. Please keep up the good work. Lots of good wishes from a true blooded Indian.

Deepak: Strategic alliances last as long as there is continued mutual business interest. Our strategic alliance with P & G was amicably restructured because both parties felt that it would be in their mutual interest.

Sir, Have Heard That Diversification Can Also Be Spelt Di-Worse-Fication. Don't U Think That Godrej Should Seriously Concentrate On One Good ?

Mr Godrej: Do you think that India is still on the buying list of the FIIs ?

Do you regret the association with P&G? You have lost your marketing dept which your family built up over so many years. How will you recover from this blow?

Mr Godrej:Do you think that the Indian stocks are still in the buying lists of FIIs?

Mr Godrej, may I draw your attention to my question on takeovers?

melanie: The lessons are 1) Joint ventures and strategic aliances are not necessarily forever. 2) That as people change in MNCs every three years or so, perceptions can also change. 3) That MNCs are not interested in promoting brands which are not global.

Mr Godrej, my question on synergy and concentrating on one core area. Incidentally, Deepak has the same question.

Dear Mr.Godrej what is the mission with regard to Information Technology. You have made a small attempt at getting into this category. Do you think getting into this category is a bit too far fetched for a company who is mainly into soaps and industrial products?? Moreover your venture has not been too sucessful. Don't you think that you made a mistake by getting into this?

Mr Godrej: I'm keen to know if the Godrej brands suffered during the time you had the joint venture with P&G ?

Ryan: I'm not a memeber of the so called Bombay club. I'm not at all frightened of foreign competition. I'm an outspoken supporter of MNCs investment in India.

Adi dear what time are you coming home tonite??

James Brown: Our group is only involved in niche areas in information technology. We, however, are involved in distribution of peripherals. Distribution, is one of Godrej's core competency.

Mr Godrej, as a representative of Indian industry, can you tell us why Indian industrialists do not promote professional management? Why is that only sons take over from their fathers (a sort of dynastic rule)? And given that MNCs do not, are you not limiting your professionalism by doing so?

I am sure you are not frightened of mncs. I was just curious about why Indian businessmen are so scared of mncs and intl competition.

In the event of this restructuring and in keeping up with the competition in the consumer goods market, what are your products that you will be concentrating on aggressively?

Ramchandran: The overall market share of the Godrej brands remained unchanged. Cinthol went up. Some of the smaller brands went down.

Sir, This Question Is With Regard To U Supporting MNC Investment In India. My Question Is How Long Will We Be Able To Produce Competative Goods With Very Less R&D WhenCompared To Them ??

Do you think the reforms can be reversed? I read an interview you had given Rediff where you say they could not. Have you changed your mind now that the United front govt is speaking several voices?

Melanie: We will be concentrating on our Cinthol and Ganga brands, Our hair dye business.

Mr. Godrej. Thanks for answering. No doubting Godrej's distribution strengths. But then why is it that even with the marketing strength of Microsoft behind you the software section of your operation is losing money??

Mr Godrej, could you be a little morfe xpansive in your responses?

Hi folks,
Wanna have a bath? Use me. Just me...

Balamurali: I do not belive that the reforms either will or can be reversed. Most Indians support reforms.

Mr Godrej, you just said in a reply that Indian managers are adjusting globally. If this is actually taking shape, why is there a perception that MNC's bully their Indian partners. Do you think the Indian partner is often taken for granted by multinational giants?

Dear SABOON. Are you one of our brands?? If not then please slip out quitely thru the drainage.

James Brown: I can't answer your question. As I'm not familiar with the nitty-gritty of that business.

There is such a lot of skullduggery in Indian business. To what do you account this to?

Mr Godrej: Which are the next set of reforms which the government should take up to ensure that the economic growth is maintained at a high level.

SABOON how does one unwrap you???

Mr Godrej, you still have not answered my question on takovers. What I wanted to know was: could Hindustan Lever take over Godrej? Is it possible under SEBI's new code?

Melanie: you can only be bullied as much as you allow yourself to be. Many Indian companies are refusing to yield to unreasonable MNCs demand. I feel it is a learning process and soon Indian companies will not only be able to resist unreasonable MNC demands but also effectively compete in the market place.

Mr Godrej, if Mr Chidambaram were to ask you for advice on the reforms, what would you tell him? Somebody else on this Chat had asked you about the reforms. Could you answer both questions?

Ryan: No, As the Godrej group controls 70% of the shares of Godrej soaps.

Sir, U Still Have Not Answered My Question On Competation Between Indian Comps. & MNC's

Mr Godrej: You have 70% but do you contemplate your selling out to HLL anytime in the future?

Hullo, Mr Adi Godrej. I have just logged in. It's pretty early here in Cincinnati. If you were to list five things that led to the break between P&G and your companies, what would you say it was.

S R vengsakar: I would suggest the following. 1) reduce personal income tax rates as I feel lower rates will lead to higher revenue. 2) I would free the rupee on the capital account at an early date. 3) I would suggest opening up of all consumer product imports.

Who are the Indian businessmen you admire most? And the Indian companies you admire most?

to imran khan
Hee, hee, naughty boy. Dont talk of unwrapping me. Just press squish squish. I am a bottle you know.

Mr Godrej: With regard to priority in economic reforms don't you think the government should address the issue of infrastructure?

Hi, Wouldn't The Freeing Of Consumer Product Imports Lead To A Slump In The Local Market.

What is your impression of the P&G operation in India? Is it a competitive company? I get tghe impression that US corporations are tied down in India. Take Kellogg. Or P&G. Would you agree with this thesis?

SABOON its a pity you are a bottle. I ma now going to block your nozzle so that you will suffocate and explode into a million bubbles:-)

Mr Godrej, by the beginning of next century where do you see Godrej soaps? Do you see a Godrej coming up with a strong competitor in the washing powder range. Something that could give Ariel and Surf a threat?

I am Mr Stephen Lee and am going to chat w/ U.

Sir, How Long Do U Think Reforms Will Go On Under This Coalition Govt. How Long Do U Think The Govt Will Last ??

Good Evening, Mr Godrej, What is the secret of your success?

Samuel: 1) The negotiated amicable restructuring was found to be mutually beneficial. 2) P & G found it attractive to have 100% control over it's distribution, and we did not mind as we had an alternative distribution system in our group company, Godrej Hi care limited.3) MNCs change their top personnel very rapidly. New people tend to have different perception. 4) At the time of our alliance P &G were not permitted 100% investments in India, Now they are. 5) The restrictions imposed on each other were oppressive.

Chan Li: 1) I spend 30 days a year, atleast in training. 2) Hardwork.

Were you not aware of these conditions when you formed the alliance with P&G? Did it become obvious to you only later? You mentioned people in the MNC... was David Thomas the problem?

Deepak: I'm not an astrologer!!!

Mr Godrej: You seem to be sidestepping on the issue of the short lived arrangement with P&G , please give us the real reasons for the parting

TO IMRAN KHAN
Sheeeesh. Your if you are going to get violent I am leaving.

Dear Mr. Godrej. If you were to sum up the corporate philosophy of Godrej in one line, what would it be??

Samuel: Some of the changes were certainly un anticipated. I don't want to name any individual persons.

Sir, Talking About Training Do U Think That We Will Be Able To Face Competition Globally Since Training Here Is Certainly Not Given Precedence ??

James: Value based conduct of business.

SABOON if you have to go then please dissolve into the drainage

Sir, Can you guide us, what are the hidden pitfalls of having a merger with the whites? Anything specific?

What do you feel now that the relationship with P&G is over? Is there a sense of relief? Trepidation? Has it undermined your stature in the family and the company? Left a question mark over your place in business history?

Mr Godrej, in view of liberalisation, which Indian companies today have a true global perspective?

Mr. Godrej. That is a refreshing change in perspective. Very few people talk about values anymore today. What would you attribute this decline in value based morality to??

Deepak: Many Indian companies have increased their emphasis on training tremendously. I think it is absolutely essential to spend a lot of money on training and continuous improvement. In our group every employee has to undergo atleast 5 days of training a year.

TO IMRAN KHAN:
Help!! the drainage is choked

I wish the whole of India community will come to understand what life is in Singapore. There are multi-racial communities in Singapore.

I agree with mr Brown. Why are most of your peers so shady? So unethical? Do you attribute to a lack of culture, their origin in the thugees of the 19th century?

Mr. Godrej I am sure that you have a good highly motivated team of people working for you. Besides training what are the other things according to you which are the key to keeping employees happy and build a successful business empire such as yours??

Sir, After Seeing Melainie's Question What I Want To Ask Is This. Will India Be Able To Make A Breakthru In Say Info Tech.(For Ex) to Make A Niche For Themselves Do U Think Figures Count ??

Brown: Value based companies are very successful throughout the world. If you look at companies which have succeded for many decades, most of them lay great emphasis on values. In our group, we undertook an exercise where all our employees were involved in evolving shared values for the corporation.

Venerable Sir, I ask you what are the pitfalls of mergers with the whites.... must know soon.

Mr Godrej: Do you think that Indian companies have the resourses to tap the potential in food processing industry?

Brown: Empowerment of employees is very important.

SABOON just hold on I have called the plumber

Sir, In Asia, Where Would U Rank India Based On The Business Structrue ?

Ramchandran: Because of tastes and eating habbits, I feel that the food processing industry will not take of very rapidly in India. Those, however, who invest at this early stage wilkl reap major benefits 10 to 15 years hence.

TO IMRAN KHAN
Please dont. The last I heard was that the PLUMBER was killin people in South Bombay.

Sir, you make mistake. Soap not for whites...stick to Asians they bathe everyday

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Sir, Talking About MNC's How Long Do U Think They Will Last Here, What With Red-Tapism, Bureacracy & Corruption All Around ???

Melanie: Some that come to mind are: Ranbaxy, Bajaj Auto, Arvind mills. There are many others.

Mr Godrej. I am disappointed. You have not told me about why P&G's operations have not taken off in India? Was the problem david Thomas?

SABOON that is presicely the reason I have sent for him.

Mr Godrej: I think food processing has bright future even in the short term , which is reflected in the increased investments by MNCs like HLL and Nestle` in this sector. Don't you think your group should also go a little faster in this industry?

Deepak: There are MNCs who have been in India for more than 100 years. There will always be some who will drop out. I however feel that many will succeed.

Mr. Lee please spare us the sales jab.

Do you think foreign managers tend to look down on Indian managers? How do we resolve the clash of cultures that dog MNCs?

Ramchandran: Our group has two companies in food processing. Godrej foods ltd. and Godrej Pillsbury ltd.

BYE FOLKS... *snif* NOBODY RESPECTS A SOAP HERE :-(((

Sir, You have any outlets in Kowloon?

Mr. Godrej I personally believ that only Indian cos. will do good in food processing business here because they understand the Indian pallete. I am sure you will do well if you get into it. Are you seriously planning to? In what products?

Mr Godrej, I thought you spoke your mind. I am upset that you don't want to discuss the MNC manager angle.

To Saboon, Get The H**L Out Of Here

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S R Vengeskar: Many foreign managers have high regard for Indian managers. There are however forein managers who due to inadequate experience in India do not handle Indian managers well on ocassion.

Sir, Talking About Food Processing, There Have Been Many Companies Which Have Had To Close Bcos Of A Non-Existent Market Here. Since Godrej Also Makes Products, How Large Do U Think The Market Will Be ??

Good evening, Adi. I am curious. Why would someone like you, a world class maneger, still believe that your companies must be run by the family. Don't you think you can no longer afford that liberty and luxury in the liberalised era?

Mr. Godrej with all due respects I disagree with you on the white manager issue. I have seen many indian managers being looked down upon. Whites to my mind are condescending at the best. I think it is their color bias which comes in the way. Therefore I like cos. like HLL who actually have brown guys manage white ones.

Deepak: Food processing is a difficult area. I see more failures in this business than in others.

Where do you see Indian business heading in the next 10 years?

Anybody got lots of vacant office space?

Mr Godrej: How would you describe your style of management? We have heard its very centralised and you tend to domineer.

Mr. Godrej you were seen in the HLL HQ soon after the P&G beak-up. Is anything cooking out there or were you there only to congragulate Mr. Dadiseth on his new appointment??

What are trhe gtreatest obstacles confronting the Indian economy? Can a company like yours ever be global? Do you harbour the urge to get back at P&G?

Burjor Pavri: I belive in professional management. We have taken management trainees in our group for the last 30 years. I am a graduate of the Sloan school of business, MIT, And my brother is a graduate from Harvard business school. So we are professional managers too.

Mr Godrej,again talking of these MNC's with foreign CEO's based in India. Why is it that they are so inaccessible. Say a David Thomas, a HJJ Rensma,why aren't they as accessible as you are. Isn't this a part of corporate strategy?

Hey CUPBOARD got any interesting skeletons?? Are thay smelling bad. Come into the chat room I may give you a FREE Cinthol.

THANKS FOR THE INTERACTION, UNFORTUNATELY I HAVE TO LEAVE NOW. I ENJOYED IT. BEST WISHES.

HEY SAMUEL STEELE
Even my last name is STEEL?

PLEASE TAKE FIVE MORE QUESTIONS!

Goodbye, even if you did not answer my queries. :-((((

CUPBOARD I am the original man STEEL. What say??

GOOD BOY ADI I AM PROUD OF YOU!!!!

Sir, Anyway Thanx For Answering Our Questions.

Steel, steal, or stile?

Mr Godrej, Many thanks for appearing on the Chat. I hope you will be with us again. Good evening.

Chan Li you know kung-fu??

Parmeshwar,Sure do. Want sample?

Chan yes pleeeeeeeeeeeeeease shoooooooooooooow!

Chan yes pleeeeeeeeeeeeeease shoooooooooooooow!