Succession Planning 546n1v

SUCCESSION PLANNING AT RANBAXY

Succession planning 

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Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through succession planning process, company recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.

 organizations

use the concept of succession planning to a greater extent as a way to identify and cultivate employees with leadership qualities to assume greater responsibilities in the future.

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 The

term 'succession planning' also referred to as replacement planning can be described as, 'a process through which leaders identify and help groom their replacements before moving on to another position themselves.'

 Such

organizations are able to plan for future leadership positions.  Also, they avoid the dangers of ill-timed promotions of inadequately trained managers.  Succession planning also helps in recruitment as well as retention of employees by drawing more employees to the organization and also by filling up senior level positions from within the organization

IMPORTANCE OF SUCCESSION PLANNING IN FAMILY-OWNED BUSINESSES  The

importance of succession planning is vital to the success and survival of family-owned businesses. Ideally, in a family-owned business, a CEO succession plan should contain details like who would run the business after the owner retires and how the ownership of the businesses would be transferred.

RANBAXY  In 1952, an entrepreneur Bhai Mohan Singh founded Ranbaxy as a manufacturer of pharmaceuticals in Mohali in Haryana. Like most other small pharmaceutical companies, Ranbaxy too was mainly engaged in producing drugs by reverse engineering the molecules of established drug brands . In 1967, Dr Parvinder Singh (Dr Singh), Bhai Mohan Singh's son, ed the company after completing his doctorate in pharmacy at the University of Michigan (USA). Dr Singh was a very ambitious person and worked hard to take the company to greater heights. In 1982, he became the company's Managing Director 

 Brar

had ed Ranbaxy in 1977 as a business development manager. A thorough professional and hard worker, he soon rose through the company's ranks to become one of Dr Singh's most important and trusted men  In 1993, Brar became the President and a whole time Director. From the very beginning of his career at Ranbaxy, Brar was a close confidant of Dr Singh.  Company watchers felt that it was 'Parvinder's vision and Brar's execution which helped Ranbaxy turn into a group with many manufacturing facilities outside India with more than 2,000 overseas employees 

 In

the early 1990s, differences cropped up between Dr Singh and Bhai Mohan Singh over the growth route the former was charting for the company. Dr Singh wanted to take the risk of investing huge amounts into basic R&D and in expanding operations to other countries. .

 Brar

ed Dr Singh's vision of internationalizing the company by setting up operations in various countries like China, US, Ireland, and others in Europe. In the late 1990s, Brar chalked out a strategy to shift half the company's business to the US, a decision which was staunchly opposed by of the Singh family

BRAR AS RANBAXY'S MD & CEO  When

Brar took over as Ranbaxy's MD & CEO, the company did not have any family representation on the board. It was truly a company managed by professionals. However, by the beginning of the 2000s, the Singh family reportedly decided to take control of the firm.  Reportedly, he had revealed his retirement plans in 1997 itself. Brar had said that he would retire in 2002, after completing 25 years with Ranbaxy

 Tempest

takes over. Tempest is expected to continue till Malvinder Singh is groomed to done the mantle  Under the leadership of Tempest, Ranbaxy planned to focus on HR planning and

ABOUT THE CASE

 The

case discusses the CEO succession planning controversy at Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company.  The case describes how and why Parvinder Singh (Ranbaxy's promoter, also CEO) believed in running the business professionally and handed over the company's management to D S Brar (Brar), a professional (and a non-family member), amidst stiff opposition from family . The case then details how Brar transformed Ranbaxy from a small Indian pharmaceutical company into a research based global pharmaceutical major

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