Management Control Systems at Reliance Industries Limited Essay

creed Industries Limited (RIL) is populations leading and Indias no 1 Private Ltd. Company. RIL group is a highly modify group and is in to multiproduct business sector concern like oil / gas exploration, retail of petro / consumer products and mfg. of petrochemical / polish and textile products. Also, in to infrastructure and transportation sectors. he reliance base, founded by Dhirubhai H. Ambani (1932-2002), is Indias largest private sector enterprise, with businesses in the energy and materials set drawing string. Groups annual revenues argon in excess of US$ 44 billion.The flagship gild, opinion Industries Limited, is a quite a little Global 500 company and is the largest private sector company in India. Backward vertical integrating has been the cornerstone of the evolution and growth of doctrine. Starting with textiles in the late seventies, credence pursued a strategy of backward vertical integration in polyester, fibre intermediates, plastics, petrochemicals , petroleum refining and oil and gas exploration and issue to be richly integrated along the materials and energy re entertain chain.The Groups activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail and special economic zones. assent enjoys global lead in its businesses, organism the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major(ip) petrochemical products.Major Group Companies argon trust Industries Limited (including main supplementary Reliance Retail Limited) and Reliance Industrial stand Limitedorganisational Structure of Reliance Figure 1 Reliance Major Subsidiaries * Reliance Petroleum Limited (RPL) was a subsidiary of Reliance Industries Limited (RIL) and was created to exploit the emerging opportunities, creating value in the refining sector worldwide. Currently, RPL s tands amalgamated with RIL. 7 * Reliance Life Sciences is a research-driven, biotechnology-led, life sciences physical com status that sidetrackicipates in medical, plant and industrial biotechnology opportunities.Specific eithery, these relate to Biopharmaceuticals, Pharmaceuticals, Clinical Research Services, Regenerative Medicine, Molecular Medicine, Novel Therapeutics, Biofuels, inst every last(predicate) Biotechnology and Industrial Biotechnology. 8 * Reliance Industrial Infrastructure Limited (RIIL) is sedulous in the business of setting up / operating Industrial Infrastructure that alike involves leasing and providing services connected with computer softw atomic number 18 and data answering. 9 * Reliance Logistics (P) Limited is a single window solutions provider for transportation, distribution, warehousing, logistics, and supply chain needs, supported by in house state of art telematics and telemetry solutions. 11 * Reliance Clinical Research Services (RCRS), a contr act research shaping (CRO) and wholly owned subsidiary of Reliance Life Sciences, has been set up to provide clinical research services to pharmaceutical, biotechnology and medical trick companies.As far as mature structure of RIL is implicated on that point are 8 Non executive directors and four executive directors, hence RIL is rigorously following suggestions minded(p) by Kumar mangalam Birla committee regarding embodied governance. Figure 2 Reliance Board Structure Figure 3 Reliance reportage Hierarchy Functional structure Employees indoors the practicable divisions of an organization course to perform a specialized set of tasks, for instance the engineering part would be staffed lone(prenominal) with production engineers. This leads to useable efficiencies within that group.However it could also lead to a lack of communication between the functional groups within an organization, making the organization slow and inflexible. As a hale, a functional organization i s best suited as a producer of exchangeable goods and services at large volume and low cost. Coordination and specialization of tasks are centralized in a functional structure, which makes producing a limited sum up of products or services efficient and predictable. Moreover, efficiencies can further be accomplished as functional organizations integrate their activities vertically so that products are sell and distributed quickly and at low cost.For instance, a small business could stupefy making the components it requires for production of its products instead of procuring it from an external organization. But not only beneficial for organization but also for employees faiths. Hence Reliance is Having Highest available efficiency as compared to competitors. Management Style And Culture At Reliance Industries Limited Reliance Industries Limited (RIL) has emerged as Indias largest private-sector enterprise and carved out a distinct place for itself in global Fortune 500 compani es.Reliances business success and competitive position reflect the leadership provided by its founder, Mr.Dhirubhai Ambani who said, Growth has no limit at Reliance. I keep revising my vision. Only when you dream it do you tolerate it. The leadership system defined by Ambani is based on value creation towards both its customers and s suck inholders. The same vision has been taken up and forwarded by his son Mr. Mukesh Ambani, menstruum Chairman and Managing Director of RIL. Reliance believes that any business conduct can be ethical only when it rests on the ix core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Caring.The humans of the close in RIL is driven towards acquisition of excellence in systems, processes, technology and people and also toward the fulfillment of their corporate vision i. e. To become a globally competitive enterprise, driven by the market, creating and maintaining a lead over competition through quality products and establishing itself to be the preferred supplier of its customers. With the vertical integration of chain from refinery to textiles, RIL has unique all-embracingy integrated structure.Basically it is a process centric organization that maximized synergies crossways all interfaces, leverage core competencies of various disciplines to maximize value from current assets and create growth opportunities while allowing people to develop and contribute to their full capabilities. When we talk about the organization culture, specifically RIL focuses on high mental process work culture which fosters groundwork, entrepreneurship, inclusiveness, teamwork and continuous onrushs. Among all RIL basically focuses on innovation and has a innovative council for promoting the same.The company believes hat it is the innovation in idea and execution that has make RIL reach where it is today. The firm belief of innovation being the differentiator for future and the source o f competitive advantage shows the importance that is disposed(p) to it. RIL in the early 1990s did suffer from low employee participation in improvement activities and low customer joy. The introduction of various quality improvement tools in the facilities like the Total Quality Management( TQM), Kaizen Activities and customer focus approach led to the improvement in quality, productivity improvement and customer satisfaction in the organization.RIL realizing the importance of human and intellectual capital for business success, has given more than importance to the use of its human potential and the creation of accomplishment organization to help in continued success in future. RIL in its importance to the health and safety also has also initiated Safety, Health and piece of work Environment Program (CASHe) which is an initiative to promote healthy workplace and cut back health and safety risk has been instrumental in creating a culture of implementing health, safety and env ironment project on a priority basis.This architectural plan has also been able to improve the performance of the company on the occupational health and safety front. The Health and Safety Principles that were put forward in this regards to articulate the stakeholders expectation along with the existing values of the company defend both the corporate culture and cooperation across the company. The growing importance of incarnate Governance by RIL shows its priority towards a transparent and accountable organization thus being able to meet the needs of all the concerned stakeholders.The publication of annual corporate governance report is one of import aspect showing its growing inclination towards it and its aim to pee-pee pretty and equitable treatment of its employees, shareholders, customers and investors. They aim to provide timely and balanced divine revelation of all material information concerned towards stakeholders. Moreover they aim to have a sound system of risk cha rge and inner(a) reckon.The existence of code for board of directors and board committees, code of business conduct and moral philosophy for director/management personnel signifies the existence of the culture driving the whole organization towards effective corporate governance. RIL has a long and strong customs duty of supporting the larger communities that it connects with from education, health, drinking water, large-scale development of employable skills, to monetary aid during natural calamities such as earthquakes and cyclones.The Reliance Foundation would address well-disposed development imperatives of India, specifically quality, formal and vocational education, affordable high-quality health care, meaty rural development and urban renewal, and protection and promotion of Indias valuable heritage of arts and culture. Management in simple words are characteristic ways of making decisions and relating to subordinates. Different management styles and employed by dif ferent organizations depending on the prevailing culture, the nature of the business, the nature of the task and the temperament and skills of the leaders.RIL is an organization which is operation in multiple facets. They have multiple manufacturing facilities at multiple locations where by dealing in different product ranges. The supreme authority of the company is Board of Directors. But they have given more more independence to the individual units at different direct to take decisions at their level. There is a good mix of corporate level strategy (taking RIL as a whole which is set up by the BOD) as well as appropriate business level and operational strategies at each segment as well as business units to accomplish the corporate level strategy.Every unit which is a part of RIL has its own hierarchy, headed by the CEO or the President, but a more of a democratic style of leadership is seen. Since they promote innovation and value their human capital they promote participativ e environment at different levels of management to be able to make a better and informed decision. Empowering the employees in RIL is relevant. However the level of decisions and intensity of problems are defined whereby decisions can be taken at particular level of management.Management Control Systems intragroup Controls RIL has a comprehensive system of internal controls to safeguard the Companys assets against loss from unauthorised use and ensure proper authorisation of financial transactions. The Company has an exhaustive budgetary control system to monitor all expenditures against approved budgets on an ongoing basis. The Companys write up process is based on uniform accounting guideline that sets out accounting policies and significant processes and deadlines on a company wide basis.There are inding directives for internal reconciliations and other accounting operations. The Company maintains a system of internal controls designed to provide a high degree of assurance rega rding the authorization and efficiency of operations, the reliability of financial controls, and residence with laws and regulations. RIL has well established constitution towards maintaining the highest standards of health, safety and environmental norms while maintaining operational integrity. This policy is strictly adhered to all RIL manufacturing facilities.The Company has an internal audit function, which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It is also responsible for assessing and improving the effectiveness of risk management, control and governance process. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors. Internal Checks and Balances.