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Abstract

The case discusses the CEO succession planning controversy at Ranbaxy Laboratories Limited (Ranbaxy), India''s largest pharmaceutical company. It describes the concept of succession planning and its importance in managing large companies (especially family-owned businesses). The case describes how and why CEO Parvinder Singh (Ranbaxy''s promoter) believed in running the business professionally and handed over the company''s management to DS Brar (Brar), a professional (and a non-family member), amidst stiff opposition from family members. The case then details how Brar transformed Ranbaxy from a small Indian pharmaceutical company into a research-based global pharmaceutical major. It examines the reasons for Brar''s decision to step down as the CEO and comments on his succession plan. The case concludes with a discussion on whether Ranbaxy''s promoters would take over the company''s management or continue to allow professionals to manage their business. The case is structured to enable students to: (1) understand the concept of succession planning and its importance in managing businesses, especially family-owned business; (2) analyse the importance of professional management and the role it plays in making a business highly successful; (3) discuss why organisations should focus on succession planning of the top-level management, particularly at the CEO level; (4) identify various considerations (like age, professional experience, leadership quality, etc) that need to be looked at before considering a candidate for CEO succession planning; and (5) discuss the reasons why professional management of a large family-owned businesses is not encouraged by the promoters, especially in India. The case is targeted at MBA/PGDBA students and is intended to be part of the human resources management or corporate governance curriculum. The teaching note does not contain an analysis of the case.
Location:
Industry:
Size:
Large
Other setting(s):
2000-2004

About

Abstract

The case discusses the CEO succession planning controversy at Ranbaxy Laboratories Limited (Ranbaxy), India''s largest pharmaceutical company. It describes the concept of succession planning and its importance in managing large companies (especially family-owned businesses). The case describes how and why CEO Parvinder Singh (Ranbaxy''s promoter) believed in running the business professionally and handed over the company''s management to DS Brar (Brar), a professional (and a non-family member), amidst stiff opposition from family members. The case then details how Brar transformed Ranbaxy from a small Indian pharmaceutical company into a research-based global pharmaceutical major. It examines the reasons for Brar''s decision to step down as the CEO and comments on his succession plan. The case concludes with a discussion on whether Ranbaxy''s promoters would take over the company''s management or continue to allow professionals to manage their business. The case is structured to enable students to: (1) understand the concept of succession planning and its importance in managing businesses, especially family-owned business; (2) analyse the importance of professional management and the role it plays in making a business highly successful; (3) discuss why organisations should focus on succession planning of the top-level management, particularly at the CEO level; (4) identify various considerations (like age, professional experience, leadership quality, etc) that need to be looked at before considering a candidate for CEO succession planning; and (5) discuss the reasons why professional management of a large family-owned businesses is not encouraged by the promoters, especially in India. The case is targeted at MBA/PGDBA students and is intended to be part of the human resources management or corporate governance curriculum. The teaching note does not contain an analysis of the case.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
2000-2004

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