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The secret of success of Anand Group behind building and sustaining Joint ventures , whereas most others have

failed
Abhinav Kumar BLP Ananthan P. HRLP Anurag Dubey MLP Gaurav Shahare BLP Sahiba Sanan HRLP Shailesh Jain BLP

JV Failures
O Low success rate of JV: 47%

failures in the world O Mistakes during the launch phase often erode up to half the potential value creation of a venture O Lack of communication throughout the life of the venture

Governance - JV Challenge
O Parents share control of JV
O Sharing complicates the decision

making O Mismatch between reporting system, process and metrics O Weak controls costs money and exposes to unexpected risks

Deep C Anand Foundation


Anand Supervisory Board Anand Policy Committee

Anand Management Committee

Advisors Director

Operating Companies

Corporate Staff

Development Council

Hub Leaders

Deep C Anand Foundation


O Ensures good governance
O Ensures orderly and smooth

succession planning O Segregates the roles of Promoters and Anand management O Bridge the gap between Promoters and Group management

Strategy - JV Challenge
O Parents may hold different strategic

interests O May affect nature and degree of integration O May lose focus on first year goal of the JV

Deep C Anand Foundation


Anand Supervisory Board Anand Policy Committee

Anand Management Committee

Advisors Director

Operating Companies

Corporate Staff

Development Council

Hub Leaders

Anand Supervisory Board


O Evolves long term strategy
O Safeguards stakeholder interests O Strengthen relationship with foreign

clients O Specifies the first year goal for JV which others fails to do

Economics - JV Challenge
O Parents provides ongoing services,

staffing and resources to JV O It affects venture economics O Transfer pricing may become an issue O Less transparency as compared to parents

Deep C Anand Foundation


Anand Supervisory Board Anand Policy Committee

Anand Management Committee

Advisors Director

Operating Companies

Corporate Staff

Development Council

Hub Leaders

Anand Policy Committee


O Regulates services and resources
O Decides policy issues for JV O Approves new projects and investments

for JV O Maintains transparency, Regular audit O Each JV is overseen by one of the committee members

Organization - JV Challenge
O Issues with cultural difference
O Productivity, compensation issues and

managing career paths O Treated as dumping grounds for underperforming executives

Deep C Anand Foundation


Anand Supervisory Board Anand Policy Committee

Anand Management Committee

Advisors Director

Operating Companies

Corporate Staff

Development Council

Hub Leaders

Anand Management Committee


O Reviews and decides all operating

issues O Drives synergies, cost optimisation and productivity in the Group O Right incentives and processes to secure top talent O Creates compelling value proposition for JV employee

Anand Group
O Believes that business is 90% people
O Operating Engineers - knowledge

workforce O Anand U - as the hub for transfer of learning throughout the Group O Anand Production System, a Lean Manufacturing initiative

Success in JV due to
O Strong organization structure
O Cost and productivity optimization O Strong value proposition

O Transparency in operations
O Employee centric approach

References
O http://www.anandgroupindia.com/corpor

ate_governance.aspx O www.hbr.org