1

A study of Human
Resource Management in
Ranbaxy Laboratories Ltd.
SUMMARY
Submitted to
M.J.P. Rohilkhand University, Bareilly
For the award of the Degree of
DOCTOR OF PHILOSOPHY
In
COMMERCE

2007

Supervisior Research Scholor

Dr. B.N. Chaurasia Miss Shallo Maggo
Reader,
Department of Commerce
Hindu College,
MORADABAD

Summary of the thesis entitled "A study of Human

Resource Management in Ranbaxy Laboratories Ltd." submitted
by Miss. Shallo Maggo, under the supervision of Dr. B.N.
Chaurasia, Reader, Department of Commerce Hindu College,
Moradabad.
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SUMMARY

In the first two chapters of the thesis the researcher has given the introduction on Human
Resource Management and its theoretical foundation.
Human resource management relates to a strategic and coherent approach to the management
of an organisation’s people contributing towards the attainment of business objectives. It involves a set
of interrelated policies with ideological and philosophical orientation, and forms a business focused
approach to manage people for competitive advantage.
As Armstrong observes, the Human Resource Management emerged in the mid 1980s when
two models were evolved by academics in the USA: “matching model” and the ‘Harvard framework”.
The matching model specifies that HR systems and the organizational structure must match with
organizational strategy. Likewise, the founders of Harvard framework stressed the need for coherence in
Human Resource Management policies. They were first of point out that the Human Resource
Management belonged to the line managers. As Beer et al. assert, human resource management involves
all management decisions and act ion which affect the nature of the relationship between the
organisation and its employees - its human resources. The problems of historical personnel management
can only be solved when general managers evolve a viewpoint of how they intend to see employees
involved in and developed by the enterprise, and up to what extent Human Resource Management
policies and practices may facilitate those goals.
For example, general managers may make decisions regarding introduction of new technology
or a new financial strategy. These Human Resource Management decisions fall beyond the purview of’
the personnel functions. There is an urgent need for a long-term perspective in managing people and
consideration of people as potential assets rather than merely a viable cost.
Similarly, Walton, another Harvard professor, observes that the Human Resource Management
model is composed of policies which promote mutuality, i.e. mutual goals, mutual influence, mutual
respect, mutual rewards and mutual responsibility. The theory is that policies of mutuality will stimulate
commitment which, in turn, will provide both better economic performance and greater human
development. Thus, the Harvard framework specifies that the Human Resource Management is a
concern of management in general rather than the personnel function in particular.
Some of the UK versions of the Human Resource Management model are those proposed by
David Guest, Karen Legge and John Storey David Guest has further developed the Harvard model
stressing four policy goals: (1) strategic integration, (2) high commitment. (3) high quality, and (4)
flexibility.
Karen Legge specifies three elements of Human Resource Management as follows:

o HR policies should be integrated with strategic business planning and used to reinforce an
appropriate (or change an inappropriate) culture.
o Human resources are valuable and a source of competitive advantage
o Human resources can be tapped most effectively by mutually consistent policies which
promote commitment and foster a willingness in employees to act flexibly in the interests of
the adaptive organsation’s pursuit of excellence.
John Storey specifies four elements of Human Resource Management as follows:

o A set of beliefs and assumptions.

o A strategic thrust embodying decisions about people manage me at.
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o The central involvement of line managers.
o Dependence upon a set of levers to determine the employment relationships.
“Human Resource Management is regarded by some personnel managers as just a set of
initials or old wine in new bottles. It could indeed by no more and no less than another name for
personnel management, but as usually perceived, at least it has the virtue of emphasising the virtue of
treating people as a key resource, the management of which is a direct concern of top management as
part of the strategic processes of the enterprise."
Management of human resources is a new field of study embodying behavioural science
knowledge relating to the working of line and staff officials and union leaders to motivate and develop
employees in attaining organizational goals. The human resources approach to the management of
employees represents a significant measure of utilising human resources to accomplish organizational
goals through the application of behavioural sciences and experimental psychology. The interaction of
social, psychological and cultural factors in organisations tiave assumed significance from the standpoint
of this approach. It is a highly comprehensive field involving the use of numerous concepts such as
personnel management, personnel administration, labour relations, industrial relations, manpower
management and employment relations. Definitions of these concepts will enhance the understanding of
this field.
Yoder et. a1. lucidly differentiate different concepts used in manpower management.
According to them, “Manpower means people involving both employers and employees, and manpower
management refers to direction and control of human resources in employment situations". The term
"labour management” can be used "manpower management, but it should be kept in mind that the latter
does not mean simply managing of rank-and-file employees or merely the management of union labour”.
The term personnel management can also be used for the manpower management, but it should be
remembered that the latter is not merely limited to the management of employees as individuals
excluding collective bargaining with unions.
Overall, as Heneman et al observe, personnel/human resource management is concerned with
improving contributions of people towards the effectiveness of the organisations. Their contributions can
be assessed in terms of specific personnel/human resource outcomes; attraction, performance, retention,
attendance and satisfaction.
Human resources (HR) function in an organisation is concerned with facilitating effectiveness
of all human resources (white and blue collar workers) and related units in the organisation: individuals,
roles, dyads, teams, inter teams, unions and the total organisation.
The main function of HRD is to design systems and instruments the development of all the
organizational units, create and sustain the culture the organisation decides to develop, give data-based
feedback on implementation of the systems, develop competencies needed at various levels, analyse
organizational (especially personnel) practices from t he point of view of HRD values, suggest ways of’
advancing humanisation and effectiveness of the organisation and respond to line managers’ needs by
designing and using organisation development (OD) interventions.
Management of human resources is of utmost significance from at least three stand points -
social, professional and individual enterprise. In view of the widening scope and the utmost significance
of Human Resource Management in India, the Human Resource Management department in industrial
organisations has a high status.
The third chapter has been devoted to research methodology and tools of research adopted for
the development of the thesis. Here the researcher has discussed the practical aspect of research
methodology used for the present study. It discusses all about methodology, techniques, research design
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and processing and analysis of data. The researcher has first of all developed upon the theoretical
narration of research and various concepts related to research.
The present research project is a combination of descriptive. analytical, exploratory and
empirical research designs. It makes use of primary as-well-as secondary data. Primary data are collected
by the use of different research tools like personal visits to the organisation interviewing people at work,
administering questionnaires, face to lace discussions with the officials of Ranbaxy Laboratories Ltd.
The researcher has planned a comprehensive and stratified questionnaire consisting of about 40
questions on various aspects of human resource policies distributed to about 200 persons consisting of
workers, supervisors officials and managers.
The fourth chapter discusses the various Human Resource Accounting valuation models. The
common fifth and sixth chapter depicts organisational profile and human resource management in
Ranbaxy Laboratories Ltd.
In the Pharmaceutical Industry of India, Ranbaxy Laboratories has achieved phenomenal
success in the present times especially after eighties. Today Ranbaxy is a drug giant with interests
ranging from pharmaceuticals to diagnostics, fine chemicals, animal health care. R&D activities. bio-
technology and biological research and other innovative programmes with a turnover exceeding Rs.
2500 crore (2005-2006) per annum; the company is now country s third largest pharma company after
Glaxo and Cipla.
Ranbaxy has approximately market share behind Glaxo's 5.50% and Cipla Laboratories about
4. 60%. Ranbaxy has made its place in the Indian market and is adopting many survival, growth, change,
development & diversification strategies. At present Ranbaxy manufactures over 410 products in 12
production lines.
The company that started its pharmaceutical business with a small factory in 1973. crew in
less than 30 years. into India’s topmost pharmaceutical complex. It made a modest start by
manufacturing life-saving drugs for human beings. It slowly progressed along the value chain beginning
with basic-drugs and changing to value added generals.
Late Shri. Parminder Singh, one of the three sons of Bhai Mohan Singh played a key role in
the running of his father's company, Ranbaxy Laboratories Limited for over a decade. He was
responsible for transforming a small company into an industry leader with global ambitions. Bhai Mohan
Singh stepped down as chairman of Ranbaxy in April, 1993 and transferred the ownership of his
company to his son Parminder Singh. Now the resent dynamic and vivacious M D, Mr. Tejender Khanna
is putting his labour to make Ranbaxy a leading pharmaceutical industry in India.
Ranbaxy Laboratories Limited one of the leading public sector undertakings, has successfully
implemented its Human Resource Management programme and has achieved worthwhile results. The
basic principle of Human Resource Management philosophy is the belief in: (i) human resources; and its
development; (ii) optimum utilisation of human resources; and (iii) a harmonious balance between
business strategy and Human Resource Management strategy i.e., strategic planning and FIRM should
go hand in hand. Ranbaxy adopt the leading consultant Dr. M.B. Athreya's model of strategic
management and organisation development.
According to this model, OD & Human Resource Management efforts may tend to be wasteful
exercise, if there are no opportunities to utilise the development of human capability. Similarly, all
strategic options in terms of business plans will remain unfulfilled or paper projects at the most, if
human resource are not made available to implement them.
The importance of Human Resource Management as a catalytic agent of growth has been
increasingly recognised in Ranbaxy Laboratories Limited. The following three factors may be
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considered while examining the recent Human Resource Management efforts in Ranbaxy
Laboratories Limited.
• Competition in all areas of business operation has put considerable pressure on management to
improve productivity, quality and reduce cost. Success in this direction requires a dynamic
FIRM strategy.
• The introduction of new computer- aided technology and fundamental change in the
manufacturing process has caused the need for developing new skills to suit the demand of
new technology.
• To-day's better trained and better educated managers’ have stressed the emergence of new
work values where they have more opportunities to make contribution and to be recognised.
• Human Resources are the most important assets in the organisation.
• Unlike other resources, human resources can be developed and increased to an unlimited
extent.
• A healthy climate, characterized by the values of openness, enthusiasm, trust, mutuality and
collaboration is essential for developing human resources.
• Human Resource Management can be planned and managed in ways that are beneficial both to
the individual and organization.
• Employees feel committed to their work and organization if the organization prepetuates a
feeling of belongingness.
• Employees are likely to have this feeling of the organisation if it provides for their basic needs
and for their higher needs through appropriate management styles and systems.
• Employee commitment is increased with opportunity to discover and use one’s capabilities and
potential in one’s work.
It is every manager’s responsibility to create a healthy and motivating work climate and to set
examples for subordinates to follow.
Ranbaxy believes in the motto ‘Putting people first’. In order to sustain its success and renew
its products, Ranbaxy has focused on the people behind its products and not on the products themselves.
The strategy framed by Ranbaxy is around core intellectual or services competencies.
Ranbaxy has focused on people, i.e., both employees and customers. The strategy has been to
recruit locally in host countries. The company has succeeded in creating multicultural portfolio of human
resource skills.
The training in the organisation shifted from mixed participant groups to work groups. This
has increased focus on people that create and perpetuate such knowledge.
As part of Ranbaxy’s ongoing commitment to produce high-tech quality drugs and
pharmaceuticals that cater to the specific needs of markets around the world, the company has applied
rigid quality measures at every stage of manufacturing at their plants.
Good quality remains the commitment of every employee at Ranbaxy : from careful selection
and analysis of raw materials to meticulous testing of finished products to meet stringent in-house
standards that goes beyond the pharmaceuticals to ensure customer satisfaction.
To meet growing international business requirement, a programme to set up new facilities for
the production of bulk drugs pharmaceutical dosage from basic chemicals and intermediates has been
under implementation to fulfil its aim on quality.
Chairman says, “At Ranbaxy, we are on corporate journey. It is a long and winding road that
has brought us from a domestic company with a few hundred employees to one that now aspires to be an
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international pharmaceutical company. Our mission is clear and our values well articulated. We
give shape to our dreams.
The researcher presents his findings in the last chapter of the thesis. The present phase is
summing up phase giving analysis of the finding, conclusions and suggestions.
The present discussion also gives the idea of emerging concept of good corporate governance
to achieve managerial excellence. The concept of good corporate governance is gaining momentum
these days. The researcher has conducted the preset research with a strong focus on innovation. It is
hoped that this study will focus on innovations that encourage further researches.
The researcher has developed a bank of ideas and innovations as a resource of further progress
in similar studies. Ranbaxy Laboratories Ltd. is a giant pharmaceutical company with newer concept of
public responsibility and good corporate governance.
Research evidences, observations and findings of this study indicate that the company is
fulfilling fully the social responsibility, social ethics and social audit.
Ranbaxy is famous for its focussed marketing, better net working and innovative products
position and Ranbaxy is at the leading edge in its global pursuits. To create something of value, the
imagination must soar, unfettered, it must fly like a bird in search of new horizons.
Ranbaxy Chairman Sri Parminder Singh, said some days before going to his heavenly abode.
“No amount of assets, capital, inventory, financial reserves, sophisticated technology, plant, process,
product or wealth of any kind that an organisation builds can match the treasure of its human resource".
Shri Tajendra Khanna - Chairman, Ranbaxy - 1999 spoke in his message to the shareholders,
“As we approach the WTO deadline of January 1, 2005, for aligning our domestic patent laws to
conform to the TRIPS Agreement (Trade Related Intellectual Property Rights), it is clear that domestic
pharmaceutical companies will have to rely more for their future growth on developing new products
from their own research and development efforts and less on producing and marketing of reverse
engineered drugs.
Ranbaxy places the highest importance on Human Resource Development for its future
evolution. The development of a highly motivated, innovative, alert, forward looking and ethically
committed team of managers, supervisors and production shop floor, marketing and administrative staffs
will play a key role in ensuring the Company’s future progress. The recent initiative of changing the
Performance Appraisal System to make it more interactive and to better gauge the achievements and
potential of staff members, is a step in this direction.
In my messages to fellow Ranbaxyian's I have stressed the need for maintaining the highest
standards of honesty and ethical commitment as well as diligence and alertness in the pursuit of assigned
tasks. I have also invited innovative suggestions from all members and suggestions will be considered
carefully on merits, irrespective of the level from which they happen to originate.”
Similarly we can quote Dr. D.S. Barar, CEO & Managing Director of Ranbaxy regarding
human resources policy of the company in the following lines :
“In our quest to become international, the importance of a solid home foundation cannot be
over emphasised. I have no empirical evidence of a company that has demonstrated vibrant international
presence with low visibility at home. We have been fortunate to realise this early in our journey and
absorb a vision that required us to build a portfolio of competencies and strengths that we would later
leverage abroad.
Today, Ranbaxy has emerged as a leading pharmaceutical company on the Indian firmament
with a second largest market share. The company enjoys an enviable reputation amongst the medical
fraternity for its high standard of ethics and quality. Around our core strength of anti-infectives where
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some of the best recognised brands have led over decades, we have built more recent ones in
emerging therapeutic areas like Cardiovasculars, Central Nervous System and Nutritionals that reflect
lifestyle transitions in emerging markets. Supporting this expansion we have invested in world class
manufacturing infrastructure that leverages India’s comparative cost advantage and skilled manpower
while delivering international quality. As we fortify our presence further in this market, we are turning
our Indian learning into an international opportunity.
Ranbaxy is now a fairly well recognised international generic company. There are a few
generic companies with an international presence, but fewer still have embarked upon a complex, multi-
country operation from a developing country, with a vision that engulfs emerging and advanced markets.
Our audacious ambitions are balanced by limited resources but fueled by competitive entrepreneurial
energy. Our drive for internationalisation is guided by a well-planned Brand strategy that covers some of
the largest emerging markets like China, CIS, Central Europe and Latin America.
Simultaneously, Ranbaxy was the first company to move out of India to seize opportunities in
the large generic markets of USA, UK and Western Europe on the belief that no intent of
internationalization is complete without a presence in these markets. The M.D. Says "Our position today
is probably in the league of top 100 pharmaceutical companies of the world and our recent ranking as the
11th largest company in the international generics space (Source: Warburg Dillon Read, based on 1999
revenues of leading global generic companies) is a resounding endorsement of our strategic intent.
Recognition as Asia’s 2nd best pharmaceutical company (Source: Euromoney’s Asian Company ranking
poll) gives us the confidence that we seem to be doing all this the right way.
We are clear that the dominant share of our revenues for a considerable period of time will
continue to come from an ever-expanding global generics market. The driver for this effort has not been
so much the impending Product patent regime as the fact that the pharmaceutical industry is
fundamentally knowledge driven. Our belief that sustained growth in this industry can be achieved only
through continuous pursuit of innovation, is enshrined in the intent of our mission. After the initial steps
in this direction that created the necessary infrastructure both for research in novel drug delivery systems
and new drug development, we now have demonstrable evidence of the first stirring of success.
Chairman of the Company says "Our singular strength in the journey I have described, has
been our vibrant human assets. We have often faced intimidating odds in entering new markets and
moving into areas of innovative research. The undying spirit of our people and their intense competitive
and entrepreneurial energy sustained us through these odds. Their ability to steer through seeming chaos
in a diversity of new markets has progressively powered our growth. Be it with core business activities,
consistent support for operations or the spirit of innovation that drives research, Ranbaxy owes in no
small measure to the vitality of its workforce.
As we gradually transform our composition to a truly multicultural, multiracial team that I
personally count as Ranbaxy’s biggest achievement it is also, intuitively, its biggest challenge. To
integrate these ethnicities and cultures towards a solitary purpose while retaining our quest for new
perspectives will govern our future success.
Ranbaxy has been rated by doctors to be the best in popularity, service and products. This was
documented by a syndicated research titled, "Company and Representative Image” conducted by ORG
among doctors in India to asses the corporate image of pharma companies amongst the medical
fraternity. The research, based on a structured questionnaire, comparised face-to-face interviews across
12 Indian metros, mini-metros and class-one towns. 1,045 doctors were interviewed comprising of
General Practitioners (GPs) and Specialists (Physicians, Gynecologists, Orthopaedics & Pediatricians).
The survey was large-scale and tested product-related attributes such as good quality,
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reasonable price, and easy availability along with company image such as strength and character. In
all these areas, Ranbaxy was rated as:
• Amongst the most salient Pharma companies in India along with Glaxo-Welicome and Cipla.
• The recipient of the highest number of mentions, very high on level o familiarity and overall
impressions.
• No. 1 pharma company in India.
• Extremely high for its promotional efforts, standard of detailing materials, educational
material, adequacy of product samples and usefulness of leave-behind literature.
• The best on overall impression, followed by Glaxo, Cipla, Pfizer and Smithkline Beacharn.
• No. 2 company by the specialists.
• Company representative is excellent.
The study concludes that
o There is professional management in the company.
o Ranbaxy Laboratories Ltd. enjoys sound industrial relations and human relations.
o There are nominal employees’ grievances in the organisation and there exists an enlightened
trade union and its leaders are responsible leaders.
o The company has normal human resource development programmes.
The company has satisfactory recruitment and selection policies of the people but promotional
policies and merit rating plans are unsatisfactory.
Thus, it is evident from above discussion that Ranbaxy gives top priority to its human
resources above all over other physical wealth, money inventory stock, financial reserves, capital
reserves etc. The human resource accounting in the organisation is in the form of recognition to human
dignity, human welfare, social security & above all human resource participation in management
programmes and decision-making areas. The top management is philosophy of understanding the value
of human resources is the real basis of the recognition of human resource accounting at the company.
The latest position of Ranbaxy can be seen in the following remarks of James Mathew
Ranbaxy’s first in-house developed R&D product - once a day dosage anti-infective drug Ciprofloxacin -
is expected to get government approval in a day or two, paving the way for its commercial launch in the
domestic market soon, ahead of the international launch of this drug by Bayer AG.
According to market analysts, the launch of the new drug is expected to add to the bottom line
of Ranbaxy significantly since the company, a leading player in the anti-infective segment, has been
suffering because of the sagging sales growths in this segment in the recent quarters. Ranbaxy is doing
well in all fields because its main thrust is on the development of human resources in the organisation. It
is hoped that the same philosophy of human resource development will continue by the strategic
management of Ranbaxy laboratories ltd.
The present study is a study in the field of human resource management. The researcher is sure
that it brings into light the true position of human resource management in Ranbaxy Laboratories Ltd.
Though there are several studies on various aspects on human resource management in Indian context.
As such, the researcher is sure that the present study is fact finding and pioneer and motivates and
stimulates further researches in this field.