Bajaj's

Political
Relations
GROUP 6 ARYAN | AVANISH | AVIJIT |SHRIDHAR | SIDDHART | SOHAM

Story of Bajaj Auto
Inception of Bajaj
Rahul Bajaj was appointed as
the CEO of Bajaj Auto in 1968,
and after his father’s death in
1972, he became the managing
director of the company.
Growth of Bajaj
Under Rahul Bajaj’s leadership,
the company’s Chetak line of
scooters became a household
name in the 1980s
II
Tussel With The Govt.
The Indira Gandhi government
did not approve the expansion
of Bajaj’s operation
III The 1970s

Political Bajaj described the decade of the 1970s

Tussel
as the worst in the history of
independent India for industry

How It All Started The 1980s

The Congress government retaliated in He also stated that things only started
May 1976, when income tax officers improving in the 1980s when Rajiv
raided Bajaj group establishments across Gandhi became Prime Minister
the country.

Politics And Business
The License Raj
License Raj was a difficult time
for Bajaj. Despite being highly
efficient and possessing the
potential to grow into an
automotive giant, licenses came
as a hurdle for Bajaj.
Governmental Dominance
The dominance model of BGS
relations is applicable here. The
government decided upon the
production capacity
investments and even the
operation of the company
IV
Personal Agendas?
A pseudo-one-party system in
the country led to the
propagation of personal
agendas of the government to
the businesses. Bajaj was no
exception.
V
Politics
Within
Internal Governance Issue
Naval K Firodia was MD of Bajaj Tempo.
Bajaj Auto and Tempo Split
Rahul held on to Bajaj Tempo Shares.
Why?
Firodia's vulnerable - Cold War continues
Principle - Agent Dilemma
Principle was Bajaj and Firodias and
agents were managers who worked under
them. The agent's aim is to maximise
profits. The issue was both Bajaj and
Firodias wanted to follow different
directions to reach their goal.
Things That Followed
When Daimler exited Bajaj Tempo, the
Firodias wanted to do away with the Bajaj
brand. It was renamed Force Motors in
2005. Bajaj and Firodias are now in non-
competing markets and maintain cordial
relations.
 VI
II

Conclusions
Expectation Ideal Relation

Both the government and the Ideal state-business

business community need relationship characteristics:
Transparency
each other to thrive.
Reciprocity
Credible Commitment
Stable Policy
Environment
Checks and Balance
Coordination
Thank You