Formation of the Company:
Ranbaxy Laboratories Limited was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. The name Ranbaxy is a combination of the names of its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir and Gurbax. After Bhai Mohan Singh's son Parvinder Singh joined the company in 1967, the company saw an increase in scale.
Summary of the Case Study:
Ranbaxy ranks No. 1with a 2007 turnover of Rs 4,198.96 crore (Rs 41.989 billion) by sales, Ranbaxy is the largest pharmaceutical company in India. The case discusses about the CEO succession planning controversy at Ranbaxy Laboratories Limited, one of India's largest pharmaceutical company. The founder of Ranbaxy Mr. Bhai Mohan Singh established this company in 1961. By 1967 his son Dr. Parvinder Singh (Dr.Singh) joined the company and worked hard to take the company to great heights, by 1982 he became the Managing Director of his company. Since the retirement of Mr. Bhai Mohan Singh in 1993, his son (Dr. Singh) took full control of the company’s business affairs.
Dr. Singh adopted highly professional work standards and was well known for his commitment to corporate governance and corporate ethics. Although it was a family owned business, Ranbaxy was managed and run by professional managers. He wanted to internationalise Ranbaxy in order to transform it into a multinational pharma giant, to accomplish this task, he carefully chose a team of professionals. He retired in the year 1998 after he was been detected to be suffering from cancer. At his day of retirement, he chose Devinder Singh Brar (D.S. Brar) as the MD and CEO of the company. Dr. Singh wanted his sons (Malvinder Singh and Shivinder Singh) to earn their positions through hard work and merit to enter their company.
Devinder Singh Brar (Brar) had joined Ranbaxy in 1977 as a business development