Reliance Reworks Retail Top Deck in India

From A Vertical Structure,Co Moves Towards A Store-Based Format

CALL IT the Wal-Mart effect. Reliance Retail is overhauling its existing management structure and changing operational heads in its first gear shift since the venture was launched last year. From a vertical structure categorised on industry lines, the company has decided to move towards a store format-based structure. This will help the company to expedite the rollout of its ambitious retail venture and make it more accountable with separate profit-and-loss accounts, with effect from May 1. Senior operational and functional chiefs like Raghu Pillai (head of store operations), Gunender Kapur (head of Reliance Fresh), Sanjeev Asthana (head of agri-retail) and Bijay Sahoo (head of human resources) are likely to be moved up to the newly-created Central Leadership Team (CLT), which would supervise the functioning of the entire activity of Reliance Retail.
A new set of operation heads would manage the various retail formats. For one, Bhavdeep Singh would take over as the head of Reliance Fresh from Kapur while S Radhakrishna would head hypermarkets, likely to be named Reliance Hyper Marts. Ajay Baijal would head Reliance Digital, the consumer electronics and IT store.
Similar to Infocomm rejig
ANOTHER critical function of the retail industry - human resources - is also changing hands with Uday Bhende taking over as the head from Bijay Sahoo. All format heads would report directly to Mukesh Ambani, said a source.
Mr Singh has been recently hired from the US, where he was working in a retail chain while Mr Bhende has been roped in from Siemens. Mr Radhakrishna joined Reliance Retail from the retail chain Spencer’s last year and Mr Baijal was poached from Reliance Communications as a replacement for Rajeev Karwal.
Reliance’s new structure is a clear departure from its earlier one which was managed as verticals, each under a CEO, with the front-end divorced from the back-end.
“The structure was centralised and the merchandise and sourcing team were independent of the actual retail business. That may end now,” said a source. Veteran Reliance watchers compare this considerable change in the management structure to a similar exercise undertaken by the then Mukesh Ambani-controlled Reliance Infocomm, after the failure of the Dhirubhai Ambani Pioneer scheme.
Despite repeated attempts, the Reliance Retail spokesperson could not be contacted. While some professionals in Reliance Retail’s Central Leadership Team are likely to play an active role, there would be some who would be sidelined also. While it’s not clear as to what prompted the development, analysts say greater urgency to usher in an effective co-ordination in supply-chain function could have triggered the move. “With each vertical working across more than one format, the company may have foreseen the problems it would lead to as the retail venture rolls out nationally,” said a source close to Reliance Retail. Some call it a “hit-and-trial” approach to arrive at the right combination so as to gear up for the mega competition when the likes of Wal-Mart and Tesco enter the market.