Focus on organisation building, not merger

While the two companies, Kinetic Engineering and Kinetic Motors, have drawn strength from the synergies between them, there are no plans to merge. "There are no specific advantages," says Sulajja Firodia Motwani, joint managing director, Kinetic Engineering Ltd. "Wherever it has been possible, we have used the advantages."

While distribution and dealer network is one, purchase is another area where the group has succeeded in "commonising" activities. "We have created common purchase committees which go to the vendors. With higher volumes, we are able to get better deals," she says.

However, there are strong indications that the two finance companies will be merged. "It is an issue we are looking at," says Ms Firodia Motwani. "We are happy the way they are, but in a year's time we may look at a combined entity. We are looking at the things that need to be commonised, the databases, the different software, and the systems. For example, at Kinetic Leasing there are no branch operations, whereas Fincap is wholly branch-oriented."

At Kinetic Motors, progressive practices such as employee stock options are making an entry. During the last two years, the group has inducted many professionals. Professional directors and presidents have been inducted in all the group companies.

"The trend is towards bringing in more and more professional talent into the group and ensuring that the group is managed by experienced, competent professionals. The ultimate objective is that the company should be managed completely by professionals, and our role should be that of owners, which is basically designing the road map and monitoring the progress, becoming the public face, deciding the overall strategy, and not really getting into day-to-day management," argues Ms Firodia Motwani.

"So when we induct senior professionals, we have to look at different ways to keep their interests fitting into that of the group. We have to provide them incentives, in addition to a good working environment and professional growth, to be with us. One of the incentives is employee stock options."

The ESOP will be first implemented at KMCL, and later at KEL. "It's pretty exciting to have stock options, you realise that the company should make good profits, that it should have good sales, its stock price should go up, in other words that the company should be a success. In every company there are some people who really drive the company, and they should be rewarded."

The board of KMCL has just passed a resolution and sent in the application for offering the stock options. The process is expected to be cleared for implementation by September 1999.