the tatas without ratan

8/7/2019 THE TATAS WITHOUT RATAN

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Member 1

Ashwin Raveendran

Regn. No.: FPB1012/018

Member 2

Ebin Thomas

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TRIMESTER-2



cover story

The Tatas Without Ratan

Ratan tata created India¶s first truly

multinational business group. As he prepares to step down, the bar¶s been

raised sky-high for his successor.



The cover story is an apt tribute to Ratan Tata. It is difficult to be

born in a lineage of great men and make one¶s way to the top²a

task that Ratan Tata has achieved with ease. Tata will be an Indian

whose life every management student will want to study.



1937 Born in Mumbai on Dec 28. 1962 completes BSc in architecture from Cornell

University. 1962 Joins Tata Group.

1971Appointed Director of The National Radio &Electronics (Nelco).

1974 Becomes a Director in Tata Sons. 1975 Completes management programme from HarvardBusiness School.

1977 Given charge of Empress Mills. 1981 Named Chairman of Tata Industries. 1984 Sale of Tomco 1991 Takes over as group chairman from JRD Tata.



December 2012, when he turns 75, is the third scheduled

retirement for Ratan Tata.

Ratan Tata is indispensible

Critics were loud and unrestrained in their disapproval andscepticism

Ratan Tata has gained his position purely on strength of his

surname

JRD TATA ± ³He didn¶t possess an iota of the chairsma of his

uncle predceessor´ Tata group is the largest Indian multinational conglomerate



S pread against 56 countries in 6 continents

Past decade ± Acquired 22 companies world wide

Big companies acquired - Tetley Tea and Corus Steel , New

York¶s Pierre Hotel and Jaguar Land Rover



According to Bala V

Balachandran, ³Ratan Tata

outperformed JRD. He toppled

people as strong as Russi

Mody, thought out of the box

and came up with path-

breaking concepts like the

Nano´

According to Rajeev Gupta,´

Whoever runs the Tata group

has to provide strategic

leadership, direction and inputs

on multiple businesses, which

is hugely challenging´

Tata¶s job is the most difficult

one in the country today

"Ratan Tata toppled people as

strong as Russi Mody, thought

out of the box and came up

with the Nano.³

"Whoever runs the Tata group

has to provide strategic

leadership, direction and inputs

on multiple businesses.³

"The first three or four years

after Ratan Tata took over, he

was engaged in struggles with

the satraps."

"Ratan Tata put µdesign¶ into

the group²in mergers and

acquisitions, engineering or

cars or anything else."



After training at Cornell University

Ratan would have stayed in us. But«...

Joined family business - working on theTata Steel shopfloor at

Jamshedpur(

Same as several thousand employees)

The two ³failures´ of Nelco and Empress Mills haunted Ratan

Tata for decades.

First independent Assignment-Director of National Radio and

Electronics (Nelco), in 1971

Second trouble stricken assignment ± Asked to stick aroundsick Empress Mills



Ratan recalled that Telco was ³the first company in which I

could actually do something. In other companies, I was always

put in a fire-fighting situation.´

the secret of RatanT

ata¶s enormous success lies in his ability tothink big²and small.



Tata group historian RM Lala recalls speaking with JRD ask

whether Ratan had been chosen because of his integrity

JRD Tatas reply. ³I chose him because of his memory. Ratan

will be more like me.´

First three or four years were engaged in struggles says Lala

Individual company heads were larger-than-life personalities

Russi Mody at Tata Steel, Darbari Seth at Tata Chemicals, Ajit

Kerkar at Indian Hotels, and Nani Palkhivala at ACC

In an interview a few years ago, Ratan recalled his surprise onhearing of his appointment: he had thought Palkhivala and

Mody to be neck-and-neck in the race for the top post



Mistry is the single largest shareholder in Tata Sons and,

incidentally, the father-in-law of Noel Tata, Ratan¶s half-

brother and the frontrunner in the current succession race.



Dusted off the 1983 plan and updated it

Attention to brand name

Thrust on technology-driven leadership

Rationalizing theT

ata business structure-First to sell and now a business expansion

According to Zia Mody, "He has institutionalised processes.

The reputation of the group and its guiding principles are

uppermost in his mind while taking decisions´

"Ratan Tata put µdesign¶ into the group²in mergers andacquisitions, engineering or cars or anything else.³



Ability to think big²and small(Pierre Hotel, Ginger hotels,Jaguar and Land Rover, Nano etc)

Ratan had the vision to foresee Group was totally unprepared for liberalisation, which was

knocking on the door when he took over Radical change in mindset Among the top three business groups in the country Tata¶s 1st global venture purchase of Tetley tea company The Corus deal is proof of the kind of goodwill the Tata group

has created for itself across the world, not just within thecountry

Tata¶s big deals are balanced by projects focusing on the lowestcommon denominator



Indica Tata Motors great success story²about a million units have

been sold since its 1998 launch.

Corus deal would lead the group to bankruptcy, critics declared

investors dumped Tata Steel shares

Tata was driving straight to disaster with the Jaguar Land Rover deal

group¶s international acquisitions are doing well, some have started

making money

Ratan¶s µfollies¶ were decisions guided by prescience and not instinct

and gut feel

Tata Steel¶s joint venture with Larsen & Toubro to construct a port atDhamra, Orissa, has come under the scanner for its proximity to two

protected areas, one of which is the world¶s largest nesting site for

the endangered Olive Ridley Turtle and the other India¶s second-

largest mangrove forest



In 2006, several tribals were killed while protesting a wall

being built by Tata Steel on land

RatanTata¶s pet Nano project was mired in controversy about

land acquisition for the factory



It will be some months before even the shortlist for Ratan¶s

successor is known

Ratan had drawn up a simplistic checklist: someone ³younger´,

ideally in his 40s, who believes inT

ata values, demonstratesmanagerial ability and has the vision to run the Tata group

More recently, he also spelled out what the person doesn¶t need

to be: a Tata, Parsi, or even Indian

³There will be a vacuum if a non-Tata person is at the top. Any

new person without the Tata name starts with a hugedisadvantage,´ says Harish Bijoor, brand specialist

. Former Tata Steel CMD Russi Mody doesn¶t consider the

lack of the right surname a handicap²³I was a chairman

although I wasn¶t a Tata´



Preety Kumar, Managing Partner at global executive search

firm Amrop, gives the neutral observer¶s viewpoint. ³Internal

succession always has smoother transition than an external

one. In some of our work, successor appointments have beenmade two or three years before the succession, which helps

change perceptions´

Sanjay Teli, MD of executive search firm ESP Consultants,

adds that group acceptance of and support to the heir apparent

is critical. ³Ratan Tata¶s personality and the changes he broughtabout helped attract the best talent to the group. Retaining

some of those people may become an issue in the future,´ he

warns



The five-member panel²comprising Tata Sons Vice-Chairman NASoonawala, Group Advisor Shirin Bharucha, British businessmanLord Bhattacharya, Tata Sons Director Cyrus Mistry and IndianHotels Vice-Chairman RK Krishnakumar²is expected to announce

its choice by March 2011 ³It¶s a scientific process,³The candidates will be evaluated on

leadership qualities, management skills, operational performance andother criteria. There will be a matrix and the top scorer will get thetop job.´

the qualities that catapulted B Muthuraman to the top job at Tata

Steel in 2001 Muthuraman and T Mukherjee, both executive directors, and Firdose

A Vandrewala responsible for sales and marketing,were consideredlikely successors



³Mr Tata asked all three to prepare a presentation on the future

of Tata Steel. Muthuraman¶s vision and roadmap was crisp,

clear and the most appropriate,´ says a 30-year veteran of the

company.



successor¶s task will be easier than Ratan¶s The new chairman is also not likely to be battling cliques and

freedoms within the group²his predecessor has already taken

care of that. Instead of the ³corporate commonwealth´ that

Ratan inherited, theT

ata group now operates more or less as acohesive unit, which will work to the successor¶s advantage. Most Tata Sons board members are nearing 75, when non-

executive directors have to retire. The heads of the three biggest companies in the group also

retired last year: there¶s fresh blood at the top at Tata Motors,Tata Steel and Tata Consultancy Services

Clearly, the old order has changed. But some things will

remain constant²Mr Tata stepped into the shoes of a giant in

1991. His successor will do likewise.



THANK

YOU

the tatas without ratan

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