Leading the Tata group: The RATAN TATA YEARS;

BRIEF SUMMARY: The case study takes us back to the time when the Tata group came into
being when Jamsetji Nusserwanji Tata started a trading firm in 1868. The company first
entered into manufacturing of textile in 1874 and then into services (hotels) in 1904. The
study captures the important aspects and the revolution that took place in the company since
its birth.

Q1. Would you have picked RATAN TATA to lead the Tata group? Why ?why Not?

ANS:YES,I would have picked RATAN TATA to lead the company because it was during
his leadership the companied NELCO could achieved its market share from 3% to 20%
moreover the company was able to recover its losses. Secondly Mr RATAN TATA had a
very clear vision in his mind of what could be done with the Tata group in the next 5 to 10
years. Mr RATAN TATA had simple strategic plan for its company, and by implementing
his strategic plan the company would become a single unified group ,which in return would
help the group companies to take the advantage of tits groupsize and diversity and have full
ownership of its group.

Q2.What were the key challenges faced by rata Tata when he became the group chairman?
how did he overcome those challenges?

ANS: The challenges faced by RATAN TATA when he became the chairmen are as follows:

1. Liberalization of the Indian economy had changed the Indian industry scenario. Many
predicted that the Indian companies have operated in a closed economy for decades
and they will lose out to new and agile competition by the foreign players.
2. Little control over the companies because of low ownership stakes
3. Revision of the old policy for retirement age had led to a conflict between RATAN
TATA AND RUSSI MOODY.
4. Poor performance of the two flagship companies i.e TATA STEEL AND TATA
MOTORS was one of the biggest challenged that was faced by the chairman.
5. Managing and Organizing the various business into a coherent structure
6. Using the Tata name and the brand logo to represent its group companies was
criticized by various group and personalities like NANI PALKHIVALA.
7. Failure of INDICA reported a net loss of 5 billion, the largest loss posted by many
private sector company in India and the largest loss in the history of the Tata group.
8. The 2008 recession deeply impacted Corus which was profit making company at the
time of its acquisition, lost 303 million due to recession.

RATAN TATA developed a group wide strategic plan which proposed the promotion of new
and high technology ventures which helped in increasing the groups international business
and moving out the underperforming business. Under his chairmanship tata motors entered
the utility vehicle segment with the launch of tata sumo and had a joint venture with
Mercedes bens to assemble cars for sale in india and explore the potential for the export.
After the poor performance of the two flagship companies , he made a significant investment
in the upgrading the technology and revamping its product portfolio which helped in
improving the quality and productivity of both the companies. In order to organize the
various business into a coherent structure the company took the help form the consulting
firms like mckinsey&company and was able to formulated various business into seven
sectors; a)information technology and communication B) engineering products and services
c)materials d)services E)energy f)consumer products and G)chemicals. To promote the tata
brand for all its group companies, seven tata companies TISCLO,TELCO,TATA
TEA,TATA CHEMICALS TATA ELECTIC COMPANIES,TATA INTERNATIONAL
AND TATA INDUSTRIES singed the agreement to make the brand more prominent. TISCO
was renamed as TATA STEEL and TELCO was renamed as TATA MOTORS. The diverse
logo used by group companies were also replaced with a common group logo.

In order to improved and developed holistically various types of committees and centre were
formed like 1. GEO which guided the company in forming strategic plans , benchmarking
the performances and in allocating the resources.2.TBEM helped in identifying the areas of
improvement ,quality improvement, cost reduction, re-engineering of processes and new
product development ,through the formation of such committees and centre tata steel was
able achieve cost leadership in steel manufacturing in the world.3. GCC helped the company
to acquire two major companies of different sector namely a). Tetley A Uk based tea
company and B). Jlr (Jaguar and land rover)the premiere luxury car brand.4. TGIF was
formed to promote innovation and the forum use to organized an annual innovation
competition named Innovista.

Part B

Q1. Do you agree with the decision of the board of tata sons to replace CYRUS MISTRY as
chairman?why? why not?

ANS: YES, I agreed with the decision of the board of tata sons to replace CYRUS MISTRY a
chairman because he could not perform well, he had a good vision but he failed to give the
right direction to is company , most of the sectors were underperforming , moreover the
companys plans to restructure and improve the performance of its telecom venture was
hindered by the impasses with its joint venture partner DOCOMO. The company was heavy
dependent on the profits from its other sectors namely TCS And JLR, on the other hand
when efforts to turn around the domestic operations of tata motors was gaining some
traction- the company decided to stop its production of its passenger segment cars like
MANZA, VISTA, he even sold the underperforming UK assets which had adversely affected
the fortune of the tata steel, and he was not being able to meet up with expectations of its
shareholder, therefore the board members of the tata son took the right decision to replace
CRYUS MISTRY as a chairman so as to safeguard the vales and interest of the company in
the long run.
Q2.ASSESS the performance of CYRUS MISTRY. Do you agree with the board views that
mistry removal was necessary for the long term interest of the Tata group?

ANS; IN 2012 CYRUS MISTRY became the chairman of the tata group. As a chairman he
formed his own agenda of profitable growth with full earnest through restricting and had
made assets write down across various group companies and shelving the acquisition
decisions such a Indian hotels at 1.2billion dollar bit for orient express hotel.

He shared his vision for his company , vision 2025 which consist of a) to be among the top
25 in terms of market share capitalization) to reach 25% of the global population) to be
among the 25 globally admired corporate and employer brand and also talked about various
strategies that would be implemented to maximise the performance of the company, optimise
the portfolio for its sustained future performance.

During his chairmanship the company came into partnership with low cost airline companies
like air aisa, vistara and Singapore airlines. The company formed an joint venture with US
major coffee beverage company. The company entered into the ecommerce platform with the
launch of TATA CLIQ, which helped in attracting exclusive partnership with top luxurious
brand like COACH, BURBERRY,ARMANI etc,

He further simplified the group oversight structure by merging the two group offices-the
GGC AND THE GEO into one group executive council. HE included briefing in the process
of assessment of the group companies under TBEM.HE introduce BOARD
EFFECTIVENESS FRAMEWORK so as to put emphasises on both compliance and
strategic roles for the boards. Later he formed a group name the group technology and
innovation office(GTIO) which looked after all the innovations and technology programs that
the company doing in their respective business.

In august the company had form a tie up with various leading academic institutions, and took
consultancy services from ERNST AND Young to reviews its performances in the changing
competitive world.

The above initiatives taken by the chairman were good to some extent but under the
chairmanship of CYRUS MISTRY the company were underperform well in its flagships
businesses. The company was incurring losses from those sectors where it had gained cost
leadership under the chairmanship of RATAN TATA. High debt and heavy dependency on
the profits from other sectors had forced the board members to removed CYRUS MISTRY as
the chairman of the TATA GROUP.