In Mumbai's Colaba, past the Navy Nagar, runs a seafront that passes right behind the Tata Institute of Fundamental Research (TIFR), the cradle of India’s nuclear programme, established by Dr Homi J. Bhabha with generous funding from the Dorabji Tata Trust. Sitting on the rocky pavement next to the jogger’s pathway, one can catch a beautiful visual of Mumbai Marine Drive lined up by high rises and Indian-model sky-scrappers housing the who’s who of corporate India.
Among the high rises is Antilla – home to Mukesh Ambani, the head of the Reliance Group and the richest man in the country and the continent. Watching Antilla from afar and then looking back at TIFR on your right from this seafront will make you draw comparisons between the two business groups: the road which the Reliance Group took to industrial success and on the other, the socio-economic roles through which the TATA group contributed to nation building since the time of independence.
From TIFR to the Indian Institute of Science (IISc), the Tata Institute of Social Science (TISS) and the Tata Energy Research Institute (TERI), the Tata Group’s contribution to nation-building was far beyond the extent of philanthropy and the kind of altruism usually identified with conglomerates that produce and sell everything from tea leaves and safety pins to luxury cars and aircraft.
It is this legacy and tradition whose mantle fell upon Ratan Tata when his legendary predecessor, J R D Tata decided to relinquish the seat of chairman of the Tata Group in 1991. While JRD’s legacy was a colossus in itself, and a hard endeavour to imitate, the timing of Ratan Tata’s accession at the helm of affairs was both an opportunity and a challenge.
Ratan Tata’s advent coincided with the liberalisation of the Indian economy which meant not just growth opportunities and global expansion but also the emergence of new competitors. From the TATA-Birla binary of socialist India, the post-liberalisation economic surge of the country saw TATA vying for space with the rise of a new generation of conglomerates from the Reliance Group, Hindustan Unilever and Mahindra to lately, the Adani Group.
Ratan Tata reportedly faced resistance in his early days at the helm with heads of the powerful subsidiaries challenging his consolidation measures. However, Ratan Tata, who cut his teeth on the Group’s shop floors and production lines and tediously worked his way to the top, swiftly managed to consolidate power and bring subsidiaries under the pivotal control of TATA Sons.
Once in charge, Ratan Tata prepped the group companies to not just stand tall in the competitive Indian industrial space but also gain new ground.
Among the post-liberalisation initiatives that Ratan Tata heralded was the reinvigoration of Tata Computer Systems into Tata Consultancy Services (TCS) in order to prepare for the information technology (IT) revolution that emerged as the first green shoot of India’s integration with the global economy. Over the years, TCS rose to a numero uno position and continues to give tough competition to industry majors like Infosys and Wipro.
On similar lines, Tata also gave a fresh life to Tata Teleservices in order to play a major role in the telecom revolution that was initiated during the first two decades of liberalization. Such initiatives saw the Tata Group becoming one of the first beneficiaries of the disinvestment programme of Prime Minister Atal Bihar Vajpayee with the acquisition of the Videsh Sanchar Nigam Limited (VSNL), which gave the Group control over the information gateways through which the Internet movement permeated in the country.
However, the visionary in Ratan Tata began to show when he unveiled his plans to transform the fortunes of Tata Motors. Starting with brand new designs like Tata Sierra, Safari and Indica, Ratan Tata heralded the indigenization and ‘Indianness’ of the domestic auto industry, which was then facing the influx of Japanese and Korean auto majors, and followed by the European and American automobile brands.
At the core of his transformation strategy were the collaborations he struck with numerous international partners along with strategic acquisitions, be it the collaboration with Fiat, the acquisition of Daewoo’s commercial vehicle wing, Tata-Marcopolo which gave him a foothold in Brazil, Tata-Hispano that opened the Spanish market for the Group, Tata-Hitachi for construction machinery production, the European Technical Centre for automotive design and research at the University of Warwick, the agreement with Hyundai for automatic transmission machinery, and so on.
None of these, however, matched the aura and international glory that the Tata Sons gained with the outright purchase of the legendary Jaguar Land Rover from the Ford Motor Company in June 2008. In the previous year, Ratan Tata had already made waves in the European business scene with his purchase of the Anglo-Dutch steel major, Corus Group, for a hefty 11.3 billion dollars. Both acquisitions ensured that Tata Motors and Tata Steel were positioned as global brands.
Braving perception issues on the JLR sale in Britain and dealing with labour problems at the Corus plant in Swansea, Ratan Tata managed to turn around the JLR in a matter of a few years and set things on track at Corus had reinforced in global image as a technocrat business leader. No surprise then that Ratan Tata made it to the advisory board of many global companies like Mitsubishi and JP Morgan Chase.
Yet, Ratan Tata’s role in and contribution to the global emergence of the Indian automotive industry cannot be told without the story of Nano – the Rs 1 Lakh Aam Aadmi car that was launched in March 2009 for the common man by the Tata Group doyen. Despite recurring issues like the protest against the Nano plant in Singur (which brought Mamata Banerjee to power), the concerns over safety and the lukewarm response from the middle class who saw more pride in the foreign brands that came to India in a dozen, Nano had a generational run for over a decade until 2018.
While the changed landscape of Indian consumer preferences and the influx of foreign brands might have dented Ratan Tata’s vision of a people’s car, the inspiration and objective behind producing a car that cost as much as a motorcycle were indeed laudatory and ‘nationalistic’ in goal and spirit.
While Ratan Tata’s years at the helm of TATA Sons will be as glorious as his legendary predecessor, JRD Tata, the former had made a spectacular addition to the Tata staple in his swansong years by bringing back a home-grown brand that was snatched away from the Tata family during JRD’s time. Floated as Tata Airlines in 1932, JRD himself flew its first de Haviland Puss Moth on a historic flight from Karachi to Bombay in British India.
While Tata made it a public company and named it Air India in 1946, the Indian government passed the Air Corporations Act in order to nationalize Air India in 1953 though JRD remained as Chairman till 1977. Air India went through metamorphoses over the years, with Indian Airlines created out of it, and then merged and demerged multiple times during the tumultuous years as a loss-making national airline. Under Ratan Tata’s stewardship, Tata Sons made numerous attempts in the 1990s and 2000s to float a new airline which was often aborted due to unfriendly government policies or competitor pressure.
In 2013, Ratan Tata managed to fulfil his long-running dream of a Tata-owned airline by floating Vistara in partnership with Singapore Airlines. This was followed by a tie-up that brought Air Asia to India, thus making Tata Sons a full-fledged airline operator. However, it was not until October 2021 that the Tata Sons could lay their eyes on their heritage product when the Narendra Modi government decided to sell the perennially loss-making national airline to the highest bidder, which incidentally turned out to be its original owner.
While many at Tata Sons might have felt that a historic wrong has been corrected with the acquisition of Air India for Rs 18000 crores, the Group swiftly moved to integrate Vistara and Air Asia India in order to recreate a new aviation history over Indian skies.
A tradition of corporate ethics and integrity, with a few glitches
Despite its status as a private enterprise and global conglomerate, the Tata Group is perceived as a ‘national’ enterprise for Indians who see it more as a public enterprise than an industrial behemoth owned by profit-making tycoons and business families.
A pivotal reason for this perception is how Tata Sons have diminished their family control over the Group over the years, engaged in extensive nation-building initiatives and, above all, brought to the helm efficient leaders who did not have legacies to boast of like other top business houses in the country. For that matter, no other business house can match the nationalistic initiatives of Tata Trusts like TIFR, TISS, IISc or TERI.
Both JRD and Ratan Tata were revered in the corporate world for their high business ethics and integrity as opposed to the stories of odium and manipulation identified with many of their contemporaries. This image remained undented largely for the Tata Sons, and particularly for Ratan Tata, but for in two instances.
The first was the Radia Tapes controversy in which Ratan Tata was among a set of people including politicians, journalists and other prominent personalities whose conversation with a lobbyist, Niira Radia, was secretly taped by the Income Tax Department as part of investigations on the 2G scheme. These tapes were subsequently leaked to the media causing an uproar. Though no wrongdoing was attributed on the part of Ratan Tata and his name figured in the tapes probably because Radia was handling Tata’s public relations, the controversy gave rise to the perception that he too sought to influence policy through an allegedly surreptitious political lobbyist.
The other incident was the Cyrus Mistry sacking that led to considerable heartburn between Tata Sons and Shapoorji Pallonji (SP) Group, which is the largest individual equity holder in Tata Group. Mistry was handpicked by Ratan Tata after he resigned as Chairman of Tata Sons in 2012.
While there are varied reports on why Mistry was removed from the post in October 2016, the National Company Law Tribunal (NCLT), while rejecting Mistry's petition against his dismissal, stated that Mistry was removed as the Tata Sons Board and majority shareholders had lost confidence in him as he was alleged to have sent out sensitive information to the IT department, leaked information to the press and gave public statements against the company and board members.
According to some reports, Mistry had accused Ratan Tata of interfering in the operational decisions of Tata Sons, despite his retirement. Claiming that governance within the group was compromised, Mistry also alleged favours shown by Ratan Tata to some businessmen. Though an Appellate Tribunal of NCLT restored Mistry’s chairmanship in 2018, the Supreme Court upheld the Tribunal’s original decision on his ouster.
Following Mistry’s ouster, Ratan Tata took over as interim Chairman and a committee was formed to select a new Chairman, which eventually resulted in N Chandrasekaran, a Tata Group veteran and first non-Parsi Chairman, being chosen to head the Group.
Though the SP group is reported to have attempted reconciliation with the Tata Sons after Mistry died in a road accident in September 2022, the acrimony over the spat between two leading promoter families of the Tata Group had cast a shadow over the Group’s governance record and public perceptions of one-upmanship by the Tata family.
While these controversies have not dented the Tata brand image which stands tall globally as the leading Indian conglomerate that can take on the global corporations in any area of business and industry, the legacy of Ratan Tata will remain over the Tata Group for years to come for the simple reason that he has neither anointed a successor from his family.
A few names from the Tata family, which holds over 60 percent stake in Tata Sons, including Noel Tata and his three children – Leah, Maya, and Neville – are being discussed as potential successors of Ratan in the Tata Sons Board. Though Noel, Ratan’s half-brother, in his late 60s is a potential replacement on the Board, expecting him to replicate Ratan Tata’s record of leadership legacy at this age, and emerging as Chairman to replace Chandrasekaran, could be a long shot.
The younger generation, on the other hand, are mostly Ivy League type management talents who will easily form the next generation of Tata Sons leadership. However, any one of them managing to slip into or replicate the leadership heritage of either JRD or Ratan Tata might be unlikely for the simple reason that gems like JRD or Ratan do not emerge when there is a problem of plenty.
By that count, Ratan Tata could have been that last-standing TATA from a family which will produce many more Tata, but probably none like JRD or Ratan!
