Ratan Tata: from unlikely heir to architect of the Tata group’s global legacy
Ratan Tata (Photo posted on Instagram by @ratantata)
Fate placed Ratan Tata in a situation where few expected him to succeed. However, he not only succeeded, but he also transformed the sprawling Tata Group from an India-focused entity into one of the most important names in the world, from an old-fashioned company to a modern conglomerate, where his software outfit became the crown jewel. , and from a group that had parted ways with Air India to a group that brought the airline back into its fold.
Equally important, Tata changed the nature of the group from a federal setup to a cohesive operation, led by Tata Sons, the group’s holding company, which in turn is controlled by Tata Trusts.
It is no surprise that Tata’s journey as helmsman of the Tata Group – beginning in 1991, the year India embraced economic reforms and liberalization – paralleled the country’s rise as an economic power and the unleashing of India’s managerial and technological talent across the whole world. sphere.
However, the thread that connects the numerous dots in this story is Tata’s personal journey.
“It’s hard to be a Tata. The surname admits of no failure…” wrote Gita Piramal in Business Maharajas, first published in the 1990s.
Yet that was exactly what the wise money was betting on when Tata took over: that he would fail. He joined the group in 1962, armed with a bachelor’s degree in architecture from Cornell. He served in a variety of roles before embarking on a less-than-glorious stint at the National Radio and Electronics Company in 1971. Ten years later, he was appointed chairman of Tata Industries, where he showed his first glimpse of his talent by transforming the company into a strategic think tank and promoter of high-tech ventures.
However, few paid attention to Tata Industries at a time when legends like Russi Mody at Tata Steel, Darbari Seth at Tata Chemicals and Tata Tea, and Ajit Kerkar at Indian Hotels loosely reported to the bigger legend: JRD Tata.
Naturally, few expected Ratan Tata to go far when he became head of the group. He shouldn’t have agreed to that. His main rival for the position, Mody, gave a newspaper interview that ended his chances.
Mody’s eventual dismissal made it clear that Ratan Tata would not adhere to JRD’s loose federal structure. Instead, he took on the heavier task of bringing the satraps under control. From there he systematically increased Tata Sons’ stake in group companies. In 1996, he launched the Brand Subscription Scheme, under which group companies paid a fee for using the Tata name.
Once Tata felt safe, he pursued his dreams. Unlike some of his peers, such as Rahul Bajaj, who guarded their sovereignty and did not relinquish equality, Tata was open to collaborations with foreign partners. He went one step further with a series of foreign acquisitions, most notably Tetley, Corus and Jaguar Land Rover.
What he did at home was just as important. He always dreamed of creating a people’s car for India, combining the comfort of the ambassador with the economy of a Maruti. This is how the Indica was born and held its own against international brands for a while. However, the more ambitious Nano proved to be a challenge. Tata had promised an ideal car for India for around Rs 1 lakh, but despite fulfilling that promise, the Nano failed to capture the imagination of the Indian masses, who resisted being identified as owners of the cheapest car.
Then came the delivery of the Radia tires. Tata and Niira Radia met in the 1990s when the group was aiming to establish an airline with Singapore International Airlines. Radia, who had moved to India with her three sons, advised SIA. Following the leaked tapes, which showed Radia in questionable conversations, their association came under scrutiny, even though Tata had repeatedly stated that Radia was brought in to counter negative campaigns against the group.
Nevertheless, it was clear that Tata handed over the helm to Cyrus Mistry in 2012 and left behind a glorious legacy. However, dissatisfaction with Mistry’s leadership led to a boardroom battle in 2016, which saw Tata return as interim chairman before initiating a more lasting succession.
It was an eventful journey for someone who shouldn’t have been in the role. Maybe he wasn’t even a Tata. His father, Naval, was adopted by Ratanji Tata, the son of group founder Jamsetji.
Ratan Tata could have remained an architect, but his grandmother’s illness brought him back to India regularly, and one thing led to another. He stayed and wrote an indelible chapter in Indian business history.
First publication: October 10, 2024 | 1:05 am IST