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business leaders > profiles > Ratan Tata
Ratan Tata
Ratan Tata: Tending it like a Tata
Barely a decade and a half ago, when Ratan N Tata took over as chairman of Tata Sons, the holding company of the Tata Group, people in the markets and in management circles dismissed him as a person of no consequence. When he sold off Tata Oil Mills Company in 1993 people said he had no stomach for competition. When he exited ACC, India's leading cement company, people said he was frittering away

his heritage. When he decided to build India's first indigenous car, analysts predicted ruin.

Ratan Tata has proved all his critics wrong. And how!

Tata is one of Indian industry's most respected business leaders. The shy, somewhat reticent chairman has taken the group's annual revenues to $21.7 billion, or more than seven times their level when he took over as boss in 1991. He still has eight years to go before he retires at the age of 75.

Tata has successfully restructured and revitalised a group that was seen as slow, bureaucratic and unable to deal with the hurly-burly of today's intensely competitive world. Tata companies have made aggressive strides in India and abroad, leading the rush for overseas acquisitions by Indian groups, and ramping up market shares at home.

Under his leadership, the Tata group has emerged as India's largest business conglomerate, a modern, unified organisation ready for the challenges of a young economy and increasingly global marketplace. He has also ensured that while the group metamorphoses to meet the volatile demands of a borderless international market, its tradition of business ethics and commitment to society remain intact, and even become stronger.

When Tata took office in 1991, he inherited an unwieldy giant with over 250 companies, representing nearly every industry, loosely held together by the group management. The immediate challenge Tata faced was to galvanise this amorphous entity to face the challenges of a newly liberalised economy. It was a feat he executed with such skill, foresight and success that it has silenced his detractors.

Tata took over the helm of the group from his uncle, the legendary JRD Tata, after spending three decades in relatively smaller roles in group companies. His first stint was with Tata Steel, which he joined in December 1962, after returning from the United States with a degree in architecture from Cornell University and a brief assignment with the architectural firm of Jones and Emmons in Los Angeles.

Tata rose to the chairmanship of the Tata Group, at a pivotal moment in the country's economic history – the liberalisation of the Indian economy. The development seemed to be timed in his favour. He took over from JRD Tata, who, though a pioneer in his time, had left the group unprepared for a new economy. While the group was still pursuing its manufacturing thrust, the younger Tata had anticipated the opportunities in the information-based industries.

Strengthening an inheritence
Ratan Tata quietly but firmly began to assert the group's authority on the individual companies. He strengthened the unified brand image of the group. A major restructuring effort was undertaken, excess baggage was dropped and businesses were rationalised and consolidated. The effort ended with a leaner portfolio of 93 companies, focused on seven identified industry sectors – engineering, materials, energy, chemicals, services, consumer products, and information systems and communication.

Tata has been instrumental in promoting the Tata brand and the 'Made in India' tag not only in India but across the globe in sectors as diverse as steel, automobiles, chemicals and hospitality. His mandate for group companies was clear: shape up, or ship out; be among the top three players in your business or get out of it.

Under Tata's stewardship, the group is in a leadership position in information technology (TCS, CMC), steel (Tata Steel), chemicals (Tata Chemicals), tea (Tata Tea) and hospitality (Indian Hotels), and the Tata name is reaching new geographies through an aggressive 'internationalisation' effort. The group now has a presence in 40 countries and exports to 140.

What has ensured the success of Tata's plans is his unwavering focus on the customer. Quality, he insists, must be the hallmark of all Tata products and services, no matter which segment of society or which country they are meant for. Good governance, fair business practices and social responsibility should be the guide for all Tata companies, in all locations and at all times.

Recent years have seen the group make rapid strides in its M&A and JV strategy across the globe. Since 2004 the Tata group has acquired over 30 companies, totalling about $2 billion. The group has also built strategic partnerships with global companies, in order to improve its competitive position.

As he drives the group's expansion plans in other geographies, Ratan Tata is encouraging Tata companies in India to shift their focus from the urban to the rural and create products and services that address the needs of the bottom of the pyramid. The Taj group's recently launched Ginger chain of economy hotels, Tata Motor's proposed Rs 1-lakh small car, Titan's Sonata brand of watches, and Tata BP Solar's initiatives in harnessing solar energy to light up villages, are efforts at creating affordable but quality products and services for small-town and rural customers.

Referred to in the media as a recluse, Ratan Tata is not to be found at the regular high-society events patronised by many of his peers. He prefers instead to indulge his passion for flying by piloting a plane or helicopter to his weekend getaway at Mandwa, and spending time with his two Labradors.

Educational qualifications:

  • Graduated from Cathedral and John Connon School, Mumbai
  • Bachelor of Science degree in architecture from Cornell University in 1962
  • Advanced Management Program conducted by Harvard Business School in 1975

Positions held:

  • Chairman of Tata Sons
  • Chairman of all major Tata companies (Tata Steel, Tata Motors, Tata Power, Tata Consultancy Services, Tata Tea, Tata Chemicals, Indian Hotels, Tata Teleservices)
  • Chairmanship of the government of India's Investment Commission
  • Membership of the central board of the Reserve Bank of India
  • Membership the international advisory boards of Mitsubishi Corporation,
  • Membership the American International Group,
  • Membership J.P. Morgan Chase,
  • Membership the International Investment Council set up by the president of the Republic of South Africa,
  • Membership the Asia Pacific advisory committee to the board of directors of the New York Stock Exchange
  • Serves on the board of trustees of the Ford Foundation
  • Programme board of the Bill & Melinda Gates Foundations' India AIDS initiative
  • And chairs the advisory board of RAND's Center for Asia Pacific Policy

Awards and distinctions:

  • The Padma Bhushan, on Republic Day, January 26, 2000
  • Honorary doctorate in business administration by Ohio State University
  • Honorary doctorate in technology by the Asian Institute of Technology, Bangkok
  • An honorary doctorate in science by the University of Warwick

Compiled by Shifra Menezes

Also see:
M&As in recent years
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