CASE STUDY BASED ON

LEADERSHIP OF RATAN TATA

EXECUTIVE SUMMARY
Tata is India’s oldest and largest private sector business
entity. Founded in 1868, the group now consists of more than 100
companies, with a turnover of more than $70bn. It has a wide range
of interests, with companies trading in fields as diverse as steel, cars
and trucks, chemicals, IT consultancy, retailing and hotels.

The Tata group is highly decentralised, and member

companies have great aut­onomy in terms of strategy and operations.
The main instrument for unifying the group is the Tata corporate
brand, which embodies values that are shared by all companies in
the group.
 However, not all the companies use the corporate brand in
the same way. Many, such as Tata Beverages and Tata Motors, use
the name and logo explicitly. However, even in India some
companies in the group, such as Trent and Taj Hotels, do not use the
Tata name. Taj Hotels also has its own brand mark.

This inconsistency is seen by the Tata group as less

important than adherence to the group’s values. It was originally
founded for the purpose of creating and spreading wealth in order to
strengthen the Indian nation and economy.
THE CHALLENGE

 Before 1991 the Tata group had few interests in the world outside
India. Its brand identity was very strongly Indian, rooted in India’s
culture and history. However, Ratan Tata, the group’s leader,
believed this had to change. He felt that Tata’s future lay outside
India, and that it should aspire to become a global company.
 But could a company with such a strong Indian identity succeed in
establishing a global brand? And if so, what would be the
disadvantages? There were – and still are – many in India who believed
that the process of globalisation would change Tata and damage its
values, turning it into just another big company that would be concerned
only with profit. Others outside India wondered – and some still do – if
western consumers in particular would really ac­cept the Tata brand.
LEADERSHIP QUALITIES
PRAGMATIC APPROACH
Tata’s approach to handling the new acquisitions has
been pragmatic. Conventional corporate branding theory suggests
that all acquisitions should be branded with the corporate brand
name and mark. GE, for example, applies the GE brand across the
board to all new ventures and all new acquisitions.

But Tata faced different pressures, and had to respond in

a different way. The group had simultaneously to reassure its
stakeholders in India that it was not about to abandon its traditional
values in favour of global growth, and to reassure stakeholders in
the companies it was acquiring outside India that their favourite
brands would not be spoilt.
COMPANY INITIATIVES

Tata group companies have always displayed a keen interest in

the welfare of the communities in which they operate. The work
they do on this front is managed by, and channeled through,
organisations established to further the cause of community
development.

 Tata Chemicals Society for Rural Development

 Tata Steel for Rural Development Society

 Rallilove ACTS
PROCESS OF GROWTH THROUGH
LEADERSHIP

• A self-actualised person is set to develop deep social

interest and compassion. Keeping this in the context, if you
look at the purpose statement of Tata, it reads, “At the Tata
group we are committed to improving the quality of life of the
communities we serve.” Anyone who visits Jamshedpur will
know the meaning of this purpose statement and how well this
statement is expressed and executed there.
• The thing that makes leaders successful is their ability to create
and develop a set of leaders in their organisations. Through TAS
(Tata Administrative Services) and other leadership initiatives,
Ratan Tata was able build a cadre of leaders who demonstrate the
Tata values and contribute significantly to the organisation. A
common leadership thread runs through and across different Tata
enterprises and there is a strong link to the group values and
purpose. There is a distinctive leadership profile and leadership
development agenda at the top; a leadership engine that takes care of
early planning and picking the right people for the future and
training them to take on bigger responsibilities.
PROBLEMS AND SOLUTIONS
Startup founders generally face a few crisis situations
during the lifecycle of their venture. On being asked about the
effective strategies to deal with crises and whether it is an acquired
or latent skill, Mr. Tata noted,
“Crisis is the greatest textbook of leadership”
He noted that one often wonders where leadership skills come
from, especially during times of crisis. Citing the example of the
terror attack that hit Mumbai in 2008, he pointed to how people one
generally considered to be mild and timid became leaders amidst the
crisis and saved lives. This happens in business too. He noted that
there are leaders who deal with crisis head on, and others who look
to cover it up.
 TATA Power is also facing problems as the company has not
been able to commission its 4,000 MW Mundra ultra mega power
project this year. Tata Power, like other power producers, has
suffered due to high coal prices and depreciation of the rupee. After
funding 63 per cent of the costs, the lenders are holding back the
remaining loans as they are worried over the cash flows.

The company's consolidated net loss in the second quarter of the

current fiscal was Rs 1,219 crore, down from a profit of Rs 673
crore in the same quarter last year. Tata Consultancy Services Ltd.
(TCS), the Tata group's biggest unit by market value, is India's
largest information technology company worth $2.2 billion (Rs
10,870 crore).
TOP LEADERSHIP IN SUCCESSION
PLANNING
CONCLUSION
The big boys in the group, the likes of Tata Steel, Tata Tea
and Tata Chemicals, have in-house organisations dedicated to the
community development task, but that does not mean smaller
companies lag behind. Each Tata company has its own priorities in
social development. They take up whatever is relevant to the
communities and constituencies in which they function. Somebody
is working in water management, somebody is in education,
someone is in Aids containment, someone in income generation; the
range is huge.