Ratan Tata: Leading the Tata Group into the 21st Century Essay Example

organization. Many individual companies and subsidiaries operated independently and did not reflect the core values of the founders. This lack of cohesion resulted in CEOs clinging to their positions for too long, preventing the next generation of managers from advancing. Despite facing opposition, Ratan Tata stayed true to his principles and successfully reformed the top management of the group within a few years. This led to better-equipped managers who could take advantage of business opportunities in the era of neo-liberalization. The program of leadership change also addressed inefficiencies and quality issues. Therefore, Ratan Tata deserves recognition for preparing the Tata group to embrace globalization under the neo-liberal policy framework. (Source: www.economist.com, 2007)

Ratan Tata is credited for streamlining and improving the conglomerate by withdrawing from unmanageable and unprofitable businesses. Simultaneously, the Tata group successfully expanded into Information Technology and Telecommunication, thus demonstrating Ratan Tata's legacy of exploring new business sectors. This transformation in the conglomerate's composition is driven by Ratan Tata's philosophy of embracing risk. In his own words,

“You can choose to avoid taking risks and have a predictable growth trajectory. Alternatively, you can adopt a cautious approach while taking more risks in order to achieve faster growth. As a Group, we were not willing to take risks and as a result, our growth was limited either due to safety concerns or lack of precedent. I believe that taking risks means exploring uncharted territory. It is about thinking big, something we failed to do in the past. Our tendency was to make gradual progress, which caused us to consistently fall behind.” (Case 10, Center for Management Research, 2008)

Despite the risks and uncertain returns associated with

the acquisitions of Corus by Tata Steel and Land Rover and Jaguar by Tata Motors, Ratan Tata should be commended for standing by his philosophy on risk. Skepticism from business analysts was warranted, as these deals heavily drained the financial resources of the group. However, it will take many years to fully comprehend the advantages and disadvantages of these acquisitions.

Despite the potential negative effects on the financial prospects of Tata Steel and Tata Motors, Ratan Tata's personal legacy is undeniably significant. An evaluation of his leadership should also consider his philanthropic inclination. The Tata group stands out from other profit-driven enterprises due to its remarkable contributions to the greater common good of Indian society. The Tata family has founded two prominent charitable institutions in India, and what is even more impressive is that they have continued to operate even during severe economic recessions. Few other major business houses, whether in India or abroad, would sacrifice their business interests to prioritize public welfare.Although the inclination for charity has been present for several generations, beginning with Jamshetji Tata, Ratan Tata deserves notable recognition for upholding it even amidst severe economic circumstances (www.forbes.com, 2005).

Ratan Tata's business decisions were influenced by social concerns. One example is the conception of Nano, the world's cheapest car. Inspired by seeing a family of four traveling on a bike during a rainy day in Mumbai, Tata decided to provide a safer alternative for the Indian middle class. The unveiling of Nano received an overwhelming public reception and impressed analysts with its efficiency and reasonable comfort. However, it will take many years of sustained sales for Tata Motors to show impressive profits, which means

shareholders can only expect moderate returns in the medium term. Despite this, Ratan Tata prioritizes social good over immediate profits, setting him apart from the rest of the Indian business community (Business India, 2001).

Despite being an inspirational leader and responsible for shaking up the top management in his early years as Chairman, Ratan Tata has received criticism for not bringing more women into high-level positions within the group. This criticism is a stain on an otherwise impressive resume. Additionally, while Ratan Tata is credited with rightsizing the group's companies and prioritizing innovation and change, some commentators argue that the Tata group has too broad of a business portfolio, spanning across multiple domains. This critique represents a minor drawback in an otherwise exemplary career. Furthermore, the group's plans for expansion in new markets and business verticals are unlikely to address this concern in the future. (Talgeri & Srinivasan, 2008)