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Ratan Tata: From fighting fiefdoms to a global giant

Last updated on: August 18, 2010 14:15 IST

Ratan Tata: From fighting fiefdoms to a global giant

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Manoj Rammohan in New Delhi

Credited with creating India's top most brand, Ratan Tata -- search for whose successor is on now -- had to fight hard in the 1980s to create a brand for Tatas and keep the companies from being run as 'fiefdoms'.

"We did not have a brand... We identified our brand in 15 or 20 different ways, each company doing its own thing," Tata Group Chairman Ratan Tata was quoted in a book, Tata: The Evolution of Corporate Brand.

Tata, who has led the group to global heights, had to fight a hard battle from the times when he was waiting in the wings to take charge of the conglomerate.

After he took the reins of the group in 1991 amid stiff resistance from within, his task was to stop the breaking down of systems established by his predecessor J R D Tata.

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Image: Ratan Tata, chairman, Tata Group.
Photographs: Reuters
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The book, authored by Morgen Witzel, said that when in 1981 Ratan Tata proposed the establishment of a strategic planning forum to harmonise the group's strategy, he was opposed by his colleagues.

Some felt he was trying to rein them in and limit their autonomy; others were simply opposed to sharing information with other Tata companies that they regarded as rivals. To outsiders, at least, it looked as if the glue that held Tata together was starting to dissolve, the book said.

"We had fiefdoms that were going in different directions. . . We had companies in the same business competing with one another. We had uncontrolled entry into new businesses," Ratan Tata said in the book that reminisces about the group in the late 1980s.

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Image: Ratan Tata caught in a traffic jam in Kolkata.
Photographs: Reuters
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According to the book, as the then chief J R D Tata's power started to decline during the late 1980s, the group of managers promoted by him in the 1950s and 1960s began to "run their companies autonomously.

"So, we had companies that were doing suboptimal business, that did not have scale or critical mass," Ratan Tata has said in the book.

Today, Tata group is the wealthiest conglomerate in the country in terms of market capitalisation of listed entities at Rs 3.7 lakh crore (Rs 3.7 trillion).

In 2008, the Tata group was valued at $11.4 billion, and ranked 57th among top 100 brands by Brand Finance, an independent company focused on the management and valuation of brands -- a success for which Tata has been credited.

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Image: Ratan Tata.
Photographs: Reuters
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The group earlier this month set up a panel to search for the successor of Ratan Tata.

Speculations are rife that Ratan Tata's half brother Noel Tata, who is increasingly being given more responsibilities in the group, would be the next man in charge.

As per the book, in the early 1990s, the efforts by holding company Tata Sons to make the various companies work together as a meaningful and recognisable group were resisted with great vigour and some executives like Tata Steel's then chief Russi Mody solved the problem by stepping down.

Recalling the early days of Ratan Tata at the helm of affairs, the book said that he had assigned himself the target of consolidating the group.

As a first step for which Tata Sons slowly started hiking its share in each group firms to 26 per cent as it had fallen over the past decades.

"We set ourselves the task of seeing how we could put ourselves together as a more meaningful and recognisable group of companies with more central control," Ratan Tata has said.


Image: Tata Sons chairman Ratan Tata being given the Buisnessman of the Decade award by Maharashtra Governor K Sankarnarayanan.
Photographs: Hitesh Harisinghani
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