MONITORING (SW) – Crowds of mourners have gathered in India’s financial capital Mumbai for the funeral of industrialist Ratan Tata, hailed as a “titan” who led one of the country’s biggest conglomerates.
Ratan Tata, the philanthropist and former chairman of Tata Group who has died aged 86, played an instrumental role in globalizing and modernizing one of India’s oldest business houses.
His ability to take bold, audacious business risks informed a high-profile acquisition strategy that kept the salt-to-steel conglomerate founded 155 years ago by his forefathers relevant after India liberalized its economy in the 1990s, reported BBC.
At the turn of the millennium, Tata executed the biggest cross-border acquisition in Indian corporate history – buying Tetley Tea, the world’s second largest producer of teabags. The iconic British brand was three times the size of the small Tata group company that had bought it.
In subsequent years, his ambitions grew only bigger, as his group swallowed up major British industrial giants like the steelmaker Corus and the luxury car manufacturer Jaguar Land Rover.
The Tata Group’s outlook had been “outward-oriented” from the very beginning, according to Andrea Goldstein, an economist who published a study in 2008 on the internationalization of Indian companies, with a particular focus on Tata.
As early as in the 1950s, Tata companies operated with foreign partners.
But Ratan Tata was keen to “internationalize in giant strides, not in token, incremental steps”, Ms. Goldstein pointed out.
His unconventional education in architecture and a ring side view of his family group companies may have played a part in the way he thought about expansion, says Mr Raianu. But it was the “structural transformation of the group” he steered, that allowed him to execute his vision for a global footprint.
Tata had to fight an exceptional corporate battle at Bombay House, the group headquarters, when he took over as the chairman of Tata Sons in 1991 – an appointment that coincided with India’s decision to open up its economy.
He began centralizing increasingly decentralized, domestic-focused operations by showing the door to a string of ‘satraps’ (a Persian term meaning an imperial governor) at Tata Steel, Tata Motors and the Taj Group of Hotels who ran operations with little corporate oversight from the holding company.
Doing this allowed him not only to surround himself with people who could help him execute his global vision, but also prevent the Tata Group – protected thus far from foreign competition – from fading into irrelevance as India opened up.
In spite of the many wrong turns, Tata retired in 2012, leaving the vast empire he inherited in a much stronger position both domestically and globally.
India under Prime Minister Narendra Modi appears to have clearly adopted an industrial policy of creating “national champions” whereby a few large conglomerates are built up and promoted in order to achieve rapid economic outcomes that extend across priority sectors.
Along with newer industrial groups like Adani, the decks are clearly stacked in favour of the Tata Group to benefit from this.
