“Businesses need to go beyond the interest of their companies to the communities they serve.” – Rattan Tata (“On Ratan Tata’s 80th Birthday, Some Life Lessons From The Man Himself”, 2018)
TATA group is one of the biggest multinational conglomerate company in India. The headquarters of the company lie in the financial capital of India in Mumbai, Maharashtra. TATA group started its operations as a trading company when originally founded by Jamsetji Tata in 1986 but today have expanded to 80 different countries across 6 continents. Tata industries employ more than 200,000 employees and working in seven different sectors namely Information and communications technology, engineering, energy, consumer products, materials, services and chemicals. TATA Group is more than 150 years old today and has gone through various organizational transitions such as Rationalization, globalization and are currently in the innovation phase. The diverse sectors that Tata industries specializes in are Tata Motors, Tata Steel, Tata Consultancy Services (TCS), Tata Chemicals, Tata Teleservices, Tata Global Beverages, Tata Communications, Tata Industries and Taj Hotels with a target of achieving of $500 billion in revenue by 2020-2021. (Hill, 2011)
Tata Group Timeline:
1. Founded in 1868 by Jamsetji N Tata great grandfather of Ratan Tata as Trading Co.
2. Diversified to textiles in 1874
3. Established First Luxury Hotel in 1903
4. First Private Steel Company in India in 1907
5. Group opened British office in London in 1907
6. First Airline in 1932
7. The group opened a representative office in US in 1945
8. First Software firm venture in 1968
9. JRD Tenure of 53 years as Chairman starting 1938, 13 Companies in 1938 to 300 in 1991
10. Ratan Tata, JRD’s nephew took over in 1991.
Tata industry had set it sights firmly on the Indian economy before it’s internationalization phase. The demographic catered to was endemic to the geographical and economical environment it encountered back home in India. Various cultural, economic and operational challenges were to be overcome if TATA was to be a global brand. The decentralized nature of the group companies made it hard to define a wide spectrum vision and operational setup that would provide both a united front in terms of strategy and resource pool at least in a tangible asset frame of thought. A field strategy was required to streamline the Tata group portfolio and achieve their goal of establishing a global footprint. A transition in the leadership DNA was needed to suit a growth based model of operation. Another challenge faced was on an economic policy front. The FERA act and other capital controls imposed by the Indian government limited foreign exchange. The limit imposed on net value based foreign investments was limited by the Indian government to a fraction of the net value of the company and as a result made it very hard for TATA Industries to take up international business opportunities. The action plan regarding Mergers & Acquisitions was also a fairly ambiguous one and presented a dilemma to be addressed in the form of utilising the characteristics of the acquired company as opposed to pursuing brand synergy.