Wednesday, April 12, 2017

Transforming TATA Group: From a Local Player to Global Player

In my 2 years of work experience with TATA group, I had a chance to attend a town hall headed by the then CEO of TATA Group, Mr. Ratan Tata about how he envisioned the growth of TATA group and what he wishes from the group’s future endeavors.

The TATA Group was always famous for its risk-averse approaches in Business, because of which it was always a slow-moving giant. It was the leadership of visionary Ratan Tata that transformed the TATA Group into a dynamic and aggressive conglomerate who has its wings spread all over the world. TATA Group has companies that cover automobiles and consulting, software and steel, tea and coffee, chemicals and hotels. Tata Consultancy Services (TCS) is Asia's largest software company. Tata Steel is India's largest steelmaker and number ten in the world. Taj Hotels Resorts and Palaces is India's biggest luxury hotel group by far. Tata Power is the country's largest private electricity company. Tata Global Beverages is the world's second-largest maker of branded tea.

It is the undisputable truth that it was Ratan Tata who had led the company to excellence in the 21st century. It was because of his sheer determination and leadership quality that he was able to take his vision for the group and transformed it into a reality. TATA Group was involved in a wide variety of businesses since its early days, what Tata did was that he streamlined the TATA Group. There were about 84 businesses in which TATA was involved. He sold out many businesses which were not doing well and didn’t have a much future scope of development.

The decision of the group to embrace the globalization effect present in the period of 1995-2005 in India, proved to be the turning point for the company. In this period the rate of foreign acquisition by the group increases rapidly. From 1995-2003 TATA on an average made one acquisition per year, and in 2004 they made 6 and in 2005 it increased to 20. Some of the famous foreign acquisitions were Tetley Group (tea Company), Corus (Steel Company) and Jaguar Land Rover (JLR). Today it earns about three-fifths of its revenue abroad and employs more British workers than any other manufacturer, and two of its biggest companies, Tata Motors and Tata Communications, are listed on the New York Stock Exchange.

There was a widespread criticism against CEO for changing the strategy TATA Group had followed for years. There were rumors that TATA had made a mistake by buying Corus and JLR. It proved to be somewhat true in the 2007-08 when stock markets crashed. CEO had to admit that they had to reach deep into its pockets to keep some subsidiaries going. But this crisis couldn’t dampen his vision and determination as slowly the international purchases started to prove profitable. In the year 2011, the JLR alone made around $1 billion in profit for the TATA motors.


The transformation has been dramatic. A group which was known for as a source of secure employment and an Indian company has become a global player with many of the big names under its wings. Every organization needs a visionary leader who has the guts to take that leap of faith and lead the company to excellence.

References:
http://www.economist.com/node/18285497

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.