Tata Group Research Articles

Role of Leadership and Corporate Governance: The Case of Tata Group and Infosys

Is your job secured? Do layoffs happen? How long do you plan to work in the same organization? How is your performance rated? These are the set of typical questions asked to bottom-level employees working in multinational corporations. Possibly, gone are the days when an employee used to engage with a firm for a long period of their career. Attrition rate is becoming higher in many firms due to endless reasons. But how far do such trends apply to top-level or C-suite employees? Are they equally impacted such as middle- and bottom-level employees in various circumstances or taken care well by founders and boards of the organization? In this case study, an attempt was made to see if we can get some answers to these questions by considering the recent issues that happened in Tata Group and Infosys during recent times. Expulsion of Cyrus Mistry from Tata Group in 2016 and Infosys 2017 saga rocked the Indian corporate image worldwide and raised issues concerning corporate governance practices. The journeys of an insider chairman of a conglomerate and a technocrat CEO were cut short by two business tycoons Ratan Tata and Narayana Murthy in a much unexpected manner which brought a bad reputation to them. It raises issues regarding leadership styles and roles in such business empires. Transparency, accountability and security are the three pillars of corporate governance, which seem to have failed in these two organizations. It also raises a serious question of credibility, integrity and business ethics of leaders in handling these two issues with the verbal criticism which continued for days in public forum.

Tata: the biggest boardroom coup

Subject area Corporate governance; General management; Strategy Study level/applicability Post Graduate/MBA Case overview Tata Group is a conglomerate having 29 listed companies with consolidated revenues of $103bn in FY2016. On October 24, 2016, Cyrus Mistry, chairman of the group has been replaced in an unceremonious way from this job, in a boardroom coup, without being given any opportunity to explain his case. This news arrived in the media between October 2016 and December 2016 and wide and public debates took place on the corporate governance practices of Tata Group. Mistry’s ouster was attributed to non-performance, unethical practices and non-compliance to Tata culture. This case presents the Tata Group performance before Mistry, at the ouster of Mistry, the major trouble points and the corporate governance activities that took place in this saga at Tata Group. The real losers in this battle were the investors who lost $12bn between October 2016 and December 2016. Many of Tata Group companies’ stocks plunged. Expected learning outcomes The students will learn corporate governance, know how a non-listed company control and govern listed entities, know the way performance of a chairman of a company has been evaluated and learn how ethical and cultural issues impact the performance of chairman of a listed company. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS: 11: Strategy

Influence of Board Reformation on the Stock Returns: an Event Study

Investor sentiments pertaining to stocks are propelled by the contentions of financial sector reforms, fiscal policy and management change. Any uncertainty has a significant impact on the stock prices and returns accruing to the company. The paper examines the effect of change in management on the stock returns of a corporate entity. Organizational performance is dependent on the realization of the numerous roles the board of directors are entrusted with. Any change in the composition of the board through the resignation, retirement or ouster can thus have a significant impact on the stock prices and returns accruing to the company. It is anticipated that voluntary resignations, age related turnovers have small or negative impact on the stock price reactions. The paper investigates the impact of the ouster of the Chairman of the Tata group on the volatility of the daily prices and returns of four companies under the Tata umbrella. Event study methodology has been adopted following the market model of return generating process. Investors react to the market information thereby affecting the security prices positively or negatively during the event window. The findings disclose market sentiments are affected on the occurrence of the event though the acceptance of the event may be unforeseen.

Tata becoming multinational: a long-term process

L’économie indienne a connu une croissance remarquable ces dernières décennies. La montée de la grande entreprise et ses avancées hors de l’Inde constituent certainement l’une des manifestations les plus explicites de ce dynamisme. Le groupe Tata est sans doute l’illustration la plus brillante de cette tendance. Lancé au xix e siècle, ce groupe n’est vraiment devenu multinational qu’à la fin du siècle suivant. En étudiant son évolution ainsi que ses relations avec l’État indien, le présent article entend démontrer que la multinationalisation de Tata ne résulte pas seulement des réformes de 1991 en Inde, mais aussi de stratégies de long terme qui ont permis au groupe d’avoir accès aux marchés internationaux.

Tata as a Sustainable Enterprise: The Causal Role of Spirituality

The year 2018 is the 150 anniversary of the Tata group. This article is an attempt to examine the role of spiritual family values in shaping Tata as a sustainable business. Jamsetji Nusserwanji Tata, the founder of Tata, was a trained Parsi priest, who was greatly influenced by Humata or good thoughts, Hukhta or good words, and Hvarshta or good deeds toward others. Since its founding in 1868, the Tata leadership legacy has persistently followed those watchwords of the Zoroastrian faith. The extant workplace spirituality literature posits that the role of spiritual and religious values is vital for organizations and individuals to prosper. Employing historical data and biographical method, we trace the history of Tata to examine the causal mechanism between spirituality and sustainable business, under the influence of stakeholder concept, sustainability and family values-based leadership. Implications for research and practice are discussed.

Financial Efficiency of India Tourism Development Corporation (ITDC) Limited: An Empirical Study

Tourism is one of the significant service sectors in India as it contributes about 9.6 per cent in Gross Domestic Production and the third largest foreign exchange earner for the country. The Government of India recognized this sector as an industry in 1986 and it became eligible for several incentives and facilities like tax incentives, subsidies etc. Further, the tourism industry was also declared as a priority sector for foreign investment in 1991. It is an important tool for employment generation, economic development and rural transformation. India is a country of vast geographical diversity which attracts tourists from all over the world throughout the year. A number of different groups, companies and organizations are operating in tourism sector like ITDC, Tata Group, Oberoi Group, ITC Ltd. etc. India Tourism Development Corporation (ITDC) is the leading public sector corporation and the prime mover in the progressive development, promotion and expansion of tourism in the country. Since, ITDC has been playing a vital role in the growth of tourism activities in the country, financial soundness and efficiency is prerequisite for such type of corporation engaged in development activities. Thus, it is important to investigate the operational activities and financial soundness of this corporation. The present study is an attempt to analyse the financial efficiency of ITDC in the context of its financial performance and operational activities from 2012-13 to 2016-17. The results indicated profitability and operational efficiency of this corporation found satisfactory during the study period. The study also concludes that ITDC is performing well in maintaining and developing tourism infrastructure and provide necessary facilities to the national and international tourist.

“Tata i-Shakti” to “Tata Sampann”: rebranding or repositioning?

Subject area Marketing. Study level/applicability This case may be used by instructors to teach undergraduate, post graduate and executive level programmes in management. It may be used in basic marketing, branding or marketing strategy courses. The case may serve as a platform for the instructor to discuss the concepts and issues related to positioning and repositioning. Case overview Tata Chemicals, a subsidiary of the Tata group, launched the “i-Shakti” brand six years ago for its low-cost “solar-evaporated” salt for rural customers. In 2010, the company extended the brand equity of i-Shakti to a premium segment and launched a new brand “Tata i-Shakti” with a range of unpolished pulses. Changing the brand name and customer base from “i-Shakti for rural market” to “Tata i-Shakti for premium market” created a dilemma among customers in the market. To overcome this problem, in October 2015, the company’s portfolio of pulses, gram flour and food grade soda under “Tata i-Shakti” label has migrated into a new brand “Tata Sampann”. The company also launched a range of spices under the brand name of “Tata Sampann”. This new brand “Tata Sampann” was launched to serve the premium segment with an aim to “enrich everyday meals with extra nutrition and extra joy”. Also, this brand recreation was made by the company with anticipation to make avenues for future launches in the staples and food segment under Tata’s consumer products business. It has been almost a year since Tata Sampann was launched in the market. Given the tough competition and expected growth of the spices market in India, it remained to be seen whether “Tata i-Shakti” was rightly rebranded or repositioned with “Tata Sampann”. Expected learning outcomes To make participants understand the basic concepts of branding such as umbrella branding, brand repositioning and rebranding. To make participants learn about various brand elements and how they contribute in communicating the value proposition of the brand. To make participants appreciate various marketing and brand related strategies. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS: 8: Marketing.

Effects of Changing Business Environment on Organization Performance: The Case of HMT Watches Ltd.

Hindustan Machine Tools (HMT) Limited was incorporated in 1953 by the Government of India as a machine tool manufacturing company. In the later years, the company diversified into other products including watches. Its watch division, known as the HMT Watches Limited, started in 1961 with the support of Japan’s Citizen Watch Company. Over the years, HMT made tremendous progress in all business dimensions to emerge as a market leader in the Indian watch industry. The company also earned the reputation of ‘the time keeper of the nation’ for its profound impact on the country’s watch business. Hindustan Machine Tools established itself as a strong brand in the Indian market. However, post-liberalization in 1991, HMT’s performance started dwindling. The policies of liberalization, privatization and globalization paved the way for the entry of many private brands, both domestic and foreign, into the Indian watch market that became hyper-competitive. The HMT management did not show enough agility to make necessary changes in its business models to cope with the changing business environment. Gradually, HMT lost its numero uno position to Titan Watches of the Tata Group. Hindustan Machine Tools inability to understand the needs of modern-day customers and its less-than-adequate attention towards new product development made things even worse for the organization. With losses accumulating over the years, HMT became financially unviable. After several failed attempts to turn around, the government finally closed down HMT Watches in early 2016. With this, HMT became a brand of the bygone era. This case portrays the long and eventful journey of HMT Watches and then analyzes the major reasons behind its failure. It implies a few important strategic lessons for the management students.

Tata at a Crossroads

The case is about one of the leading business houses in India, the Tata Group, which is known for its ethical leadership and was well known for its corporate social responsibility. Under the leadership of Mr. Tata, this legacy passed to the next level and Tata’s business flourished globally through acquisitions. When Mr. Mistry replaced Mr. Tata, he took a different approach of divestment. On October 24, 2016, Cyrus Mistry was removed as the chairman of the $100- billion Tata Group unexpectedly and re-appointed Ratan Tata as the chairman for an interim term of four months. This case study is about Ratan Tata, Cyrus Mistry and the different leadership in the Tata Group. It discusses how Ratan Tata restructured the Tata Sons business and developed the company subsequently. Mr. Tata transformed Tata from a struggling unit into one of the most successful and profitable companies in the world by revamping the operations of Tata Steel and made it one of the lowest cost steel producers in the world. He retired at the age of 75 and Mr. Mistry became the chairman of Tata. Apart from being the Tata Sons chairman, Mr. Mistry had also become the chairman of Tata Steel, Tata Motors, TCS, Tata Power, Indian Hotels, and Tata Global Beverages, the verticals of Tata Sons. He was a hard decision maker, which puts Tata into the red. Tata Family was unhappy at Mr. Mistry's policy of looking to sell off parts of the business rather than holding on to assets and extending the firm's global reach. In 2016, Mr. Cyrus was asked to step down within four years.

Tata Motors Limited: Ratan's Next Step

Suitable for MBA, EMBA, and executive education programs, this case uses Tata Motors' move to acquire Jaguar Land Rover (JLR) from Ford to analyze a growth-through-acquisition strategy. It offers a discussion about the firm's overall strategy to acquire instead of growing organically. The case begins when Ratan Tata, chairman of Tata Motors, unveils the world's cheapest car—the Nano. He had challenged the people around him to design and produce something that had previously been unthinkable. Their ability to deliver on such a bold aspiration provided the confidence Tata Motors needed to compete in the international automobile market. Ratan believed he would have to establish a firm foothold in the United States and the United Kingdom to be considered a global contender. His strategy was to become a runner in the bid to acquire JLR from Ford. Establishing a luxury brand would go a long way toward separating Tata Motors from regional automotive firms. Yet Ratan had to think about whether the firm was well positioned to execute the acquisition if it won the bid. Or was organic growth a safer route to the same end? Excerpt UVA-S-0184 Rev. May 9, 2013 TATA MOTORS LIMITED: RATAN'S NEXT STEP On January 10, 2008, Ratan Tata, chairman of Tata Motors Limited (Tata Motors), drove onto the stage at the New Delhi Auto Expo in the world's cheapest car. As he parked next to two other models of the Nano, he thought back on the day several years prior when he had promised the world an affordable car that could be bought for under $ 2,500. At the time, India was an emerging economy that had begun to invest millions of dollars in transportation infrastructure. Ratan saw the influx of roads and new prosperity for Indians as the perfect environment to debut a car that could be purchased by almost anyone. Like his personal hero, John F. Kennedy, Ratan challenged the people around him to design and produce something that had previously been unthinkable. Ratan's ability to deliver on such a bold aspiration instilled in his investors and him the confidence that Tata Motors was capable of competing in the international automobile market. The Nano's production was made possible by a wide range of capabilities within the Tata Group, which, along with Tata Motors, owned 98 other companies operating in 80 countries. Such a diverse and complete range of resources made Tata's future bright. And even as Ratan stood on the stage introducing his accomplishment, he wondered what the next step ought to be to move his company forward. A lifelong interest in automobiles and an appreciation of the Western car market led Ratan to believe that he would have to establish a firm foothold in the United States and the United Kingdom to be considered a contender in the global automotive industry. His mind turned to the ongoing bid and negotiations to acquire Jaguar Land Rover (JLR) from Ford Motor Company (Ford). Establishing a luxury brand would go a long way toward separating Tata Motors from regional automotive firms. Yet he had to think about whether the firm was well positioned to execute the acquisition if it won the bid. Or was organic growth a safer route to the same end? . . .

"Making History: Archives, Historiography, and Their Silences"

What are the challenges in doing history as part of Critical Management Studies (CMS)? Reflecting on my experiences of having worked in and on archives of the Tata Group, India’s leading multi-nati...

Responding to Social Responsibilities and Ethics - A Study of Refractory Industry in Odisha

Businesses work in a wide social environment in which they have a responsibility to a range of stakeholders including the community. The term Corporate Social Responsibility (CSR) refers to the responsibility that modern business organizations have to creating a healthy and prosperous society. Ethical practices in refractory marketing help marketers distinguish between right and wrong behavior. Adherence to ethics is essential in industrial markets as mutual trust among buyers and sellers is the key to long-term success. Marketing has evolved from a production-centric approach to a societal marketing approach that lays greater emphasis on the ethical issues in marketing. With the advent of globalization, corporations continue to evolve, grow in power, and influence the process of consolidation. Corporations are in positions of power that allow them to do greater damage to others when they act unethically or socially in an irresponsible manner. The rights theory encompasses a variety of ethical philosophies holding that certain human rights are fundamental and must be respected by other humans. The economic theories of the firm cannot be segregated of ethical considerations as they have crucial impact on how the firm concentrates on economic power, formulate the rules of law. Profit maximisation has always been the driving force and an undercurrent behind the development of corporate. But profit is not made in vacuum, it always has an associated cost, some of which is always externalized (Rhee, 2008). Corporate law has an ethical foundation and the debate on values necessarily revolves round the activities of the firm. This research paper on the basis of secondary sources of data collected from reports, research papers and Internet, focuses on corporate social responsibility (CSR) of TATA Group with reference to Tata Krosaki Refractories Ltd, Bajoria Group with reference to IFGL Refractories Ltd (Odisha), OCL Refractories Ltd, Sarvesh Refractories, and Manishree Refractories (Odisha). The study intends to understand the scope of corporate social responsibility and get an insight in CSR and ethical practices in the light of the case study of the refractory industries in Odisha.

Financing Strategy at Tata Steel

In January 2011 Tata Steel Ltd, a world-size steel company in India and a flagship company of the $80b Tata Group, announced an issue of equity to the investing public through a book-building process. This was one of the many securities that the company issued during 2007–2011. The company would raise Rs 34,770m and Rs 33,850m from the issue at the upper and lower ends of the price band. The case opens with an analyst studying the company's financial condition with the objective of making an investment recommendation. Students are asked to evaluate the attractiveness of the offer and its timing apart from undertaking an analysis of the historical choice of securities. The case can be used to teach students capital structure theories, the thought process behind security issuance, the dynamic nature of finance, and the role of a CFO and valuation analysis.

Trust Ownership of the Tata Group

The Indian Tata Group is one of the largest and most admired business groups in the world. It has 28 listed subsidiaries and more than 80 operating businesses. It has shown strong financial performance and social responsibility for decades. Interestingly, it has a unique ownership structure: the main holding company Tata Sons Limited is majority-owned by charitable trusts. We examine the governance of this remarkable entity. The Trusts own 66% of Tata Sons, the main holding company of the Group, while members of the founding Tata family are very small minority shareholders. The governance structure is characterized by managerial distance between trusts and Group companies. The Trusts are almost exclusively concerned with philanthropy, and according to the Articles of Association of Tata Sons Limited, their governance role is limited to nominating two members to the Selection Committee which recommends the Chairman of the company’s Board of Directors. Group companies are independently managed, but there are significant cross shareholdings and a member of the founding family, Mr Ratan Tata, chairs the Trusts, holding companies and major subsidiaries. Mr. Cyrus P Mistry, Managing Director of the Shapoorji Pallonji Group, a minority shareholder in Tata Sons, is to succeed Mr. Ratan Tata as chairman of Tata Sons in 2012. Trustees in the major Trusts are paid nominal fees of as little as $10 and $20 a year.

Multi-Level Corporate Responsibility: A Comparison of Gandhi’s Trusteeship with Stakeholder and Stewardship Frameworks

Mohandas Karamchand “Mahatma” Gandhi discussed corporate responsibility (CR) and business ethics over several decades of the twentieth century. His views are still influential in modern India. In this paper, we highlight Gandhi’s cross-level CR framework, which operates at institutional, organizational, and individual levels. We also outline how the Tata Group, one of India’s largest conglomerates, has historically applied and continues to utilize Gandhi’s concept of trusteeship. We then compare Gandhi’s framework to modern notions of stakeholder and stewardship management. We conclude that trusteeship has strong potential to help firms and their stakeholders achieve shared value by (a) considering the interactions between individual, organizational, and institutional factors, and (b) paying attention to a range of multi-level (reciprocal) stakeholder obligations.

The Performance of Foundation-Owned Companies

A number of world class companies – such as the Tata Group, Robert Bosch, and Bertelsmann -- are majority owned by charitable nonprofit foundations. This structure places control of the company in the hands of a self-perpetuating foundation board that is immune to outside discipline through a proxy fight or hostile acquisition, and whose members receive no incentive compensation. Conventional economic theories of corporate governance predict that such companies would be riven with agency costs and therefore highly inefficient. Yet previous studies find that companies owned by industrial foundations seem to perform as well as more conventional investor-owned companies. In this paper we reassess the relative performance of foundation-owned companies by comparing a substantial sample of them from the Nordic countries with various different samples of investor-owned Nordic companies, including matched pairs of companies in the same industry and of comparable size. We find that, overall, foundation-owned companies have similar accounting profitability, take less risk, and grow more slowly than listed investor-owned companies. We offer alternative theories regarding the costs and benefits of foundation ownership that appear consistent with our results.

Corporate social responsibility : Effective tools to solve the social problem of society

Corporate Social Responsibility (CSR) is very known concept in India. Ever since their inception, corporates like the Tata Group, the Aditya Birla Group, and Indian Oil Corporation, to name a few, have been involved in serving the community. Through donations and charity events, many other organizations have been doing their part for the society. The basic objective of CSR in these days is to maximize the company's overall impact on the society and stakeholders. CSR policies, practices and programs are being comprehensively integrated by an increasing number of companies throughout their business operations and processes. Many corporates feel that CSR is not just another form of indirect expense but is important for protecting the goodwill and reputation, defending attacks and increasing business competitiveness. The present study contributes to the CSR research by exploring how consumer perception on CSR influences consumers' attitude and purchase behaviour. Considering that the past CSR research tends to focus mostly on Indian perspectives, this study extends the scope of CSR research on Eastern culture. This research produced mixed results, suggesting that CSR is still a concept waiting to be applied in the developing country. Consumers are often unaware and unsupportive towards corporate social responsibility. This is the opposite finding of consumer perception in developed countries, where most consumers are willing to support CSR launched by corporations. Nevertheless, there is an interesting finding; when consumers have to buy similar products with the same price and quality, CSR could be the determining factor. The main aim of this research paper is to analyze and understand the role of corporate social responsibility in the overall consumer's perceptions and reactions towards CSR activities.

Scalable, sustainable cost-effective surgical care: a model for safety and quality in the developing world, part I: challenge and commitment.

With an estimated backlog of 4,000,000 patients worldwide, cleft lip and cleft palate remain a stark example of the global burden of surgical disease. The need for a new paradigm in global surgery has been increasingly recognized by governments, funding agencies, and professionals to exponentially expand care while emphasizing safety and quality. This three-part article examines the evolution of the Operation Smile Guwahati Comprehensive Cleft Care Center (GCCCC) as an innovative model for sustainable cleft care in the developing world. The GCCCC is the result of a unique public-private partnership between government, charity, and private enterprise. In 2009, Operation Smile, the Government of Assam, the National Rural Health Mission, and the Tata Group joined together to work towards the common goal of creating a center of excellence in cleft care for the region. This partnership combined expertise in medical care and training, organizational structure and management, local health care infrastructure, and finance. A state-of-the-art surgical facility was constructed in Guwahati, Assam which includes a modern integrated operating suite with an open layout, advanced surgical equipment, sophisticated anesthesia and monitoring capabilities, central medical gases, and sterilization facilities. The combination of established leaders and dreamers from different arenas combined to create a synergy of ambitions, resources, and compassion that became the backbone of success in Guwahati.

Interview with Mr Rajeev Dubey, National President, National HRD Network, India

Human Resource Development (HRD) in India has been experiencing a transformation, especially over the last decade. National HRD Network (NHRDN), India, established in 1985, has been playing a pioneering institutional role behind this transformation. The NHRDN is all about tapping unexplored human potential. Its logo represents the idea that NHRDN helps complete the missing pieces in any HR practitioner’s life, be it professional or personal. The jigsaw piece in the logo represents a single individual, because it is the individual who has the power to change oneself and that only he/she can complete the circle of life. It carries the features of humanist classification, perhaps aptly reflecting the origin of the HRD function which has its roots in humanism. As the National Apex body of human resources (HR) professionals, NHRDN is committed to promoting the HRD movement in the country and enhancing the capability of HR professionals to compete globally, thereby creating value for society. Towards this end, NHRDN is committed to the development of HR through education, training, research and experience sharing. It is an auto nomous, not-for-profit, professionally managed organization, playing a catalyst role in grooming leaders for tomorrow. It has 12,500 members representing multinationals, public and private organizations including Government, Micro, Small and Medium Enterprises (MSMEs) and Non-Government Organizations (NGOs) spread across 30 chapters in India and serves as a reference point for HR Professionals in India. Mr Rajeev Dubey is the current president of NHRDN. He is also the president (Group HR, Corporate Services & After-Market) and a member of the Group Executive Board of Mahindra & Mahindra Ltd. He is also the chairman of the CSR Council and the Corporate Governance Cell of the Group and serves on the Boards of several Group Companies. He joined Mahindra & Mahindra Ltd. in January 2004 after a career spanning 29 years in the Tata Group, where he joined in 1975 as a member of the Tata Administrative Service (TAS), the central managerial cadre South Asian Journal of Human Resources Management 1(1) 119–125 2014 SAGE Publications India Private Limited SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/2322093714526668 http://hrm.sagepub.com

Corporate Social Responsibility: A Way of Life at the Tata Group

Over the last 140 years, the Tata Group has been a pioneer not only in corporate India, but has been a leader of sorts in the social sphere also. It has contributed substantially to nation building. Among other initiatives for social development and welfare, it has established eminent institutions, such as, the Indian Institute of Science (IISc), the Tata Institute of Fundamental Research (TIFR) and the Tata Institute of Social Sciences (TISS). This article studies the structure of the Tata Group and its main Trusts which facilitate the unique philosophy of the Group that integrates social responsibility and corporate functioning. Over two-thirds of the Tata companies are held by the Trusts, and these Trusts are focussed on social welfare initiatives. This is a unique example in the corporate world deserving a detailed study. This article details some innovative initiatives undertaken by the Tata companies in their respective industries for the society and local community. The study is based on triangulation of data and follows the descriptive research design and the anecdotal style of narration. The data collection has been done by the author through personal interviews with top executives of the Group companies, responses to an Executive Perception Survey on the society and local community, and secondary data gathered through the information available in the public domain.