When we talk about Ratan Tata, the first thing that comes to mind is his role in expanding the Tata Group. Known for his quiet behavior, Ratan Tata’s business leadership over 21 years brought the Tata brand global recognition, turning it into a powerful ambassador for the Indian industry. His leadership made significant business achievements, but it also carried political neutrality, a rare feat in India’s corporate world.
A Business Leader Who Stayed Clear of Political Ties
After India’s independence, the Tata Group was often linked to the government, with critics labeling it as a ‘Tata-Birla government.’ However, during Ratan Tata’s leadership, the group stayed clear of such labels. Despite being one of India’s top business houses, Tata managed to keep its distance from political favouritism, relying solely on business strength rather than government influence. This independence showcases Tata’s integrity and his ability to make the group a business giant without needing political support.
Ratan Tata’s Global Vision: Taking Tata Beyond India
Ratan Tata’s name might not feature in the list of the world’s richest, but his vision transformed the Tata Group into a global player. Taking charge at a time when India was just opening up economically, Ratan Tata strengthened the group’s ownership and brought in new initiatives like employee share options.
Under his leadership, the Tata Group’s market value increased 17 times, and turnover grew 30 times. Tata’s acquisitions of companies like Corus Steel, Jaguar Land Rover, and Tata Tetley signaled India’s entry onto the global corporate stage. These deals put Tata and Indian companies in the global spotlight.
Tata’s Reach: From Salt to Airlines
Tata’s influence touches every corner of life in India. From the Tata Salt in our kitchens to the Tata buses that run on roads, the group’s footprint is everywhere. Many of us also fly in Tata-owned airlines like Air India.
One of the significant changes we’ve seen under Tata’s leadership is how public services have improved through Tata Consultancy Services (TCS). TCS, for example, played a pivotal role in streamlining India’s passport services by improving efficiency after the government outsourced many of these tasks to the company. This move simplified getting a passport and is just one example of how Tata Group impacts daily life.
Expanding Tata’s Business Footprint: Defence, Electronics, and EVs
While Ratan Tata inherited an already established business, he didn’t just settle for what was given. He led the group into new industries, including defence, electronics, and electric vehicles (EVs). While TCS was founded by JRD Tata in 1969 and run by Fakir Chand Kohli until 1996, Ratan Tata continued its legacy by selecting and empowering capable leaders to take it forward.
Not All Ventures Succeeded
Ratan Tata’s track record isn’t without a few stumbles. Not every venture turned into a success story. For instance, while other telecom companies thrived, Tata Telecom didn’t see much success. Tata Capital also failed to make a significant impact.
Ratan Tata’s most ambitious project, the launch of the world’s cheapest car, the Tata Nano, was an engineering marvel but a commercial flop. Despite the excitement around it, the Nano didn’t take off as expected.
Political Neutrality and Honest Business Practices
One of the unique aspects of Ratan Tata’s leadership is the political neutrality he maintained. Even though the Tata Group remains a business powerhouse, it does not have a reputation for being aligned with any specific political party. Tata Group makes political donations through a trust, distributing funds based on votes received in previous elections. This balanced approach has ensured that Tata remains on good terms with all parties.
The Need for More Investment in R&D
While the Tata Group has seen many successes, one area where it has lagged is in research and development (R&D). Although Ratan Tata supported the development of the Indian supercomputer ‘Eka’ in 2007, such dedication to R&D hasn’t been consistently applied across the group. India spends just 0.64% of its GDP on R&D, far behind countries like Israel (5.6%) and South Korea (4.9%). This gap highlights the need for greater focus on innovation and research across all business groups, including Tata.
A Legacy of Merit-Based Leadership
Ratan Tata’s choice to appoint N Chandrasekaran, someone outside the Tata family, as his successor speaks volumes about his belief in merit over lineage. This move reflects the growing complexity of modern business and the need for professional leadership. Tata’s future will likely see a continued focus on selecting the best talent, regardless of family ties, setting a new standard for Indian businesses.
By prioritizing merit and professional leadership over nepotism, Ratan Tata has set the Tata Group on a path that ensures its continued growth and success.
