Tata Group- Corporate Restructuring

Tata Group- Corporate Restructuring

Tata Group: Transforming the Sleeping Elephant
“A company does not become global by simply participating in geographical markets around the world. The objective of globalization is to become globally competitive, leverage global opportunities and have the required global capabilities. It implies an organization, which employs talented people without reference to nationality. We are in the process of acquiring such competitive position and global capabilities”. Ratan Tata, Chairman, Tata Sons (Hindustan Times, September 5, 2004). “Despite popular perception Ratan Tata has more than lived up to JRD’s vision and expectations”. Deepakh Parekh, Chairman, HDFC, (India Today, February, 2003). The unfolding of a crisis After proposing the Strategic Plan in 1991, Ratan Tata observed: “I think we are in many more businesses than we should have been in and were perhaps not concerned about our market position in each of those businesses. I think the needs today are that we define our businesses much more articulately and that we remain focused rather than diffused, and that we become more aggressive than we used to be, much more market driven, much more concerned about our customer satisfaction (HBS Working Paper, 9-798-037).” Ratan Tata on being questioned in an interview regarding – what criteria he will choose in deciding what to keep and what not to, in his groups’ portfolio restructuring exercise? To this he replied, “One is certainly going to be: can we be in the first three in that industry in the country? Secondly, are we willing to continue to put money and managerial resources into that industry to have it continue to be that way? The third is the most serious one, as to whether that particular firm will provide us with the returns that we are expecting (Business World, September, 1999).” Strong resentment followed with the business heads, the all powerful satraps. As a result marked differences began to emerge within the Tata group with distinct centrifugal...

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