Analysis of Tata Group As A Family Business: By-Rithika Ravichandran and Dhairya Chhabra
Analysis of Tata Group As A Family Business: By-Rithika Ravichandran and Dhairya Chhabra
Analysis of Tata Group As A Family Business: By-Rithika Ravichandran and Dhairya Chhabra
FAMILY BUSINESS
• Tata Group is one of the largest conglomerates in India and has a diverse
portfolio of businesses. While I can provide general information about work-life
balance practices, it's important to note that specific work-life balance initiatives
and policies may vary across different Tata Group companies.
• Flexible Work Arrangements: Many Tata companies recognize the importance
of work-life balance and offer flexible work arrangements such as flexitime,
telecommuting, and compressed work weeks. These arrangements allow
employees to have more control over their schedules and balance personal
commitments with work responsibilities.
• Leave Policies: Tata Group companies typically provide employees with various
types of leave, including annual leave, sick leave, and parental leave. These
policies are designed to support employees' personal needs and give them time to
recharge and spend quality time with their families.
• Employee Assistance Programs: Some Tata companies have employee
assistance programs (EAPs) in place to support employees' overall well-being.
EAPs often provide counseling services, financial advice, and other resources to
help employees manage stress, maintain a healthy work-life balance, and address
personal challenges.
• Health and Wellness Initiatives: Tata Group companies recognize the
importance of employee well-being and promote a healthy lifestyle through
various wellness initiatives. These may include on-site fitness facilities, health
check-ups, wellness workshops, and employee sports events.
• Employee Engagement Activities: Tata companies often organize
employee engagement activities to foster a positive work environment and
promote work-life balance. These activities can include team-building
exercises, celebrations, recreational events, and volunteering opportunities.
• Work-Life Balance Awareness: Tata Group companies may also conduct
workshops, seminars, or awareness campaigns to educate employees about
the significance of work-life balance and provide them with tools and
strategies to achieve it.
ETHICAL CONDUCT
• Tata Group is known for its strong commitment to ethical conduct and corporate
responsibility. The company places a high emphasis on ethical business practices
and has implemented several initiatives and policies to ensure ethical behavior
throughout its operations. Here are some key aspects of ethical conduct in Tata:
• Tata Code of Conduct: Tata has a comprehensive Code of Conduct that outlines
the ethical standards and principles that all employees, directors, and business
partners are expected to uphold. The code covers various areas such as integrity,
honesty, transparency, respect, and compliance with laws and regulations.
• Corporate Governance: Tata Group follows robust corporate governance
practices to ensure transparency, accountability, and fairness. The company has an
independent board of directors that oversees the management and ensures
adherence to ethical standards. It also maintains a strong framework for internal
controls and risk management.
• Sustainability and Environmental Responsibility: Tata Group is committed
to sustainable development and environmental stewardship. It strives to
minimize its environmental impact, conserve natural resources, and promote
sustainable practices across its businesses. Tata has set ambitious targets for
reducing its carbon footprint and has been actively investing in renewable
energy and eco-friendly technologies.
• Community Development: Tata has a long-standing tradition of giving back
to society. The company is involved in various community development
initiatives, focusing on education, healthcare, livelihoods, and rural
development. Tata encourages its employees to volunteer and contribute to
social causes through its employee engagement programs.
• Supplier and Partner Relations: Tata maintains strong relationships with its
suppliers and partners based on fairness, integrity, and mutual respect. The company
expects its suppliers and partners to adhere to similar ethical standards and promotes
responsible sourcing and procurement practices.
• Whistleblower Policy: Tata has a Whistleblower Policy in place to encourage
employees and stakeholders to report any unethical behavior or misconduct. This
policy ensures that individuals can raise concerns without fear of retaliation and
provides a mechanism for investigating and addressing such issues.
• 7. Compliance and Integrity Management: Tata has robust compliance and
integrity management systems in place. The company regularly conducts internal
audits and risk assessments to identify and mitigate any potential ethical and
legal risks. Tata also provides training and awareness programs to its employees
to promote ethical behavior and ensure compliance with laws and regulations.
• Overall, Tata Group places a strong emphasis on ethical conduct and strives to be
a responsible corporate citizen. The company's commitment to ethical practices
is reflected in its policies, initiatives, and actions, demonstrating its dedication to
upholding the highest standards of integrity and corporate responsibility.
SECTION-2
- D H A I RYA C H H A B R A
CORE MEMBERS OF THE TATA FAMILY
• In the case of Cyrus Mistry and Ratan Tata, their relationship can be explored through a genogram to
understand the broader family and business context that influenced their conflict.
• 1. Family Dynamics: A genogram would outline the family structure, including key family
members and their roles. It would identify Ratan Tata as the patriarch of the Tata family and Cyrus
Mistry as his successor as the chairman of Tata Sons. This visual representation can help in
understanding their positions, responsibilities, and the power dynamics within the family.
• 2. Interactions and Relationships: A genogram also highlights the relationships and connections
between family members. It would show the ties between Ratan Tata and Cyrus Mistry, such as their
professional relationship as well as any family connections, such as marriage or blood relations.
• 3. Generational Influences: A genogram can also reveal the influence of previous generations on
the conflict between Mistry and Tata. By tracing back the family lineage, it can uncover patterns,
values, and expectations passed down through generations that might have played a role in shaping
their differing perspectives.
• 4. Relationship with Noel: The genogram can also reveal why Noel Tata was not chosen as the
immediate successor. It would also reveal the need to go to Mistry as the immediate family
successor.
FLEXIBILITY IN TATA
• 1. Shared values and legacy: The Tata family has a shared set of values that have
been passed down through generations. These values, such as integrity, social
responsibility, and ethical business practices, form the foundation of the Tata Group's
culture and guide the family's actions
• 2. Family governance structures: The family members participate in family council
meetings and forums where they can discuss and align their interests and goals. This
enables them to maintain open lines of communication, resolve conflicts, and make
collective decisions that benefit the family and the group.
• 3. Long-term vision and stability: The Tata family has demonstrated a long-term
vision for the group's growth and sustainability. This shared vision provides a unifying
force and helps align the family members toward common goals.
• 4. Respect for expertise and collaboration: The Tata family values expertise and
collaboration within the group. Family members recognize and respect each other's
unique skills and experiences, and they actively collaborate across different businesses
and functions.
THE MAN OF COHESION
• Flexibly Separated
• Flexibly Connected
• Structurally Separated
• Structurally Connected
WHAT IS SUCCESSION PLANNING?
Under Ratan Tata, Tata Group has grown rapidly, and has become a
global company, with a presence in foreign markets in Europe, Asia,
and Africa. As a result of the globalization of its businesses, Tata
Group’s organization has become more complex. Under such
circumstances, Tata Group is in need of fresh, young leadership with
the ability to break through challenges. The selection of a young
successor to Ratan Tata shows Tata Group’s determination to look
beyond the status quo and make a more concerted effort toward
globalization.
LEGACY AS A FACTOR
• Recall that 20 years ago, JRD was advised by friends to disregard Ratan Tata,
who had still not proved his mettle, as the future leader of the Group. There
was pressure on JRD to choose a trusted professional instead; among the names
being bandied about back then was that of Russi Mody, CEO of Tisco (now
Tata Steel). However, JRD was eventually guided at least partly by the fact that
in the 143-year-old Group’s history, a non-Tata has been Chairman only once,
and just for six years (1932–38). JRD chose a Tata.
SUCCESSION
PLANNING
IDENTIFYING SUCCESSION NEEDS
The need for Chairman analysed after Ratan Tata. The Tata Group had a
Chairman in place, namely Natarajan Chandrasekaran. He has been
serving as the Chairman of the Tata Group since February 2017.
However, it's important to note that leadership positions in large
organizations like the Tata Group are subject to change over time.
ASSESSING INTERNAL CANDIDATES
The Economic Times speculates that the internal candidates include Tata Sons executive
directors Ishaat Hussain and R. Gopalakrishnan; and B. Muthuraman, Ravi Kant and S.
Ramadorai, vice chairmen of Tata Steel, Tata Motors and Tata Consultancy Services (TCS),
respectively. The younger group includes the CEOs of TCS (N. Chandrasekaran) and Titan
(Bhaskar Bhat). But they are long shots at best, observers say.
There is also speculation that, given the group’s increasing global focus, the choice need not be
an Indian. The Times of India says that the candidates could include Indra Nooyi of PepsiCo,
former Vodafone head Arun Sarin and Renault Nissan chief Carlos Ghosn. “The selection
process would consider suitable persons from within the Tata companies, other professionals in
India as well as persons overseas with global experience,” says a Tata Sons press release.
The composition of the selection panel has some critics
speculating that the choice of Noel is pre-decided. It consists
of Tata Sons directors R.K. Krishna Kumar and Cyrus Mistry
(who is Noel Tata’s brother-in-law), Tata veteran N.S.
Soonawala, group legal advisor Shirin Barucha and
independent member Lord Kumar Bhattacharya of the
Warwick Manufacturing Group of the U.K.
DEVELOPING AND TRAINING
CANDIDATES
• “The selection committee was given the responsibility of coming out with a new
successor for Tata Sons. Cyrus P Mistry will take over as the deputy chairman of
Tata Sons. Even when Cyrus Mistry’s experience is very limited, Ratan Tata's 12
months grooming will help Mistry fit into Tata's shoes”
• In Tata Chemicals, change was sought in 2001. Outsider Prasad Menon was recruited to
succeed Manu Seth.
All the identified candidates were watched, coached, talked about and nominated to
Advanced Management Programmes. Finally a choice was made by selecting R.
Mukundan, with a short bridging role by veteran Homi Khusrokhan back in 2001.
TRANSITION PLANNING
• At several forums Ratan Tata endorsed Mistry to the staff and stakeholders of the
Tata Group as Mistry accompanied him to get a handle on the Group’s varied
businesses.
• Ratan Tata wrote in a letter to Group employees: ‘The Tata Group will undoubtedly
play an important role in the continued development of our country, providing
leadership in various industrial segments in which they operate and living by the
value systems and ethical standards on which our Group was founded. The future
growth of the Group will be led in the coming years by Cyrus Mistry.’
• His advice to Mistry was, ‘Be your own man. Be yourself and just be driven by the
fact that every act you do and every move you make has to stand the test of public
scrutiny.’
LOOPHOLES: TATA’S SUCCESSION
• Ratan Tata led the group for 21 years. The retirement age was changed twice to
extend his tenure. Yet, when he finally decided he would retire in 2012, there
were no obvious successors in view. No body had been systematically groomed
to handle the responsibility. A search panel took over a year to name a
successor -- and the successor was finally named from within the panel itself.
Cyrus Mistry was part of the search panel at that time. He worked closely with
Ratan Tata for almost a year, before he finally took charge. It was to be a
relatively short stint, and has been marred by an ugly battle in the end, and that
problem has not been resolved.
• Chandra was considered a possibility even earlier in the first round, but
surprisingly, he was not groomed for the group responsibility. Even when
Cyrus Mistry was ousted in a messy battle, neither of the two internal names
being suggested -- Ralf Speth and Chandra -- had been given any major group
responsibilities.
• For a group as big and complex as the Tata group, it is obviously that while
each company had its pool of leaders, no similar pool had been created for the
eventuality that Ratan Tata would retire.
THREE STAGES OF EVOLUTION- TATA
GROUP (FOUNDING GENERATION)
• Jamsetji Tata, the founder of the Tata Group, played a pivotal role in the establishment of the
business. His core values, including integrity, excellence, and a commitment to social
responsibility, laid the groundwork for the group's future endeavors.
• Under subsequent generations of the Tata family's leadership, the Tata Group expanded and
diversified its business interests. Ratan Tata, as the Chairman, played a significant role in
expanding the group's global presence and spearheading strategic initiatives across various
industries, including steel, automobiles, telecommunications, information technology, and
hospitality.
• The founding generation of the Tata Group emphasized the importance of values and social
responsibility. This is reflected in the establishment of the Tata Trusts, which hold a majority
stake in the group, and the commitment to giving back to society through philanthropic
initiatives.
SUCCESSOR GENERATION
• One prominent figure in the successor generation of the Tata Group is Ratan
Tata. Ratan Tata served as the Chairman of the Tata Group from 1991 to 2012,
leading the conglomerate through a transformative period.
• During this stage, the successors of the Tata family had to balance the
preservation of the family's values, vision, and social responsibility with the
need to adapt to a rapidly changing business environment. They navigated
complex challenges, such as globalization, increasing competition, and
disruptive technologies, while upholding the Tata Group's legacy of integrity,
ethical business practices, and commitment to social impact.
• It's important to note that the successor generation
in the Tata Group extends beyond Ratan Tata.
After Ratan Tata's retirement, Cyrus Mistry briefly
served as Chairman before a leadership transition
and subsequent changes in the management
structure. The Tata Group continues to evolve
under the leadership of Natarajan Chandrasekaran,
who took over as Chairman in 2017.
EVOLUTIONARY GENERATION
• The evolutionary generation in the Tata Group would have emphasized the
importance of embracing innovation to stay competitive in the rapidly
evolving business landscape. This includes fostering a culture of creativity,
exploring new technologies, and investing in research and development. By
encouraging innovation, the group can identify and capitalize on emerging
opportunities, adapt to changing consumer preferences, and drive growth
across its diverse business portfolio.
In harmony with his religion, Tata’s company would exist to finance and initiate
projects to improve the lives of the people of India. So Jamsetji became not only
a catalyst for sweeping change in his vast homeland, but, in the process,
conceptualised an entirely new way of doing business as well as philanthropy.
What he began has changed the lives of billions, as the company he founded
continues to work for the betterment of society.
JNT’s inherent generosity of heart and his love for India led him to start,
back in 1892, India’s first scholarship for higher studies. The JN Tata
Endowment was the first of the Tata Trusts, marking the beginning of
the 126-year journey of nation-building and community welfare.
• “The Tata philosophy of management has always been and is today more
than ever, that corporate enterprises must be managed not merely in the
interests of their owners, but equally in those of their employees, of the
customers of their products, of the local community and finally of the
country as a whole.”
H O W D O E S TATA G RO U P I M P L E M E N T I T S C U LT UR E
T H RO U G H A C O D E O F CO N D U CT ?
• R. Gopalakrishnan, former director at Tata Sons, called TCOC the Tatas’ bible that contained ‘all
the dilemmas and questions of conduct that have come up. We (top leadership) are clergy that go
around and say, ‘What troubles you in your heart?’’
• A Young Tata Manager's Fight Against Corruption
• The first incident comes into picture when an accountant very impressed with TCOC and
convinced of Tata values, one of his job responsibilities was dealing with excise, customs and local
tax department officials. During one of his interactions, a tax officer insisted that the Tata company
should pay ₹10,000 a month (split between the officer, his boss and the accountant) to ensure
hindrance-free processing of papers. The accountant protested but the officer was unyielding. The
accountant acted as the whistle-blower and wrote a complaint to the director-general of the Anti-
Corruption Bureau, New Delhi. The authorities promptly responded, and a trap was set. Both the
tax officers got caught and were sent to jail. The accountant hadn’t even informed his superiors
about this entire chain of events because he was convinced that he had abided by TCOC.
CONCLUSION
• In conclusion, the Tata Group is a prominent family business that has made a
significant impact on India's industrial and economic development. Founded
by Jamsetji Tata in the 19th century, the group has grown into one of India's
largest conglomerates under the stewardship of subsequent generations of the
Tata family.
• The Tata family's entrepreneurial vision, coupled with a commitment to
ethical business practices and social responsibility, has been instrumental in
shaping the group's success. While embracing professional management and
corporate governance structures, the family has retained a strong influence on
the group's operations and direction.