The story of India through Powerful leaders

By siliconindia   |   Friday, 12 August 2011, 13:59 Hrs
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Ratan Tata: Ratan Tata was born to Naval Tata and Soonoo Commisariat in the Tata family, a prominent family belonging to the Parsi community. He is the great-grandson of Tata group founder Jamsedji Tata. After his parents separated in 1944, he was brought up by his grandmother Lady Navajbai and he completed his schooling in Mumbai from Campion School. Later, he was enrolled in Cornell University, where he earned a B.S in architecture with structural engineering in 1962. He had also completed the Advanced Management Program at Harvard Business School. When he returned to India in 1962 after turning down a job with IBM on the advice of JRD, he was sent to Jamshedpur to work on the shop floor at Tata Steel with other blue-collar employees, shoveling limestone and handling the blast furnace. Till Independence, JRD Tata had the good fortune of working in a free economy. The opportunities were fewer, but there were no restrictions. And he was politically correct too. JRD Tata was one of the seven architects of the Bombay Plan of 1945.
However, things took a U-turn after Independence. Industrial licensing was brought in, the insurance venture of the Tatas and their airlines were nationalized. Thus, what Ratan Tata inherited was small, fragmented and inefficient. The license raj had pushed Indian businesses into the middle ages.The group had a foot in almost all businesses, yet none was of any noteworthy scale and the bulk of its profits came from a handful of companies. In 1981, JRD Tata stepped down as Tata Industries chairman, naming Ratan as his successor. He was heavily criticized for lacking experience in running a company of the scale of Tata Industries and in 1991; he was appointed group chairman of the Tata group. The economy was opening up, and Indian enterprises were simply not efficient enough to face the challenge. In addition, there were satraps well ensconced in various companies: Russi Mody in Tata Steel, Darbari Seth in Tata Chemicals and Ajit Kerkar in Indian Hotels. Ratan Tata knew it was essential to take a holistic view of the group. But that could not happen. In the first phase, Ratan Tata reorganized the businesses - some were sold, the remaining were asked to tighten their belts and become efficient. All the satraps were removed. In the second phase, Ratan Tata really grew the business. He bought Tetley, the truck business of Daewoo, Corus and Jaguar-Land Rover. These were the large purchases he drove. There were several smaller acquisitions as well. He created waves all over the world when he launched the Nano for as low as Rs 100,000.