Ratan Tata, the UK's largest private sector employer, steps down


Ratan Tata’s retirement yesterday, on his 75th birthday, from the chairmanship of Tata Sons, India’s biggest conglomerate, marks the end of an era for Indian business as well as the group. No-one has bestraddled Indian business in the way that he has done, presiding over Tata’s $100bn-plus revenues, more than half from 80 countries overseas, with over 450,000 employees in 100 operating companies and interests ranging from tea to telecoms, software to hotels, wrist watches to defence rockets, and coffee (Starbucks) to power and steel.

There is no other Indian business figure of similar stature, and no one near to being able to take his place as a symbol of managerial ethics and success. He took over in 1991, the year of India’s economic reforms, first uniting the loosely run group under the Tata banner, ousting elderly satraps, and then using opportunities unleashed by the reforms to spend $20bn on foreign take-overs and become India’s first group with $100bn revenues (2011-12). His dream for 2020-21 is $500bn.

He strove for a corruption-free group, and lost influence in Delhi and elsewhere as a result – he has always seemed uncomfortable with the complexities of political and corporate corruption that has grown enormously in India during the past 20 years. “I can say, with my hand to my heart, that we have not in fact partaken in any clandestine activity,” Mr Tata said last year when being questioned about his group’s involvement in a far-reaching telecoms scandal.  “I think there are many honest businessmen. There are many that bend. I am happy that I have not bent”.

But such a massive array of businesses could never fully match the “exemplary” ethics and values that he has said he would like to be his legacy, and he unwisely hired Nira Radia, an influence peddler at the centre of  a telecoms-linked political crisis in 2010, as his trusted public and government relations adviser. His companies’ environmental record has also not always been as good as he would like it to appear, especially in the extractive industries, and his lack of concern was demonstrated by the construction of the Dhamra Port in Orissa in 2008.

His biggest contribution has been to spearhead Indian companies’ foreign investments abroad, starting rather unexcitingly with the purchase of Tetley Tea in the UK in 2000. Much more significant was a take-over of South Korea’s Daewoo truck manufacturer in 2004. This was a trailblazer because it showed that someone in India’s largely unimpressive and uncompetitive manufacturing industry had the ability and nerve to venture abroad. I have always thought that this deal was a turning point in Indian industry’s self-confidence, which then grew rapidly in the mid-late 2000s.

It led on in 2007 to Tata Motors’ $2.3bn purchase from Ford Motor of the Jaguar Land Rover business, which has been a huge success. Sceptics criticised the deal because they had not foreseen that, by capitalising on design work started but not carried through by Ford, Tata had the energy, finance and managerial strength to produce impressive new models and expand sales internationally, especially in China. This demonstrated Mr Tata's capacity to drive through his decisions, as he also did, against advice from senior colleagues, on his far less successful $11bn take-over in 2007 of Europe’s Corus steel business that has left Tata Steel heavily indebted.

He then spearheaded the misguided concept and launch in 2009 of the Nano, the world’s cheapest car, which failed to take off. Aspirational Indian families, who Mr Tata dreamed of upgrading from unsafe over-loaded scooters, did not want to own the world’s cheapest product – it has now been re-launched slightly upmarket and is doing better.

Tata Motors was the company where Mr Tata had most direct influence and significantly, he spent yesterday, his last day at work, at its Pune factory. But the company’s India operations need an overhaul now that it is no longer controlled by the patriarch, as do the steel and telecommunications businesses plus, according to some reports (left), the Taj hotels. The company that needs least attention is TCS, the information technology cash cow.

Over the last two decades, Mr Tata has changed many parts of the group and has led it abroad to many countries including the UK where it is the largest private sector employer. He has did that at a time when other big Indian companies, which thrive by bribing the Delhi and state governments, were shy of venturing into unknown territories.

He now retires to be chairman of the Tata’s charitable trusts that own 66% of the group, having handed over as chairman of Tata Sons, the main holding company, to Cyrus Mistry, a 44-year old businessman linked to the Tata family by marriage and the Parsi religion, and to the group by an 18% equity stake.

Mr Tata’s leadership has symbolised ethics and vision, despite a few bumps, and the gap left by his retirement is the absence of an Indian businessman with a similar renowned image in India and abroad.

For a longer version of this article go to John Elliott’s Riding the Elephant blog at http://wp.me/pieST-1Sa

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Customer Service Executive

£18000 - £22000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Retail Buyer / Ecommerce Buyer

£30000 - £35000 per annum: Recruitment Genius: Working closely with the market...

Recruitment Genius: Sales Executive - CAD Software Solutions Sales

£20000 - £50000 per annum: Recruitment Genius: A reputable company, famed for ...

Ashdown Group: Client Accountant Team Manager - Reading

Negotiable: Ashdown Group: The Ashdown Group has been engaged by a highly resp...

Day In a Page

Read Next

Letter from the Education Editor: This shocking abuse of teachers should be taken seriously

Richard Garner
Brand loyalty: businessmen Stuart Rose (pictured with David Cameron at the Conservative conference in 2010) was among the signatories  

So, the people who always support the Tories... are supporting the Tories? Has the world gone mad?

Mark Steel
War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?