Tata Group Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Although a household name in India, the name Tata did not enter global consciousness until the 21st century. By 2008, Tata had acquired a bewildering set of associations: acquirer of luxury auto brands Land Rover and Jaguar; developer of the world’s cheapest car, Nano; buyer of Corus, the company formerly called British Steel; India’s top software and technology service firm; luxury hotelier; and rebuffed suitor of Orient Express luxury travel properties. With nearly $60 billion in revenue, almost two-thirds from outside India, Tata Group has emerged as the top multinational business from India.

In the second half of 19th century, Tata Group’s visionary founder, Jamsetji Nusserwanji Tata, decided that India—even as a British colony—should have world-class technological capabilities. Starting with the formation of a trading company in 1868, Tata Group steadily climbed a diverse ladder of enterprise founding steps. A textile mill (1874), the luxury Taj Hotel in Mumbai (2003), a steel company (1907), and an electric utility (1910) became part of the growing Tata Group. The diversified evolution of the group continued with the creation of other pioneering enterprises: airlines (1932), automotive firm (1945), software consultancy firm (1968), and telecom venture (1996).

Like other business group structures of Asia—for example, keiretsu of Japan and chaebols of South Korea—India’s business groups such as Tata Group are characterized by cross-ownership of companies, overlapping directorates, and control through loyalty and moral persuasion. From its relatively simple headquarters at Bombay House in Mumbai, the controlling entities Tata Sons and Tata Industries direct the far-flung global Tata enterprises.

Tata Group and Indian nationalism have always gone hand in hand. For example, the founder Jamsetji Tata lived to see the completion of the iconic Taj Mahal Hotel in Mumbai, a hotel he launched because the British colonial rulers barred Indians from entering elite hotels and clubs.

Tata Group views itself as being entwined with the foundation of a technologically and scientifically capable India. The group helped establish key scientific institutions that laid the bedrock for, among other things, India’s space and nuclear programs, the Indian Institute of Science (1911), Tata Institute of Social Sciences (1936), Tata Institute of Fundamental Research (1945), Tata Memorial Center—focusing on cancer research (1952), and JRD Tata Ecotechnology Center (1998).

Ratan Tata, a descendant of the Group’s founder, has been credited with the aggressive global thrust of Tata Group since the mid-1990s, and with innovative ideas such as the launch of the Nano, the “people’s car,” priced at $2,500. Included in 2008 lists such as Time magazine’s 100 most influential people and Fortune magazine’s 25 most powerful businesspeople, Ratan Tata has a reputation of leading a simple life and providing exemplary leadership and inspiration to Tata Group. He announced his intention to retire after the successful market introduction of the Nano car.

The long history of Tata Group, while punctuated by many entrepreneurial triumphs, has also had its share of setbacks and middling performance. Tata entered the consumer products business as early as 1917, and launched Lakme, India’s first cosmetics line, in the 1950s. The consumer businesses, however, have been overtaken by competition, and Tata has divested from many of these. Similarly, in chemicals, late entrants such as Reliance have overtaken Tata.

While some of the Tata Group companies have had international trade relationships and other connections for decades, the group began to attract global attention through high-profile acquisitions in the 21st century. Among the most prominent Tata Group global acquisitions are Tetley Tea (2000), Daewoo’s truck division in Korea (2004), Corus—formerly British Steel—in 2007, and the Land Rover and Jaguar brands from Ford in 2008.

Bibliography:

Fisman and T. Khanna, “Facilitating Development: The Role of Business Groups,” World Development (v.32/4, 2004);
E. Hoskisson et al., “Diversified Business Groups and Corporate Refocusing in Emerging Economies,” Journal of Management (v.31/6, 2005);
L. Kedia et al., “Indian Business Groups: Evolution and Transformation,” Asia Pacific Journal of Management (v.23/4, 2006);
M. Lala, The Creation of Wealth: The Tatas from the 19th to the 21st Century (Penguin, 2007);
Nath, Horizons: The Tata-India Century 1904–2004 (India Book House, 2006).

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