Introduction

Ratan Tata is a philanthropist and more than 65% of his share is invested in charitable trusts. His
aim has been to raise the quality of life for Indians along with Human Development. Ratan
thinks that 'Philanthropy' can be seen in different perspectives, earlier 'philanthropy' was to
develop institutions, charitable hospitals etc. whereas, now it’s more about nation building.

Early Life

He was born on December 28, 1937 in Surat, India, to Naval Tata and Sonoo. Naval Tata was
the adopted son of the Jamsetji Tata’s younger son Ratanji Tata. Jamsetji Tata was the founder of
the Tata Group of Companies. Ratan Tata has a brother, Jimmy, and a step-brother, Noel Tata.

When he was ten, his parents, got separated and thereafter, he and his brother were brought up
by his grandmother, Navajbai Tata.

He received his early education from the Campion School, Mumbai and finished his schooling
from the Cathedral and John Connon School, Mumbai. In 1962, he obtained his B.S. in

1
architecture with structural engineering from Cornell University, U.S.A. Later he got enrolled at
the Harvard Business School and completed an Advanced Management Program in 1975.

Background

Ratan Tata was born to Naval Tata and Soonoo Commisariat and has a younger brother Jimmy
Tata. Ratan's father, Naval Tata was remarried to Simone Dunoyer, after his divorce and had one
son, Noel Tata, from his second wife. Ratan's father was an adopted son of Sir Ratan Tata.

Ratan N. Tata has been brought up in an old and well-known business family. He belongs to a
prominent Parsi family. He has not faced any such financial issues since his family had been
successful businessmen since the British rule in India. He was brought up by his grandmother,
Lady Navajbai.

Ratan N. Tata is a highly educated businessman. He holds a Bachelors degree in Architecture

from the Cornell University, USA, and has pursued and Advanced Management Program from
the Harvard Business School, USA. It was in 1962 that he joined his family business; the Tata
Group. Ratan N. Tata is 73 years old, unmarried and has been in news regarding several of his
relationships. But the big question is “who would eventually succeed Ratan N Tata?”. Media has
been talking about his strive for finding an appropriate successor.

Career

In 1962, he started his career with the Tata Steel division where he shoveled stones and worked
with the furnaces along with the blue-collar employees. It was a difficult job and helped him gain
a better understanding and respect for his family business.

In 1971, he was appointed as the Director-in-Charge of the National Radio & Electronics
Company Limited (NELCO) in order to help its struggling finances. He worked towards building
a better consumer electronics division but the economic recession and union strikes prevented
him from achieving success.

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In 1977, he was moved to Empress Mills, a struggling textile mill within the Tata Group. He
proposed a plan for the mill but the other Tata executives rejected it and the mill was shut down.
Later, he was moved to the Tata Industries.In 1991, J.R.D. Tata appointed him as the new
Chairman of the Tata Group of Companies. This decision came under scrutiny following
objections from other executives of the company and questions were raised regarding his ability
to run the corporation.

But he succeeded in improving the financial success of the industries and expanded the growth
of the organization under his leadership. He transformed the management and vision of the
division, and managed to bring in significantly larger dividends.He also became a member of the
Prime Minister's Council on Trade and Industry. He served on the advisory board of the RAND's
center for Asia Pacific Policy and is also an active participant in India's AIDS initiative
program.He also holds the membership of the international advisory board of the Mitsubishi
Cooperation, the American International Group, JP Morgan Chase and Booze Allen
Hamilton.On his 75th birthday, i.e, on 28 December 2012 he resigned from the post of Chairman
of Tata Group and was succeeded by Cyrus Mistry, managing director of Shapoorji Pallonji
Group. Even after retirement, he is still an active businessman and invests in upcoming
promising business ventures.

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Achievements of Ratan Tata

Ratan Tata serves the Indian organizations in senior capacities, for example, he is the member
of the Prime Minister's Council on Trade and Industry. He is also on the advisory board of the
RAND's center for Asia Pacific Policy.Ratan N. Tata is also an active participant in the India's
AIDS initiative program. Ratan Tata has a long list of foreign affiliations as well, such as, the
membership of the international advisory board of the Mitsubishi Cooperation, the American
International Group, JP Morgan Chase and Booze Allen Hamilton.

Major Works

As the Chairman of Tata Group, he was able to achieve international recognition and prestige
for his company. The astounding financial success of the company brought the Tata Group to the
New York Stock Exchange and under his supervision the corporation became a global brand by
acquiring many companies including Tetley, Jaguar Land Rover, and Corus. He was
instrumental in the conception and building of Tata Nano and Tata Indica cars.

He is also a notable philanthropist and more than 65% of his share is invested in charitable
trusts. One of the primary goals of his life has been to raise the quality of life of Indians along
with human development.

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Awards

Ratan Tata has the following honorary distinctions as well:

 Legend in Leadership Award from the Yale.

 Honorary Citizenship of Singapore
 'Businessman of the Decade' Award by the Federation of Indo-Israeli Chambers of
Commerce in 2010.
 Carnegie Medal of Philanthropy, on behalf of the Tata Family.
 Ratan N. Tata has been also honored by the Government of India with the second
highest civilian award, The Padma Vibhooshan, in 2008.
 In 2000, he was conferred the Padma Bhushan, the third highest civilian honor
awarded by the Government of India.
 In 2004, he received the ‘Medal of the Oriental Republic of Uruguay’ from the
Government of Uruguay.
 In 2005, he was conferred the ‘International Distinguished Achievement Award’ by the
B'nai B'rith International.
 In 2007, he was conferred the Honorary Fellowship of The London School of
Economics and Political Science.
 In 2008, he was awarded the ‘Padma Vibhusan’, the second highest civilian honor
awarded by the Government of India.
 In 2009, he received the ‘Award of 'Grand Officer' of the Order of Merit of the Italian
Republic’ from the Government of Italy.
 In 2009, he was awarded the title of Honorary Knight Commander of the Order of the
British Empire, United Kingdom.
 In 2010, he won the ‘Oslo Business for Peace Award’ presented by the Business for
Peace Foundation.
 In 2014, he was conferred the ‘Honorary Knight Grand Cross of The Order of the
British Empire’.

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Personal Life & Legacy

Ratan Tata is a bachelor. He is known for his low profile lifestyle. He resides in a simple
house in Mumbai and drives around in a Tata Sedan.

Personality

• Very dignified

• Ethical

• Dependable

• Believes in keeping promises

• Loyal and believes in relationship

• Questioning the unquestionable

• Risk taker not speculator

• Exemplary leadership qualities and a Motivator

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SWOT Analysis of Ratan Tata

Strength:

• Visionary

• Strategist

• Initiator Weakness:

• Less Autocratic

• Successors

• Ownership

• Dependable Opportunities:

• Adaptability

• Changing Champions

• Business Ethics Threats:

• Perfectionists

• Question the unquestionable

Leadership Qualities:

• Visionary

• Passionate

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• Creative

• Flexible

• Inspiring

• Innovative

• Courageous

• Imaginative

• Experimental

• Initiate change

• Personal Power

Leadership Style:

• Democratic

• According to path goal theory- Achievement style

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Principles of TATA

• Nothing worthwhile is ever achieved without deep thought and hard work.

• Good human relations not only bring great personal rewards but are essential to the
success of many enterprise.

Marriage Facts

His achievements are well-documented, but Ratan Tata's personal life has come out only in parts.
The latest revelation is that the 73-year old bachelor industrialist had come close to getting
married four times. But it was fear that got the better of the man who runs the $72 billion
business empire.

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In an interview to CNN International's Talk Asia, Tata said, "I came seriously close to getting
married four times and each time I backed off in fear or for one reason or another". "Each
occasion was different, but in hindsight when I look at the people involved; it wasn't a bad thing
what I did. I think it may have been more complex had the marriage taken place."When asked
the number of times he has fallen in love, he confessed, "seriously, four times".

When Ratan Tata was quizzed about his love life in an interview to CNN International's Talk
Asia programme, he said, "I was probably the most serious was when I was working in the US
and the only reason we didn't get married was that I came back to India and she was to follow
me. That was the year of the Indo-Chinese conflict. This conflict in the snowy, uninhabited part
of the Himalayas was seen in the United States as a major war between India and China and so,
she didn't come and finally got married in the US thereafter." Little is known about that
American lady in Tata's life. In 1962, Tata returned to India because of his grandmother's ill
health.Asked whether any of the women he was in love with were still in the city, he replied in
the affirmative, but didn't speak any further on the matter.

Unlike most family run businesses in India where the next generation usually takes over, the Tata
group is in the midst of the succession issue. Tata will hang up his boots in December 2012 when
he turns 75—the mandatory age for a Tata group chairman to retire.

The Tata Group- Company Profile

The Tata Group of Companies is the leading conglomerate company of India. The company has
over 90 operating companies in seven business sectors: communications and information
technology, engineering, materials, services, energy, consumer products and chemicals. The
group operates in over 80 countries. The Tata Group has over 395,000 employees working
worldwide.

The brand name 'Tata' has been respected in the country for about 140 years. Their Market
Capitalization is of about $99.78 billion and has a shareholder base of 3.5 million.

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Obstacles faced by Tata Group

In June 2008, the Tata Group faced a global financial crisis due to the failure of the acquisition
of Jaguar Land Rover (JLR). The bridge loan taken by them of US$ 3 billion which was used to
fund the acquisition of the JLR was not paid back fully, only US$ 1 billion was paid.

Complexity in raising funds before the acquisition was another problem for the Tatas.

Tata had negative working capital and it was facing a problem in cash liquidity. The Tata’s
thought of merging with other big companies, but very soon it managed all the issues.

Due to the Global financial crisis, the Indian automobile sector was highly affected: the GDP
growth declined and inflation took place due to which the prices of the fuels and automobiles
products increased and hence Tata Motors, the leading automobile company of India suffered the
most.

The qualities that make Ratan Tata a born leader

In the midst of an ongoing search process to find Ratan Tata's successor to head the country's
biggest corporate house, top leaders from the group have heaped lavish praise on his leadership
style.Ratan Tata has been heading the group since 1991 as chairman of the group's promoter
company Tata Sons and is scheduled to retire in December next year.A search committee has
been tasked to find Ratan Tata's successor to head the salt-to-software business conglomerate
and the process is on for many months now.

In the meantime, as many as five senior executives from the group have written about "the many
hues of leadership" in the latest edition of the Tata Group's internal publication Tata Review,
wherein they have praised the leadership styles of the group as also that of Ratan Tata.

These include Tata Sons director R Gopalakrishnan, Tata Sons finance director Ishaat Hussain,
Tata Industries managing director Kishor Chaukar, Tata Sons' group human resources chief
Satish Pradhan and Tata Quality Management Services head Sunil Sinha.

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Another senior group executive and a search panel member R K Krishna Kumar recently
admitted that finding a successor for Ratan Tata was a difficult task and the panel was
considering people from both within and outside the group.Krishna Kumar, in an internal
interview published on the group's website in March, had also praised Ratan Tata for his
contributions to not only the group, but the business and industry as a whole and called him a
'born leader'.Now, Ishaat Hussain has named Ratan Tata among the business leaders who are
inventors. "That's why I admire Ratan Tata -- he is such a game changer," he said.Hussain
further said that the Tata Group leaders, both past and present, subscribe to a form of leadership
where shareholder value was relevant and inclusive.Chaukar, on the other hand, said that Ratan
Tata was a 'terrific combination' of the four necessary leadership characteristics -- character,
commitment, competence and courage

Terming 'courage' as one of the most important ingredients to become a leader, Chaukar said:
"The courage bit is partly yours and substantially that of the organisation you are with. If it had
not been for Ratan Tata, I don't know whether I, as an individual, would have had that courage."

12
About Ratan Tata, he further said: "Additionally, he is an amazing indefatigable individual. I
have never seen him say, "I am tired, we'll do this tomorrow.""Be it with technical stuff, finance,
business matters or anything else, he is able to bring tremendous energy levels to the job. He has
this immense persistence in always moving closer to his goal, even if this goal keeps shifting,"
Chaukar noted.Satish Pradhan said: "The Tata leadership story is part of the distinctive narrative
that has Ratan Tata and the leadership infrastructure he created at the centre of the group."

Noting that Tata was the chairman of several companies as well as Tata Sons, Pradhan said, "A
whisper from him can reach 5,000 decibels. So he plays his role in a measured, gentle way."At
the same time, Sunil Sinha said that the Tata model of leadership creation was in contrast to
business houses that have 'a structure where the centre is more powerful than the states'."In such
organisations, the parent companies are listed and the children are unlisted. In case of the Tatas,
the parent is unlisted and the children are listed," he said.Sinha said that the Tata structure has
transferred a huge amount of responsibility from centre to state, which results in leaders coming
out from different business milieus.

Terming humility as yet another dimension to the Tata leadership matrix, Sinha said, "No one
demonstrates this characteristic more than Ratan Tata."

The amazing story of how Ratan Tata built an empire

After ruling the Tata empire for more than two decades as its chairman, Ratan Naval Tata is set
to retire on December 28, 2012. As a tribute to an iconic businessman, rediff.com is republishing
this article that first appeared in Outlook Business in 2010.He's packing his bags -- again.
December 2012, when he turns 75, is the third scheduled retirement for Ratan Tata.

The Tata Group has been at this inflection point twice earlier, and stepped back both times. In
2002, when Tata was to retire at 65, the Tata Sons board promptly redesignated him non-
executive chairman, which meant he could continue for another five years.

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Three years later, the board upped the retirement age of non-executive directors to 75. The
message is clear: Ratan Tata is indispensable.And it's not just the board that feels that way. There
were loud cries of support from shareholders at the Tata Steel AGM in August, held soon after
the announcement that Tata Sons had created a panel to find Tata's successor.

"We can't lose our ratan (jewel)," said one shareholder, while others asked him to stay on as
chairman emeritus.Whether or not he acknowledges it openly, Tata must be feeling vindicated by
this public recognition of his worth. When he took over as Tata Group chairman on March 25,
1991, critics were loud and unrestrained in their disapproval and scepticism.

Ratan Tata was considered to have gained his position purely on the strength of his surname; he
was incompetent, raged opponents both within and outside Bombay House, and he didn't possess
an iota of the charisma of his uncle and predecessor, JRD Tata.

Nearly 20 years later, Ratan Tata has achieved almost everything on his 1991 agenda. At Rs 3.46
lakh crore (Rs 3.46 trillion), Tata Group revenue is 40 times the 1991 level, while net profit has
gone up four times.It is the largest Indian multinational conglomerate; more than 65% of the
group's income comes from overseas and it has 98 operating companies (28 listed) spread across
56 countries in six continents.In the past decade -- the decade that marked the glorious years of
Ratan Tata -- nearly $18 billion was shelled out to acquire 22 companies worldwide, including
Tetley Tea and Corus Steel in the UK, New York's Pierre Hotel and Jaguar Land Rover.The Tata
Group includes India's largest private steel company, the biggest auto manufacturer and the
largest IT outsourcing firm.

"Ratan Tata outperformed JRD. He toppled people as strong as Russi Mody, thought out of the
box and came up with path-breaking concepts like the Nano," says Bala V Balachandran, faculty
member at Kellogg School of Management, and dean of the Great Lakes Institute of
Management.Not bad going for a man who was once likened to the clown in a circus (by his
loudest detractor, Russi Mody). For Tata's successor -- whoever that turns out to be -- the bar's
been raised sky high.

"Tata's job is the most difficult one in the country today. Whoever runs the Tata Group has to
provide strategic leadership, direction and inputs on multiple businesses, which is hugely
challenging," says Rajeev Gupta, managing director of private equity firm Carlyle India.The new
chairman may be relieved of the responsibility of running individual companies, but he or she
will have to head a team of extraordinarily talented and able leaders.Not only will the heir have
to ensure continuation of the group's growth momentum, but also provide the direction and
vision for future growth. It's not an easy task. But then, nor was Tata's.

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A shaky start

Left to himself, Ratan Tata would probably have stayed on in the United States after training as
an architect at Cornell University. But the son of deputy group chairman Naval Tata and the
nephew of JRD Tata couldn't be allowed to work outside the group (he had an offer from
IBM).In 1962, Ratan joined the family business, working on the Tata Steel shopfloor at
Jamshedpur, just one of several thousand employees.He got his first independent assignment less
than a decade later -- as director of National Radio and Electronics (Nelco), in 1971 -- but it was
a mixed blessing. Nelco was in dire straits when Ratan came on board -- losses of 40% and
barely 2% share of the consumer electronics market.Just when he turned it around, the
Emergency was declared. A weak economy and labour issues compounded the problem and
Nelco was quickly near collapse again.Ratan's next assignment was just as trouble-stricken. He
was asked to turn around the sick Empress Mills. He did, but was refused the Rs 50 lakh (Rs 5
million) investment required to make the textile unit competitive. Empress Mills floundered and
was finally closed in 1986 (by which time the infamous Mumbai textile workers' strike had also
taken its toll).

The two 'failures' haunted Ratan for decades. His track record was suspect, he was jinxed, said
his baiters. "My first directorship was that of Nelco and the status of that company has forever
been held against me. No one wanted to see that Nelco did become profitable, that it went from a
15
2% market share to a 25% market share," Tata said several years later.The attacks became more
vicious after 1981, when JRD stepped down as Tata Industries chairman, naming Ratan his
successor -- in one leap, Ratan had moved to the head of the queue for eventual leadership of the
entire Tata Group, and that was completely unacceptable to many.So much so, that at one Tata
Sons meeting, when Nelco's losses were being blamed on Ratan (although he came to the
company much later), JRD had to step in and deflect the criticism.Later, recalling the incident,
Ratan was to remark, "Jeh came to my rescue and slowly turned around the whole conversation."

But even JRD's backing wasn't enough to help Ratan achieve many of his ambitions for the
group. Foreseeing expansion of capital markets, which meant easier access to money for new
projects, Ratan helped draw up a group strategic plan in 1983.Among other things, it emphasised
venturing into hi-tech businesses; focussing on select markets and products; judicious mergers
and acquisitions; and leveraging group synergies.Accordingly, Ratan promoted seven hi-tech
businesses under Tata Industries in the eighties: Tata Telecom, Tata Finance, Tata Keltron,
Hitech Drilling Services, Tata Honeywell, Tata Elxsi and Plantek.

But elsewhere in the group, his blueprint gathered cobwebs as companies -- many of which were
run by their CEOs as independent fiefdoms under JRD's benevolent leadership -- blatantly
ignored it or at best, paid lip service to the 1983 plan.New businesses and M&As in these
companies, if they happened, occurred independent of Ratan, not because of him.

Ratan's spell of bad luck continued -- even as his successes grew. He was steadily finding a place
on the board of many group companies, having become a director at Tata Sons back in 1974.In
1988, he took over from Sumant Moolgaokar as Telco chairman -- and promptly found himself
at the centre of a prolonged labour dispute, perhaps the worst industrial relations slide in Tata
history.Ratan stood firm and eventually the matter was resolved in the company's favour. In an
interview some years ago, Ratan recalled that Telco was "the first company in which I could
actually do something. In other companies, I was always put in a fire-fighting situation."

Back against the wall

Taking over from JRD as group chairman in 1991 didn't resolve matters either, even though it
was a Tata Sons board decision to make him group chairman.Tata Group historian R M Lala
recalls speaking with JRD some 10 days after the announcement and asking whether Ratan had
been chosen because of his integrity.

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"Oh no, I wouldn't say that; that would mean the others did not have integrity," JRD replied. "I
chose him because of his memory. Ratan will be more like me."JRD may have seen his own
reflection in his successor but others, both inside and outside Bombay House, did not, at least
initially. "Who expected Ratan Tata to become such a towering figure in his own right? The first
three or four years were engaged in struggles with the satraps," says Lala.

Individual company heads were larger-than-life personalities in their own right, and had ruled
these satraps for decades: Russi Mody at Tata Steel, Darbari Seth at Tata Chemicals, Ajit Kerkar
at Indian Hotels, and Nani Palkhivala at ACC. Getting them to toe a group line and work in
tandem with other companies was next to impossible.It didn't help that they were more
experienced and, many believed, more deserving than Ratan to head the group. Indeed, in an
interview a few years ago, Ratan recalled his surprise on hearing of his appointment: he had
thought Palkhivala and Mody to be neck-and-neck in the race for the top post.

As it happened, Palkhivala's political views and Mody's clashes within the group worked against
them. Mody, though, continued to be a thorn in the flesh of both JRD and Ratan. His battles with
Ratan were loud, acrimonious and conducted in full public view, which went against the ethos of
this low-key business house -- an inside joke at the time was that Russi Mody had become Rude-
i Mody. JRD finally dismissed him in 1993.Ratan enforced the long-dormant retirement age rule
for all business heads and directors, which effectively dealt with Seth and Kerkar (ill-health
hastened Palkhivala's departure).

But the crown remained shaky for several years -- there was conjecture as late as 1997 that
Shapoorji Pallonji Mistry would oust Ratan and take over the mantle of Tata Group head.
(Mistry is the single largest shareholder in Tata Sons and, incidentally, the father-in-law of Noel
Tata, Ratan's half-brother and the frontrunner in the current succession race.)

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Business as unusual

To his credit, Tata didn't let the criticism and internecine battles deflect him from his chosen
path. On taking over in 1991, he dusted off the 1983 plan and updated it, taking the newly-
opened economy into account.Now, the thrust was equally on technology-driven leadership,
global competitiveness and being among the top three domestically, regardless of the line of
business.That meant rationalising the Tata business structure. The remnants of the era of
government controls combined with independent functioning of group companies in decades past
could be seen in the way the group had grown till then -- unstructured, with overlapping business
across multiple companies.

When Ratan took over, there were three group companies manufacturing cement; five were
involved in pharmaceuticals, while nine companies operated in the IT space. One of his first acts
was to sell Tomco; swift exits from pharma and textiles and, later, cement,
followed.Management consultancy McKinsey was brought on board to help with the
reorganisation. The Tata Group is still a diversified, salt-to-software group, but now there is a
method to the business expansion.Tata also paid attention to brand Tata. By 1998, there was a
single group logo and the Tata brand belonged to Tata Sons. Now, companies needed to sign
brand equity and business promotion agreements with Tata Sons before they got use of the brand
name.

And Ratan was choosy about its use (stepmother Simone's cosmetics business, Lakme, which
was later sold, and half-brother Noel's retail business didn't make the cut).Zia Mody, managing
partner at law firm AZB & Partners, which has advised the Tatas on acquisitions like Corus and
Jaguar Land Rover, believes the group-culture Ratan Tata has created will stay on as his
legacy."He has institutionalised processes. The reputation of the group and its guiding principles
are uppermost in his mind while taking decisions," she points out.

18
Business historian and writer Gita Piramal has a different take on Ratan Tata's legacy. "Tata put
'design' into the group -- in mergers and acquisitions, engineering or cars or anything else. It is a
very forward-looking strategy, putting new competency in very old companies," she says.

Ratan the manager

Perhaps the secret of Ratan Tata's success lies in his ability to think big -- and small. While he
guides the Tata Group to pick up the luxurious Pierre Hotel in New York, he's also driving the
launch of the budget Ginger hotels in India.He has the ability to envisage an automotive business
that encompasses diverse businesses such as the iconic Jaguar and Land Rover marques on the
one hand, the world's cheapest car the Nano, on the other, and hardy, rough-road trucks
sandwiched in between.JRD is admired for creating world-class companies that could be
globally competitive at a time when India was still not thinking scale and was instead leaning
towards a socialist set up.In contrast, Ratan had the vision to foresee the direction the economy --
and policy -- was taking, consolidate the business accordingly, and embrace change to leap ahead

The group was totally unprepared for liberalisation, which was knocking on the door when he
took over. Ratan knew the Tatas required a radical change in mindset and he set out to work in
that direction.He streamlined the organisation by selling some businesses and rationalised the
processes and functioning of the Tata Group.That explains why it still remains among the top
three business groups in the country while many have fallen by the wayside -- or dropped in the
rankings -- in the post-liberalisation era.

Yet almost none of this change came at the cost of people or employee morale. Be it the fixing of
a retirement age for various employees or the creation of a close-knit group that could meet the
group's ambitions, Ratan created a nimble-footed organisation.Insiders say that those who were
asked to leave were given full salary till the age of 60.It's no secret that the genesis of the Tata
Group's blockbuster moves can be traced to him. Tata's first global venture -- the February 2000
purchase of Tetley -- had begun five years earlier when Ratan Tata made a $318 million bid for
the tea company.That didn't work out, but Ratan didn't lose heart and kept an eye on the
company's activities. The deal was finally clinched at $430 million. Sheer perseverance may
have made that deal come true.

The Corus deal is also a telling example. A close associate recalls Ratan calling Tata Steel MD B
Muthuraman, who was on a trip to Hong Kong. "I've learnt that Corus is up for sale. Do you
think we can look at it?" he asked. After some thought, Muthuraman replied that they could
perhaps pick up a strategic stake. Ratan had different plans. "We must buy that company. Think

19
it over," he advised. The next morning, Muthuraman called Tata to say he was game. With no
disrespect to Muthuraman and other leaders who have spearheaded the various companies in the
group, it must be said that such gutsy deals can't be done without a strong group backing or
reputation.The Corus deal is proof of the kind of goodwill the Tata Group has created for itself
across the world, not just within the country. Unlike the Mittal Steel bid for Arcelor, which
created a huge furore, the Tata bid faced little opposition.

Although the Anglo-Dutch company had several plants in the United Kingdom, there was little
attempt to stop the deal by either political parties or trade unions. The Corus management was
happy to support the deal, placing its faith in the group's reassurance that there would be no
layoffs and that pension shortfalls would be taken care off.Not just that. Given that Tata Steel
was bidding for a company four times its size, it could not have funded the entire deal. In fact,
the company put up just 25% of the equity; the rest was funded through foreign debt.And even
that was to be funded only through cash flows from Corus, with no recourse to Tata Steel -- a
reflection of the credibility the group enjoyed in global financial markets.Tata's big deals are
balanced by projects focusing on the lowest common denominator. In fact, Tata has been among
the very few to perfectly understand the pysche and the needs of the Indian consumer -- and
build successful businesses around those insights.

That is, by recognising that the big market opportunity lies in making desirable products
affordable for a larger audience and creating successful products to cater to a market need -- be it
the passenger-car foray with the Indica in the early 1990s, the promise to create a Rs 1 lakh (Rs
100,000) car or for that matter, making water filters that don't need electricity (for rural areas).

Hemendra Kothari, the doyen of investment banking in India who has worked on most Tata
Group deals, has watched Tata's working style closely. "He is a very discerning person when it
comes to decision-making. And once he has made up his mind, he is prepared to go all out to
achieve his objective, be it Corus or Nano," he says.

20
Ratan's folly

Still, the markets have usually considered Tata to be out of his depth, questioning -- and
dismissing -- his big, bold moves as 'Ratan's follies'.The Indica was the first. People scoffed
openly, when, in 1995, Tata spoke of building a passenger car with "the Zen's size, the
Ambassador's internal dimensions and the price of a Maruti 800".The scepticism seemed
justified as project costs escalated to Rs 1,700 crore (Rs 17 billion) and Tata Motors posted Rs
500 crore (Rs 5 billion) in losses -- the biggest splash of red in Indian balance-sheet history.

"Even within Tatas, people kept asking me to distance myself from the project so that when it
failed I wouldn't be stuck with the blame. And when I refused to do that, they distanced
themselves from me," Tata said in an interview a few years ago.Ratan proved his detractors
wrong, and how. Indica went on to become Tata Motors' great success story -- about a million
units have been sold since its 1998 launch.The group's global ambitions were greeted with
similar scepticism. The Corus deal would lead the group to bankruptcy, critics declared:
investors dumped Tata Steel shares after the announcement, and the share price plunged
11%.And Tata was driving straight to disaster with the Jaguar-Land Rover deal: the brands were
troubled, demand was low. Tata went on to prove everyone wrong. The group's international
acquisitions are doing well, some have started making money.When Tata took over, less than 5%
of the group's revenues came from overseas. As the self-consciousness eased, the confidence
grew. And with it, the scale of ambition.

The Ratan Tata of 15 years ago would never have gone for broke on deals like Corus and JLR.
The JLR deal was audacious. Tata's interest was sparked as soon as the banks told the group that
the marques were available. Why? According to him, "First, as Tata Motors in the number two
SUV builder in India, owning [Land Rover] the gold standard of SUVs would be an enormous
benefit to us. Second, to own a luxury brand with an immense history and heritage such as
Jaguar is a virtually irresistible opportunity."

There's a personal angle to the "immense history": Ratan's father Naval was one of five people in
India who took delivery of a new Jaguar XK120 in the late 1940s. "I remember the XK with
great nostalgia," Tata commented to a Jaguar team. "I particularly remember the instruments on
the dashboard and how stylish they looked."Less than two weeks after the $3-billion deal was
inked, Tata flew into the US on his private jet to meet Jaguar and Rover dealers across the
country; for many dealers, it was their first ever interaction with a company executive.

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Several years ago, in an interview, Tata dismissed the notion that he was a risk-taker. "There
have been certain occasions when I have been a risk taker. Perhaps more so than some, and less
so than certain others. It is a question of where you view that from. I have never been
speculative. I have never been a real gambler in the sense that some very successful businessmen
have been," he said.Going by that logic, Ratan's 'follies' were decisions guided by prescience and
not instinct and gut feel.

Of course, he's not perfect. Ratan Tata personally, and the Tata Group in general, have been
bogged down by their share of controversies. When it comes to the environment, especially, the
group gets a "can do better" grade.

In recent years, Tata Steel's joint venture with Larsen & Toubro to construct a port at Dhamra,
Orissa, has come under the scanner for its proximity to two protected areas, one of which is the
world's largest nesting site for the endangered Olive Ridley Turtle and the other India's second-
largest mangrove forest.A soda ash extraction plant in Tanzania also came under fire because of
the threat it poses to a nearby lake and its flamingo population. ribal rights have also been a
touchy subject. In 2006, several tribals were killed while protesting a wall being built by Tata
Steel on land that was historically theirs. And Ratan Tata's pet Nano project was mired in
controversy about land acquisition for the factory. After farmers in Singur, West Bengal,
protested about forcible evictions and inadequate compensation, and Mamata Banerjee leapt into
the fray, the Tatas pulled out of the state.

The company shifted the factory to Sanand, Gujarat, but Ratan Tata's subsequent praise for
controversial Gujarat Chief Minister Narendra Modi also drew criticism.

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Situation vacant

It will be some months before even the shortlist for Ratan's successor is known. It's anybody's
guess who will finally make the cut, but the qualities expected of this paragon are fairly clear to
all.In an interview a few years ago, Ratan had drawn up a somewhat simplistic checklist:
someone "younger", ideally in his 40s, who believes in Tata values, demonstrates managerial
ability and has the vision to run the Tata Group.More recently, he also spelled out what the
person doesn't need to be: a Tata, Parsi, or even Indian. "The successor should be the right
person," was his emphasis at the Tata Chemicals AGM in August.

For the record, in its 142-year history, the Tata Group has had only five chairmen, all of whom
were Parsis. The only non-Tata to make it to the top was Nowroji Saklatwala, who was chairman
from 1932 to 1938. Of course, he was still family: Saklatwala was Jamsetji Tata's sister's
son."There will be a vacuum if a non-Tata person is at the top. Any new person without the Tata
name starts with a huge disadvantage," says Harish Bijoor, brand specialist and CEO of Harish
Bijoor Consults.Still, considering there aren't too many Tatas around anymore, perhaps it does
make sense to keep an open mind about candidates from outside the family. But not outside the
company, and certainly not outside the country, seems to be the majority opinion. Former Tata
Steel CMD Russi Mody doesn't consider the lack of the right surname a handicap -- "I was a
chairman although I wasn't a Tata," he says -- but is quite sure that only a company man will do
for the job.

"This is an Indian company and an Indian should be appointed chairman. A company man will
have loyalty to the group," he declares.

Preety Kumar, managing partner at global executive search firm Amrop, gives the neutral
observer's viewpoint. "Internal succession always has smoother transition than an external one.
In some of our work, successor appointments have been made two or three years before the
succession, which helps change perceptions," she says.Sanjay Teli, MD of executive search firm
ESP Consultants, adds that group acceptance of and support to the heir apparent is critical.
"Ratan Tata's personality and the changes he brought about helped attract the best talent to the
group. Retaining some of those people may become an issue in the future," he warns.

Those and other important issues must be top of mind for the selection committee as it searches
for the ideal candidate. The five-member panel -- comprising Tata Sons vice chairman NA
Soonawala, group advisor Shirin Bharucha, British businessman Lord Bhattacharya, Tata Sons
director Cyrus Mistry and Indian Hotels vice chairman R K Krishnakumar -- is expected to
announce its choice by March 2011, which leaves room for a reasonably long handover period.

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The actual selection process isn't public, but it is known that Tata and other senior executives
have given their inputs on what to look for. "It's a scientific process," says a person familiar with
the broad workings of the panel."The candidates will be evaluated on leadership qualities,
management skills, operational performance and other criteria. There will be a matrix and the top
scorer will get the top job."

As it happens, those are precisely the qualities that catapulted B Muthuraman to the top job at
Tata Steel in 2001. When J J Irani's retirement was imminent, three people were considered
likely successors -- Muthuraman and T Mukherjee, both executive directors, and Firdose A
Vandrewala, who was responsible for sales and marketing, as well as new business initiatives at
the company. "Tata asked all three to prepare a presentation on the future of Tata Steel.
Muthuraman's vision and roadmap was crisp, clear and the most appropriate," says a 30-year
veteran of the company.Background and prior domain expertise aren't make-or-break criteria for
Ratan Tata, perhaps because he's living proof that track records can be deceptive or
misinterpreted.Anil Sardana was CEO of North Delhi Power when he was picked to lead Tata
Teleservices (TTSL), a different industry altogether. He's already proved that the group's
confidence in him was justified: from a user base of 15 million in August 2007 when he took
over, TTSL now has 75 million.

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The old order change

In many ways, the successor's task will be easier than Ratan's. It begins with the selection
process itself. When Ratan took over from JRD, it was a succession fraught with intrigue,
suspense and bad blood.

Resentment from established camps within the group at what was seen as an arbitrary decision
was only compounded by Ratan's own admission of surprise at the announcement. The ongoing
selection process may be equally opaque -- at least, at present -- but there is some logic and
purpose behind it, which should make the panel's decision easier to accept.The new chairman is
also not likely to be battling cliques and fiefdoms within the group -- his predecessor has already
taken care of that. Instead of the "corporate commonwealth" that Ratan inherited, the Tata Group
now operates more or less as a cohesive unit, which will work to the successor's advantage.

Besides, there is now frequent churn at the board-level as senior members attain retirement age --
most Tata Sons board members are nearing 75, when non-executive directors have to retire. The
heads of the three biggest companies in the group also retired last year: there's fresh blood at the
top at Tata Motors, Tata Steel and Tata Consultancy Services.

Also, when Ratan took over, the Tata family had neither financial nor managerial control over
many group companies. Indeed, at one point in the 1980s, the Birlas owned more stock in Tisco
than the Tatas (through Tata Sons) did. That vulnerability to outside interference is now greatly
reduced: Tata Sons' holding in most group companies is now around 26%, sometimes
more.Clearly, the old order has changed. But some things will remain constant -- Tata stepped
into the shoes of a giant in 1991. His successor will do likewise. From driving cars to flying
choppers, from charity to business strategy, Ratan Tata does it all, and he does it passionately.
But, despite being the cynosure of all eyes, very little is known about the Tata Sons chairman's
personal life.

"He is a very private man. Even his closest business aides know little about what he does in his
free time," says a veteran at the group.It's anybody's guess what Tata will do after he steps down
from the country's top private sector job. Those who know him well believe he will indulge in all
his pet interests, things he didn't have enough time for while helming the Tata Group.

A bachelor, Tata continues to live in a flat in Colaba, filled with books and dogs. Cars and planes
are his biggest -- and perhaps, only -- indulgences. He has eight or nine cars in his stable,
including a Chrysler Sebring, Land Rover Freelander and Indigo Marina. (There are rumours of a
metallic blue Ferrari California and a Maserati also finding their way into his collection.)

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"Unfortunately, I do not get enough time to drive. Sunday is when I take my cars out. The cars
that I really like, I tend not to let my chauffeur drive," he said to an auto magazine almost a
decade ago.Now he'll have time to spend with his cars, as well as his other mechanical passion,
planes. Like his predecessor and uncle JRD Tata, Ratan is an accomplished pilot and flies both
planes and helicopters.

He made his first solo flight at 17 and enjoys piloting his Falcon 2000. He has also flown the F-
16 and F/A-18 fighters, getting into their cockpits at the Aero India 2007 show. "I've got a type
rating [a licence that allows the holder to fly specific aircraft] for the Falcon business jet, but
lately I've been getting more into flying helicopters. I love the engineering in them and they're
challenging to fly well," he says.

There's also likely to be more time for swimming and golf, post 2012. Tata used to scuba dive
regularly, but punctured his eardrums "too many times". He's had to give that up, but still swims
"a lot".

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Conclusion

Ratan Tata grew up in the lap of luxury -- in the south Mumbai mansion that now houses
Deutsche Bank, driven to school in a Rolls Royce.All that was forgotten in the decade he spent
in the US studying architecture at Cornell, taking on odd jobs -- including washing dishes -- to
supplement the pittance that the Reserve Bank of India allowed as foreign exchange allowance.

Returning to India and joining the Tata Group didn't mean any substantial improvement in his
standard of living. Ratan's first jobs were on the Tata Steel shop floor in Jamshedpur, where he is
believed to have done all manner of tasks, including shovelling coal into the furnace. Which is
perhaps why he retains the common touch, and focusses on innovations that will make the lives
of ordinary people easier.Although Ratan Tata will retire in 2012, he will continue to be
associated closely with the Tata Group -- nearly 60% of the group holding company is controlled
by two charitable trusts, the Sir Dorabji Trust and the Sir Ratan Tata Trust. Tata heads both.

That will mean that not only will he get the chance to sit in the audience during group company
AGMs and ask questions (as he said he'd like to do), he will also be able to carry on the Tata
family tradition of philanthropy.

"The Tata Group is associated with many charitable activities. It is logical that Tata will increase
his involvement in that work," says an insider.

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Tata may also spend a lot of time working with educational and business organisations with
which he is associated. Clearly, Ratan Tata will be a busy man even after moving out of the hot
seat.

References

 Biography of Ratan Tata

 www.tatagroup.com
 Leadership of Ratan Tata by Abhishek Paul
 Presentation of TATA Group
 Background of success of Ratan Tata

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