The Tata Group’s outlook had been “outward-oriented” from the very beginning, according to Andrea Goldstein, an economist who published a study in 2008 on the internationalisation of Indian companies, with a particular focus on Tata.
As early as in the 1950s, Tata companies operated with foreign partners.
But Ratan Tata was keen to “internationalise in giant strides, not in token, incremental steps”, Ms Goldstein pointed out.
His unconventional education in architecture and a ring side view of his family group companies may have played a part in the way he thought about expansion, says Mr Raianu. But it was the “structural transformation of the group” he steered, that allowed him to execute his vision for a global footprint.
Tata had to fight an exceptional corporate battle at Bombay House, the group headquarters, when he took over as the chairman of Tata Sons in 1991 – an appointment that coincided with India’s decision to open up its economy.
He began centralising increasingly decentralised, domestic-focused operations by showing the door to a string of ‘satraps’ (a Persian term meaning an imperial governor) at Tata Steel, Tata Motors and the Taj Group of Hotels who ran operations with little corporate oversight from the holding company.
Doing this allowed him not only to surround himself with people who could help him execute his global vision, but also prevent the Tata Group – protected thus far from foreign competition – from fading into irrelevance as India opened up.
At both Tata Sons, the holding company, as well as individual groups within it, he appointed foreigners, non-resident Indians and executives with contacts and networks across the world in the management team.
He also set up the Group Corporate Centre (GCC) to provide strategic direction to group companies. It provided “M&A [mergers and acquisitions] advisory support, helped the group companies to mobilise capital and assessed whether the target company would fit into the Tata’s values”, researchers at the Indian Institute of Management in Bangalore wrote in a 2016 paper.
The GCC also helped Tata Motors raise money for high-profile buyouts like Jaguar Land Rover which dramatically changed the global perception of a company that was essentially a tractor manufacturer.
“The JLR takeover was widely seen as ‘revenge’ on Ford, which had derisively refused to acquire Tata Motors in the early 90s and then was beaten to the punch on the deal by Tata Motors. Taken together, these acquisitions suggested that Indian corporates had ‘arrived’ on the global stage just as growth rates were picking up and the liberalising reforms bearing fruit,” says Mr Raianu.
Today, the $128bn group operates across 100 countries with a substantial portion of its total revenues coming from outside India.
Source link
