Ratan Tata

Ratan Tata

RATAN TATA One of the most well-known and respected industrialists in India, Ratan Tata (Ratan Naval Tata), is the Chairman of the salt to software conglomerate, Tata Group which is based in India and comprising 98 operating companies in seven business sectors across 80 countries. Ratan Tata was born to Soonoo & Naval Hormusji Tata on December 28, 1937. He was brought up their grandmother Lady Navajbai after his mother moved out following a troubled marriage. He studied at the Campion School in Mumbai. At the age of 15, he moved to the United States for further studies.

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He completed his graduation from Cornell University with a degree in Architecture and Structural Engineering in 1962. He worked briefly with Jones and Emmons in Los Angeles before returning to India, later that year. He completed the Advanced Management Program at Harvard Business School in 1975. Left to him, 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 shop-floor 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. In 1991, he became the Chairman of Tata Industries and was instrumental in ushering in a wide array of reforms. In his two decades as the Chairman of Tata Group, Ratan Tata has achieved almost everything on his 1991 agenda. At Rs 3. 46 lakh crore ($67. billion), Tata Group revenue is 12 times the 1991 level, while net profit has gone up four times. In the past 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 thus making Tata Group to be India’s largest private steel company, the biggest automobile manufacturer, the largest IT outsourcing firm and one of the best hospitality chains the world over.

Along with his big-ticket acquisitions, Ratan Tata will be remembered for turning the dream of owning a car of many middle-class people in India into reality with the launch of the world’s cheapest car, Nano (costing less than $3000 at the time of its launch) which was his brainchild. Along with the Tata Group, Ratan Tata serves in senior capacities in various organizations in India and he is a member of the Prime Minister’s Council on Trade and Industry.

Tata is on the board of Governors of the East-West Center, the advisory board of RAND’s Center for Asia Pacific Policy and serves on the program board of the Bill & Melinda Gates Foundation’s India AIDS initiative. Ratan Tata’s foreign affiliations include membership of the international advisory boards of the Mitsubishi Corporation, the American International Group, JP Morgan Chase and Booz Allen Hamilton. He is also a member of the board of trustees of the RAND Corporation, University of Southern California and Cornell University.

He also serves as a board member on the Republic of South Africa’s International Investment Council; and Asia-Pacific advisory committee for the New York Stock Exchange. In 2010, he joined BMB Group as an advisory board member. Known for one of the biggest successes in business, Ratan Tata has also had his downs in the career; and wide-spread criticism for his ideas. His appointment as director-in-charge of National Radio and Electronics (NELCO), in 1971 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. But 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. These 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 2% market share to a 25% market share,” Tata said several years later. Also during his appointment as the Chairman of the Group, 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. In spite of the criticism, he was successful in proving his detractors wrong by scaling new heights in his career and making the company one of the most trusted and successful brands across many nations. Perhaps the secret of his 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’ on the one hand, the world’s cheapest car, the ‘Nano’, on the other, and hardy, rough-road trucks sandwiched in between. Despite his wealth, Tata always kept a low profile. During his stint in the US, Tata had no qualms in doing odd jobs, he even washed dishes.

He is been a charitable person with many charitable trusts run by him and is involved in the education by providing top class educational facilities to the poor and needy through his charitable organizations. Mr. Tata is also known for his humane values and generosity. After the Mumbai attacks, the salaries of then heavily attacked ‘Taj Hotel’ employees were paid despite the hotel being closed for reconstruction. About 1600 employees were provided food, water, sanitation and first aid through employee outreach centers. Ratan Tata personally visited families of all the employees that were affected.

The employee’s relatives were flown to Mumbai from their places and were all accommodated for about a month. Tata also covered compensation for railway employees, police staff, and pedestrians of Mumbai, who were affected by the attack. The market vendors and shop owners were given care and assistance after the attacks. A psychiatric institution was established with the Tata Group of Social Science to counsel those who were affected from the attacks and needed help. Tata also granted the education of 46 children of the victims of the terrorist attacks.

At the age of 74, Ratan Tata co-piloted F/A-18 Super Hornet fighter jet at the Aero India Show in February 2011. He had flown and F-16 fighter aircraft in 2007 which shows his enthusiasm and sets an example to the youth. The Government of India honoured him with its second-highest civilian award, the ‘Padma Vibhushan’, in 2008 and has been granted honorary citizenship of Singapore by the Singapore government. He has also received honorary doctorates from several universities in India and overseas such as Honorary Doctor of Business Administration from Ohio State

University, Honorary Degree of Doctor of Technology from Asian Institute of Technology, Honorary Doctor of Science from University of Warwick, Honorary Doctor of Laws from Pepperdine University to name a few. He has received Legend in Leadership Award from Yale University, Businessman of the Decade from Federation of Indo-Israel Chambers of Commerce, Carnegie Medal of Philanthropy from Carnegie Endowment for International Peace, NASSCOM Global Leadership Award among others.

Tata who is set to retire from the Group 2012, is the third scheduled retirement. 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 re-designated him as non-executive chairman, which meant he could continue for another five years. Three years later, the board upped the retirement age of non-executive directors to 75. The message is clear: Ratan Tata is indispensable.


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