ETHICAL LEADERSHIP: RATAN TATA AND INDIA’S TATA GROUP

1. ETHICAL LEADERSHIP:
RATAN TATA AND
INDIA’S TATA GROUP
Anshul Gupta
Apourv Tiwari
Chandrima Roy
Parul Sharma
Prachi Bajpai
Sandip Choudhury
Sarthak Mishra

2. INTRODUCTION
• This case is about the Tata Group, one of the leading
business houses in India, a key emerging market.
• The group had a long-standing reputation for ethical
leadership and was well known for its corporate social
responsibility and principles such as
the "Tatas don't bribe" and
the "Tatas don't indulge in politics".
• Under the leadership of Ratan Tata, the group carried
forward this legacy and consolidated its businesses
further in India while also acquiring a global footprint.

3. CONTD….
• India, like many markets in transition, was passing through a
period when excessive power was concentrated in the
hands of the political elite and their cronies.
• This had led to a government-dominated economy
characterized by nepotism, patronage, and corruption.
• Despite operating in this market, the Tata Group had
managed to build its empire emphasizing the twin pillars of
 "trust" and
 "integrity" - so much so that these had become a key aspect of the
Tata brand.
• However, in 2010, the group and its leader Ratan Tata were
dragged into the infamous 2G scam that broke out in India.

4. CONTD….
• The case study deals with one of the major challenges
that organizations face in many emerging markets -
CORRUPTION.
• It is designed to spark a discussion on whether
corruption should be encouraged;
• whether this is a necessary but transient phase in the
development of modern capitalism in emerging
markets;
• what organizations should do to fight the menace of
corruption; and
• whether ethical leadership is the answer while
operating in emerging markets.

5. ABOUT THE TATA GROUP
• Founded by JAMSHEDJI TATA in 1868
• As of early 2012 the major TATA companies were
TATA STEEL
TATA MOTORS
TATA CONSULTANCY SERVICES
TATA POWER
TATA CHEMICALS
TATA GLOBAL BREVERAGES
TATA TELESERVICES
TITAN
TATA COMMUNICATIONS
INDIAN HOTELS

6. ….CONTD.
• Operations in 80 countries across the globe and
exported products and services to 85 countries
• Revenue of USD 83.3 billion in 2010
• Employed over 425,000 people worldwide
• As of early 2012, the TATA Group was a globally
renowned name with its brand ranked 41st among
the world’s 100 most valuable band

7. FINANCIAL SNAPSHOT OF TATA
GROUP

8. TATA GROUP’S REVENUE BY
SEGMENT

9. Tata Group
• Each enterprise in the Tata Group operate
independently with its own board of directors and
share holders.
• Tata Group had a series of illustrious leaders: Jamshedji
Tata, Dorab Tata, Ratan Tata.
• It is Ratan Tata who took over in 1991 made the
company global.
• Ratan Tata turn down an offer from IBM to join Tata
Group (TISCO).
• In 1981, he became the chairman of Tata engineering
and locomotive company (TELCO) and Tata industries.

10. • To bring in greater integration Ratan Tata created
the group executive office, whose members were
represented on the board of Tata company.
• To protect individual companies from hostile
takeover he also increased the stake of Tata sons.
• In subsequent years, the group sold its stakes in
Merind (including Tata pharma), Goodlass Nerolac,
Lakme and ACC.

11. Mergers & Acquisitions
• Tata controlling stake in VSNL
• Purchased Switzerland based Tyco International’s
undersea telecom cables.
• Acquired Daewoo commercial vehicles.
• Acquired Incat International (American auto and
aerospace company).
• Acquired hotels like The Pierre, Ritz Carlton,
Camden Place.
• The iconic acquisition of Jaguar and Land Rover.

12. Ratan Tata’s Response
• Leadership is the ability or authority to guide and
direct others toward achievement of a goal.
• Denied the allegations of 2G Scam
• 2010, Approached Supreme Court
• In April 2011, CBI gave a clean chit to Tata Group.
.

13. Habits of Strong Ethical Leaders
• Ethical leaders have a strong personal character.
• Ethical leaders have a passion to do right.
• Ethical leaders are proactive.
• Ethical leaders consider stakeholders’ interests.
• Ethical leaders are role models for the
organization’s values.
• Ethical leaders are transparent and actively
involved in organizational decision-making.
• Ethical leaders are competent managers who take
a holistic view of the firm’s ethical culture.

14. The most successful leaders do not rely on one style of
leadership but alternate their technique based on the
characteristics of the situation.
.

15. LEADERSHIP WITH TRUST
• Tata Group had sought to function with ethics, integrity,
social consciousness and fairness.
• The Group strategy of leadership with trust sought to
achieve higher value for its stake holders, better returns for
society, and an ethical model of business.
• The group had always been recognized as a value driven
organization.
• A unique feature of the group was that 63% of Equity
capital of Tata Sons was held by Tata Trust, which were
philanthropic in nature.

16. CONTD…
• Besides the trust activities, like hospitals, education and research centre etc.
individual group companies had taken a community development.
• Employee welfare measures were also one of the major focus area of the
group.
• Environment protection were also figured high on the list of priorities.
• To ensure that CSR measures started by the group were sustained a “social
audit” was also carried out.
• In order to align its CSR initiatives with business processes the Tata Group made
efforts to develop mechanism for integrating social responsibilities with
corporate excellence. The Group focused on developing partnership for
benchmarking with the UN development program, global reporting initiative,
the global compact, ford foundation and the confederation of Indian Industries

17. Tata Group Purpose and Core
Values
• Integrity
• Understanding
• Excellence
• Unity
• Responsibility

18. 2G Scams and the Tata’s
Key Players:
• A.Raja
• Ministry of Communication and Information Technology
• Niira Radia
• R.K Chandolia
• CBI

19. Time for a leadership transition
• The aim of the Tata group is to build multinational
businesses that would achieve growth through
excellence and innovation.
• Biggest Challenge: Retaining Tata group’s value
system.
• August 2010: Tata Group created a 5 member
committee to find successor of Ratan Tata.
• 2011: Cyrus Mistry (a construction tycoon, single
largest shareholder of Tata Sons with 18% stake)
elected as a Chairman of Tata Group