Ratan Tata: Then and Now



Nobody disputes that, during his lifetime, JRD Tata was the most respected — and probably the most admired — businessman in India. On Thursday, as I watched the TV coverage of Ratan Tata unveiling the Tata Nano in New Delhi, I was struck by a sudden thought: Ratan has finally inherited JRD’s title. He is clearly the most respected and admired businessman in India today.

And then, I thought back to that phase, 10 years ago, when the Tatas struggled to reinvent themselves in the post-JRD era. I thought of how Ratan was perceived then: awkward, untalented, unworthy of the job, out of his depth and full of vindictive anger against many of the satraps of the JRD regime.

It was a time of change. New groups were springing up out of nowhere. The certainties of the old protectionist economy and the license-permit-quota raj had collapsed. Reliance had made the transition from being seen as a parvenu to being regarded as an industrial behemoth. The Infosys legend, personified by Narayan Murthy’s personal simplicity and marked by the world-class skills of his high-tech partners, had just begun.

At Tata headquarters, however, the crises mounted: record losses at Tata Motors, the much-derided plan to launch the Indica, criminal charges over Tata Tea’s alleged links with Assam militants, allegations of foolishness in the sale of Tata Oil Mills’ assets, a plan to launch a domestic airline with Singapore Airlines that was comprehensively scuttled and more. And many of us wondered if we were watching India’s greatest industrial group diminish before our very eyes.

The house that JRD had built was crumbling. Poor, shy, inept Ratan seemed unable to cope.

And yet, a mere decade later, here was the same Ratan being feted by the world’s media as the man who reinvented, if not the wheel, then certainly the motorcar. A man who did what no global carmaker believed was possible: to build a car that looked this good and drove so well for so low a price. And here was a new Ratan, his legendary shyness temporarily in remission, as he joked about calling the car the ‘Pachauri’ (after the environmentalist who chose to attack the Nano as a pollution threat, a charge that the Nano has easily beaten) or even the ‘Mamata’ (after the nutcase) or ‘Despite Mamata’.

The following day, the Nano managed the impossible: there was not one negative review of note and the raves kept coming. To the chagrin of his rivals, Ratan even kept to the price commitment. Though input costs had gone up, he said, the Tata’s would still price the basic Nano at a lakh because “a promise is a promise”.

The triumph of the Nano was merely the crowning glory in a series of successes. Throughout the 21st century, the Tatas have beaten every doom-laden prediction and silenced every critic. Tata Motors came back from losses of over Rs 600 crore to make huge profits on the back of the Indica, the all-Indian car that had been Ratan’s dream, and — to his detractors — the vanity project that would sink the company. Infosys had fulfilled its early promise but even then Tata Consultancy Services (TCS), a company that had been little noticed in the 1990s, had grown to dominate the Indian IT sector, its size dwarfing Infosys. Tata Steel had defied Rusi Mody’s predictions, had been whittled down to a slim and lean company, and had even gone ahead and bought Corus, a global giant, after a bidding war during which Ratan had shown nerves of steel. And even as Ratan was unveiling the world’s cheapest car, the Tatas were on the verge of clinching the purchase of Jaguar, one of the world’s great luxury cars.
How had so many people, who should have known better, got Ratan so wrong? Business pundits will tell you — in the kind of detail that I will never be able to master — just how the Tatas turned themselves around. I’m sure they are right. But remember, most of these pundits were the same guys who wrote Ratan off to begin with, a decade or so ago.

I have a few theories of my own — based on the interviews I have done with this otherwise reclusive man — on the remarkable rise of Ratan Tata.
Ratan realised India was changing much before the other big houses did. He recognised that the old feudal, paternalistic structure that had worked so well in the JRD era, where the old man was the emperor and the companies were run by viceroys, would not work in the new India. He professionalised the Tatas, democratised the management, abandoned the feudalism (remember Rusi Mody’s massive birthday tamashas in Jamshedpur?) and made the group adopt a low-key, matter-of-fact, get-things-done style that had no room for satraps and stars.
He saw the wisdom of embracing the future. Hence, the focus on TCS. And hence the determination to go global: we talk about Corus, the Pierre, Tetley etc, but the big successes are only the tip of the iceberg. Years ago, Ratan told me that he was determined to use Indian managerial ability and Tata capital to globalise the group. In 2000, this seemed overly ambitious and grandiose. But he has grabbed the opportunities for globalisation like no other Indian industrialist has.
At the same time, he put his faith in young India. The team behind the Nano is young — the top guy is 35 — and overwhelmingly Indian. So it was with the Indica, a truly Indian car. One of the dichotomies of Ratan’s personality is that while he can be shy and reticent in social situations, he is warm, outgoing and able to motivate teams at work.
He told the government to go to hell. No group has faced more unfair governmental harassment than the Tatas — right from the Tata Tea case where they were framed by the Assam government to the telecom tangle where they were bullied by an arrogant Dayanidhi Maran. Not once did Ratan agree to pay a bribe. He wouldn’t even go and complain to Manmohan Singh (who has immense respect for him). Instead, he stood his ground. If in the process, he lost a project, he lived with the loss but maintained his principles. So it has been with Mamata Banerjee’s foolish Singur campaign: he will never buckle under it or try and buy her off.

He let his heart guide him. Early in his career, when Nani Palkhivala persuaded the Tatas to liquidate the Central India Mill even though it could have been turned around with an infusion of just Rs 50 lakh, an angry and disgusted Ratan gave his own annual Tata salary bonus to the officers of the company. “They were perfectly blameless people who had now lost their jobs through no fault of theirs because of a bad corporate decision. They had homes to run and children to educate,” he remembered in an interview to me in 2005.
It was his heart that told him to build the Nano. He would see families of four on a single scooter. The father would keep his son in front and the mother would hold on to her baby. He wondered why it was not possible to give such families a car where they could be safe and comfortable for the same price. Plus, they would keep their dignity.

There are many reasons for building a car. But this, I think, is the best one of all.

And finally, I think, India caught up with the Tatas. Over the last decade the middle class came of age, tired of the crony capitalism of the old bania class, was inspired by engineering success stories like Infosys and began to wonder why it wasn’t possible for everyone to do business honestly.

The Tatas had gone through good times and bad times. But they had always given nearly all of their profits to charity. They had consistently refused to break the law and encourage corruption. Older generations of businessmen thought they were silly and shortsighted to do so considering that everybody else played the game.

But now India has changed. We finally have a strong and vocal middle class that prizes honesty above all else and that has contempt for the sleazy politicians and the crony capitalists of old.

When we see Ratan Tata refusing to pay bribes, refusing to lick politicians’ boots and refusing to bend the rules — and still taking the Tatas from strength to strength, still buying the world’s best companies, and still reinventing the rules of the car industry — well then, we know that there is a better way.

It’s possible to be honest and principled. And still beat the rest of the world.

That’s the strength of the new India.

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  • http://www.happysmalltalk.blogspot.com Small Talk

    Gone a tad overboard on the principles/ honesty bit methinks. Tata is a bloody good businessman. And that generally means valuing shareholder value more than almost anything else. Sure, he is no Ambani. But Modi and Gujarat for the Nano? That in my books was a huge compromise.

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  • pushkar

    Yeah…surely ratan tata can be called the architect of modern india,but on your article bout ethics which says its still possible to win the game with ethics…i hardly doubt this because when your business rivals can bribe and fall down just to gain a tender…you would land no where.Even i belive in doing business with ethics but when criminal minded corporate people have sprung up like the ambanis which fiercely do lobbying,i doubt if becoming a business giant is possbile in the 21st century by keeping the ethics intact.
    Reply me to my mail…

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  • http://chantinglake.blogspot.com Vivek Singh

    Thanks Vir for bringing the less known side of Ratan Tata to us. You are right. India is changed. If Tata can do, so can many more.

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  • anand mohan das

    Minority would not have voted for BJP anyway, with or without so-called “misdemeanor” of Varun. To this point, your otherwise fine essay sound like biased indian media.

    Election reform, that would include mandatory voting would go a long way in breaking this “en-block minority voting”. Untill then, BJP should stick to what it is doing at present. An all out assault on congress, and may be a more balanced media would change some hearts in India as well.

    Bottom line is – Like it or not, Modi is going to be defecto charismatic leader that India will eventually have as its PM. Against all odds, he has enough personality and glamour to seriously challange italian-gandhi family pop-image.

    Jaitely is very good, but he does not match this “X” factor that Modi has. A certain section of media, and mostly muslims are always going to whine and cry, no matter what. But then, experiments of Gujarat will be played out on national level, as we inch closer into the future.

    It is good thing for India, certainly a good thing for nationalism in this country !

    Twitter @amdas108

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  • Anonymous

    As you have correctly said, Modi has, if not brought the minorities rushing into the BJP camp, at least sown the seeds of doubt in their collective mind and soul. In the coming years, it would be logical to assume that he would do a lot to rid the minority psyche of the Hindu fear and abhorrence. And then his march to Delhi would be free of pot holes.

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  • mohnish Patel

    I totally agree wth ur views, allies can be a prblm..Shiv sena,,wl go BJP’s way…yes JD(U)..wl mke sme ruckus..bt..no one wnts to leave th side of a wnning team..its jst tht Nitish kumar, dosnt wnt to gve Lalu any chance fr whch he is waiting to grab..An inside pact mst hve been made..tht thy wl criticize Modi..jst to appeal minorities..bt by th end of day, whn required ground is coverd thy wl go fr a kill..

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  • Anonymous

    Now Modi’s future is same as Advani. waiting for PM seat whole life

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  • Anita

    More myth making. The primary concern for Muslims, just like all Indians is Security followed by development. Why would muslims support a party like BJP which keeps harping on mulims as anti-nationalists and supports progroms against it like the 2002 riots. Just think about it?

    What is needed is a mentality change in people like you to realise that the real problem is communal mentality of people like you. That is what gives rise to people like Mulayam Singh and Digvijay Singh

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  • Ahmed

    FYI, Saudi Arabia was never under British rule. And slavery was systematically abolised under the Prophet himself were he declared it illegal to make a free person a slave but also mandated food and shelter to be on par of free people for them. By the 1800s, a decree by the Ottoman empire had already declared slavery as abolished. Don’t lie so blatantaly

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  • M.malla

    India needs a strong man at the helm of affairs because of testing times ahead both on the domestic as well as international fronts.Modi has all the qualities required for such a man.Unfortunately the tirade launched against him by his detractors will make the nation wait for some time for his efficient handling of the problems of India.Modi needs to assure the nation especially the minority community that he is for the development of all irrespective of community, class, caste, region etc.

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  • Ram Singapore

    Mr.Arnab STOP babbling rubbish. When these giant monopolies with political connections take over with HUGEeconomies of scale they will batter INdian public.

    Do you think they are your Dynasty showering you with goodies? It is hockingly naive of you to claim this as ben eficiaries are POLITICAMNS FAMOUS for 2G, Commonwealth SCAMS and NOW RETAIL FDI scams. If they were really intereswted to benefit AAM AADMI they should allow medium and small payers to instead of demand USD100Million investment and creating LICENSE RAJ and monopolies to bnefit COngress Central, State Govt ministers of Congress and NCP!

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  • Sharma_r81

    FDI in retail means more choices. It means farmers earn more since middlemen are excluded. And as for the neighbourhood kariyana store, all the detractors should visit countries where big malls operate – they will find that the small retailer/shops still exist and thrive. Frankly, the opposition parties have lost it.

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  • Abu Ahmed

    FDI in retail is great for the country. Farmers would get a better price for their produce; there will be more investment in the cold store chain – this means that would bring in a logistics revolution in the country. More freezer trucks, cold trucks and thereby fresh agro and agro-industrial produce would be available as those freezer / cold trucks would be able to travel long distance while keeping their load farm-fresh. Agro industries would receive a boost when cold stores are made available in their vicinity. That would mean more jobs in villages as well as in cities. Despite the presence of big stores all over the big cities, no neighbourhood Kirana shop has downed shutter. The population is so huge, there will always be room for the humblest and the most glittering store to operate successfully.
    As a huge country, we must rescue the EU businessmen and provide them an opportunity to invest in our country.
    And lastly, if we do not allow FDI, the CIA/FBI would allow another 26/11 to happen somewhere else in the country – they have several Headleys up their sleeve, you see, and they need employment too.

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  • Kiara

    A very good article, lets sit and analyze the pros and cons of allowing FDI in multi-brand retail and you will see that the +ive far outweighs the -ive.

    Politicians are opposing it only because they fear loss of influence if poor farmers get empowered as result of greater prosperity.

    Their resistance is nothing but a naked attempt to guard their captive vote banks.

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  • Bharatgopal Rajagopalan

    “wrong fact” – India is now the second-fastest growing big economy”

    India is now the fastest growing MAJOR economy in 2010 with a growth rate of 10.4% and China 10.1%. source: CIA WORLD FACT BOOK, WORLD BANK AND INTERNATIONAL MONETARY FUND.

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  • Bharatgopal Rajagopalan

    Advantages of FDI in Retail

    1. Definitely lowers prices due to high competition and other reasons like stock for high price and sell for low prices. Walmart style. and don’t forget that Walmart has its own brand of products and they sell it for cheaper prices when compared to other products in their own store
    2. Cuts down greedy and corrupt middle men. Supply chain would get regulated and farmers will definitely benefit by selling their stuff for correct prices.
    3. High quality products, especially Fruits and vegetables, Walmart would have its own transportation system, cold storage facilities.
    4. Variety of products go up. Indian manufactured goods will definitely dominate unlike claims saying that Walmart would import everything from China. There are restrictions.
    5. Employment. 10 (initially) to 50 million jobs (eventually) get created. More pay, more hours, safe work environment, secure job.
    6. Puts food on plate for lower middle class people (300 million)
    7. Millions of people can save money on food and invest somewhere else, since Indians spend most of their salary on food and rent
    8. GDP goes up and more foreign investment with better deals can start to come in after seeing the success of Walmart and stores like that.

    Even though there are some risks initially like small businesses losing business and even Walmart might find it difficult initially, during initial transition phase but we have to go by the saying “If Benefits outweigh risks” then go for it. It is the case with Pregnancy categories, when it comes to harmful drugs.

    Walmart have lot of money and they could invest 100 million dollars in each city with a population around 2 million. Eventually Walmart would dominate and reap in the benefits. Nobody can deny that.

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  • Anonymous

    This opinion piece is written with a flawed logic comparing it with computers and IT industry. The FDI in retail will definitely kill the mom & pop stores which actually sell merchandise slightly lower than the MSRP, thereby benefiting the most common middle class people. Perhaps they may not have noticed it in the flashy cities or the suburbs.

    And then on the pretext of providing better deal to the consumer, these bi name stores will bring cheap goods from China, in essence, killing the local industry and sending the local money overseas to procure these goods. We have seen this happening in the developed world, and now India is being targeted.

    And why the author of this article blaming just the BJP. The Congress Allies and many in CONgress itself are opposed to the FDI in retail. Looks like beating on BJP and RSS was a fashion and now it has become necessity to drive the point home.

    In my opinion, only the Patriotic will oppose this move.

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  • http://pulse.yahoo.com/_7AX2IIBHAUN5EVTGWDW7KNYNGI Manoj

    I cannot understand the hue and cry over FDI in retail or any sector. Indians have to learn to be pragmatic and go by economic sense rather then emotions. The fact of the matter is that we are not a export oriented economy now as compared to China which was quick to adopt and assimilate foreign technology and capital. Just compare India (1.75 trillion $ GDP, 1.2 billion population) and South Korea (1.4 trillion GDP, 50 million population). The best way forward for India is to garner as much foreign capital and continue to boost its economy till we attain a reasonable developed country status.

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  • Anonymous

    Let the customer decide what they want and let india have investment in logistics and supply chain and customer front infrastructure…it will be best boon india could have when we look back 10 years from now in both manpower work force it will create and also the modern techology it will bring from Farm to the customer !!! The naysayers will always be naysayers….who have their own vested interests to keep the same old hoaders and middle man traders who are pinching money from farmers and the Consumers and at the same time causing 40 to 50 % of wastage in perishable agri products !! All upcoming countries – China, S africa, Mexico, Brazil etc.. have 100% FDI investment opening in their countries..

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  • Anonymous

    I am not afraid to drive on this road, I did & am experiencing it up close.

    You are pointing it out just from the point of view of farmers. But what about the small and medium scale industries and small stores run by local people. The big warehouse stores are known to import items cheap, mainly form China. Looking at the current state of affairs and relations of India with China, don’t you think that it will be a suicide in terms of whatever manufacturing capability we have in the country.

    Best example for what I just wrote is for you to look towards USA, where the banks and highly paid CEOs with out a vision to future have killed the manufacturing by moving it to China while making huge profits. Yes! the local consumers are now able to save a couple of dollars on an item but it has increased the gap between middle and higher class. Without the jobs, the middle class is the new poor class and left with little or no money, leaving everyone in a financial turmoil.

    Remember, spending locally keep the money local for more job development. Once you begin importing cheap stuff, the money goes to some other outsider or a nation who can actually use the leverage to get some other concessions.

    As far as the condition of farmers is concerned, the GoI has means and technology to build the infrastructure for warehouses, transportation as well as removing the middle man. Only thing they lack is the will to do it.

    Bringing big name corporations won’t help but might affect the farmers and ecosystem negatively, — for example: the big name store would want only a specific type and size of grain, fruit or whatever that may only be achieved by genetically modifying the crop, which might have its own negative affects on human genes. The big stores would want the farmers of particular region to grow only one specific type of produce (fruit, grain, poultry, meat). This might or might not be feasible for a particular type of weather, thereby affecting the ecosystem.

    Don’t just run after the foreign investment in every sector because some showed you a rosy picture. Not every thing big is good. It’s an evil opportunity and should be avoided. Be a visionary and think about the national interest as well.

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  • Anjaan

    People from Andhra Pradesh, those that read Chalam’s literature would perhaps empathize with this relationship. Chalam’s love philosophy is that you may be able to love more than one at one time. Perhaps yes — most of the world shaped its thoughts to suit the laws of land. In Reddys case, it’s their life and their equation is one way to look at it, as much as I don’t understand it. But there are laws for some reason and countries should be enforcing those without looking at financial status and religious backgrounds. But, perhaps only in India — those laws don’t work. Look at Hindi Cinema fames — my favorite actor has two wives; he was elected as an MP – his second wife is also an MP in Rajya Sabha – bigamy was not a question in those elections or their public life. There is a lot of fear in confronting these personalities.

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  • Human Above All

    Sam, you’re cantankerous.
    Better stop posting fundamentalist shit or you’d be knocked down soon.

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  • moyeen

    If your assumption on Islam are negative, we can’t help it. One must ask querries to get benefitted. You don’t like Islam and its views. That is Okay. It’s your freedom of Choice.

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  • moyeen

    How much do you like 50 shades of grey

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  • guaranteed payday loans

    guaranteed payday loans…

    Ratan Tata: Then and Now : Counterpoint…

  • qwe123kids

    ///***
    Muslims will not let religion decide politics. We as Indian Muslims are very much rooted to party-based, secular, democratic traditions of our great country.
    */

    I Know This Blog is Old but The above Muslim cannot be and won’t Be secualr ..

    Better Use Ticket for Samjuta express and Go to pakistan

    Look At the History..

    Some Book Which Help you Understand Real Islam Why It is Terroist and Hyprocite religion

    1) Understanding Islam Through Hadis: Religious faith or Fanaticism? by Sri Ram Swarup

    2) The Calcutta Quran Petition (Sita Ram Goel )
    3) Heroic Hindu Resistance to Muslim Invaders
    4) Hindu Temples: What Happened to Them Vol. 1 ,2
    5) Muslim Separatism: Causes and Consequences by Sita Ram Goel
    6) The Story of Islamic Imperialism in India
    7) TIPU SULTAN – Villain Or Hero

    8 ) Jihad : The Islamic Doctrine of Permanent War by Suhas Majumdar
    9) Jizyah and the spread of Islam by Harsh Narain

    10) The Legacy of Muslim Rule in India Ks Lal
    11) Muslim Slave System in Medieval India Ks lal
    12) Theory and Practice of Muslim State in India

    13) Muslim League Attack on Sikhs and Hindus in the Punjab 1947
    14) Nationalism And Distortions In Indian History by Dr. N.S. Rajaram

    15) Negationaism in India – Concealing the Record of Islam by Koenraad Elst

    The above books are availbale on Voice of Dharama website in book section for free

    Robert spencer , 16) The Mhummad ,
    17) The Complete Quide to Koran for Infidel
    18) The Politically Incorrect Guide to Islam and the Crusades

    un can donwload Audiobook from any soure fro freedomwlod

    19) Jhiad M.A. Khan

    20) The Syro-Aramaic Reading Of The Koran Christoph Luxenberg (Many version of koran )

    21) The Tragic Story of Partition H.S Saredeasi.

    22) Muslim League Attack on Sikhs and Hindus in the Punjab 1947 by S. Gurbachan Singh Talib

    23) The Origins of the Koran: Classic Essays on Islam’s Holy Book : IBN warrq

    24) savkar Samgra :- Volume 1 – 10

    25) Dr K. Ajram’s Setting the Record Straight: The Miracle of Islamic Science

    26) Why_I_Killed_Gandhi_Nathuram_Godse_s_Last_Speech_in_Court_medium :- Naturam Godse

    I Think 36 books are more then enough…

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  • HateTheSick

    Sorry! But I just cannot agree with Radha, nor do I respect her for her apparent bravery. What comes to my mind is either she was lame or she did not care much. She could have spoken to her parents, family, sent the girl to hostel, shaken her husband!! All she did was ‘He will only dance with me’! I doubt if she really cared enough.
    And the man (if marrying women proves someone a man enough) is a shameless pervert who got by a young infatuated innocent girl’s crush. Instead of slapping her, he chose to take advantage of the situation and married her! how lame and sick can something be. Why is it more frustrating to read about them since they being celebrities carry a social responsibility. Kaushalya, can still be still be excused since she was just an adolescent, can’t really go back as the damage is already done. She can’t really do anything about the her decision now which she made when just a kid.

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