{"id":816,"date":"2012-08-31T06:10:55","date_gmt":"2012-08-31T06:10:55","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=816"},"modified":"2012-08-31T06:10:55","modified_gmt":"2012-08-31T06:10:55","slug":"816","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2012\/08\/31\/816\/","title":{"rendered":"Ta-ta: How Ratan rebuilt the house that JRD left him"},"content":{"rendered":"

\"\"<\/a>
\nVivek Kaul
\n<\/strong>
\nAmong the many tourist attractions of Mumbai are homes of famous people. The Ambanis used to live in Sea Wind building at Cuffe Parade till Mukesh Ambani built the 27-floor Antilia on Altamont Road. Kumar Mangalam Birla\u2019s bungalow is very close to Mukesh\u2019s Antilia. So is the Jindal Mansion of the Jindal family.
\nLata Mangeshkar\u2019s flat in Prabhu Kunj building is not too far off. Recent news reports suggest that industrialist Gautam Singhania is building a 40- storeyed building, JK House ,on Warden Road, which again is in the vicinity of Ambani\u2019s Antilia.
\nFor those who are historically inclined, there is Jinnah House (originally referred to as South Court), the erstwhile residence of Muhammad Ali Jinnah, which is very close to the residence of the Chief Minister of Maharashtra.
\nThe other famous residences in the city are Amitabh Bachchan\u2019s Jalsa and Pratiksha, Shahrukh Khan\u2019s Mannat, the late Rajesh Khanna\u2019s Aashirwad and Salman Khan\u2019s one-bedroom-hall-kitchen flat in Galaxy Apartments.
\nBefore you start wondering why I am giving you all these titbits that you may already be aware of, let me tell you, dear reader, that I have always wondered where Ratan Tata lives.
\nWhere is his Anitilia and his Jalsa? Is it as posh as the other residences I have mentioned above? And given the fact that Tata is an architect by qualification, did he design it himself?
\nThe point is that unlike a lot of other industrialists, Tata is very low key. You won\u2019t find him hosting a Page 3 party or even attending one for that matter. His reclusiveness is famous. No wonder The Economist magazine, in a January 2007 profile of him, called him the \u201cshy\u201d architect.
\nBut, as it turns out, he has designed only two houses till date. As the Guardian<\/em> newspaper wrote in a 2008 profile of his \u201cHe only designed two houses: his mother\u2019s and his own beach-house off the Arabian sea.\u201d (You can read the complete profile here<\/a>)
\nRatan Tata took over as Chairman of Tata Sons in 1991, just as the Indian economy was opening up. \u201cHis uncle (JRD Tata), who had run Tata for more than 50 years, had started Tata Airlines (which became Air India)\u2026He was a good-looking philanthropist with a French wife and held the first pilot\u2019s licence to be issued in India.His shy and unglamorous nephew, in contrast, trained as an architect at Cornell University, slipped quietly into the family firm and was not marked out for the succession even when his uncle was due to bow out,\u201d wrote The Economist<\/em> in the 2007 profile. (You can read the complete profile here<\/a>)
\nRatan Tata took over as Chairman of the group from the great Jehangir Ratanji Dadabhoy Tata, or JRD Tata, of Jeh as he was known to friends. JRD had been Chairman of the group for more than 50 years starting in 1938. He took over the reins after the untimely death of Sir Nowroji Saklatvala.
\nJRD Tata\u2019s father RD Tata was the first cousin of Jamsetji Tata, the founder of the Tata group, and had been a partner in the original Tata & Sons. As Morgen Witzel writes in Tata \u2014The Evolution of a Corporate Brand<\/em>: \u201cHe (RD Tata) had been a partner in the original Tata & Sons, but then moved to Paris, where he set up in business on his own account\u2026He married a Frenchwoman (Suzanne Briere), and JRD their eldest son was born in 1904\u2026He grew up and was educated in France; years later, some Indians remarked that he still spoke with a French accent.\u201d
\nJRD was surprised at being appointed Chairman of Tata Sons and, as Witzel points out, he \u201conce described the decision of the directors to appoint him as chairman as a \u2018moment of mental aberration\u2019\u201d. But the group did rather well under him despite the setbacks it received in the way of its companies being nationalised by the government now and then. In 1939, the group had 14 companies with total sales of Rs 280 crore. By the time JRD retired and Ratan took over, the group had more than 50 companies with sales of around Rs 15,000crore.
\nJRD was a visionary and a lot of labour reforms that Indian corporates had to carry out over the years where envisaged by him and first implemented within the Tata group. \u201cTisco (Tata Iron & Steel Co, now Tata Steel) was\u2026probably the first company in India to have a dedicated human resources department, a practice followed by other Tata companies,\u201d writes Witzel.
\nJRD was also a great believer in letting his managers do what they wanted to do. This was one of the reasons why the Tata group reached the size that it did under JRD. \u201cRussi Mody\u2026was exceptional in the way he steered Tata Steel through difficult times; Darbari Seth built Tata Chemicals and Tata Tea from scratch; Ajit Kerkar was instrumental in turning a one-hotel company into a 1,000-room hospitality giant. And, of course, there was the indomitable Nani Palkhivala, who served on the board of many Tata group companies,\u201d an Outlook Business<\/em> story on the Tata group points out. (You can read the complete story here<\/a>)
\nBut what this freedom did was that it made the entire group very unwieldy. \u201cJRD had a clean, uncomplicated portfolio of businesses when he took over in 1938. There was textiles, the group\u2019s first business, steel, power, cement, insurance, and, of course, JRD\u2019s first love\u2014aviation\u2026 In 1991, the Tata business structure was quite complicated. Till then, the group was not run as one business group.
\nEach company was led in the direction that each of the mercurial chairmen chose. JRD allowed them to give full vent to their managerial entrepreneurialism. The result was a maze of businesses. Three companies were making cement and at least five were in the pharmaceutical business in some form or the other,\u201d points out Outlook Business<\/em>. Other than making the group unwieldy different managers ran different companies within the group as their own personal fiefdoms.
\nWhat also did not help was the fact that JRD did not bother much about ownership. As Witzel points out, \u201cBy the 1980s Tata Sons held a smaller share of steel-maker Tisco than did their rivals the Birlas. Tata Sons\u2019 share of\u2026truck maker Tata Engineering & Locomotive Co (Telco, now Tata Motors) had declined to 3 percent, and its share of Indian Hotels, the parent company for many of the Taj Hotels, was now just 12 percent\u2026The family\u2019s own stake in Tata Sons had shrunk to just 1.5 percent,while construction magnate Pallonji Mistry owned 17.5 percent\u2026 \u2018There was a question,\u2019 says Ratan Tata, \u2018as to whether we had the right to claim to manage these companies. In fact we didn\u2019t have the legal right or even the moral right, to manage them.\u2019\u201d
\nWhat also did not help was the fact that JRD had left the appointment of Ratan as Chairman till very late in the day. Speculation had been rife on who would succeed JRD since the mid-1980s, when JRD had crossed the age of 80. JRD it is said to have made up his mind to pass on the baton either to Russi Mody or Nani Palkhivala.
\nPalkivala\u2019s political views worked against him. And Russi Mody did not do his chances much good by criticising the performance of other senior leaders within the group. So it was left to JRD to pass on the baton to another Tata.
\nRatan Tata was born to Naval and Soonoo Commisariat in 1937. Ratan\u2019s father Naval Tata was the adopted son of Lady Navajbai, who was the wife of Sir Ratan Tata, one of the sons of the group founder Jamsetji Tata. Sir Ratan Tata died of a heart attack at the age of 47 in 1918. He and Lady Navajbai did not have any children. Neither did his elder brother Sir Dorabji Tata.
\nSo it was decided that Lady Navajbai would adopt Naval, who was an orphan and the son of Sir Ratan\u2019s favourite cousin.
\nAs business historian Gita Piramal told the Guardian<\/em> newspaper a few years back: \u201cThe Tatas are a reconstructed family who adopt and cobble together people to make a family. That way they do promote talent rather than blood relations.\u201d
\nRatan Tata completed his graduation in architecture from Cornell University in the United States in 1962. It is said that he had a job offer from IBM but he came back to India and was put to work at Tisco, what was then the biggest group company.
\nHis first independent assignment was in 1971 as the director of National Radio and Electronics (Nelco) which was in dire straits. As soon as Tata had managed to turn the company around, Indira Gandhi declared emergency and Nelco was in dire straits again.
\nTata was then asked to turn around Empress Mill, which was one of the three businesses started by the group founder Jamsetji Tata (the other two being the Taj Mahal hotel and Tata Steel)). Tata managed to turn around the sick mill but was refused an investment of Rs 50 lakh that was needed. Soon the mill workers\u2019 strike led by Datta Samant hit Bombay (now Mumbai), and the mill had to be shut down in 1986.
\nIn 1981, Ratan Tata was appointed as the Chairman of Tata Industries. \u201cRatan helped draw up a group strategic plan in 1983. Among other things, it emphasised venturing into hi-tech businesses; focusing on select markets and products; judicious mergers and acquisitions; and leveraging group synergies.
\nAccordingly, 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,\u201d points out another Outlook Business<\/em> story on the Tatas. (You can read the complete story here<\/a>).
\nBut outside Tata Industries, the blueprint did not achieve any success with various CEOs and managing directors continuing to run their individual fiefdoms. Given this, Ratan Tata\u2019s career within the Tata Group hadn\u2019t been great shakes and his appointment as Chairman was as big a surprise for others as it was for himself. This is something that Ratan Tata admitted to in an interview later. He had believed that Palkhivala and Mody were the main players in the race.
\nSo it remains a mystery as to why Ratan Tata was appointed as the Chairman of Tata Sons by JRD. One version is pointed out by Tata group historian RM Lala in an interview to Outlook Business<\/em>.
\n\u201cRM Lala recalls speaking with JRD some 10 days after the announcement and asking whether Ratan had been chosen because of his integrity. \u2018Oh no, I wouldn\u2019t say that; that would mean the others did not have integrity,\u2019 JRD replied. \u2018I chose him because of his memory. Ratan will be more like me.\u2019\u201d Was this JRD\u2019s way of saying that Ratan Tata was chosen because he was a Tata at the end of the day? He probably felt that only someone with the Tata name could hold a group built by various satraps independently together. But we will never know for sure.
\nThe first few years of Ratan\u2019s tenure as the Chairperson were spent fighting the leaders within the Tata group and the fiefdoms they had built. And the fight with Russi Mody got very ugly with JRD having to fire Mody in 1993.
\nRatan Tata, on that occasion, had said that Tisco would not be affected by Mody\u2019s exit. To this Mody had replied \u201cRatan is quite right. No one is indispensable. My disappearance from Jamshedpur may not be felt, but the arrival of Ratan Tata and (JJ) Irani will certainly make a difference. It\u2019s all like a circus \u2014 the serious acts of entertainment are always shown first. Then come the clowns and the animal trainers. That may well be the case with Tisco.\u201d (quoted in Russi Mody: The Man Who Also Made Steel<\/em>, written by Partha Mukherjee and Jyoti Sabharwal).
\nThat was uncharitable, but Mody was quite off the mark on this.
\nIll-health forced Nani Palkhivala to leave (he was later affected by Alzheimer\u2019s disease). Other biggies like Darbari Seth and Ajit Kerkar were forced out by implementing a long dormant retirement rule. It is the same retirement rule that Tata has now implemented for himself and appointed Cyrus Mistry in his place.
\nThe other thing that Ratan Tata did was increase the holdings of Tata Sons in all group firms to 26 percent, the level which allows a shareholder to block resolutions at the board level. As Ratan Tata told Witzel in Tata \u2013 The Evolution of a Corporate Brand<\/em>: \u201cThen we set ourselves the task of seeing how we could put ourselves together as a more meaningful and recognisable group of companies with more central control.\u201d
\nThe money required for increasing stakes in various group companies came from Tata Consultancy Services (TCS) which had become the largest software company in Asia and was generating a phenomenal amount of cash for Tata Sons. TCS was a success story that had come out of JRD\u2019s philosophy of allowing his managers to do their own thing. And since the company was unlisted back then, Tata Sons owned it fully.
\nThe other thing that Ratan Tata did was to make the Tata brand more visible and uniform. \u201cOne of the first steps in the establishment of the Tata corporate brand was the harmonisation of the brand mark as it was used. As Ratan Tata says, \u2018You could fill a wall with the different symbols used by the companies\u2019. These were now swept away and a uniform style was introduced,\u201d writes Witzel.
\nAlso company names like Tisco and Telco were changed to Tata Steel and Tata Motors to make the Tata connection more explicit. Strong brand names like the Taj Mahal hotel were not changed. The group companies were also made to sign the Tata code of conduct. This also meant paying Tata Sons a subscription fees of 0.25 percent of their annual sales, if the companies used the Tata brand name directly.
\nThe other big decision of Ratan Tata was to get Tata firms to go global. When Ratan Tata took over only around 5 percent of the group\u2019s revenues used to come from overseas operations. Now the number is at 58 percent.
\nA 2007 story by Business Week<\/em> magazine best describes Tata\u2019s international forays. \u201cSince 2003, Tata has bought the truck unit of South Korea\u2019s Daewoo Motors, a stake in one of Indonesia\u2019s biggest coal mines, and steel mills in Singapore, Thailand, and Vietnam. It has taken over a slew of tony hotels, including New York\u2019s Pierre, the Ritz-Carlton in Boston, and San Francisco\u2019s Camden Place. The 2004 purchase of Tyco International\u2019s undersea telecom cables for $130 million, a price that in hindsight looks like a steal, turned Tata into the world\u2019s biggest carrier of international phone calls. With its $91 million buyout of British engineering firm Incat International, Tata Technologies now is a major supplier of outsourced industrial design for American auto and aerospace companies, with 3,300 engineers in India, the US, and Europe.
\nThe crowning deal to date has been Tata Steel\u2019s $13 billion takeover in April of Dutch-British steel giant Corus Group, a target that would have been unthinkable just a few years ago. In one swoop, the move greatly expands Tata Steel\u2019s range of finished products, secures access to automakers across the US and Europe, and boosts its capacity fivefold, with mills added in Pennsylvania and Ohio.\u201d (You can read the complete story here<\/a>).
\nIf all that wasn\u2019t enough in 2008 Tata Motors also bought iconic British car brands the Jaguar and the Land Rover.
\nThis strategy of Tata has come in for some criticism given that a lot of companies were bought during 2003-2008 when prices were at their peak. While this is correct with the benefit of hindsight, it also needs to be pointed out that it is easier to carry out big deals in a bull market when people are willing to sell and finance is easier to raise.
\nOn the home front the group has entered newer business like Tata Sky (direct-to-home television) and Ginger Hotels (budget hotels). But Ratan Tata\u2019s big dream has been the Tata Nano, an affordable car for the average Indian. He had the idea to build a car like Nano when he saw a family of four struggling on a two-wheeler on a rainy night in Mumbai.
\nThe car has run into a spate of controversies. The Tatas had to pull out of West Bengal where the Nano was originally supposed to be made after political trouble erupted there. They have since moved manufacturing to Gujarat. Other than that, the quality of the initial batch has been criticised with some cars catching fire. But more than anything the car which was supposed to cause traffic jams all across India isn\u2019t really selling too well. Nevertheless it is too early to write off the Nano. (You can read the complete story here<\/a>). Ratan Tata, for one, believes there is life to the Nano and he could be right.
\nRatan Tata\u2019s stint at the Tata group is now coming to an end. He is set to retire in December when he turns 75. As he attends his last annual general meeting of Tata Global Beverages today (31 August 2012 in Kolkata), he can look bank in wonder at what he has created over the 20-and-odd-years he has captained the group. The total revenues of the Tata Group in 2010-2011 were around $83 billion,many more times what it was when Ratan Tata took over the group way back in 1991.
\nTata has remained a bachelor all his life though, in an interview to CNN <\/em>in April 2011, he admitted that he came close to marrying four times. \u201cWhen you asked whether I\u2019d ever been in love, I came seriously close to getting married four times and each time it got close to there and I guess I backed off in fear of one reason or another,\u201d he said.
\nThe most serious affair was when Tata was in the United States. \u201cWell, you know one was probably the most serious was when I was working in the US and the only reason we didn\u2019t get married was that I came back to India and she was to follow me\u2026 and that was the year of the, if you like, the Sino-Indian conflict and in true American fashion this conflict in the Himalayas, 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\u2019t come and finally got married in the US thereafter,\u201d he had told CNN<\/em>.
\nTata, like his uncle JRD, is an avid pilot and is known to fly the Falcon 2000 business jet on his own within India. In the Aero India 2007 air show Tata co-piloted the fighter jets Lockheed F-16 and Boeing F-18.
\nHe has a younger brother Jimmy about whom not much is known. He also has one step brother Noel (who heads the retail business of the Tata group) and three step sisters, one of whom is married to the next Tata Sons Chairman Cyrus Mistry.
\nMistry also happens to be the son of Shapoorji Pallonji Mistry, the largest individual shareholder of Tata Sons. Given this, chances are that Ratan Tata may be the last Tata at the helm of the Tata group.
\nHowever, as Gita Piramal noted earlier, one needn\u2019t be born a Tata to be its head. Tata is about a state of mind, not just being born in India\u2019s most respect business family.
\n(Vivek Kaul is a writer and can be reached at vivek.kaul@gmail.com)
\n<\/em>
\n(The article originally appeared on www.firstpost.com on August 31,2012. http:\/\/www.firstpost.com\/business\/ta-ta-how-ratan-rebuilt-the-house-that-jrd-left-him-437593.html<\/a>)<\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Kaul Among the many tourist attractions of Mumbai are homes of famous people. The Ambanis used to live in Sea Wind building at Cuffe Parade till Mukesh Ambani built the 27-floor Antilia on Altamont Road. Kumar Mangalam Birla\u2019s bungalow is very close to Mukesh\u2019s Antilia. So is the Jindal Mansion of the Jindal family. … <\/p>\n

Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"qubely_global_settings":"","qubely_interactions":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14],"tags":[199,820,867,883,1033,1237,1398,1429,1431,1845,1856,1907,1910,1945,2036,2372,2448,2534,2666,2970,2991,3175,3365,3413,3585,3587,3588,3589,3607,3617,3775],"qubely_featured_image_url":null,"qubely_author":{"display_name":"Vivek Kaul","author_link":"https:\/\/vivekkaul.com\/author\/vivekkaul\/"},"qubely_comment":0,"qubely_category":"Business<\/a>","qubely_excerpt":"Vivek Kaul Among the many tourist attractions of Mumbai are homes of famous people. The Ambanis used to live in Sea Wind building at Cuffe Parade till Mukesh Ambani built the 27-floor Antilia on Altamont Road. Kumar Mangalam Birla\u2019s bungalow is very close to Mukesh\u2019s Antilia. So is the Jindal Mansion of the Jindal family.…","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/816"}],"collection":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/comments?post=816"}],"version-history":[{"count":0,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/816\/revisions"}],"wp:attachment":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/media?parent=816"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/categories?post=816"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/tags?post=816"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}