‘Tata created new competencies’

Business historian, Gita Piramal on Ratan Tata’s legacy:

What are Mr. Tata’s major contributions to the group?

He created and embedded new competencies in the organisation. These competencies will be critical for the Tata Group in the 21st century.

The first is competency to design. Be it Ginger Hotels, the Nano, Titan or Indian Hotels, there is now much higher design capability in each of these Tata companies.

Second, he has globalised the group. At present, 60 per cent of the group’s sales come from outside India.

More importantly, each Tata company was encouraged to develop its own global plan.

Mr. Ratan Tata has improved IT infrastructure in the group and the group’s vision broadened under him. On another level, he enhanced the Tata shareholding in group companies.

Under JRD, because of the existing financial markets and the draconian MRTP Act, the shareholding of the Tatas in several group companies fell to lower levels, making marquee companies potential targets for takeovers.

For JRD at that time, equity dilution was the price of growth.

Is Ratan Tata a typical Tata?

Each Tata chairman has been unique. The common thread among them is that they are passionate about the Tata ethos

How does he compare with JRD Tata?

Both are detail-oriented. They have passion for a job well done. Both have passion for engineering. Examples would be JRD at Air India and Tata Steel, Ratan Tata at Titan and Tata Motors.

What is his biggest failure?

Uneven financial performance between group companies.