TATA Group

TATA Group has announced that 73 year old Mr.Ratan Tata will handover the Chairmanship of the Group to 43 year old Mr.Cyrus Mistry. It is a very good and revolutionary move. The Group is a USD 83 billion Conglomerate.

I have done an audit assignment in Tata Oil Mills Factory in Tiruvottiyur, Chennai in 1986. I have first come to know about the TATA Group in 1980. I had desired to join the TATA Group as a young Chartered Accountant in 1987 and applied for a job in TCS. I tried again after a gap of one year but in vain. As has always been the case in my life it was “apply, apply no reply”.

I have always admired the TATA Group and in those days there were two very popular Groups in India the TATA Group and the Birla Group. Shri.J.R.D. Tata was managing the Group in those days and followed a de-centralised approach. After JRD the Group’s reins were taken over by Mr.Ratan Tata and he followed a Centralised approach and showed tremendous growth in all the business segments of the TATA Group.

Mr.Ratan Tata has now chosen Mr.Cyrus Mistry to succeed him as the Chairman of the Group. This move has come as a big surprise as it was least expected. As a futuristic approach I would say this is the best decision made by Mr.Ratan Tata.

Mr.Cyrus Mistry has spent the prime time of his life over the last twenty years in various capacities and is now Managing Director of Shapoorji Pallonji. The last twenty years has seen some of the greatest inventions including the Internet. The last twenty years has also seen Corporate Boom in India after India opened up in 1991 and allowed Foreign Direct Investments.

Mr.Ratan Tata has set a new example and showed the way for the Corporate World that the person at the helm of affairs in a Corporate Group should ideally be a person in his early forties so that the person can drive the business into the next level. The younger generation has the requisite skills, maturity and exposure to handle complex business models. In the global environment it is extremely important for having a young mind at the helm of affairs.

Ideally the older generation (those who are more than 60 years old) should step aside and take on the role of an advisor to the Board of Directors. This would help the younger generation to take on the reigns and run the Corporate World in a dynamic way. It is ideal that someone takes over the reigns of the business at 40 -45 and stays at the top for about 10 years. The Succession Planning should be done in a structured manner so that the baton can be passed on in a planned manner over a period of two to three years under the guidance of the existing leader.

I appreciate and Congratulate Mr.Ratan Tata for taking this revolutionary and trend setting route and sincerely hope that people at the helm of affairs at various Corporate Groups take a cue and follow this path.

T.P.Anand
26th November 2011, Dubai, U.A.E.